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  • Entrepreneur’s Interview – OnUs Payments

    Sachi: Good evening everybody, today our guest for this entrepreneur’s interview is G.G. Shrinivas. G.G. Srinivas along with Hari have founder this startup called ‘Onus payment’. 
    Without further delay I would request G.G to give us brief background about himself, his co-founder and founding of the company.
    Shrinivas: Thank you. I am a 97 graduate of IIM Bangalore. Hari and I were colleagues in Standard Charted Bank – we were working in card sales at that point of time. We occasionally kept in touch with each other and saying some day we want to start off. Everything kind of fell in place thanks to the circumstances and the opportunity that was there at that time. Both of us were in Bombay fairly dissatisfied with what was going on – that is when we began working on taking this off the ground.
    So there was sense of comfort with each other because, we had worked as colleagues. We were just ordinary colleagues, there was bit of respect, but I wouldn’t call it as deep friendship. I can talk about respect for Hari, I think he is the one of the best sales man that I have ever seen in my Professional stint. He gets across to the table something very fundamental. So even if we are not friends at that point of that time, the fact that we respected each other, we said let’s try it out.
    We went about the classical way, I mean like you know, normally whatever anyone would do, when he starts a company. Get the idea it’s like one of our boss used to say take a deep drag of band substance or is their market at hand. So, we did a lot of validation in that point of time. We went to lot of seniors who were in this fields, I mean to a couple of heads of MNC Banks in India, A couple assets heads in India of MNC Banks. And said this is the opportunity at hand, are we dreaming this or is this opportunity that is there to be exploited. The unequivocal response that we had from everybody was, this makes a lot of sense provided you scale it up. This is going to be pretty big opportunity. I think to the extent that we spent little too much time on the validation, but we went about validating the complete idea. We went customers and we said if we give this product how much would pay? It was never about would you like this product – it was always about would you pay money for this product? We had gone to some of the high end schools in Bombay, which is where we were located at that point of the time and asked them about this.
    We had industry experts who said this possible. We had customers who said they are willing to pay. The funny thing was Hari being Hari, went out and actually closed to sales and came back and didn’t had product, money, technology nothing. I mean we had not even incorporated our company!
    The next phase of it was we had to go back to our families and say that this is what we starting. For first time entrepreneurs like us, it was very important to have a backing of the family. So we went up to senior people in Hari’s family and said, ‘this is what idea is’ should we be going ahead – one of  them actually ended up being on our advisory board. So, that’s the great thing for us. They actually liked the idea, after we had checked, cross-checked, verified and re-verified and we had wasted sixth month of time, is when we said OK fine now we have to form a company now. That’s when we started a company.
    Sachi: Could you explain what your company does so that the readers of the blog have an idea? 
    Shrinivas: Without going into great details about what the structure of payment industries is like in India; Think about any transaction less than 200 Rupees these are the transactions like buying coffee, buying an idly, buying a tea, buying a cholle buthur kind of thing and you are doing a lot of these transactions day in and day out. There are lot of transaction we do in less than 200 bracket – the only transaction tool that is available to us is cash. We can go by our personal experience or whatever we transact on a daily basis which is less than 200 Rs. Irrespective of which category of customer class it belong to the only transaction tool that is available to us is cash and cash is increasingly becoming difficult to use as a transaction tool because some of the changes we are seeing to. As you know, right in front of our eyes the 50 paisa is going out fashion. People neither give 50 paisa nor accept 50 paisa. As late as 2 year back some people were accepting it and without knowing it’s not getting accepted.
    So what happens is the bulk of the transaction that we are doing is less Rs. 200. And this transaction cannot be done on cash. So we looked at this and said – is there an opportunity for us to tap into these segments. These transactions come into the ‘C’ category of transaction – This is large volume low value.
    If we keep focus right and if we cherry pick within this transaction, this is substantial value of transaction that can be done on this. Provided you get across the right technology, keep your cost low everything else goes with to run a company. So if you keep everything else constant you should make money!
    Sachi: Both Hari and you are from the sales background of and to scale up the back end operations will be IT. We have seen that many firms begin with creating the software themselves. I understand that you have not taken that approach. How have you managed all that?
    Shrinivas: Hari and I are yes from sales background, Hari is one  of the superlative sales guy that I  have seen. There is fundamental understanding that when you are up to start up a company, to start off a new product, new concept it will take heck a lot of selling to push the product across. May be a little naively, but we believed that everything else can be made. Once customer exist and once he is willing to pay, the rest of the stuff can be put in place – as in raising the money to start the operations, getting the technology to run the operations, actually running the – operations everything can be put in place provided you have customer first. Obviously two of us are forced to think like this because we are not technology persons.
    I am a jack of all, whereas Hari is primarily into sales. The advantage this gives us is that when the operations are still not scaled up I am pretty much capable of handling operations, technology and marketing. Having said that jack of all trades never works out when things going to specialization. When the company is starting off somebody like me, would be able to handle, all the other things that Hari is not handling. There is an understanding between Hari and me what he is handling at this point of time is one of the important things of business. Getting to run a company is almost like pushing a vegan once it is running even I can go and give it a push, but when it is standing to make it move  is what is very difficult. Hari provides the traction I ensure that I take care of everything else. So, we don’t increase our cost base in the interim. Now once the whole thing starts of we need to obviously get in people who handle the technology, operation – at that point of time there would be fair bit of specialization.I think we are approaching that time because what we have done.
    Because of this approach, have we made mistakes? – Yes we have made mistakes. I mean there was a wrong choice of one of the product we had taken which kind of set us back by about four months. Would trained technology have helped? Obviously, I mean like you know Grade A technologist would have helped. Have we suffered from other fronts because of this? No, technology is one of the issues that we had. But it was not unmanageable. Thankfully it didn’t sink the company.
    We put the paying customer in front of us and align the rest of us behind the paying customer. With one and half year of this, I can say it works.
    Sachi: Putting the customer front and aligning all other things behind it definitely has some advantages, would you also highlight some of the challenges yuo faced in this approach and how you handled it? 
    Shrinivas: Between Hari and me we have 21 -22 years of payment card experience. Either in sales, marketing, operations, a little bit of service and collections. What you try to do is you end up a duplicating a whole bunch of things which are there on a payment card.
    The biggest example I can quote is – the credit card allows you to do paisa transactions. When you go and buy something in a super market you can buy for 1063.15. In real life I have not done a 0.15 transaction ever. Now over the last 15 odd months we have done over 17 lakh transactions. Within this transaction everyone of the paisa transaction that has come to us, is actually an error by the customer on the data entry front. What essentially has happened is something where I can go and probably pump my chest and say you do a one paisa transaction, is nothing but a boast .Which doesn’t hold any value for the customer because the customer is entering into round figure transaction of one rupee. And here I have build up a utility which can take paisa transaction. Now look at this and ask – why did this you stupid mistake happen? Don’t I go out and purchase? To put it simply, if I am drinking chai every day, and this were to be taken on a card how many times paid in a paisa. And answer is ‘NO’, so why did I put it on payment card? – Because I was aping credit card.
