I had a chance to meet entrepreneurs in the wonderful city of Pune yesterday and met some really amazing folks. One of them, Roby John, impressed me much, but more about him in another post. He gave me a book to read called “How Children Succeed“.

For anyone that has very young kids, is thinking of kids or works with kids (teachers, care providers, etc.) this is a must read book.

In the book Paul Tough talks about the things that dont matter early on – cognitive abilities and those that do – grit, curiosity, optimism etc.

There’s one part in the book that struck me as odd after I have had a chance to read it and understand its key points.

Tough mentions one person “James Heckman” from who he claims he got most of his information and connections from.

That’s it. One person.

Heckman is a Nobel laureate and a leading thinker in the field of cognitive sciences.

Heckman is quite possibly in the 1% of Americans given his background and work.

I found it fascinating that over $5 Billion was being invested on changing early childhood programs and parenting based on his work alone.

One person – making a dramatic change in the world.

1% of the world’s population is a fairly large number – 70 Million.

0.001% is a mighty small number. 70,000

I think the number of influential thinkers, taste makers and people that determine and shape the course of our world is even smaller. Its possibly 7000 people or less.

These are the folks that are not necessarily rich, but are the most powerful and those that change the world for all the other 7 Billion.

Imagine that.

Fewer than 10,000 people (which I think is also a very high number) that make decisions and think and do for the rest of us. The rest are largely living in the world created by the 0.001%.

They are certainly not the richest, or always the most powerful.

Now imagine the same for smaller “worlds”.

Like clothing. Imagine fewer than 100 people that decide the things we should wear.

Or eating.

Or movies, music and dance.

Unfortunately that’s a lot more real than even I thought was happening.

The chosen few are making the decisions that the rest of us live with.

Over the last few weeks we reviewed over 500 startups and talked (phone, skype, etc.) with over 100 startup founders. This was our shortlisting process to get to 15 companies that will make it to our Spring 2013 batch at the Accelerator.

First, we reviewed a lot of travel startups. Especially the problem of helping travelers with trip planning. A list of things to do, places to see, restaurants to eat, etc. With all the data available from multiple sites including Yelp, Facebook friends recommendations, and other online sources there seems to be enough data to form a more informed trip plan. Unfortunately we picked none of them. Its too hard to see what will differentiate one company from another. Some claim it is their User experience, others their recommendation algorithm and still others their human-powered technology planning.

Second we reviewed many more gaming applications than we did in the previous batch. Zynga’s performance notwithstanding, many folks are jumping on the in-app purchases and social gaming concept. Most start with a web social game though, not mobile. That’s fair, since the number of mobile smartphone early adopters in India is still far and few between. Again, we passed on all of them since the teams did not seem complete and hiring design talent is amazingly hard in India.

Third we reviewed many SaaS applications in the help desk and customer support area. There were 3 teams with excellent experience & background in the space and all had some initial customer traction. Many were gunning for BMC Remedy, but my sense was although the market is fairly large, nothing set one team apart from another. They all pretty much had the same feature set as ZenDesk or FreshDesk.

Bonus trend – we saw many education “ERP” applications. School management, test preparation academy management, College alumni management etc.

We finished collecting applications at the Microsoft Accelerator last week. Since I did not see the applicants from the previous batch I was extremely pleased with the high quality of applications overall. By most measures we exceeded the quality of applicants that we had internally hoped for.

Since there are 4 Microsoft accelerators worldwide – Israel, Beijing, Seattle and Bangalore we get to see trends across a fairly diverse set of companies.

I wanted to focus on 3 metrics that I noticed from our Seattle accelerator compared to the Indian one. I dont want to focus on the entrepreneurs or their background and quality but more on the ideas and markets themselves.

Lets play Venture Capitalist for a day shall we?

Assuming a 5 year investment horizon starting in 2013 in 50 startups and a total of $50 million, what areas (technology categories) would you put money in to get the best return by 2018?

Some rules:

1. You have to put the same amount of money in each company and it cannot exceed $1 Million.

2. You have to put all the money in technology companies alone.

3. You can get “exits” before 2022, but your entire portfolio will be liquidated on Dec 2022 (10 year fund).

A partial list of categories for you to consider. You can put 100% in one or spread them around, or ignore a few categories as you wish.

1. Consumer Internet

2. Mobile applications

3. SaaS applications

4. Cloud infrastructure software

5. Gaming

6. eCommerce

7. Robotics

8. 3D printing

9. Social Networking

10. Storage software

11. Networking (like Cisco, Juniper, etc.)

12. Data Center technology

13. Education technology

14. Healthcare technology

15. Big data

Any other category I missed.

