RURAL TECHNOLOGY AND BUSINESS INCUBATOR:

LEVERAGING THE INDIAN INSTITUTE OF TECHNOLOGY,

MADRAS ECOSYSTEM FOR SOCIAL ENTERPRISES

Joseph Thomas1

1 Project Consultant: Centre for Social Innovation and Entrepreneurship, Indian Institute of Technology, Madras, Tamil Nadu India 600036

This work was carried out with the aid of a grant fromthe International Development Research Centre, Ottawa, Canada.

The Rural Technology and Business Incubator (RTBI), spun off from within the Indian Institute of Technology

Madras(IITM) at Chennai, has its roots in an informal network called the TeNeT group that worked to create

cost effective communication technologies to compete with imported ones. The TeNet group incubated

many companies started by alumni and other bright young engineers. It provided technical advice through

the faculty at the Electrical Engineering (EE) and Computer Science (CS) Departments of IITM. Prof. Ashok

Jhunjhunwala of the EE realised that companies that wished to serve rural markets needed many different

types of support and RTBI was created to address all the needs of such social enterprises. The success of a

number of these social enterprises points to the fact that the RTBI and IITM have had some influence in getting

these enterprises to move from being self-sustaining to profitability and with some having accessed venture

funding. This paper presents the findings and learnings from a study that looked at how RTBI has leveraged

the IITM ecosystem to achieve this.

The Indian economy has been booming ever since Indian enterprises entered the Information Technology (IT)

sector. Initially large companies like the Tatas and Wipro were leading the IT services revolution. Gradually

many smaller players emerged and grew into large entities Infosys and Satyam being good examples. There

were many such entrepreneurial ventures that may not have grown as big but they certainly heralded a new

class of businessman, the innovative entrepreneur. Over the last ten years India has been encouraging such

innovation and entrepreneurship in sectors other than IT.

Since many of the early success stories emerged from technology incubators the Indian government through

the National Science and Technology Entrepreneurship Development Board (NSTEDB) set out on an ambitious

plan to create more such incubators across the country. All these incubators are predominantly designed

to promote technology and entrepreneurs and very few have a rural or pro-poor focus. A study done by the

Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ)2 in September 2012 identified 16 incubators

involved with social enterprises. Of the 16, RTBI is the only one addressing the needs of rural India housed

within an engineering Institution of higher learning like IITM. One conclusion of the study was that there is a

lack of comprehensive information for all organizations active in the ecosystem and there is a need for greater

transparency and information sharing between all stakeholders. This study is an attempt to address those

lacunae by documenting lessons about practical, pragmatic responses to challenges the social enterprise

community in India faces and how campus based incubators have supported incubation of social enterprises.

INTRODUCTION

2 http://www.giz.de/Themen/de/dokumente/giz2012-enablers-for-change-india-en.pdf, pg7.

METHODOLOGYThis paper includes the history of Technology and Business Incubators and the setting up of RTBI and an

overview of the initiatives that it has incubated. The companies incubated were screened and a select few that

were at different stages of growth identified. Some of these companies were surveyed to gather information

on whether and how they leveraged the IITM ecosystem and what factors affected the ease of engaging with

students, faculty, and other campus resources. The companies perspective on potentially valuable campus

resources was also sought. The portfolio of services offered by RTBI to incubated companies was listed and

used in the survey.

The paper documents the RTBI IITM relationship and the ways in which companies and RTBI have drawn

upon IITMs capabilities as a university. Aside from the IITM resources, external support received by RTBI from

funding agencies, intermediary organizations and professional networks was ascertained. The paper attempts

to analyze criteria used by RTBI to assess company performance and evaluate whether the extent of linkages

between the enterprise and campus have any relationship to the enterprises performance.

This study examined published documents on RTBI like the National Bureau of Asian Research case study of

RTBI3 . It analyzed the published annual reports of RTBI. Key personnel at RTBI and in the selected enterprises

were identified and interviews were conducted. The study also used structured questionnaires with selected

companies incubated at RTBI.

The companies incubated at RTBI have very passionate entrepreneurs who have created businesses that

attempt to improve the quality of life of people within India. These enterprises require multiple types of

support that can be found within the ecosystem of an educational institution like the IITM. Given the support

system provided by RTBI and IITM the expectation is that these companies stand a better chance of reaching

their goals and graduating out of the incubator. The access to subject matter experts across all engineering

and management disciplines cannot be found in stand-alone incubators. There are many campus based

incubators in India but RTBI is unique in its rural focus and has now over the years built an environment to

address the specific needs of enterprises to achieve technical, financial and service viability.

Out of 34 companies incubated at RTBI, 8 were chosen for their longer gestation and ability to raise

investment. The engagement with the majority of these companies was not just during the course of this

study. Their ideation and growth were witnessed at close quarters by the author over the past 7 to 8 years and

in some cases while some of the entrepreneurs were still students or fresh graduates.

3 http://pacifichealthsummit.org/downloads/HITCaseStudies/RTBICaseStudy.pdf

The survey undertaken with the incubated companies examined their perception of how RTBI services and the

IIT ecosystem (or other ecosystems) were utilized during the ideation, implementation and growth phases of

the individual companies. The results were expected to confirm whether the ecosystem was a contributor to

the current state of the enterprise.