    So the experience that we have some time noose around your neck. That’s when we decided that will not invent feature that are nice on credit card, unless the customer comes and ask for a feature which we should have the ability to turn it around fast. We would not implement that idea because we burnt our fingers in couple of features which we put on the card which the customer never uses. They are nice to tell on the sales pitch but all most never the customer has a utility for that kind of transaction. Sometimes like the paisa example I gave you, they actually become a point of failure for payment solution.  We went by heuristic of saying if Hari and I want to X number of features on the card. Hari will divide feature at by half and I’ll divided the features at by another half. And whatever is the number of features are left is the features that we implement. Any feature that has to be implemented after that the customer has to ask for it. The design that will have it will take into account that the features may be added later but would not make feature unless customer ask for it. So what happens is we typically go to the customer and say this is the basic product this is what it is you tell us you will use this and if there something needs to be added we can turn it off fast that’s not a problem. Thankfully we have a very good technology partner. So what happens is we can implement those things very fast. We know that we are not wasting our money in terms of spending a feature. So it actually worked out for us very well.
    A wasted feature is wasted time and wasted money. We have couple of them I mean like we talk some experience on this.
    Sachi: You said, customer feedback on features is essential, did your dependence on this feedback hold you back?
    Shrinivas:Thanks for the confluence of a couple of technology issues of that we had,  for first seventy days of operation we visited the customers every single day and at 11.00 O’clock in the night. One of us would drive, 50Kmtrs, two ways and visit the customer at 11.00 PM including December 31st of 2010. If you visit a customer 70 days continuously doesn’t matter whether the customer is a dumb guy – he will start talking. Even if you are deaf you will start listening because there will be issues on the card which would start understanding pretty fast.
    In hindsight, that was the best thing would have happened to us. Rather than the pain of going there every day at 11.00 O’clock that was the one best thing happened to us because at the end of it we understood how the customer is using. Simple thing like a 21 years young girl telling a boy with her – telling him that I will pay by my card it is much cooler! It makes your day. Obviously I am not giving you the bad news.
    70 days of visiting the customer you pretty much get it. I would honest enough say that we say that this is the not part of the design, If anything else it would be part of the bug. But it helped us a lot.
    Something that we tried now consciously to do that even when we set up installation, however small the installation is we ensure that for a  25 days we will visit the customer every alternate day. To a point the customers starts asking why are you not handling over the solution to us. There are a the couple of features on the card which we do not hand over because you want the customers to realize, otherwise he will never gets into the operation. We continue to visit – Till he says why you are coming so often, it is at that point that we complete the installation and at that time we handover.
    It is at that point of time that you understand lot of things which are going over there. First and foremost you know we need to know what the points of expansion in the business are.  It is not to understand the customer business, but it is to understand where our future points of expansion are. It’s a small installation one is I can say god has given me small installation to this place. Other is to look at it and say where can I expand his business and in the process expand myself also. So, it helps us in the 25 days to understand where we can be, where the solution has to move, what are the kind of thing. So, we added a couple of solutions, which are totally not part of payment in this process when we understood from the customer, so it helps us there, for us it is a big thing, even it is painful we will have to visit the customer first 25 days at least every alternate day. Obviously it is a big installation we will have to park as on there of 4,5,6,7 hours a day. In the process we understand good amount of thing of the customer and that tells us what are the feature sets that we need to have? what is the pain points? what is the future expansion that can happen?. You pretty much bit understand the flow of transaction, whose blocking the process, whose helping the process, who are your early adopters. So there is lot of things that you understand at this point of time. That kind of helps us to define the features set.
    Sachi: Lot of aspiring entrepreneurs have questions on funding so – could you tell us how you organize your funding? 
    Shrinivas: As a background I think we lost about 5 and half months of time on funding. Before we had gone off this entire round, there were three things that we ensured.
    The first thing we said was at all points of time have sufficient capital to run the business one mistake should not turn the game. That helps because both of us are experience professionals to that extent we had sufficient of payments so that we could spend on the company.
    That the second what we did was we said that as founders may be will not pick up money from company as in charges but as founders we also will never cross a particular limit – that is we would not get into a situation of good money of the bad money. We drew a line of what you would invest. We had friends and family money always as a backup, there are commitment from friends and family due to us. Third we were in touch with some couple of angels who were really helpful in the whole process.
    Thanks to a confluence of things we wanted to pick up our first funding from NSRCEL, that got delayed extremely and the mistake that we made and this is the second big mistake that we made  one was obviously the whole process of super validation and seeking over the customers and customers starting of everything. This is the second mistake that we made was we didn’t know when to  say no to NSRCEL money and actually go to the angle who was pretty much saying come and take the money. Because he was happy with the traction and he didn’t wanted us to die for lack of money. I think we did a mistake there. Yeah, it didn’t kill us it hurt us but all that were same mistakes, something that will carry forward from this wrong.  One was the complete validation phase we kept on validating. Second one we were also turning all the stones to figure out where we can find funding. Because we knew that some time we would be going for big amount of funding. So one of the things that we did was we started looking out for money not   asking for money but looking out for money before there was a need. We are happy that point of time because crux comes to crux we can get about 10-12 months of money almost in weeks time into our bank account but do you want that No. No we don’t want that because – like ambulance coming to you early is good thing but actually calling it is early is not a good thing.
    Sachi: In the discussion you did mentioned about first mistake waiting for a customer. Could you just tell us bit about that?
    Shrinivas: We have three first customers all three of them like the product. All three of them are saying ya let’s do it. So, we are wearing the bride’s maid dress and marriage is not happening.
    Were we doing something wrong? Actually to say we are not doing anything wrong – we are good thing, we are adding value to the customers and customer are saying we are interested in you but guess what he is interested in his business I mean he is running his primary business. And there are days when I would to get frustrated and lets pick up the phone and like you know lets pursue and Hari would stop me , and there are days he would do that and I would stop him. We were like bride’s maid for for four and half months.
    Thats heck of lot of time, I mean like you know when you have product ready, everything is ready with you and you are dying to start of the race. And dam referee is not shooting the gun!.
    So you start wondering what’s happening. I don’t know unlike the funding part of which doesn’t mentioned is the second mistake which where we clear learning in terms of to do next time when we have a situation like this. Here I don’t know what to do? Thankfully, I have never been in the state again. Its learning but I don’t know I will apply it next time.
    Sachi: What is your message for other aspiring entrepreneurs?
     
