Now 
let us look at innovators can use their R
and D competencies in 3 different ways.
One, they can achieve leadership in the applications
they are steeped in.
Second, they can provide leadership in the
experiences which customers are used to and
third they can do a number of experiments
to explore how things could be better if only
a new way of doing things is done.
So, innovation helps in dramatic improvements
in applications.
Helps in dramatic improvements in experience,
it could lead to dramatic disruptions and
transformations through experimentation.
Now application leadership requires a kind
of approach which uses new technologies to
make aspirational things reality.
For example, car is a on road mobility vehicle,
but if you were to get a flying car it could
probably overcome the traffic logjams which
we experience.
So, it is an aspiration, that aspiration can
be brought into a normal mobility application
by thinking of technologies which are borrowed
or taken from aerospace technology, whereas,
experience leadership requires a combination
of different product and process approaches
to take user experiences to a different level.
For example, when you have a product with
a camera which you are using and the camera
is able to play back the sound recordings,
the nature responses when you are filming
something you actually move into an immersive
experience that happens.
Similarly, augmented reality and virtual reality
they take experience to a different level.
Therefore, when you merge different technologies
to develop a particular product or service
that is experience leadership.
The newer type of graphics where we use different
graphics to recreate the human or natural
living beings in terms of animation that is
different types of experience leadership that
is being provided to movie making.
Then the experimental leadership is kind of
white space research, clean board you have
no fixed agenda, but you keep on dreaming,
you keep on experimenting and you come up
with something which is really path breaking.
For example, zero waste technology that no
one should waste anything, it is a desire
how do you do that.
You got experiment with several ways of achieving
this or you think of a circular economy in
a city, how do I achieve circular economy
where there is no pollution of any kind, there
is minimal wastage of products from manufacturing
to customer usage, maximum reuse of products,
maximum recycling of products how do I do
so.
So, you got experiments with different ways
of doing things because there are multiple
ways of doing this.
They are multiple industries which are interconnected
in this activity.
So, when you look at innovation as your prime
startup vehicle the questions to ask, Am I
trying to provide new technologies for achieving
new aspirations?
Am I trying to merge several technologies
to take experience to a new level?
Or I am going to dabble in the unknown and
find out how newer technologies can bring
forth something which was not considered possible
until now.
Then we have differentiation there are several
faculties of futurism which comes with a keen
sense of observation, timing, learning about
the future, imagining the future, sensing
a future.
When you do these things, you are in a position
to differentiate.
For example, you can use sensor technologies
to sense how you are going to walk or how
you are going to sit.
So that is going to be a kind of device which
will have senior citizens to mend their life
in a more safe, more productive way.
So, sensor technologies will be a game changer.
Similarly, you can have differentiation by
saying, how future trends are going to be
in terms of customer usage.
When the smart devices were made, they were
made to record pictures like normal cameras,
but then the whole idea of taking your own
picture through your own phone came in that
is how the selfie revolution came and therefore
the question of putting equally powerful front
camera came into being.
Now we may have situation where the front
cameras are more powerful than the rear camera
in not too distant future.
This has so far not come into the high quality
DSLR professional service cameras which are
still used for recording the outside panorama,
but changes could come there as well.
Then how do I time when I would put this market,
should technology be ahead of the market or
should we allow technology to reach up to
the market.
How does it function most effectively?
Then how do we learn about the future?
We learn about the future when we constantly
look at things which are happening.
You may say that counting steps and putting
into a smart watches one step of developing
a product, but what else is happening in the
human healthcare diagnosis wellness space
and how do I incorporate all of those development
in my smart wearable that is learning about
the future.
And finally imagining a future, that is imagining
how an eye functions and therefore develop
an artificial eye.
Imagining how a hand and the brain work together
to conduct a medical operation and therefore
create a robot which does robotic surgery
that is another way of imagining the future.
So, we talked about the flying cars.
So, when we look at the future from 4, 5 different
ways basically 5 ways of looking at our sensory
aspects.
Observation, timing, learning, imagining and
sensing then you will find that futurism has
a strong play in how startup start their activity
and how they mould their technologies.