The first section of this paper presents a brief history of Technology and Business incubators around the

world and in India. Section two discusses the origins of RTBI and its support to the incubated companies.

This section also lists the various incubated companies as well as the financials of RTBI. The third section

presents the findings of the study, results of the survey and interviews. The fourth section presents the

recommendations and concludes.

A SHORT HISTORY OF TECHNOLOGY AND BUSINESS INCUBATORSA. Business IncubatorsBusiness incubators are organizations that help start-up businesses to evolve into sustainable businesses.

Business incubators play an important role in the economic development of nations and communities. They

were pioneered in USA in 1959 with the establishment of an incubator - Batavia Industrial Center (BIC), set up

in Batavia in the state of New York. It then spread to Europe at the end of 1960s where they were established

on the basis of research parks and concentrated on the support of technologically oriented start-ups, e.g.

Herriot-Watt University, Edinburgh (1969) or Cambridge University. In the 1970s, the first incubators were set

up in Australia (1972) and Asia (1974). In the 1980s, other incubators were opened in Scandinavia (1982), India

(1982), Germany (1983) and many other African and Brazilian countries.

The Business incubators can be categorized based on their objectives4

Table 1: Typology of Business Incubators

Main Philosophy dealing with

Main Objective Secondary Sectors involved

Mixed Incubators Business gap Create start-ups Employment

creation

All Sectors

Economic development Incubators

Regional or local disparity gap

Regional development

Business creation All Sectors

4 Mathew. J. Manimala, 2012. Working Paper No. 358 Technology Business Incubators : A Perspective for the Emerging Economies, IIM Bangalore.

5 Mathew. J. Manimala, 2012. Working Paper No. 358 Technology Business Incubators : A Perspective for the Emerging Economies, IIM Bangalore.

Main Philosophy dealing with

Main Objective Secondary Sectors involved

Technology Incubators

Entrepreneurial gap Create entrepreneurship

Stimulate Innovation, technology Start-ups and graduates

Focus on technology, recently targeted e.g. IT, Speech-biotechnology

Social Incubators Social gap Integration of social categories

Employment creation

Non-profit Sector

Basic Research Incubators

Discovery gap Blue-Sky research Spin-offs High Tech

B. Technology Business incubator:Technology Business incubators (TBI) are business incubators which focus on innovations in new technology-

based enterprises. They encourage entrepreneurs who generate employment and wealth and diffuse

technology through their enterprises. TBIs are largely affiliated with public and private research centers such

as universities, science and technology parks, or clusters of firms with R&D capacity.

As cited by Phan, Siegel & Wright, in Mathew.J. Manimala, 20125 , the emergence of Technology Business

Incubators (TBIs) around the 1980s and 1990s may be attributed to the scientific advancements in biomedical

technologies and the emergence of the Internet and the World-Wide-Web around the same time.

The need for TBIs has been recognized the world over for initiating technology led and knowledge driven

enterprises. Studies also show that such mechanisms help not only in the growth of technology based new

enterprises but also in improving their survival rate substantially (from 30 per cent to over 70 per cent). TBIs

also facilitate speedy commercialization of research outputs. The TBIs besides providing a host of services

to new enterprises (and also to existing SMEs in the region) also facilitate a congenial atmosphere for their

survival and growth (ISBA and NSTEDB. India, 2009).

C. Existing scenario of TBIs in IndiaAmong developing countries, India had an early start in the 1950s on building comprehensive state-supported

programmes for small business support, scientific research and entrepreneurship development. For instance,

the Entrepreneurship Development Institute India, Ahmedabad, is world-class and the network of

laboratories of the Council for Scientific and Industrial Research with 10,000 researchers is among the worlds

6 RustamLalkaka, 2002.Technology business incubators to help build an innovation-based economy.Henry Stewart Publications 1469-7017 (2002) Vol. 3, 2, 167176 Journal of Change Management. 7 http://www.nstedb.com/fsr-tbi09/chapter3.html

largest. With support from the UN Fund for Science and Technology, three pilot TBIs were initiated in the late

1980s in India6

The National Science & Technology Entrepreneurship Development Board (NSTEDB), established in 1982

by the Government of India under the aegis of Department of Science & Technology, plays a pivotal role

in establishing Science and Technology Enterprise Parks (STEP) and TBIs in India to promote technology

intensive enterprises. NSTEDB has facilitated many R & D institutions and Universities to set up TBIs within

their premises.

Figure 1Technology Business Incubators in India7 (ISBA and NSTEDB, 2009)

D. Structure of TBIAll NSTEDB promoted TBIs are intended to be self-sustaining, operating on for-profit principles. Administratively, they

function as autonomous bodies, either as a Society registered under Societies Act, 1860 or as a not-for-profit company

under the provisions of Section 25 of the Companies Act, 1956. The affairs of these TBI are managed by an Advisory

Board which helps not only in development of a strategic plan containing quantifiable objectives to achieve the desired

results but also in managing the TBI efficiently and effectively.