    Shrinivas: I don’t know, whether we are to pass messages and give advice we need to have bank balance – Bank balance that has come from this operation.
    When you look back at whole journey right from the stage of  validating  the idea to this point of  time where we are saying hey we are doing X number of transactions that represent a valid like high number of  transactions per month kind of thing. The sheer number people would want to help you is phenomenal and to anybody who doesn’t start off and cannot understand what I am talking about – because number of people who are likely to laugh at you, and declare as you public hazard, trying to kill you by laughter for having propounded such a silly idea is so miniscule compared  to the number of guy who would actually go on a limb and help you with the things like where find a customer, where to find the technology help you on their area expertise, giving a general bit of advice, maintain your operations.
    It is phenomenal, for example I have friend of mine sitting in UAE and writing major amount of code for me for free. Why because somehow people will always help somebody who is taking a risk. It’s something that we always discount. It is when you start off that you realize – there are some really nice people who really love to help anybody who are taking risks.
    I call it good luck that will not be a part of business plan but ones you are start off their bound to be huge amount of good luck. There are I mean like there are lot of people who would like to help you. It is very heartening thing, it’s very non-monetary payoff for the whole thing, obviously in the start of thing talk about non-monetary pay off.
    Sachi: Thank you once again for being in this interview. Thank you.

