Cracking India

Andrew Hamilton
A different landscape (photo: Andrew Hamilton)

During February, I was lucky enough to travel to India on a trade mission with NZ Trade and Enterprise and a bunch of cool technology companies to participate in the Nasscom Leadership Forum, which is a major technology conference with a couple thousand executives.

The companies on the Mission included:

Below are some reflections and bussines tips from the visit, but first what our objectives were.

By going on the Trade Mission, we were interested in

  1. Market Understanding - I personally had never been before, and we have a 5 year strategy of growing our knowledge and networks in Asia including India
     
  2. Networks - develop networks to assist Icehouse and Kiwi companies that are looking to enter the Indian market
     
  3. Angel Investors – continue forging connections with angel investors in India building on relationships with the Indian Angel Network and Mumbai Angels
     
  4. Partners – continue developing a growing relationship with CMC which is a global systems integration and IT services firm, and a subsidiary of Tata, the multinational Indian company.
     
  5. Company Specific: I was also looking for specific market opportunities for some companies including eBus , Down to Earth Systems , Live Links and FaceMe 

So yes, it was not about ‘deals’ from the get-go, more about building a case to succeed over the longer term, just like we are currently doing with initiatives in Singapore, Japan and China.

So how did the Mission go? It was fantastic, here are some thoughts on the experience and then further below what I have taken from this for doing business in India:

  1. Travel in India can be challenging for the inexperienced, 2-3 meetings per day max. Having said that, getting things like drivers (mandatory, unless you are mad) is easily done.
     
  2. You get sick, most of us did, but it aint that bad really. Apart from when I got to Singapore, story for another day!
     
  3. The market is so huge, so competitive and so complex that you have to realise it is completely different to the world of NZ. This means naturally that we have to adapt to the conditions there before they really take us seriously.
     
  4. NZTE were fantastic, not only in NZ but also on the ground in India and also out of Singapore. Why? Well they know what works in India and they know how to leverage. They got us huge profile at Nasscom and other events. They used Sir Richard Hadlee as a high profile key note speaker, Indians generally love cricket, and they had on tap their in region sales and marketing professionals to assist the companies with connections, profile and mentoring. I really do like the way the NZTE model is morphing, particularly with this ‘in-region’ sales and marketing resource, which I understand is across 5 regions now.
     
  5. We had a great reception from the angel groups and investors in India – they are open, ready to learn from others who might be more experienced (read New Zealand), and interested in syndicated deals. This is natural because I predict there will be a wall of money (yes even more than now) trying to get into India, just because of the market size.
     
  6. I was very lucky to be accepted by the other companies on the Mission – people like Manoj Doli from Xlerate and Chris de Boer and Tarun Kanji of Pingar – these guys are experienced in India, doing business already and always willing to lend a hand. I also thought Candace Kinser of NZICT was a rock-star for brand NZ. She was tireless in her interviews and cheer-leading for the country and technology companies.


The following business implications are focused on technology companies:

1. Partnering

  • A well respected local strategic partner is essential to doing business in India; particularly so when dealing with Government entities or large enterprises.
  • Sometimes you might have to go through the pain of ‘direct on your own’ first, to get the credibility to get a partner. One of our companies had to do this, and it was not an ideal way to go.
     

2.    Pricing

  • All discussions/negotiations should be in Rupees or alternatively, US$
  • Free trial or proof of concept is the excepted norm, in fact is required
  • Taking a ‘NZ-pricing’ model to India does not work, because of scale pricing could be as high as 1/100th
     

3.    Market Penetration

  • Focus is typically to go for ‘scale first’ and ‘profit last’, claim the market and then build the margin (this is very difficult for Kiwi companies to get their head around)
  • India is a market of markets, major business happens in Mumbai however
  • There are many different routes to market, which can also tend to be very ‘relationship driven’
     

4.    Presence

  • It is critical to spend time ‘in the market’ and be present to build relationships which are critical in India
  • Sales cycles are long and involve serious commitment in terms of time, money and resources
  • Customers expect products/services sold to them to be around for a while, not disappear overnight.

Andrew Hamilton is CEO of business incubator The Icehouse.

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5 Comments & Questions

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This is a good and real insight for NZ companies thinking of going to India to enter a multi billion dollar market.......Success requires serious commitment....

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Have exported for more years than I care to recall I find your comments on NZTE quite disturbing. Perhaps it was they who picked up your tab, but any thinking person would know that the biggest disadvantage NZ has in exporting is in fact NZTE. The only thing they constantly do is hog all the lime light. It’s long overdue for them to be put completely through the ringer and get rid of the people who actually know nothing about export – from the top down. Sorry Andy you have again proven your grip on how things work is suspect.

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The Icehouse is part funded by NZTE so would not expect to see negative comments about them.

But from what is said there is nothing in what NZTE appears to have done that is above what one would expect as a minimum. One hopes that NZTE's overseas offices actually understand local business otherwise what is the point of the costs of having these offices.

My experience with them is they add little real value and in some cases are a major negative.

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NZTE do a pretty good job promoting a country with few companies of size or substance.
As for the Icehouse ... Few if any successes after ten years but plenty of PR. Andy Hamilton and his team are great at pontificating but short on delivery.

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NZTE is going through change, and my experience is that it is much better for that change. Yes we have observed a less than ideal performance in the past. What I care about is helping/contributing to improving the service for the whole country - and I think it is going in the right direction. They also need support to make the changes we need to able our firms to compete. Just ask Pingar what they think of them - the in market support is amazing.

Track record of ICEHOUSE - we are very proud of what we have done, both for the ecosystem and most importantly with the businesses we have worked with. Here are a few companies that we played a small part in their progress - . M-Com, Biomatters, Optima Corp, eBus, BigLittleBang, Enlight Photo, PowerByProxi, Sutton Group, Prolife Foods, FPG World, Furnware, Mainland Poultry, TH Hamilton, AuCom Electronics, Piako Yoghurt, FaceMe, Allied Medical, Holdfast, Jucy Group, McKay Electrical and there's more, remembering we have worked with over 100 startups and around 3500 owner managers.

We also need to improve - over 11 years I have seen countless times where our service and results have not been ideal. Our 'win' or success rate is not high enough. We get it wrong sometimes and what drives us is to be better and learn from these mistakes because we genuinely care and love our country, so we make no apology for having the profile - it gives us the opportunity to work with a lot of Kiwi companies who want to work with us and hopefully make a difference.

I am looking forward to posting my China Experience article shortly and praising both Len the Mayor and NZTE again, maybe I am on both of their payrolls.

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