TBI, as a researcher insightfully observed, is a trial and error process, hence it becomes necessary to

create mechanisms that provide feedbacks from the effects and that are continuously able to select out the

unsuccessful programme elements, while strengthening the successful ones. (ISBA and NSTEDB, 2009)

Figure 2Process chart for TBI (ISBA and NSTEDB, 20098 )

Preferred LocationAcademic/R&d institutions

Well Structuredbusiness plan for TBI

Networking with other institutions (see fig.1)

Good governanceboard-ledProactive Management

Core staffSmall Team

Operation on a business mode

Self- supporting within given timeframe

Clearly defined thrust areaTechnology specific/mixed

i.e. biotech, IT, Agri-business, advanced materials etc

ServicesCommon business Support

Specialised and Critical Support

TBIGood infrastructure

Pre-incubation support

Tenant selectionwell defined admission criterion

Tenant GraduationWell-defined Exit policy

Continuous performance tracking and evaluation Refinement of processes/policies Benchmarking (both internal and external)

Commercially viable products/services

8 http://www.nstedb.com/fsr-tbi09/images/chapter1.pdf

E. Growth of University based Technology Business Incubators

F. How RTBI is unique and why it needs to be studied

It is estimated that there are 7500 incubators worldwide growing at an annual rate of 33% and that

approximately 2500 are connected with universities (Knopp.L, 2010; Monkman, 2010 as cited in Hanadi Al

Mubaraki and Michael Busler, 2012)9 .TBIs set up within Universities/Institutions has become a progressively

significant mechanism for transfer of knowledge from universities to businesses. They seem to be bridging the

gap between the theories learnt in Institutes of higher education and the existing industries.

Fisher, L.M, as cited in Hanadi Al Mubaraki and Michael Busler, 201210 mentions that Stanford University

has been a leader in technology transfer, commercializing new technology, and fostering the growth of

Northern California Silicon Valley, the birthplace of Silicon Valley being Stanford University itself. In addition,

Stanford University provides creative solutions to new challenges for research and economic growth including

innovation, start-up companies and new technologies.

Most of the TBIs in India are situated in premier educational institutes and in urban India, where rural clients

would not get benefited due to reasons of its geographical location, target audience, as well as objective

(Perumal Koshy, 2011)11 .All these incubators are predominantly designed to promote technology and

entrepreneurs and very few have a rural or pro-poor focus.

Rural Technology and Business Incubator (RTBI12),located at Indian Institute of Technology, Madras (IITM) was

set up to design, pilot and incubate scalable business ventures with a rural / social inclusive focus catering to

the developmental needs of rural India. It is now housed at IITMs Research Park adjacent to the campus. RTBI

was conceived as the Incubator Initiative for rural technology and business by the TeNeT Group and was

registered as a Society in October 2006 with a grant from the Department of Science and Technology, Govt. of

India and Info Dev Grant III-41 (2006-07).

9 Hanadi Al Mubaraki and Michael Busler, 2012. University technology transfer through Innovation Incubator: A Case Study. World Journal of Social Sciences, Vol. 2.No. 2.Pp 128-134, March.10Hanadi Al Mubaraki and Michael Busler, 2012. University technology transfer through Innovation Incubator: A Case Study. World Journal of Social Sciences, Vol. 2.No. 2.Pp 128-134, March.11 Perumal Koshy, 2011. Role of rural business incubators in translating micro finance to sustainable micro enterprises.International NGO Journal, Vol/ 6 (4). Pp 104-112. http://www.academicjournals.org/ingoj/pdf/pdf2011/April/Koshy.pdf12http://rtbi.in/incubate.html

RURAL TECHNOLOGY AND BUSINESSINCUBATOR AT IITM.

RTBI is currently involved in supporting entrepreneurs in building ventures to promote livelihoods, education,

healthcare, agriculture, connectivity and financial inclusion in Indias rural areas. As an Incubator, RTBI leverages

information and Communication Technologies (ICT) for social development, supports young entrepreneurs aspiring to

evolve rural inclusive business models, and mediates between urban enterprise and rural potential. RTBI uses business

incubation as a strategy and methodology for rural and social development towards imparting facilities for capacity

building, income generation and enabling services (Rural Technology & Business Incubator, 2009). As mentioned earlier,

out of 16 incubators involved with social enterprises, only RTBI housed within an engineering Institution of higher

learning like IIT, Madras is addressing the needs of rural India

A. OriginsIITMs Rural Technology Business Incubator (RTBI) was the outcome of the pioneering efforts of the TeNeT

Group (Telecommunications and Computer Networks), an informal incubator that resulted in companies like

Vortex Engineering (manufacturer of Indias first ATM for rural areas) and Neurosynaptic Communications

(makers of an affordable medical diagnostic kit). TeNet consisted of faculty members from the Department

of Electrical Engineering and Department of Computer Science. RTBI, conceived as a vehicle to focus on rural

Indias needs was born in October, 2006 (RTBIs 2007 Annual report13 ).