  • Punctuate Equilibrium and organizational innovation

    In the last blog we talked about the evolutionary model of organization and the sort of innovation that would accompany it. In today’s blog we discuss how the organization’s model of growth when modeled around the punctuated equilibrium would handle innovation. 
    The punctuated equilibrium model proposes that organizations typically initiate a revolutionary structural change during periods of environmental turbulence. The general state of an organization would comprise of long periods of evolutionary change with certain short bursts of radical change. These short bursts of change could really transform the organizations strategy, structure, power distribution, control systems etc!
    One could call the relatively stable period of growth as – “evolutionary periods” while the short radical changing periods as those of “revolutionary periods”. 
    Empirically it has been found that the organizations that were able to transform themselves drastically were able to perform better than those that transformed incrementally. But this study wasn’t comprehensive enough to allow us to understand the reason of the failed transitions. The implication of the concept is that the competitive environment repeatedly changes over time and the successful organizations accordingly have to initiate periodic discontinuous or revolutionary change to adapt to the environmental changes.  
    The challenge here is that the organization would have to develop diverse competencies and capabilities to shape and deal with the technology cycle.
    While this model explains the patterns of organizational evolution and relationship with the change well, the model fails to address the crucial question of how organizations create manifest into new forms during the revolutionary phases. It also doesn’t address the long terms survival prospects of the organization!

  • Evolutionary view of organizational change and Innovation

    In the last blog we learnt about the classification of theories on organizational change. In today’s blog we attempt to understand the relation between evolutionary view of organizational change and the associated innovation. 
    When one thinks of organization’s established structures, procedures, norms etc, we realize that generally these would have developed as learning from organization’s response to the challenges it faced. Every time a new challenge is posed to the organization, these very systems that have been set up to handle some similar but past situations turn to be inertial force. Thus these organizations are slowed down in responding relatively to the threats and opportunities that the environment poses.
    When faced by environmental change, new entrants within the industry would potentially displace the established organizations that do not react quickly enough. It has also been observed that new entrant companies play a “competence-destroying” technological innovation, while the existing companies thrive at “competence-enhancing” technological change adaptation. It would be interesting to also relate these to the discussion we had on the J-Form and adhocracy models and the innovation. We leave that as a thought exercise for the readers here.

