Anthony Thomas, the Keralite who took over as Chief Information Officer of GE India earlier this month, is an active proponent of the start-up ecosystem. Prior to GE, Tony, as he is fondly known, was the CIO of Vodafone India.
He is a founding member of CIO Angel Network (CAN), and a member of Indian Angel Network (IAN). Tony is also a core member of Reserve Bank of India’s Technical Committee on Mobile Banking, the CII National Committee on IT, ITeS & eCommerce, ASSOCHAM National Council on IT/ IteS and Cellular Operators Association of India (COAI).
Tony, who did his electrical and electronics engineering from College of Engineering, Thiruvananthapuram, explains to Onmanorama his views on the start-up ecosystem in the state ahead of Startup Mantra 3.0, an annual platform aimed at moulding aspiring entrepreneurs, being held in the capital city.
How do you rate the start-up ecosystem in Kerala and what is its way ahead?
Start-ups not only need investors, but good mentors and wider access to market to go beyond the initial stage. Ideally, if the investors are qualified mentors with access to market, the dilution can be lower. That’s why I co-founded the CIO Angel Network (CAN), where the Angel investors are CxOs themselves. We now have chapters in Mumbai and Delhi and plan to take it further.
I feel the start-up ecosystem in Kerala is at a very nascent stage and will take some time to mature. Kerala has some fundamental advantages, can be an awesome place to bootstrap and build products at a lower cost compared to other places. However, we must establish a mechanism to attract innovators and startups from other parts of the country and globe.
We must leverage accomplished Keralites from various parts of the world to build a critical mass of influencers who can coach and mentor the start-ups to build world class firms from them. Media should focus on the right kind of start-up stories, so would-be entrepreneurs get influenced the right way. It’s not going to be easy, but should definitely give a try.
When do you see a billion-dollar firm sprouting from Kerala start-up ecosystem?
Tough one to answer as I am not very well connected with the Kerala start-up ecosystem. We have home grown tech product companies like IBS and Suntec that are probably moving in the right direction. There are also quite a few start-ups coming up through various channels like Startup Village etc. It could be one of them or a new one.
How do you see the government backing for start-ups in the state? What sort of a backing is needed?
The Kerala Government understands the need for supporting start-ups and innovation. I’ve seen reports of events where the Chief Minister himself is championing and encouraging the start-ups. While this is good at one level, I feel handing out funds and goodies directly to start-ups may not generate long-term benefits. Start-ups must learn the hard way, bootstrap and build success, so the value of money is appreciated.
More than money, start-ups need right eco-system including access to infrastructure, mentoring and market exposure. I feel the government should focus on providing these and an education system that encourages free thinking for ideas to be born and mature. Government can also help attract mentors and help establish the ecoystem where innovators can thrive in. You can’t legislate innovation.
What are the factors you take into account while picking a start-up for investing?
I primarily look into three key areas of team expertise, addressable market size and finally the unfair advantage with the disruptive idea. In addition to these, at CIO Angel Network (CAN), we look at many aspects and perform thorough due-diligence with the help of our investors, who themselves are accomplished experts in their own area.
There is a notion that while funding avenues are aplenty, start-up pitches have been lacking depth?
Pitches are good due to all the incubators and accelerators in town but we see challenges due to lot of “me too” ideas. We see a trend of pitches which are copy of what is successful in west or what might have been funded. At CIO Angel Network, we take members' help to filter the right ideas to pitch. As I Tweeted a few days back “Build in an area you’re passionate about. Don’t blindly chase someone else’s dream, create your own. You’ll be richer.”
If you were to pick a start-up with immense potential at this moment which would that be?
At CIO Angel Network, we are bullish about any innovative idea in SMAC (Social, Mobility, Analytics and Cloud) space. I believe Internet of Things (IoT) has huge potential, especially in a country like ours with all the inherent challenges. We will be announcing few deals in coming weeks.
What would be your tip to aspiring entrepreneurs vis-a-vis getting funds?
My suggestion would to raise less money at seed stage, plan to build business and not plan to spend.
What sort of areas would you bet on for start-ups?
B2B Technology Start-ups especially with SaaS play will be of key interest for us at CIO Angel Network.
What are the sectors in which you see a lot of start-up activity?
Consumer internet start-ups are now getting lesser and we are seeing lot of activities in enterprise space.
Is our start-up ecosystem getting confined to metros or do you see an uptick in activity from smaller towns?
We are seeing start-ups from all over India. Definitely metros account for the major share of start-ups. Kerala is lagging quite a bit in this area.