Driven by the new mantra to make a difference
As the jugaad mindset gives way to a culture of innovation, SMEs are charting new courses, with a knack for customer-centricity
SMEs have come a long way from being SMBs. Yes, while the two terms have mostly been used interchangeably, it’s time that we recognize and celebrate the difference. As you know, while the first acronym stands for small and medium enterprises, the latter represents small and medium businesses.
Yes, the catchwords are ‘enterprise’ and ‘business.’ While earlier these entities used to be characterized by their almost singular focus on doing business, the focus is now shifting to being entrepreneurial. This is a cultural and mindset change that seems to be silently taking place, where the erstwhile ‘jugaad’ instinct is being replaced by an innovation consciousness.
The external environment, where technologies have come to play definitive roles, is certainly helping to shape this change. Particularly, the newer generation that is taking over the reins in family-owned businesses is better exposed and accustomed to the newer paradigms (such as customer-centricity versus product-centricity). They tend to be acting as key catalysts by virtue of being the right people in the right places.
Being transformed from within, today’s SMEs are also geared to be the harbingers of changes that they are capable of bring about—not just in their business processes and organizational structures but also in the markets where they operate and the lives of customers they impact. And of course, there are the SMEs driven by first-generation entrepreneurs.
The keenness of these SMEs to use technology to overcome everyday customer problems is also making them more attractive to venture capitals and funds. In this sense, as also in other ways, there is a rub-off of the start-up phenomenon on the SMEs and one is witnessing considerable overlap and fusion between the two archetypes.
To illustrate, here we bring you examples of the modern-day SMEs that are the new change-makers in their own unique ways:
1) Aarav Unmanned Systems – Targeting the civil engineering, infrastructure and utility industries, the IIT Kanpur-incubated startup headquartered in Bangalore, started operations in 2013 with seed capital of Rs 25 lakh. It has been offering precision agriculture solutions using proprietary drone technology to optimize irrigation, fertilization, pesticide distribution and early failure warnings. A common interest in aeromodelling and robotics brought the AUS team led by CEO Nikhil Upadhye together. The product range includes Nayan, a quadrotor for developers and researchers, and upcoming application-oriented platforms with fully autonomous operations, lightweight and rapid deployment capabilities. In February this year, with revenues of less than Rs 1 crore, AUS raised an undisclosed amount from StartupXseed Ventures, The Phoenix Fund and other individual investors.
2) Practo Technologies – Discovering the right doctor at the right time would keep patient anxieties and insecurities at bay, putting them at ease. This developing niche market led to the development of appointment booking platform Practo Search. As subscriber numbers grew, the Bangalore-based consumer Internet startup expanded into untapped domains like online doctor consultation, clinics, beauty and wellness and even medicine delivery. New markets beckoned. Practo first zeroed in on Singapore before branching out into the Philippines, Malaysia, Indonesia and Brazil. It acquired hospital information management solution provider Insta Health Solutions for $12 million in September last year in an attempt to boost revenues. The company, which is the best-funded healthcare startup in India, has so far raised about $128 million from investors such as Tencent, Sequoia Capital, Matrix Partners, Google Capital and Yuri Milner, the Russian billionaire and founder of DST Global, among others.
3) Bluemeric – Startups at the back-end of technology which is increasingly running the Internet are going to have it really good when companies shift more of their IT operations into supporting the mobile and other personal devices of employees and clients. Cloud storage, processing and networking are seeing opportunities for new traffic management applications from development operations (DevOps) companies like Bangalore-based Bluemeric. Started in 2011 by Vinothini Raju from Erode in Tamil Nadu, Bluemeric has been working on developing automation software which can help cloud infrastructures of companies rapidly scale up their process flows and deploy upgrades as well as test how the system holds up against traffic fluctuations as it goes ahead. The company now has 25 engineers on its rolls with several US e-commerce firms on its client list. Long-term contracts will be key for Bluemeric going ahead. DevOps is becoming a crowded market, with low margins already setting in, but the company has managed to stay profitable thus far.
4) SmartVizX – How much are your clients willing to pay for your product when they do not know what lies within the experience of using it? The challenge of virtual reality would need a product quite ahead of its times. Entrepreneur couple Tithi and Gautam Tewari’s company SmartVizX helps clients show their products to consumers by drawing and designing the experience using virtual reality. This involves being able to visualise the product before writing the code. Their product has applications in real estate, hospitality, tourism, automobiles and insurance. Currently, most virtual reality products convert 2D images to 3D. The couple’s grooming in architecture has helped them immensely on the job, and impressed investors like the Indian Angel Network and Stanford Angels enough to help them out with half a million dollars.