  • Class of Theories relating organizational change and innovation

    In the last blog, we looked at the affect of market economies on the organization’s structure and there by the innovation – knowledge sharing perspective. Over the last few blogs we have covered 2 dimension of the study of organizational innovation – its relation with organization structure and its relation with organization knowledge creation & learning. Starting from today, over the next few blogs we attempt to understand the relation between organizational change and the innovation there in.
    If one where to begin the journey of understanding the relation between the ways an organizational change we would first have to understand the process or perception of the way organizations change itself. It is pretty clear that organizational change happens in response to the environmental challenges or technology changes. Management theorists have classified the study of organizational adaptation and change into 3 categories
    1. Incremental / Evolutionary view of Organizational change – it focuses on the way environments select organizations and how this selection process creates change in the organization form. 
    2. Punctuated Equilibrium and Discontinuous Organization Transformation – treats organizational transformation as discontinuous event occurring over a short period of time
    3. Strategic adaptation and Continuous Change – stresses that managerial action and organizational learning and importance of continuous change. The organization is not a passive recipient but has the power to influence and shape it.
    We shall dwell into these individual streams over the next few blogs.

  • Organizational Innovation influenced by Societal Context

    In the last blog, we looked at a short case where a new concept – Spaghetti Organization was discussed. In today’s blog we look at the societal institutions influence the organization form and its innovative ability.
    We have discussed 2 forms of organization in pretty detail with respect to the organization’s innovative ability – The J Form and the Adhocracy. We also mentioned that organizations were said to be of J form given the structure followed in Japan. However we would require to broaden the horizon from Japan and ask if there is a larger social context that drives such organization structure. While understanding Adhocracy too we used the example of Silicon Valley to talk about labor market which is a component of society!
    Research has indicated that there is a relation between the type of “capitalism” and the innovation stype persued. If we could classify the capitalistic economies into 
    1. Coordinated Market Economies (CME) and
    2. Liberal Market Economies (LME)

    we begin seeing some patterns. CME and LME differ from one another in labor market organization, training systems, soceital norsm, values governing business and economic relationships.
    CME is followed in countries like Japan, Germany etc. These have deleveoped institution that encourage long-term employment and business relationships, facilitating the delevopment of distinctive organizational comepetencies conducince to continuous but incremental innovation. LMEs on the other hand, are follwed in contries like the US and the UK, where a certain type of adhocracy is followed to be able to rapidly and radically innovate. It is not just the labor markets that aid these types of organization structures – the financial markets, education systems etc too play a major role. 
    What one needs to remember is that the relation between instutions, organization and innovation are more complex than the simpified difference between the J-Form and Adhocracy. they are more dependent on the social context and the institutional framework that is developed. Infact the societal institutions play the dual role of creating constraints and also possibilities for the firm to evaluate the type of oganization they could evlove into

