Goods & Service Tax in India, scope for new product?

New Products / Innovation can happen, when we see a gap in the industry or because of some major policy changes introduced by the government, this was explained by Surya Narayana (Head of NSRCEL, IIMB Incubation cell for entrepreneurship) in a idea pitch meeting at NSRCEL. I think, one such major policy change is happening in Finance domain of India - Introduction of GST (Goods & Service Tax) from April 2011.

I'm not an expert in Finance domain & my knowledge of implications on process (invoicing / taxing) is less, but from the extent of debate / deliberation going on between state & central government it is going to be a major shakeout of existing procedures. Also, one of the first few Indirect Tax Codes that will have state & central government share of the tax amount.

Who are best suited to create a product that might help companies / finance auditors / government? - putting together a team with best of brains from Finance Industry (Chartered Accountants, specialized in Indirect Tax Codes) & IT Industry… can help brainstorm / conceptualize a solution that could be proposed as a solution to companies / auditors / government to enable GST transition.

Is this best suited for bigger IT companies or can start up participate? - there is definitely an advantage for big established product company to venture into this, because of government pre-conditions on existing revenues, strength of company etc (as part of any eGovernance Project bids), a startup can definitely participate indirectly through a big IT company (for government projects) or consider a pure retail play by building a next generation billing / invoicing software that provide GST compliance for the businesses.

I have been following GST thread for a while, looking out... if any IT startup, jumps into this - likely there are few startups into it already!

Good luck!

-Bhaskara

Is your idea a parasite?

As a startup (or person with an idea) with plans to build a New Product, need to evaluate if the developed product has to depend on some existing product or service for it to be made operational or succeed in the market. The degree of dependency should be well analyzed & right kind of partnerships or discussions with potential companies should be made… at every stage of new product development.

I'm using the word "parasite" here for the ideas that completely dependent on other service / product for their existence, for example - several ideas or applications dependent on Twitter , in open consumer or enterprise space. In the consumer world (like Twitter or Facebook), the eco-system nurtures other ideas to grow around them as it only makes them look even stronger & the parent will extend benefits to favorable ideas within the eco-system.

Let us debate the potential approach to tackle the "parasite" situation in enterprise space & dilemmas a startup would go through in reaching a decision:

• Selection of the right company / product to keep as base to build the sample (use specifications) for your idea. Should this be based on personal interest of the founder among the marker players?
• Right time to present the idea to the company - is it too early to explain at the stage of conceptualization, because of the likely chance of the company doing it in-house, after rejecting your partnership?
• Seeking the advice of valuable advisors for your idea - seem to be first step, that would help in validating of the idea. Preferably a person who might be in non-exec position of the company or a retired individual. Also, an option is to seek help from critics or reviewers of the industry to signup as advisors?
• Lastly, getting the required product specifications (before speaking with the company) to start research or build your product around it… is a tough challenge. One option, could be to make a key hire as founding member from the company to your startup?

I don’t have any right / wrong answers to these questions, throwing open to think out loud… as I find myself in such a situation, sometimes.


-Bhaskara

teething problems...

Every new product, profession or thing we start doing... would have teething problem? - is it because we are so used to working with old products or routine that make us think, there is something wrong with this new one?

What are the means to reduce this teething problem?
Try to have a trial or walk through of the product or service - by an experienced person or best thing, get a trial for few days.. so you can have both old & new for a while, before you jump into using the new product or service.

-Bhaskara

Challenges in B2B product launch...

You think launching a new product or innovation in B2B space is easier? ready with a detailed industry gap analysis, found an opportunity & come up with a solution to fix the gap? It also sounds easier compare to B2C products, because there are less number of people to pitch your product, take to market, go live!

YET - B2B products are as harder to launch & be successful, I have tried to list a few... based on a recent research that we have done in B2B space:

• Current Process - are you changing the existing process, that business are using currently? for them to adopt your product - if yes, think again... might have an uphill task in convincing the potential customers
• Savings - is your pitch mainly on cost savings to the business? be sure that you have done a complete research & understand is the cost line item you are replacing is on the top 10 of the cost line items for the business
  
• Payment Cycle - assume you will be a paid product for the businesses, you should be aware of the payment cycle of the businesses in the industry - helps to know what is the money needed for WIP & be ready for such a cash flow
• Literacy of People - are the target users in business literate with the tools or technologies you are using or proposing? if no - then you might waste & break your head with people not willing to learn or use the tool
• Industry - last, but an important one... is the industry you are targeting shown a sign of adoption or willingness to look at new products, open for change, backed with legal (formal or informal) compliance to ethical practices

I still think B2B market has better chances of succeeding on innovation, profitability & target revenue realization... rather than living in virtual money or valuations of B2C market (at least for the tech companies)

-Bhaskara

Data Provider Partners...

If you are building a new software product, say "changing" the way a certain industry works from being manual to be automated, one of the biggest challenges is to show the value in the product to prospective buyers. It's a chicken & egg problem - "no proven data, hence no customers - no customers, hence no data"

I have been thinking about this & found one possible approach to solve this... read along & give me your comments.

• Design / Architect the product using as much possible inputs from the industry experts, do user interviews, work in the domain for a while (if you don't have exposure) etc
• Build a prototype to show, while speaking to the industry veterans, it helps in sharing the idea / concept much easily - than just speaking about it
• Customers may not signup, because of lack of confidence right? Try to engage them as "data provider" partner, collect all their current manual data & upload into your system
• Anonymise (remove the company name, demographics etc) the data - as much possible and use this as base to run through various business flows, make sure the software is working as expected
• Also - use the data collected (anonymous) as suggestions or boundary conditions data to new or trial customers (whom you have been finally able to convince to come onboard) - they would be happy to see, that system is providing some guidance!

It's not the complete solution, but a possible approach that can be useful for enterprise products.

Thanks
Bhaskara