Why I am putting this together?

I will be putting together our investment thesis and our mix of companies so I’d love to crowd source some of the thinking behind startup investing.

If you think its better to do a form or a survey type web page, let me know, else just give me your spread and mix in the comments.

I think this post might be one that generates a lot of discussion and debate, so I want to clarify – that is my intent.

I had an awesome 4 hour session yesterday at the offices of Saif partners in Delhi (Gurgaon actually) yesterday as part of the Microsoft ThinkNext event series. Mukul from Saif has been keen to get more events in the NCR region and he was happy to host us for a Marketing diagnostic clinic in Delhi with 30+ entrepreneurs. The ever charming Avinash Raghava from Product Nation used all  the powers of persuasion to pull together few more entrepreneurs and we had an awesome quorum of people to help understand how to get Go to market right for startups.

We had 6 pitches from companies – yonyx, croak.it, 91mobiles, reviews42, touchtalent and zumbl. The format was simple – you pitch your company and give us the GTM problem you have, and the team (everyone participated) helped diagnose & troubleshoot the problem and offer suggestions.

I wanted to highlight one part of the anatomy of the Indian entrepreneur that I find challenging.

From our Microsoft accelerator database, 45% of entrepreneurs have a full time job and  WONT work on their startup full-time until they get funding.

That’s just unacceptable.

If you are not going to take the risk of going into your startup full time, I dont think anyone else will.

If you are not committed to your startup full time, dont expect an investor to get excited about funding you.

I understand many people have commitments to families, EMI’s to pay, and food to put on the table.

I also understand many people feel their “dead-end job” is stifling their creative juices or their full-time job is just that – “a job” and their passions are with their startup.

I also am aware that many “side projects” lead to full time startups eventually.

BUT.

If you are looking to raise money from an investor and will not commit to your startup full time until the investor puts the money into the company dont expect any investor to sign up.

If you say however that you are working on your startup part-time and dont need funds to move things forward, or that it is a side-project or you will hire people just to experiment, by all means, do that.

I dont think the person is being “sensible” when they say they are seeing if the investor is “committed” to funding them by putting money in before the entrepreneur comes on board full-time.

I’d love to hear both opinions, but yesterday when I heard this from an entrepreneur, I was shocked he even asked me for funding or connections to investors who would put money into his venture before he was on board full-time.

Neil Patel

Neil Patel writes a very popular blog Quick Sprout and he was in India a few weeks ago for the NASSCOM product conclave. He wrote a post about his experience at the NASSCOM product conclave as a guest post for this blog.

A few weeks ago I had the privilege of speaking at NASSCOM Product Conclave in Bangalore, India. And boy what can I say other than it was one of the best conferences I’ve ever been to.

The people were friendly, the audience was very receptive to the advice they were receiving, and everyone was helping each other out so they could increase their odds of succeeding as an entrepreneur.

Here are 5 reasons you ought to attend NASSCOM Product Conclave next year.

1.     Knowledge – even as a speaker, I learned a lot from the attendees. I actually sat down with over 30 companies and gave them feedback on their product and business. At the same time they were teaching me some cool tricks on how I could grow my business. One company shared the results of 11 a/b tests they ran on their pricing page and gave me some ideas on what we should do at KISSmetrics.

2.     Giving back – unlike most events NASSCOM is fully put on by volunteers. Every single person there who helped make the event come together, did it all for free. Because of this the conference had a different vibe from the get go, as everyone there was in the giving mood. Attendees gave back by helping other attendees with their business for free.

3.     Actionable insights – NASSCOM doesn’t just let speakers speak on whatever they want. Instead they make sure they are speaking on advice that is actionable. This means you’ll be able to walk away from a session and have key takeaways on what you need to do for your business.

4.     Comfort – it’s very rare that you feel at home when you’re at a conference. At NASSCOM, not only did I feel at home, but people went above and beyond to make me enjoy the NASSCOM experience. From picking me up from the airport to offering to take me around the city, people were always there to help me out.

5.     Food – don’t you hate it when you go to conferences and all they have to eat is boxed lunches? I know I hate box lunches. Well, you won’t experience that here. They have all types of foods and best of all, everything is freshly made and isn’t boxed. You can pick what you want right when the food comes out from the kitchen.

Hopefully you go to NASSCOM Product Conclave next year as it is one of the best events you’ll ever attended… both as a speaker and attendee.