  • Entrepreneur’s Interview – Dumadu Games

    Sachi: Welcome Narasimha Reddy, founder – Dumadu Games to the interview. Dumadu is nearly a year old company operating in the space of gaming across various platforms.
    Narasimha, It would be great to begin the interview with a brief background about yourself and then let us know how the company and how has grown this far.
    Narasimha: Thank you, I am Narasimha, I completed my engineering in 2003, and began my career in Tata Elexi. Then I joined EFI, worked two years before starting my own company. I worked along with a partner setting up the company for three year and then began this company called Dumadu. Dumadu is into computer gaming.
    Sachi: Dumadu is an year old company right! How did you envision the idea of Dumadu as gaming company? Why did you start it off? How did the idea strike you?
    Narasimha: While with working on iPhone, we realized that it is the best platform for the gaming, so we felt that mobile gaming is going to boom, that how we started a gaming company separately – That how Dumadu started.
    Sachi: When you started off Dumadu you are looking at two fold challenge I understand.
    • One, mobile application development on mobile was just about maturing
    • Two, the gaming industry in India was primarily flooded with flash games – mobiles gaming wasn’t really a great industry to get into.
    Could you highlight the challenges you faced in when you began?
    Narasimha : The biggest challenge was the lack of experienced resources. When I looked for game developers with more than three to four years of experience, I couldn’t find many people. There were very few developers mostly on desktop gaming and not on mobiles. So that is the big challenge.
    We solved this problem by, recruiting freshers, training them and placing them as developers in our company.
    The current challenge that we face is – finding people who can conceptualize the game. In this case too, we are selecting freshers, training them and getting them to prepare specifications and develop games.
    These are the biggest challenges we had.
    Sachi: Since you began recruiting freshers and training them, the training costs would be pretty high. Is this just the case since you are one of the early entrants into the field in India or is it the way the industry is?
    Narasimha: Yes, there is a cost in training these people; the turnaround time would be long. We cannot expect them to be productive in the first six to seven months. This involves both time and money!
    Sachi: Creating a team for designing the complete game is difficult – it involves elaborate process of game design, create the story board, the characters, etc and then go ahead and implement the game.  Finding good game developers and Designers as you said is a challenge, so how did you go ahead forming the team?
    Narasimha: When we started off, we didn’t begin with big games – we began with casual games. These did not require many specifications etc, as we have gained experience, we are slowly adding in more experienced people and also building bigger games.
    Sachi: You looked at this opportunity in the mobile gaming space, and entered into it. What were the kinds of games that actually on iPhone app-store or Android app store, how has it changed over the last one year?
    Narasimha: The trend changes every six months, in this space changes everything. When we started the trend was towards paid applications, now there are ads in applications, then the trend was towards web service and in-app purchases. The trend we are adopting is more or less the same. Most of the games we are developing have web service, and we are not expecting any revenues from paid applications. Most of our revenues are coming from In-app Purchases and Ads.
    Sachi: Could you elaborate on the way the games have changed, rather than generic applications?
    Narasimha:  Casual games have always remained. In the last six to seven month we have seen lots of companies coming up with social game. Now the trend is more of social games and games with virtual money.
    Sachi: how has the team size grown over the last 6 months of operations?
    Narasimha: When we started the team size was 20, now have reached 80.
    Sachi: A scaling up 4 times in an year, impressive! What were the challenges in terms of people that you faced?
    Narasimha: The biggest challenge is attrition. The market is very good for game developers and India does not have many game developers too, so it is hard to retain people. That’s a big challenge!
    Sachi: Given your growth in number of people and of the kind of products your visibility would have increased. Did you look for any funding to actually scale up?
    Narasimha:  We have been approached by many VCs but we are not willing to take funding now. Probably in another 6 to 7 months when we are organized well. I do not consider my company too well organized. If we are organized in the current way, it would be extremely hard to scale, so when we have organized ourselves better, I would look for funding – I am expecting this to take around 6 months.
    Sachi:  When you have scaled from 20-80 people with the span of nearly one year, you would definitely have some challenges in the kind people you are looking for. What is it that you essentially look for in somebody while being recruited?
    Narasimha: When we recruited a fresher, we look for the aptitude of the candidate, and obviously the attitude. These we feel are extremely important to be looked into.
    Sachi: When you said attitude, what is it that you are looking for?
    Narasimha:  When you say attitude, one must have an interest to learn, should be willing to stick to a company for long time and hard work.
    Sachi:  Could you share with us, the vision you have about the company for its future?
    Narasimha: In the beginning, we struggled for some time for revenues to generate. Even at this stage we looked at doing only products, we didn’t intent to get into services at all. I see the market has been pretty good.
    The second aspect is the development cost – in India the cost is almost 1/4th or 1/5th of what it is in the US.  The place where both of us – the Indian companies and the US companies promote is the same. So it translates to saying that our cost is lesser but the market is the same – So we are able to realize the huge potential in terms of revenue for our products and we would stick to it.
    Sachi: Did you consider a model where in you create a brand name, and market your products. At a later date you could focus on just doing the marketing and branding while outsourcing the development to someone else or even entertaining freelancers approach you?
    Narasimha: No, we are not looking for that model.
    At the moment, the place where we lack is in making good specifications – Specify the game. We are looking for the model where we tie up with a company that do the specifications and we develop the game and market it. We share the revenues with the company. That is the model we are looking at.
    Sachi: It is interesting model where you complement your weakness with someone elses strength and look at a win win situation.
    Given that gaming is such a dynamic field, where do you want to see Dumadu in the next couple of years?
     