Now when we look at technology, we can use
a Porters model for theory of competitive
strategy to mimic a power of technological
ecosystem.
Every technology has got a functional power.
Every product is designed to develop a particular
functionality that is the functionality of
the product.
Then there is a power of material, if you
use a LED battery there is a particular level
of power in the battery.
If you use a lithium-ion battery there is
a particular level of power in the battery,
if you use rare metals like cobalt and nickel
there is a particular level of power in that
lithium-ion battery that is the power of materials.
Then you have got the technologies power of
processes we talked about how the recovery
of rare materials can improve the manufacturing
process, the cost competitiveness or product
or the tolerances you get in manufacturing
a chip, how it could pack more power.
Or how you could get durability and wearability
built into the materials that could be the
power of process then the operating system
itself, how the component, the assembly, the
original equipment how they are all merged
to meet customer demand, the operating system
whether you do it through programming, through
artificial intelligence, machine learning
that is the technological force.
When we do all these four forces and combine
with the power of the supportive ecosystem
you have a complete 5 technology forces situation
and each of these forces is a potent area
for a startup to start it project.
Now we are looking at the way you do innovation,
looking at the way you do differentiation,
looking at the way the technological powers
operate in a particular ecosystem.
We have 3 types of strategies.
One is a functional technology strategy which
says that you will improve the product functionality
to much higher levels which is an optimum
investment revenue and profit relationship.
Second you take the experience of using the
product to a different level that is a experience
technology strategy and third is completely
game changing the way you conduct your life
a completely circular economy for example
is the life technology strategy that is your
home is completely self-reliant, self-sufficient
in terms of your energy needs in terms of
its pollution damage, in terms of usage patterns
of various inputs like water or energy.
And outputs like waste is there anything is
a self-reliant system it is the life technology
strategy, how do you operate and where do
you operate and what kind of technologies
we adopt.
Another way you can do it that you can do
the customized product design.
We discussed that the markets are so heterogeneous
and so layered that we cannot use a traditional
homogeneous market strategy or even a segmented
market strategy you really need to customize
for the masses.
So how do you understand the personal needs,
how do you measure and calibrate the individual
diversities.
How do you do the business data analytics
built into this and then how do you get flexible
manufacturing and delivery systems and where
does machine learning and artificial intelligence
play a role.
Now if you look at the readymade apparel industry
which has grown substantially over the last
few decades.
Earlier if it has to be clocked, that is bought
and tailored to individual needs this readymade
apparel business has come in a big way.
Which provided the advantages of cost competitiveness,
high quality, factory processes and also styling.
So as a result of that industry took routes
and led to many startups in the textile zones
and also a big industrial houses in the organized
area, but then all of these things suffer
from the fact that you are fitting the person
into the apparel rather then fitting the apparel
on to the person.
So you have pre-specified sizes small, medium
large, extra-large or double XL and we all
have to adjust ourselves into apparel that
is made available by the apparel ecosystem
and if it does not suit you got to go back
to your tailor and adjust a few things or
just live with it.
Now if you are able to design a system by
which you move into a apparel shop and you
are biometrically kind of sensed for all your
body, shapes, contours and fitments.
And then that data is fed into the apparel
making unit and then immediately it tailors
the product for you and then shifts it back
it is a great development that is a kind of
centralized tailoring system, but it has its
lead time, but what happens once you use the
system is that while you are doing this here
in Tamil Naidu, in Chennai quite possibly
there could be hundreds of such people or
thousands of such people having similar dimensions.
Having similar requirements coming from different
parts of the nation.
So if you have created a system by which all
of this data is fed into a centralized data
pool and then apparel is being made to match
these requirements then obviously you are
bringing the benefits of mass customization
and as this data pool expands over a period
of time the lead time to manufacture will
be reduced, the perfection will be much more.
And then probably you will be in a position
to send in advance products which meet a particular
biometric system.
So, when somebody comes in you do not have
really decide whether it is XL or something
else you do a kind of reality check, the person
can be sized up and the apparel can be sized
up and right apparel person fit can be made.
So, this is a technological ecosystem which
you are creating to ensure that there is best
fit between the customer requirement and the
product availability.
