Focus on small verticals, Murthy tells IT startups

“Today, there are many companies in vanilla IT services area that have huge cash and build big brands and it is not easy for small companies to become another vanilla IT services company,” he added.  Niche sectors could be specialising in retail, pharma, SMEs and providing mobile solutions, among others, he said.

The idea of the start-ups has to be much more specialised than the bigger companies, he said adding they (start-ups) have to demonstrate that the idea which they are bringing to the table are not the idea big companies are bringing.

Talking about his own venture capital fund, Murthy said, “we are in touch with many companies and by March 15, 2010, we will be more active.” “We are evaluating the companies which are approaching us, their ideas, scalability of business, leadership of entrepreneurs, etc,” Murthy said.

Further, he said, the venture capital fund set up by him will have a wide portfolio and not focus on any particular sector. “We will have a wide portfolio for both horizontal and vertical opportunities. By vertical, I mean we will be doing angel investing, early-stage investment, mezzanine-stage, late-stage investment. By horizontal, I mean any sector of economy,” Murthy said, adding he was in touch with a lot of entrepreneurs and many of them have sent their proposals.

“We will be evaluating ideas, viability of business plan, scalability of business, leadership capability of entrepreneurs and market readiness and then will encourage the companies,” Murthy said.