    Narasimha: If we look at the number of games published on the app-store, we have published more games than any other company in India. Going forward into the next 2 years, we are looking at creating larger number of social games. We want to change our portfolio to social games from casual games.
    Sachi: Do you have larger vision as to what you want to do with Dumadu Games?
    Narasimha: No, I don’t have any such large vision for Dumadu Games.
    Sachi: What is your message to the aspiring Entrepreneurs?
    Narasimha: Right now the market is too good -especially, when mobile applications are concerned. If one wants to be an entrepreneur, they have lots of opportunity.
    Sachi: Is there any set of dos and donts that you would like to give the entrepreneurs?
    Narasimha: The market is too good and I would welcome more entrepreneurs to this world.
    When you are confident about your capabilities, it’s always better to try.
    When I ask someone why they don’t start a company if they are confident about their idea, they say – they aren’t confident about its success. They constantly think about the financial status.
    If I am confident about my capacities, I should be ready to leave the job and try the venture out – Its always easy to get a job, it is not really that hard. If you have tried for an year and haven’t succeeded, what you lose is one year’s salary. You can get back any time.
    Sachi: When you began your journey as entrepreneur, how difficult or easy was it to convince the people back home?
    Narasimha: I never said anything about my job or company back home, they were thinking that I was still working for nearly two years after having started off. I conveyed I had resigned only after two years after starting off.
    Sachi: Do you think it is a good idea for other people to follow?
    Narasimha: I wasn’t confident that my parent would allow me to do so, so I adopted this approach not sure if it would work for others.
    Sachi: Now that they know you have started off, how is the support at home?
    Narasimha: It been pretty well now.
    Sachi:  Any challenges you personally front with the long working hours? How about the work and life balance that people talk about?
    Narasimha: I wouldn’t say that we require working too hard. It is ok if you work as much as you work for an employer company, it’s perfectly fine. You don’t need to work too hard.
    Sachi: Thank you, for coming on to the interview.

  • Spaghetti Organization – A story of Oticon

    In the last blog, we looked at the Silicon Valley format of organizations and the related organizational learning. In this blog, we look at a unique experiment that was conducted in an organization – Oticon and the resultant term that developed called – Spaghetti Organization
    Spaghetti Organization refers to a flat, loosely coupled, project based organization characterized by ambiguous job boundaries and extensive delegation of task and project responsibilities to autonomous teams. Let’s understand this with the example of Oticon.
    Oticon is a Danish electronics producer operating in the space of hearing aids. It became extensively known for its s radical organizational transformation in the early 1990s. The organization was traditionally hierarchical, functional based organization, and transformed radically into a “Spaghetti Organization”. It was the loss of competitive advantage in the 1980s that forced it to get into implementing this model. The advent of the digital technology had almost spelt doom on this organization. In response to this, this company underwent extensive restructuring in the 1990s – the aim was to have an entrepreneurial and creative organization. This resulted in a series of remarkable innovations in the 1990s. However, this form of organization was abandoned in 1996.
    A research by Foss suggests that the reason could be the severe problems encountered in coordination and knowledge sharing due to a highly fluid and adhocratic nature of the project assignments. Employee’s commitment to the project was also another point to ponder about. Foss also argues that, the form of organization was an “internal hybrid” between elements of market autonomy and flexibility in hierarchy. It was also inherently unstable due to the motivational challenges caused by the selective intervention by the top management into project selection and coordination. The employee frustration seen due to this could have been the cause for eventual retreat of Oticon from the radical and celebrated Spaghetti Organizational model.