Compared to TeNet, RTBI is a more organized, formal effort and is a registered non- profit Society, with the

overall aim to identify, design, develop and pilot, rural inclusive businesses. RTBI was set up primarily with

funding from World Banks Infodev and the Department of Science and Technology along with support from

the IITM. Additionally project partnership and support from IBM, Texas Instruments (TI) and United Nations

Development Programme (UNDP) enabled the establishment to grow. RTBI has been able to learn from the

efforts made by TeNet14 and come up with a more robust incubator model than its predecessor. From the

TeNet efforts it was recognized that technology support alone was not sufficient for companies to become

successful. Therefore RTBI was to provide many more services than TeNeT. TeNet did not have dedicated staff

to assist companies through an incubation process and RTBI filled this gap. TeNeT could not always raise

money for the companies and RTBI was able to meet this need.

13 RTBIs 2007 Annual report (pg 1): http://www.rtbi.in/Annual07.doc14 http://m.businesstoday.in/story/the-tenet-conundrum/1/9470.html

B. RTBI - its Support and Incubated companiesRTBI has incubated 34 companies15 to date. An estimated Rs. 25 crore of wealth creation has taken place

and over 20 Patents have been filed between RTBI and its incubated companies. RTBIs biggest draw is the

opportunity to get access to the IITM ecosystem in terms of staff, faculty and students. RTBI entertains 5-6

applications or more from potential incubatees every month and chooses only a handful every year. Besides

the obvious positive rub-off of being an IITM incubatee, startups can look forward to a slew of support

services. These services have been summarized and are listed in table two below.

Table 2Services offered by RTBI

1 Free discussions with IITM faculty2 Infrastructure support within RTBI3 Interns provided from IIT 4 Mentorship support5 Prototype /Product Development /pilot launch6 Collaborations within the RTBI incubated companies7 Entrepreneurial/ Leadership development8 Project Planning & Management9 Financial Accounting procedures10 Legal services11 Copyright and Patent / IPR12 Rural linkages for service/ product13 Marketing & sales strategies/visibility14 Enabling Equity funding /loan access15 Access to IIT Madras Library16 In-house company structuring17 Sharing/Encouraging of relevant research knowledge18 Technology Transfer19 Connecting with the right people20 Formation of Board /Governance support

15 (private) Powerpoint on IITM Incubation Cell (IITMIC) by Ashok Jhunjhunwala and Lakshmi Vaidyanathan (slide 22 & 23)

Table 3

Given below is a brief on the companies that have been part of the RTBI selection and incubation process since 2006 to 2013.

Company Profile Sector Founder Financial support (RTBI)

Financial support (External)

Desicrew Rural BPO company, employs 60 per cent women, profit making.

BPO MsSaloni Malhotra-Founder , Current CEO Mr J K Manivannan.

Rs 5 lakh16 Angel funding from Rajiv Kuchal. Series A of Rs 2-4 crore from undisclosed investors17 and Rs 7 crore series B from responsAbility Ventures I, &Ventureast Tenet Fund II18

ROPE Enterprise P. Ltd

Natural Fiber home-dcor and Life-style Products

Livelihoods Mr Sreejith N Rs 5 lakh19 Rs 8 lakh from TDB

Uniphore Software Solutions P. Ltd.

Designs and delivers speech based mobile solutions across industries.

Telecom Mr Umesh / Mr Ravi Saraogi

Rs 5 lakh Rs 22 lakh from TDB and undisclosed funding from Villgro and National Research Development Corporation

Intelizon Energy Solar Energy

Products

Renewable energy

Mr Kushant Uppal Rs 4 crore funding from Emergic Venture Capital and VentureEast Tenet. Rs. 90 lakh loan from ICICI and a Rs. 30 lakh loan from Technology Development Board.

16 RTBI 2011 Annual report (page 14) http://www.rtbi.in/Annual_Report_2011.pdf17http://www.techsangam.com/2011/05/27/rural-bpo-desicrew-lands-series-a-funding/18http://in.reuters.com/article/2012/09/06/rural-bpo-desicrew-raises-12m-from-respo-idINDEE88504R2012090619 RTBI 2010 annual report (page 20) http://www.rtbi.in/Annual_Report_2010.pdf

Company Profile Sector Founder Financial support (RTBI)

Financial support (External)

eJeevika HR

P.Ltd.

Life skills and Vocational Training

Education MsRicha Pandey Rs 5 lakh Rs 6.25 lakh MSME fund and soft loan of Rs 1.5 lakh from Villgro Foundation.

AAUM Research and Analytics Pvt. Ltd.

Data analytics forrural markets and consumers

Agriculture Mr Rajesh Kumar Rs 5 lakh Rs 5.75 lakh MSME fund

Arogyam Organics

Organic food processing

Agriculture Mr Arumugasamy/ Ms Kanmani

Rs 5 lakh Rs 19 lakh from Villgro and individual investors

Invention Labs Engineering Products P. Ltd.

Speech and language for children with autism

Electronic/digital intelligent devices

Mr Ajit Narayanan

Rs 5 lakh20 Rs 2521 lakh in 2012 and Rs 10 lakh in 2010 from Technology Development Board (TDB and Rs 10 lakh from the Department of Scientific and Industrial Research

Vastra Garments Distributed garment production

Garment manufacturing

Ms Sajina Rajesh Rs 5 lakh Rs 5 lakh MSME funding

Augurtron Systems and Solutions

High end technology product engineering

Technology Ms Padma Shankar Rs 5.5 lakh MSME funding

ET Interactive Design P. Ltd.

