Company News / 20.03.2012

The Value of Incubation

This weekend, Uniphore was awarded the Best Incubatee in the ICT Category at ISBA Awards 2012. Below, CEO & Co-founder Umesh Sachdev reflects on the benefits of Incubation as a startup, and shares his insights on Incubation trends in India.

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India is known as the land of the unwavering entrepreneurial spirit. It runs in our blood.

The Registrar of Companies (RoC) indicates that Bengaluru is seeing 800 new tech startups every 6 months, and Chennai around 600. These entrepreneurs come in every shape and size, but all are excited by the prospect of doing something on their own – whether it be creating an impact, generating large wealth, or striking fame – the fruition of which is embodied by poster boys of India Inc, such as Dhirubhai Ambani, Sunil Bharti Mittal, N R Narayanmurthy and more recently Naveen Tewari (InMobi), and Sachin and Binny Bansal (Flipkart).

Six years ago, Ravi Saraogi and I joined this race with our first startup, Singularis Technologies. We thought we’d figured out the largest gap in the rapidly growing telecom industry: lost phones! By using a complicated algorithm on networks we were able to locate mobile phones within a region irrespective of the carrier network. In an effort to create a Fortune 500 company out of our few lines of code, we met with many stakeholders, analysts and gurus in the telecom industry to get their guidance. One of these people was Professor Ashok Jhunjhunwala of IIT Madras, a famed board member of many illustrious corporates in the country including Tata Communications, Sasken, Tejas Networks, etc; as well as a key decision maker on Government committees in Telecom and Finance. Upon seeing our work, he immediately told us two things: 1) that what we had was a product, not a business (I wonder if others didn’t see it or were just too nice not to say it); and 2) our passion and persistence for our mobile product was glaringly obvious. He offered to mentor us personally, if we agreed to move to his Business Incubator at IIT Madras, which was supporting and building startups with rural relevance. This was our introduction to IIT-M’s Rural Technology and Business Incubator (RTBI).

At RTBI, we saw the opportunity to use our understanding and passion of mobile technologies to solve a larger problem: access to content and services for the vast semi-literate and illiterate Indian population. We embarked on an exciting journey to create Mobile VAS products using vernacular Speech Recognition and Voice Biometrics. It took us 12 months of prototyping in the lab, a tie-up with the global leader in speech technologies, guidance and validation from multiple academicians, seed level funding from an institutional investor, and hands-on mentoring by serial entrepreneurs, to create what has now become Uniphore Software Systems. Could any of these have been possible for two young engineering grads who had recently failed at their first stint at entrepreneurship? Not in our wildest dreams! Our successful steps on the Uniphore ladder owe major gratitude to the incubation support extended by RTBI.

RTBI is not a commonplace organization in India. These types of Business Incubation programs are strongest in the US, where there has been a fairly robust startup ecosystem for over 50 years, the most notable incubators/accelerators being Tech Stars Boulder, Y Combinator, Excelerate Labs, etc. These companies provide support in the form of management, mentorship, networks and contacts, access to investors, setting up governance structures, and regulatory support and compliance, amongst other things.

However, in India, incubation is a fairly new and less developed phenomenon, with most incubators being restricted to premier technical and management institutions. In the last 5-6 years, however, there has been a spurt of newer incubation models, such as Villgro Innovations Foundation, an incubator for market-based solutions to rural development, and The Startup Centre, an accelerator program for technology startups (similar to the Y-Combinator model).

In addition to our initial incubation with RTBI, we have also gained access to the Villgro Incubation program, and have closely witnessed the creation and growth of The Startup Centre. With insight into all three models, we’ve noticed the following 3 trends in the Indian Incubation space:

  1. All incubation programs are not created equal, and they often specialize in certain elements of business support. For example, while RTBI offers unparalleled networking in the government and telecom circles, Villgro has an enviable network of social enterprises and understanding of social business models.
  2. Most incubators insist on strong governance standards, so startups looking for this kind of nurturing must be prepared for this.
  3. Incubation is not a fail-safe for success. Incubatees often take it for granted that the incubator will bail them out of any precarious, business-threatening situation, and this dependence inhibits rather than fosters their growth.

This last point is particularly poignant. As comforting as it was to rely on the seasoned success of our incubators to guide us through the startup process, Uniphore also came to the hard realization that in the end, our company’s success or failure is in our hands, and no incubator can be responsible for either result. A smart incubatee is one who knows what incubator services can be leveraged for growth, but doesn’t completely rely on the incubator to drive the business forward.

Uniphore has recently been awarded the Best Incubatee in the ICT category at the ISBA Awards 2012. For me, this award is as much a testament of the commercial success of the company as it is a validation of our ability to leverage the best offerings of RTBI and Villgro.

Uniphore is one of several successful case studies – such as Webaroo (SMS Gupshup), IdeaForge, Hashcube, and Desi Crew (Rural BPO) – which have enabled the Indian Business Incubation ecosystem to demonstrate its value. These incubators are now beginning to attract investors, seasoned mentors, and large corporates as partners to select quality enterprises for their portfolios. All these players have recognized that the technologies and business models coming out of incubators are truly cutting-edge, but need strong networks to thrive. And although these incubators can’t guarantee the success of their incubatees, their support networks, technology, business development, and governance can help get any startup vet the right path.

About Uniphore: Uniphore Software Systems is the leader in Multi lingual speech-based software solutions. Uniphore’s solutions allow any machine to understand and respond to natural human speech, thus enabling humans to use the most natural of communication modes, speech, to engage and instruct machines. Uniphore operates from its corporate headquarters at IIT Madras Research Park, Chennai, India and has sales offices in Middle East (Dubai, UAE) as well as in Manila, Philippines.