And these are the things which startups which
innovators, which differentiators can do because
they are not worried at this stage of development
whether my product is leading to x amount
of increase in my revenue.
You are trying to solve a problem by creating
a totally different technology, a totally
different measurement system so that the customers
are provided the best product possible.
And when the startup succeed in proving this
customized apparel and diagnostic and manufacturing
system then that becomes a viable product
for a big apparel manufacturing company to
acquire and that is how the value gets generated.
So, when we look at the technologies, we think
that it is a kind of impersonal, a kind of
technical matter, but there is also a behavioral
pattern in the technological dimensioning.
When we use technology, we have to see what
does it require?
How does the technology behave in the normal
place?
One, it should behave so nicely and softly
that it provides user affordability.
It should be empathetic to the users of financial
requirements, it should be understanding of
the hardware requirements which does not require
somebody else to invest huge sums of money
to be able to develop your product, you should
be able to have a operating system which is
easy, which is by the same token very sophisticated,
you should have novelty to attract people
and you should be able to come to the market
at the right time.
So, all these 5 ingredients become a holistic
technological behavior on the part of the
startup which is extremely important for the
startup to make its mark in the commercial
space.
We talked about innovation, we talked about
differentiation, but does followership has
any role in startups?
Yes, it has a role because all products gets
commoditized at one point of time even if
the technology of making steel is very sophisticated
steel itself is a commoditized product, so
how do you de-commoditize a product?
You de-commoditize a product by adding more
value to the product.
Like bronze steel you make it into steel which
is more useful for automobile products that
is one way of de-commoditizing or you create
a steel furniture, steel doors so that you
add value into the product and you do not
see steel you see a readily usable product
therefore you have de-commoditized product.
That is possible in certain industries, in
certain spaces, but what happens in product
those configuration does not change.
The radio is a radio, it cannot change.
So how do you de-commoditize?
There are 3 ways you can do.
One you add value adding features, second
you bring in additional principle functions
or you retro design with the basic roots remaining
the same and bringing in contemporary features.
So, I have given 3 examples here.
One is the caravan radio which is a radio,
but it brought in certain value added features
like preloaded music.
It has retained the retro look, but it also
has given certain selection processes for
songs and systems so that is a kind of value
adding system.
The other is bring additional principle functions
like bringing in better way of judging your
maps navigating, your operating system, your
search assistant, your camera functions more
functions are added into the same kind of
device.
So that what has been de-commoditize at one
level again become more innovative at another
level.
The other is something like Beetle which retains
its basic roots for over a century, but has
got the highest power engine today, has got
the more sophisticated GPS and navigation
system, automatic transmission system so outside
the same, but inside completely different.
So, you make a retro-looking product absolutely
futuristic that is possible.
So, when you do this a commoditized product
goes into a de-commoditize zone and how de-commoditize
it becomes depends upon the kind of strategies
you have use for doing this.
Why this de-commoditization is important because
even when you are doing a modern product as
a startup it is quite possibly that the technological
changes are so eminent or so actually happening
that the product is little obsolete by the
time it enters the market.
So, you should have the ability to retain
the basic roots of the product, but also bring
in newer technological insights into how this
product is finally offered in the market place.
Now it is not that startups works only in
a particular area, a startup can function
in any area.
So here I have got a very simple example of
shaving a cream.
Now a shaving cream looks one of the simplest
products where you workup some lather with
a brush and use it as a preparation for skin
before the face before use the razor to your
skin, but then if you really look at there
could be several aspects.
Where a startup can contribute to the strength
of the product.
One it can balance the total fatty substance
which is used in the shaving cream, it can
improve the lathering power, it can make do
with lower water content or probably use the
previous water content for the next round
of shaving in water scare areas, it should
have adequate shelf life.
It should not dry or crack too readily.
It should have unique consistency whether
it is at the top of the layer or the bottom
of the layers it should have the unique consistency,
homogeneity should be there, it should be
safe, free of microbial contamination, it
should resist microbes entering into the system,
it should be pleasant, it should be sensorily
very interesting and attractive and it should
be in an easy to pack model.
So, all of these things are areas where technology
can play a role.