End-to-end design /Branding services to rural artisans

Design & branding

Ms Robin &Ms Ruhi

Trayi Educational Services P. Ltd.

Spoken English training

Education Mr Narasimma Prasad

Rs 4.5 lakh

Ayzh Health &Livelihood Solutions P. Ltd.

Birthing kits and women centric solutions

Healthcare Ms Zubaida Bai

20 RTBI 2010 annual report (page 21) http://www.rtbi.in/Annual_Report_2010.pdf21 RTBIs 2012 Annual report (page 15) http://www.rtbi.in/Annual_Report_2012.pdf

Company Profile Sector Founder Financial support (RTBI)

Financial support (External)

Microspin Machine Works Pvt Ltd

Micro-spinning machines for inclusive textile development

Manufacturing MrKannanLakshminarayanan

Rs 5 lakh Rs 22 lakh in 2012 and additional Rs 25 lakh in 2011 from TDB and Rs.1.87 crore from National Skill Development Corporation (NSDC).

MobilTrain Knowledge Services P. Ltd.

Mobile based training platform

Telecom Ms GayathriSriram

Rs 2.5 lakh

Newdigm Healthcare Technologies Pvt Ltd

Health care expert system and rural diagnostics platform

Telecom Dr Saurav Das ,Mr Gurlivleen Singh Grewal

Rs 6.25 lakh from Micro Small Medium Enterprises (MSME) fund

Phoenix Online Power Packer P. Ltd

Supports rural SMEs with search engine optimization and web design services

Web-related services

Mr Sargunesh

Stellapps Technologies P. Ltd.

IT and automation for dairy, agriculture & logistics

Technology Mr RanjithMukundan

Rs 23 lakh from TDB fund

Unclassroom Learning India P. Ltd

Online job oriented programming language courses.

Education Mr Srikrishna Shrin

Rs 6.25 lakh from MSME fund

Swayambhu Biologics Pvt. Ltd.

Microbial tech-innovations for waste management

Agriculture Mr R. Balaji

Edutor Technologies India P. Ltd.

Educational and learning solutions

Education Mr Ram Gollamudi Rs 2 crore from Hyderabad Angels22

22http://www.thehindubusinessline.com/industry-and-economy/info-tech/edutor-tech-raises-rs-2-cr-from-hyderabad-angels/article3017137.ece

Company Profile Sector Founder Financial support (RTBI)

Financial support (External)

Mego Technologies P. Ltd

Specialised infra-free communication solutions using adhoc networks

Healthcare Mr Hrushi Mehendali Mr Mandar Gosavi

Undetermined amount given as grant by Santosh Vempala from Georgia Tech.

Skillveri Multi skill virtual training platforms

Livelihoods Mr Sabarinath C Nair

Edsix Brain Labs Pvt Ltd

Brain-skill & educational games

Education Mr Saravanan Sundaramoorthy

Qarth Technologies P Ltd

Mobile application for instant money transfer between banks across India

Telecom Mr Abhinav Srivastava /Mr Prerit Srivastava

Boxtree Vow.in (to be incorporated

Online aggregator of Organic, Eco Friendly and Fair Trade products and services

Online Ms Amritha Dinesh

Kamal Kissan (to be incorporated)

To develop, design and propagate on-farm equipment such as transplanter, harvesters, weeders, etc for small and marginal farm owners.

Market Research

Ms Devimurthy

Company Profile Sector Founder Financial support (RTBI)

Financial support (External)

Rista (Rural Indian Social Traditional Artifacts) Ventures (to be incorporated)

Rista aims to aggregate, facilitate trade in handicrafts / goods ethnic to Indian villages, bridging the gap for mainstream marketing access to rural craftsmen through online marketing, retail and e-commerce portals and direct selling to consumers

Handicrafts Ms Jothi Budia

The Enabler23 Foundation

Pilot, promote, advocate policy reforms in livelihood generation in rural India in core essential areas of healthcare and education to start with.

Livelihoods MsGayathri M Oleti

Lex aude Services Pvt Ltd24

Online contract negotiation platform

Technology Mr Vivek Durai

The basic financial support offered by RTBI to these companies is a seed loan of upto Rs 5 lakh, payable

starting after 3 years in 2-3 installments. Beyond Rs 5 lakh an interest of 5%-6% is charged. In promising

ventures, RTBI does follow-up rounds of investing, like in the case of Uniphore, Stellapps and Intelizon through

Technology Development Board (TDB), National Research Development Corporation and the government of

Indias MSME fund.

RTBIs incubatees benefit greatly from the other support services that the incubator provides through its

exploration initiative (grassroots trials that are independently funded). The exploration initiative is part of

RTBIs two-pronged rural inclusiveness strategy, which involves research, piloting new initiatives that could

become startups and testing new rural development projects.

