Product firms are shining stars in India's IT sky
They are not the poster boys of Indian IT (information technology) industry. Unlike the TCS, Infosys or Wipro who earn billions of dollars from abroad and employ thousands of people, IT product companies are really tiny in comparison.
Many of them operate from garages have a few hundred dedicated people and earn very humble revenues mostly in Indian rupee.
Yet they are touching the lives of thousands of Indians and, above all, making a difference to them. According Nasscom, 2,400 product companies together may reach an annual revenue of $2 billion.
At the Nasscom Product Conclave Deccan Herald spoke to a few successful product companies to understand what motivated them and what is unique about their business models. Interestingly, all these entrepreneurs have technology background and are either engineers or management graduates.
A hugely successful story is of Bangalore-based redBus.in which is a pioneer in online bus ticket booking. CEO Phanindra Sama and two other co-promoters chucked their lucrative jobs to start the company. Started in August 2006 with a few seats from one bus operator, redBus today is one of the most successful online bus ticket booking agencies.
It has 700 bus operators under its fold and 10,000 bus routes are listed on it, works in 15 states and sells around 5,000 tickets every day. The whole operation of online ticket booking works on redBus’s proprietary software ‘Boss’ which is installed at the fleet operators’ end. According to CEO Phanindra Sama, the company has also developed a B-to-B (business to business) platform called ‘SeatSeller’ where it plans to bring together the fleet operators and agents who sell bus tickets.
Another product company the Delhi-based Eko India Financial Services operates in the space of virtual banking having nearly 10 lakh customers. A number of them are very poor construction workers from Bihar, Tamil Nadu, Uttar Pradesh, Jharkhand, etc, using Eko’s services to deposit money in their bank accounts or transfer money to their home using the mobile telephony platform.
Eko’s business model brings unbanked people to banking network using hundreds of small shop owners. Once a customer registers with Eko with his mobile number, a small kirana shop or a pharmacy helps him open a bank account in State Bank of India after completing the required formalities, Explained Eko CEO, Abhishek Sinha.
Once the telephone number (backed with a bank account number) is registered in the system, a customer can make the payment to the kirana shop owner, who by using mobile sms sends the short codes either to deposits the same amount of money in the customers bank account or transfer the same to a recipient in a remote village. The process gets activated and completed through Eko’s server and it earns a commission from the bank, a part of which is shared with the kirana shop.
“Our whole focus is to bring the banking facilities to people who do not go to banks through shops near their place of work or home,” said Sinha of Eko, which is now averaging around 5,000 transactions in a day.
Following the “bottom of the pyramid” theory the Delhi-based Ekgaon (one village) Technologies Pvt Ltd is reaching out to village farmers in Tamil Nadu, Gujarat and Rajasthan with its agricultural advisory services for four crops: rice, wheat, cotton and groundnuts. Started by two management graduates, Ekgaon gives its advices to farmers on mobiles in the form of voice calls and text messages. Its advisory service includes, when to sow, weather condition, right usage of fertiliser & pesticides and price of the commodity in the markets near the farmers place.
Its pricing is quite simple: a farmer buys prepaid card, enrols himself and starts getting advices. The rates are really down to earth: Rs 120 for all information for one crop for four months, Rs 240 for multiple crops for 12 months and Rs 100 for tailor-made information. “In the states we operate we have already captured all the available and relevant data in terms of soil conditions, rain fall, temperature, yield, prices etc.,” said Ekgaon President K Sasikumar.
The company so far has got 12,000 farmers as its customers and in 5 years time it aims to reach 15 million customers by spreading out to entire country.