Now material technology determines therefore
the competitiveness of a shaving cream, materials
and the basic shaving stick to the way it
is you know manufactured, the way it is packed,
the kind of additional ingredients which are
put in, material technologies determine how
a shaving cream can be a better shaving cream.
Now startup can revitalize this product it
could be an evolutionary innovation as we
discussed earlier, but nevertheless is an
innovation which can change the shape of the
shaving cream industry.
Similarly, when we talk about yoga-bar as
a very nutrient bar as opposed to the other
sugar laden creamy bars.
You are trying to bring in technology to shakeup
a market without disrupting the existing product
market configuration.
You are creating a new segment or transferring
a segment which is hooked on to a particular
type of products into a new kind of products.
Now at present what is called a CATCH Model?
For new products, you should be conceptually
clear why I am doing this, you should be very
analytical, how this can be done and you should
be technologically focused on what kind of
technology can deliver this, you should be
very creative in delivering the product to
the customer and finally you should be holistic
on how this entire product is done.
So, if you look at electric vehicles if you
are a startup which is doing the electric
vehicles.
The first is conceptual clarity saying that,
yes I would like to solve the society’s
problem by eliminating the need for fossil
fuels.
I am also committed to the society by the
determination to eliminate the accidents on
the roads by having safe autonomous driving.
So, these are your concepts which are clear.
Then you come to analysis, how do I really
do it?
Is hydrogen the best non-fossil fuel?
Fuel cell is the best non fossil fuel, CNG,
should I go for all electric or a combination
of this, so you do lot of analysis and say
that this is my product Similarly, when we
talk about autonomous what is the level of
autonomy, is it level 0 or level 5 which is
more important.
That is with maximal driver assistance to
zero driver assistance.
What is the kind of autonomous driving which
I must have in the Indian situation?
Then technological, how do I have the range,
how do I have the swapping, how do I ensure
that the existing fuel outlets are converted
into swapping stations then be creative, how
do I reconfigure the mobility parameters in
the new system and holistic.
What is the point in developing a new electric
vehicle battery without understanding how
the whole vehicle has to be developed in to
a new native electric vehicle.
So, how do I have a holistic strategy for
that if I cannot do everything how do I work
with others players to make sure that the
ultimate benefit or the new technology is
provided.
So, you look at Apple’s success we are not
saying that every startup is going to be Apple,
but then do remember that companies which
are giants today have been startups like Infosys
has been startup of few founders led by Mr.
Narayana Murthy.
Apple has been a startup, Microsoft has been
a startup, Facebook has been a startup.
So, it is always important not to lose out
the established companies in our fascination
for doing something distinctive and differentiated
as a startup.
Because there are certain lessons which come
out the success of big companies which have
had their entrepreneur roots.
So the first element is design elegance whatever
you do as a new product from a startup it
should be elegant from the design aspects
of it, it should be supplied in a very efficient
manner which means that the entire supply
chain from the materials to the final product
delivery should be efficient.
Then there should be leadership which drives
the entire ecosystem together then we should
have top-class people who can contribute the
best to the development of the product then
the hardware and software must operate in
a very seamless manner.
Then the manufacturing smartness should be
there and customer connectivity should be
there.
These ingredients will be there for a startup
which is emulating Apple in terms of a new
smart wearable.
It will be required for a startup which is
converting or digitizing something which is
as basic as let us say cleaning clothes through
mass laundry activities.
Now you should have design elegance in its
stores, it should be able to attract people
to come to its stores to deposit their clothes.
You should also have design elegance in the
sense that when it delivers the fully clean
and pressed clothes they should be delivered
in such a manner that they are not crimped,
they are not spoiled so there is design elegance.
There should be supply efficiency how you
collect your clothes, how you distribute it
to your centralized or decentralized washing
machine systems and how you get back, how
do you really give it back and how do you
have leadership across your value chain, what
kind of people you have to represent the hygiene,
the cleanliness factors you cannot have people
who are unkempt or who are not really reflecting
the credos of the organization to do this
work.
Then you should have analytics software to
understand your customer requirements, go
through how you kind of stage gate your cleaning
process and how you stick to your delivery
timelines.