23Company website- http://tef.net.in/24 Company website- https://humblepaper.com/

Examples of exploratory initiatives that benefitted incubates (Annual report- 2011 and 2012) are listed below

Financial inclusion- Interbank Mobile Payment Service (IMPS) of the National Payments Corporation of India Mobile-based banking services

Agriculture Disease Mitigation and Advisory System

Rural collaborative platform

eJeevika and NIS Sparta

Evaluating National Rural Employment Guarantee Scheme Implementation

e-VyapaarSewa(eVS)

Xerox Corporation IITM and RTBI Open Innovation Project:

Financial inclusion- low-cost ATM for NREGS access: partner: Vortex

Table 4:

Year Workshops/Meetings/Conferences/Research/Awards

Papers and publications of RTBI

2012 12 72011 6 152010 7 10

2009 4 N.A2008 4 N.A

C. Challenges:RTBIs young management has the highly unenviable task of taking the incubator through to financial

maturity especially as the initial support from the Department of Science and Technology nears its end.

Nearing its seventh year in existence it faces several challenges: including building a better mentor network,

strengthening market linkages, encouraging more interaction with IITMs faculty and students, becoming more

self-sufficient and less dependent on external funding, enabling funding between the seed stage and series

A and providing better overall support to its incubatees. The two main overarching challenges that get often

repeated is lack of collaboration between RTBI and IITM and long-term financial sustainability.

D. RTBI and its financials (as available from reports)Even though RTBI has relatively good cash flow and reserves, it is largely dependent on external funding, in its

seventh year of operations it should ideally move towards being more financially independent. RTBI started

its operation using a 5-year support grant from the Department of Science and Technology, Government of

India, and that support has neared its end. Identifying new revenue streams is important for RTBIs long-term

sustainability and also the health of its incubatees.

SELECTION OF COMPANIES FOR THE STUDYIn table 5 in Section 3 we can see that the companies are at different stages of growth. Some have been

identified as potential companies to be readied for investment; others are in an implementation phase,

generating revenues, and heading towards break even on operational expenses. The more mature companies

have attracted external investments and are in a growth phase. The interaction of the companies through the

various phases of growth with the IIT Madras ecosystem is what is important for this study. As mentioned in

the methodology section the selection of companies for the study was thus dependent on a minimum of a four

year interaction that encompasses the stages of ideation, implementation and growth. The companies that

had managed to raise external investments were also considered to be part of the study.

RTBIs net worth looks robust when you look at their current assets of Rs 20.42 crore (most of it locked up in

loans to incubatees translating to Rs 11.83 crore in 2012 compared to only Rs 5.10 crore in 2011) with only Rs

1.6 crore as current liabilities.

According to information from the annual reports, the primary way that RTBI makes money is from fees for

incubator support services, research related charges, consulting fees. It can also generate revenues from

selling its the equity stakes in its incubatees. No exits have happened thus far. Full details of annual reports

from 2007 to 2012 are available at http://www.rtbi.in/publications.html.

Ideation: This is the earliest stage of growth, when the promoters have an idea that could address a market segment.

Entrepreneurs at this stage will, in general, seek validation of their idea through peer groups, mentors and in rare cases

entering the market to sell their product or service. Market research to verify the potential of the idea is rarely done

as it may be too expensive for a startup enterprise. Ideally enterprises at this stage need the most guidance to assume

the right legal framework and accounting practices aside from setting up other support functions like administration,

human resource, purchase, documentation and travel support. Many startups miss out on this crucial step in

organization building and suffer for it in different ways at later stages of growth.

Implementation: This is the stage when the enterprise enters the market and goes through the pain of adapting their

product or service based on customer feedback. Again if the entrepreneurs fail to address the customers needs the

enterprise will flounder. Once revenue is realized the correct application of the same is important. Overconfidence is

a hallmark of enterprises that realize more than anticipated revenues in the first year of operation. This initial flush

of success can see money being squandered where it should be saved and used judicially. This phase will also see the

business plan getting created and undergoing several revisions. This is the learning phase that an enterprise needs to

gain confidence in its offerings, estimating the market opportunity and creating the story it will sell to the next level of

investors. This phase should ideally bring the enterprise revenues to sustain operations.

A. The various stages are described as follows:

Investment by external agency (Growth): In this stage the enterprise is able to convince an external investor that with

the correct quantum of investment it can grow in operations and revenues. This stage can also have questionable

decision making leading to the demise of the enterprise. In many cases the mentorship that an external investor brings

in can prevent this kind of loss. Entrepreneurs that reach this stage are mature enough to guide startups and realize

many of the mistakes they have made in organization building.

The companies listed in the table 4 below were thus selected for this study based on the criteria stated above namely

four years or more of work and having raised external investment. Of course being within the RTBI fold the companies

target rural markets either directly or indirectly. Some of them create employment opportunities within rural areas and

this leads to rural wealth creation and these are ab initio criteria.

Table 5

Sr No.

