Volume 15, Number 1 Article by Srini Rajam March, 2003
Product/IP Start-ups: Crucial Growth Issues :
The goal of an enterprise is to maximise the value for its stakeholders, viz, the people who create the company, the investors and the customers. This can be best achieved by being a leader in a well-focussed business segment. Size is vital from the perspective of all the three stakeholders and leadership is typically measured by size and growth. Speaking from the point of view of an IP/products start-up as against services, Srini Rajam, Chairman and CEO, Ittiam Systems, points out that the drivers of growth (or barriers) are the investment into and efficiency of the enterprise’s three critical engines: Marketing, R&D and Sales. The quantum of investment into these areas is directly proportional to the size of the company. Unfortunately, the investment and technical bandwidth required to achieve size are in short supply for an SMIT. While well-directed venture capital offers a proven solution for investment needs, strategic partnerships present a promising model in the context of solution bandwidth, but the partnership model has been quite difficult to establish in practice. It requires a strong relationship and trust to be built and clear roles and a revenue sharing model agreed upon between the partners. In spite of the challenges, Indian SMITs must work on this area to achieve faster growth.
Reprint No 03108f
