Blog Post

Interview With Ram Shriram, Founder Of Sherpalo Ventures

Ram Shriram’s has had a busy couple of days since he arrived in Delhi on the 14th – I almost got an interview with him on the 19th, while he was in Mumbai, but finally managed to speak with him on the 20th while he was stuck in traffic in Bangalore, to catch a flight to Hyderabad. So for once, I’m glad there was a traffic jam. I spoke to Shriram briefly about his exit plans for Naukri and Cleartrip, his investment Future Bazaar, the impact of the downturn in the US economy on India, and more:

Does working in India require you to deal with a different set of ground realities – is the whole investing/incubation/exit scenario different here?
In the Internet space, the ground realities are different in the following way: size of the Internet market is not as large as China. Perhaps the government and private enterprises will do more together. Laws need to change and India needs a DMCA so the ISPs can be free of the risk. On the hiring side – there’s a shortage of people in AJAX, Javascript, UI design. We need to find a way to generate that set of people – there are people who are trained in consulting work on the Unix and tech front, but not enough skills in Internet apps. The other issue was at the middle management level, so of that will be better with markets cooling. There’s almost too much venture capital in India – there are issues with seed capital, but for Venture Capital, there’s a lot money chasing deals here. India needs a decent spectrum policy, in case of wireless broadband. The mobile phone is the pc here, and we need more, broader frequency bands made available for voice and data, and unused spectrum needs to be made available.
So are valuations out of whack in India?
Valuations are not out of whack, but they certainly are rich.
How far behind the curve is India in terms of product innovation?
India is a little bit behind China and US and it’s largely driven by the fact that the size of the market needs to grow. The talent exists, but to build a larger business, you need a larger sandbox.
Have you seen any India specific user needs – beyond mail, matrimony, jobs, news etc – which can usher in a whole set of usage?
Well, we have just announced an investment in Future Bazaar – a hybrid offline-online ecommerce model. They have the warehouses, supply chain, and we’re offering users a sale selection on the web.
How much have you invested?
We’re not disclosing that, but we’ve picked up 15 percent stake alongwith KPCB.

More in the extended text

What about your investment in Zoomin (photo sharing)?
Zoomin is a hybrid model. The management and founding team is the one with A lot of the front end of photo-work is about the UI. The initial uptake in terms of transactions and usability is pleasing to us. We’re selling tons and tons of digital cameras in India, so there’s potential.
What’s the impact of the downturn in the US economy on the Indian startup-VC ecosystem?
Spending in terms of Indian startups will continue – you may actually see more investment in a downturn, because the money has been been raised, and will continue to be spend. There might be a decline is tech spending, in retails. That’ll have a ripple effect throughout the economy. We’re just beginning to see the effects in the US. I don’t have a crystal ball, and I can’t predict how long it will last.
Any investments in the social media or content space in India?
We’ve got nothing to announce on the content side. In case of Social Media, we’ve looked at some companies, but again – nothing to announce.
What about issues with the monetization of social media?
It’s still early days for monetization of social media, and perhaps the models need to be figured out.
You’ve stayed invested in Naukri post-IPO. What are you plans for an exit?
We’re looking long term, and not looking every day at whether we should exit. That’s not our approach. There’s lots of scale, breadth and depth in Naukri, long term potential. They’re still India’s largest.
Going forward, do you see any synergy or conflict between Naukri and your other investment – Plaxo?
No we don’t see any synergy or conflict of interest between the two. Each is doing well in its domain.
What about your exit strategy for Cleartrip?
We’re thinking long term with Cleartrip as well. It’s a competitive market and they’re leaders in a competitive market with a strong brand, continuing topline growth, and perhaps they sell more online than other sites. We’re much more capital efficient.
Any advice for entrepreneurs from Ram’s Book Of Mistakes?
Just one that I’d mentioned at the event in TiE – don’t have too many meetings and keep your meetings crisp and short. Stay externally focused – on your customers, and focus internally when you have to hire.

7 Responses to “Interview With Ram Shriram, Founder Of Sherpalo Ventures”

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  2. Thanks for the post link. This proposed IT act looks very aggressive and would be a pain for service providers. Lets see what happens. I think that telecom companies would have lot of clout in the govt/politics, and they would atleast get themselves out of the any legalities. Thats not so true about internet companies in india, and they may get little protection (or in fact more liabilities) under the new law

    Another point to be noted is that in india porn is illegal. (ebay case was about porn, and not copyright). I know all of the matrimony sites filter PROACTIVELY porn content – equally for legal reasons and for keeping a tab on quality of profiles.

    Again, suppose the thieves are distributing the loot in the hotel lobby, then the hotel owner cannot claim ignorance(ignorance claim would have been possible had they been doing this in the hotel room). There are limits to claims of being ignorant.
    for ISPs whatever you say may be true, but not so for other service providers (like websites).

    on seperate thing – I think noone cares about privacy violation by big companies. what you are more concerned is that ur friends shouldnt know ur details – a big company knowing that I visited some orkut profile – I dont mind.

  3. A textual mistake in point b2 above.

    They would be held responsible in case they KNEW something wrong is happening and then didnt act

    omission completely changed the sense.

  4. "Laws need to change and India needs a DMCA so the ISPs can be free of the risk"

    On this I have done some research –
    a) There is no direct law which governs these things. What are knowns are precedents in court judgements.
    b) Current Indian law is more like DMCA (surprisingly true :) )-
    b1)service provider are free of any responsibility if something wrong happens on their site/service.
    b2)They would be held responsible in case they something wrong is happening and then didnt act – here it is more stringent than DMCA – I think dmca allows the service provider to be free of any responsibility here – dmca makes it an issue beween the affected parties –
    b3) The ebay case helped ISPs and service providers. It set a precedent – wherein service was not held responsible for the problem. (not very sure on this)

    c) Its more like this – suppose there is a hotel, and some thieves are in a hotel room. should the hotel owner be prosecuted – NO, unless hotel owner knew they are thieves and didnt act. This logic governs DMCA like situations in india right now :)

    any more on this ??