Company Profile Year Established

Financial support (RTBI)

Financial support(External)

1 Desicrew Rural BPO company, employs 60 per cent women, profit making.

2006 Rs 5 lakh Angel funding from Rajiv Kuchal. Series A of Rs 2-4 crore from undisclosed investors and Rs 7 crore series B from responsAbility Ventures I, &Ventureast Tenet Fund II

2 ROPE Enterprise P. Ltd

Natural Fiber home-dcor and Life-style Products

2007 Rs 5 lakh Rs 8 lakh from Technology Development Board (TDB)

3 Uniphore Software Solutions P. Ltd.

Speech-based mobility systems

2008 Rs 5 lakh Rs 22 lakh from TDB and undisclosed funding from Villgro and National Research Development Corporation

4 Intelizon Energy Solar Energy Products

2008 Rs 5 lakh Rs 4 crore funding from Emergic Venture Capital and VentureEast Tenet. Rs. 90 lakh loan from ICICI and an Rs. 30 lakh loan from Technology Development Board

5 AAUM Research and Analytics Pvt. Ltd.

Data Analytics for rural markets and consumers

2008 Rs 5 lakh Rs 5.75 lakh MSME fund

6 Arogyam Organics Organic Foods 2008 Rs 5 lakh Rs 21 lakh Villgro and individual investors

7 Invention Labs Engineering Products P. Ltd.

Mechatronics based India centric Technology Design Services

2008 Rs 5 lakh Rs 25 lakh in 2012 and Rs 10 lakh in 2010 from TDB and Rs 10 lakh from the Department of Scientific and Industrial Research

8 Vastra Garments Distributed Garment production

2008 Rs 5 lakh Rs 5 lakh MSME funding

The enterprises were interviewed and also asked to respond to a structured questionnaire. In the first section

(5.1) the interviews and feedback from the companies are recorded. The second section (5.2) consists of a

tabulation of the questionnaire results

RESULTS OF INTERVIEWS, FEEDBACK AND SURVEY

Kushant Uppal, the CEO of Intelizon Energy is a graduate of IIT Madras and after a stint in the US decided to

work on reliable and quality electricity for all by building products and solutions that will provide productivity

gains for people living in the rural areas worldwide with a focus on lighting and power. He visited his alma

mater and believed that the environment suited what he had in mind. He currently employs 19 people, 16 of

whom are in his Hyderabad based unit with the remaining in rural operations.

Figure 3

His first product was a solar lantern called zon light solar. This product was very well received in the market

and found buyers in the hinterland. A well designed and affordable product, it had the solar panel integrated

into the body had two power settings for the LED lamps that also served as low power indicators. While this

product was being introduced into the market his business plan underwent a radical shift. Intelizon had

developed a wide range of lighting solutions and these can be seen at http://intelizon.com/products.html. The

supply chain and delivery mechanism required to get this product into rural markets was too daunting and

with the new range of products Intelizon became a project company.

Intelizon focused on projects as opposed to products. It implemented off-grid lighting solutions in commercial

A. Interviews and Feedback

1. Intelizon Energy:

and residential properties in urban and semi-urban markets. It found greenfield opportunities and also looked

at replacement projects. The price points were found to be very attractive for customers. In many outdoor

installations the cost of wiring and getting connected to the grid is expensive due to the cabling costs. The

stand-alone solar panel and LED lighting solution worked out to be less capital intensive and running costs

are practically negligible as payment for grid electricity is not involved. Once the company achieves stability

from project installations it will continue to use state of the art optical, electronic and firmware technology

for creating affordable energy products for the rural and semi-urban markets worldwide. Till then it will be

concentrating on projects and supplying to original equipment manufacturers.

Intelizon is based in Hyderabad but continues to make use of the IIT ecosystem. At the ideation phase crucial

components of the solar plus grid based inverter design were tested at the IIT research labs. IIT provided

a researcher at Hyderabad for a period of 4 months. Currently Intelizon is involved in a project with RTBI

and IITM. Kushant stated that he chose to work with IITM because he felt that it would provide the kind of

support he had seen in Silicon Valley. Having the backing of the IITM ecosystem gave him a lot of confidence in

overcoming technology challenges faced by him.

Ajit Narayanan completed an integrated Bachelors and Masters Course from the electrical engineering

department of IIT Madras. He proceeded to work for a company in the United States of America and

subsequently returned to India. He and three batch mates from IITM joined together to start Invention Labs.

The company provided engineering solutions to complex problems presented by Industry and Defence

establishments. However various external pressures led the other founders to leave and Ajit continued to work

for the company. He also took a crucial decision to move from premises outside the campus and take up space

in the IIT Madras Research Park and sought incubation space from RTBI.

Figure 4

2. Invention labs:

Partly inspired by the work of IITM faculty Ajit took up primary work on Assistive Technology for the disabled.

Invention labs also work on product development services in both hardware and software. Invention Labs

and Ajit became famous for building the first artificial speech device in India. Ajit was recognized for the

work on Assistive Technology by MIT Technology Review and named as one of the top 35 innovators across

the globe, less than 35 years of age, in 2011. Currently Invention Labs employs about 12 people in the office

housed in RTBI at IITMRP. The Assistive Technology named Avaz costs around $800, compared with $5,000 to

$10,000 for a single-language device. The device is selling primarily in India. In foreign markets such as US,

Denmark and Australia it is an application (for mobiles) that costs $100. Avaz is the flagship product and Ajit is

working towards making it one of top two Augmentative and Alternative Communication technologies in the

world. In the future a new product line (technology) called free speech is the focus and Invention Labs will be

getting into language manipulation based products. These products may well have translation functionality in

multiple languages.