  • Understanding Adhocracy and Knowledge creation – Silicon Valley

    In the last blog, we attempted understanding the J-Form of organization better. In today’s blog we look at the Silicon Valley style of organization (closer in alignment with the Adhocracy concept) and see how Adhocracy has been leveraged.
    The Silicon Valley has been a very dynamic and successful region where rapid innovation and commercialization of fast growing technologies. The majority of the industries in this region are microelectronics, semiconductors, computer networking, and biotechnology. These industries are characterized by frequent reconfiguration and realignment of the firms to survive a constantly changing environment spurred by innovation. There is a large pool of professional experts with known reputations in particular fields that enable the firms to quickly reconstitute their knowledge and skill base in the course of their innovative endeavors. There is high mobility of the labor force that enables not just the culture of hiring and firing, in addition when combined with the professional networks this enables rapid transmission of evolving new knowledge, – this might mostly be tacit though!.
    The shared context and industry specific values ensure that the tacit knowledge is not wasted when one shifts form one organization to the other! This inherently encourages the individual to engage actively in this tacit “know-how” that he could leverage for himself. Though regional, this stability is critical to offer the sustaining of collective learning and knowledge creation within and across the firm boundaries.
    Now if we were to generalize this Silicon Valley culture in terms of Adhocracy – it could be seen as an organic and adaptive form of organization that fuses the professional expertise with various knowledge and skills into adhoc project teams for solving complex and typically uncertain problems. Careers of these professionals are structured around a series of discrete projects than a firm level growth. This indicates that the organizational boundaries are pretty permeable and allow for the insertion of new ideas and knowledge from outside – through recruitment of new staff into the firm. 
    The strength of Adhocracy is in being able to reconfigure the knowledge base quickly deal with high technical uncertain problems – this in many ways enable innovation in emerging new industries. They are capable of dynamic learning and radical innovation, however this model is not without its share of challenges – the toughest amongst this is that of knowledge accumulation at an organizational level.

  • Understanding the success of J-Form of Organizations and related organization learning

    In the last blog, we began a discussion on the relation between organizational learning and organization structure. We continue this discussion today to better understand the J-Form of organizational structures.
    In order to really understand the source for success of J-Form of Organizations in innovation and learning, it would be good to begin with the larger economy and drill deeper into an organization.
    Japanese economy is generally characterized by high level of cooperation and organizational integration. There exists extensive long-term collaboration of firms in business groups and networks. The smaller firms are very well integrated with the larger firms.
    The knowledge embedded in organizational routines, team relationships and shared culture are what form the basis of the innovative capacity of the J-Form organizations. The shop-floor skills in problem solving, intensive interaction and knowledge sharing across different functional units create an “organizational community” which drives Learning and Knowledge Creation. New Knowledge is formed the fusion, synthesis and combination of the existing knowledge base. 
    The J-Form of organizations tends to develop an orientation towards incremental innovation as a strategy and generally perform well in relatively mature technology fields characterized by rich possibilities of combinations and incremental improvements to existing products or components. The focus is on nurturing organizationally embedded, tacit knowledge and it emphasizes continuous improvement in such knowledge. This approach however has been found to be not as effective when dealing with radically innovative platforms where the knowledge might have to gain knowledge from external sources. 
    The success of Japanese firms in mature industries like – automobile, electronics etc and it’s not so good performance in areas like software and biotechnology are what we could related to.

  • Relation between Organization Structure and Organizational Learning

    In the last blog we continue the discussion on the challenges that are faced in creating a system for organizational learning. In today’s blog we try to understand the link between organization structure and organizational learning. 
    To understand the relation between structure and organizational learning, it would be extremely useful if we could put the forms of organizational structures on a continuous spectrum. At one end would be Adhocracy (Recollect from this blog the classes of organization by Mintzberg) where we have find the organization structure cutting across the normal structure lines of the organization to exploit the opportunities and solve problem. At the other end one could imagine a very “Japanese Organization” (J Form) where in formal teams etc exists and the learning is more of a cumulative exercise. 
    J-Form of Organization does comprise of organizations that are good at cumulative learning, the innovativeness of these organizations is designed by the organization specific collective competencies and problem solving routines. 
    Adhocracy – relies more on individual expertise organized in flexible market oriented project teams the individual expertise enables the organization to respond quickly to changes in knowledge and skills and integrating new kinds of expertise to generate radical new products and processes.
    Understanding each of these would require a separate blog, so we just initiate the discussion today and would continue it over the next few blogs.