5) Carbon Clean Solutions – The relationship between global warming and greenhouse emissions, particularly carbon dioxide, has been catastrophic for temperatures worldwide. Startups like Carbon Clean Solutions have seized the opportunity to mitigate the effects of global warming. IIT Kharagpur alumni Aniruddha Sharma and Prateek Bumb co-founded Carbon Clean Solutions in 2009 with the idea of nipping carbon dioxide emissions in the bud by impounding it at the source – power plants and heavy industries – before it dispersed into the atmosphere. The Mumbai-based company’s technology captures carbon from the flue gases of power plants and industrial utilities in a cost-effective and energy-efficient way. Its technology could be a major disrupter of how conventional power plants have functioned. The true paradigm shift will happen when these power plants will actually face less opposition from environmentalists and local communities if proved that CCS’ technology is practical with largescale applications across industries. The firm is currently working with Norwegian oil major Statoil to capture carbon dioxide from its plant. It has so far raised $10 million, including a tranche from Blume Ventures.
6) Oust Labs – This is one educational technology startup founded last year, which is among those going in for creating mobile-first, analytics-focused and gaming platforms that are making education more engaging and fun for teachers and students. Focusing on educationists who want to take students beyond the conventional educational structure by engaging them in new ways, Oust Labs team members have put their heads together to make the examination headache less harrowing. Using game-focused competitions on its mobile application, it encourages students to hang out with friends on Oust as they bust challenges designed for 9th-12th standard students in science, math and social science. Leaderboards are used to goad students to beat the top scorers, mirroring the user interfaces used in gaming apps. Oust Labs raised an undisclosed amount in seed funding from former Infosys director T V Mohandas Pai and Aarin Capital in February this year.
7) Inphase Power Technologies – A flourishing startup lying unsung among the piles of failures littering the manufacturing landscape, Inphase is among the very few Indian companies who own indigenous products designed, developed and manufactured within India. The barely two-year-old electrical product startup which manufactures converters and invertors for solar farms and big industries, has already launched more than four power quality products most of which are being made for the first time in India. Bangalore-based Inphase was completely bootstrapped and currently has more than 50 plus industrial customers including Coca-Cola, Thermax, Whirlpool, UltraTech Cement, ITC and more. New markets opened up in the Middle East barely a year ago, and though the company does not disclose revenues at this point, it appears to be doing far better than many an e-commerce startup selling laddoos online.
8) Tookitaki – Kolkata is not the keyword many people have in mind when discussing startups in India. But the fact is that there are a growing breed of young entrepreneurs who are trying to change the rules of the market and create new operational paradigms. Take Big Data, which when aligned with cloud storage and retrieval can help companies make better strategic decisions about customer behavior, marketing, and product sales to brands. But these decisions can be made only if they know how to mine that information for useful insights. That’s where Tookitaki comes in. The company created a decision support system, or DSS, a ready-to-use software infrastructure focusing on automated predictive analysis. The platform gives organizations the ability to analyze complete data sets faster and more easily than before. The company’s goal is to make automated predictive analytics simple and scalable for all types of businesses. Abhishek Chatterjee, Tookitaki’s chief executive, formerly worked on JP Morgan’s swap trading desk, where he honed his trading decisions based on predictive models on huge datasets, before developing his own engineering solution to speed up the process. In a first for an Indian startup, Facebook has tied up with Tookitaki to help brands in digital marketing and advertising.
9) Craftsvilla – E-tailer Craftsvilla, with its earthily ethnic products, is building quite an apple-cart for itself from a palette of never-ending ethnic colours. Compatriots Flipkart and Myntra have not been too comfortable, watching in some awe as the Bangalore-based portal captured the consumer imagination with an enviable product range, while addressing key logistics challenges with elan. Craftsvilla’s USP is purely about what you wear on your sleeves — ethnic wear with a wide range of choices and colours at affordable prices. After finding its feet in the ethnic wear market, Craftsvilla’s next adventure will be in the related ethnic foods space which it sees as an equally big category. In February, it acquired PlaceofOrigin.in, an online gourmet food marketplace in a share swap deal. Valued at $200 million, Craftsvilla has gained funding of $54 million from investors like Sequoia, Nexus Venture Partners, Lightspeed Venture Partners and Yuri Milner’s personal investment vehicle.
10) Uniphore – The predictive possibilities inherent in artificial intelligence technologies can change the way customers are perceived and how their unique needs can be met. Imagine listening to a customer query and finding out what he wants through intelligent systems that understand what the person is speaking and deliver critical output. Chennai-based Uniphore, incubated at IIT Madras in 2008, initially focused on rural markets, developing speech recognition technology that enabled farmers with limited literacy levels to access data over the phone by voice, including on the weather, prices, and other crucial information. Since then the company’s products have evolved into three forms: technology that allows call centres to analyze 100 per cent of calls being put through them, the creation of voice-based virtual assistants for companies, and voice biometrics, providing security based on voice recognition. The company, which has Infosys co-founder Kris Gopalakrishnan and IDG Ventures amongst its investors, works with 70 global and Indian companies.