Here manufacturing smartness is converted
into cleaning smartness including how you
minimize the use of water, how you minimize
the use of detergents, yet have the highest
possible cleaning efficiency and how do you
connect with your customer.
So, whether it is a huge product technologically
integrated product like Apple iPhones or clutch
of products like that or a simple product
like cleaning of utensils or cleaning of clothes
in a corporate way, you have the same kind
of requirements that determining the success.
So which means that as a company you are successful
when you are not an assembly of skills, you
are successful when you are an alchemy of
skills the same applies to startups and it
actually it applies to a greater degree to
startups because compared to larger organization
which tend to be departmentalized, which tend
to be very siloed.
Startups are much more homogenous, they are
multi-tasking one works for the other and
together they work for the company.
And their goals therefore there is a greater
alchemy which works in a startup, but assuming
for a moment that we will just understand
what is the difference between assembly of
competencies and alchemy of competencies I
would put five ways of looking at first the
organization.
In a assembly of competencies it tends to
be rigid and structured and in an alchemy
of competencies there is always a periodic
refresh with upgrade of talent.
Second collaboration tends to be project specific
whereas here it is a continuous and perpetual
and it is also networked.
Technological flair you tend to develop solutions
for a particular product development requirement
whereas here you develop technological solutions
to solve a life problem or a human problem.
The vision it is obviously physically measured
in terms of let us say I do this kind of product.
How much more it will fetch in terms of revenues
or I want to change the contours of this product
can I have a new design, whereas in the case
of startup it is beyond the obvious you feel
that yes I am changing something, but it is
very difficult to imagine how it would be
like for example when Google developed its
Google glass.
It is beyond the obvious how a glass would
really do, several other functionalities rather
than seeing the vision.
And the final one is culture.
There are diverse formal and informal relationship
in when you assemble competencies in an organization,
but there is total organizational chemistry
when you have alchemy of competencies.
So again, to kind of compare ourselves with
the real time check most organizations tend
to be assembly of competencies whereas organization
such as Apple would tend to be alchemy of
competencies and obviously that is the way
we need to move forward.
So, every organization require certain savior
skills when I say savior skills there are
also core competencies.
If an organization has got that level of core
competencies then the organization will be
competitive.
So, you can develop a startup which develops
savior skills for an industry.
How did small machine tool manufacturing companies
come up?
They came up mainly because they had the ability
to judge that manufacturing excellence is
going to be the future product competiveness
or the business competitiveness.
Therefore, they created machine tools they
design and create machine tools which could
meet the flexible manufacturing norms of the
emerging industrial milieu.
So, manufacturing excellence was the savior
skill for the industry which is based on manufacturing
conversion and by developing machine tools
several companies could come in entrepreneurially
into the machine tool industry which was let
us say was a monopoly of big company like
HMT at one point of time.
Second savior skill is product innovation,
so you need to always innovate.
So, if you are able to let us say bring in
better light sensing technology or better
ability to photograph under low light areas
or if you have a recording camera, but which
adjust itself depending upon the movements
of the person rather than stay in one place.
So, it is a kind of automatic adjustment to
the requirements of the person then you are
innovating on the product that could be a
savior skill for the recording company producers.
Then another savior skill how do I turn around
the business and your business when a business
model is defective obviously correcting that
is a managerial competence or when the demand
is going down then you really need to create
new products.
The third one obviously is when the product
itself is commoditized.
So how do I turnaround the commoditized product
we discussed earlier, how you bring in the
value adding products.
How you bring in the new functionalities or
you keep the retro-look but bring in contemporary
features, so how do you turn around.
So, several of these savior skills which we
have discussed here could be the savior skills
for a startup.
And there are companies which have originated
in India, but have had international presence
because the skill can save a market or restructure
a market or create a market a market in new
areas.
Companies which parking slot reservation systems
they have globalized, all those startups,
Oyo has globalized because of the room franchising
or the room aggregating technology it has
developed.
So, the savior skills could be even globalization.
So, when you combine the globalization skills
of a startup with the globalization potential
of the startup idea you have a worthy product
or service which could be a successful startup
in future.