Invention Labs benefitted from the IITM ecosystem in the form of Interns from the Computer Science

Department. Ajit values the mentorship provided by the faculty of IITM and the Alumni. He has been inspired

by Dean Kammen. He was quick to recognize the brand value of the IITM ecosystem especially during

discussions with government and other institutions in the disability sector. He states that IITM Research Park

provides many benefits in perception and ambience. The recent access to debt finance arranged by IITM/RTBI

has been of great use for operations.

Ajit struggled to create a market for the products and in his words there are no Mother Teresa markets. He

also felt that in the current atmosphere the drive to grow and set targets has to come from the entrepreneur

and there was little push from RTBI.

ROPE manufactures contemporary handmade designs with renewable plantain fibres at scalable distributed

production centers. The main customers are domestic and international retail chains, overseas import houses/

distributors and India based export houses of home and lifestyle products.

Figure 5Lifestyle

3. ROPE Enterprise Private Limited

Home Furnishing

Home Decoration

ROPE directly employs 130 people and indirectly supports another 600 in the manufacturing process. About 12

employees are positioned in the head office at RTBI, IITMRP. In the next 5 years ROPE has a target of impacting

9000 families and recording a turn over close to 500 million rupees. In the long run, ROPE wants to build an

integrated manufacturing campus in a rural area to aggregate new design and designers, warehousing for raw

material and finished products, quality control and packaging. N NSreejith the founder and CEO wants to make

ROPE a profitable company that will be a trusted supplier to retail chains within and outside India.

Sreejith has had interns from several institutions like IITM, Villgro, National Institute of Design (NID), Xavier

Institute of Management Bhubaneswar (XIMB) and Indian Institute of Management (IIM) Lucknow work on

various aspects of the company. Sreejith has been an invited speaker to many of the IITM ecosystem events

and has also participated in business plan competitions and more recently has been judging these events.

ROPE has been the supplier of choice for bags and other materials required at IITM conferences, seminars

and workshops. Many of the designs underwent improvements based on such customer feedback. He has

benefitted greatly from the mentorship provided by IITM faculty and from advisors amongst the external

investors. Over the years he has got the feeling that the leadership of the incubator treats individual ventures

as if they are part of a larger agenda. However laudable and relevant that agenda of creating sectoral

innovations, promoting entrepreneurship, fostering R&D or promoting the use of IT, especially wireless

technologies for wider social impact might be, the incubator should realize that individual ventures have

a single agenda of their own growth. They should be given individual attention for charting independent

growth path instead of using them to create a larger statement. Sreejith also found some of the decision

making process non-transparent and felt that the incubator should have an institutional mechanism to take

companies forward in the process for growth instead of being totally centered on one leader.

Desicrew was founded by Saloni Malhotra and her journey has been documented in books, newspaper articles

and videos. Desicrew has also won awards and a non-exhaustive list of all these are available on the wikipage

at http://en.wikipedia.org/wiki/Saloni_Malhotra as well as the Desicrew website (http://desicrew.in/in-the-

media.html). Desicrew was among the pioneering companies that took Business Process Outsourcing (BPO)

to rural areas. As quoted in the wikipage she says When we looked around, we saw that a lot of BPOs hire

people from rural areas and realized that people have to migrate to work here. So, we decided to take the

jobs to them. There are short videos of Saloni (7nos.) to be found at http://www.youtube.com/view_play_

list?p=2630E8041622BC11 talking about her learnings.

The company was formally registered in 2007 but had been operating within the TeNeT group before that. It

has operations in the State of Karnataka and Tamil Nadu and employs close to 250 people in rural BPO centers

in rural areas and around 10 in the urban office. Its Unique Selling Proposition (USP) is to export knowledge

service out of rural India. Major clients are in the Banking, Financial Services and Insurance (BFSI) space,

Information Technology Enabled Services (ITES) sector aside from Telecommunications and Government

sectors. It is looking to grow into an operation that will employ 2000 people in rural areas, operate out of 8 to

10 states and reach a turnover of 250 million rupees in the next 3 years.

Saloni stepped down as the CEO and J K Manivannan is the current CEO of Desicrew. Manivannan brought with

him the experience of running rural BPOs in rural Andhra Pradesh during his stint at the Byrraju Foundation.

He agreed to be interviewed for this study and gave his frank views on Desicrew and its interactions with

the IITM ecosystem. Desicrew benefitted from having at least 10 interns from IITM and about 5 from other

educational Institutions. In the early days it received mentorship support from the faculty of IITM from the

electrical and computer science departments. Saloni was the visible front face of Desicrew and attended

most of the functions within the IITM ecosystem giving talks about her experiences. Of course these were not

confined to IITM alone and she also gave talks at other institutions.

4. Desicrew

Figure 6

Manivannan recollects that his stint at Byrraju Foundation and his close interactions with the Chairman there

inspired him to continue in the line of rural BPOs. Manivannan is now concentrating on growing the business

and has made less use of the IITM ecosystem. His recollection of being incubated inside RTBI includes the lack

of shared support services and proper guidance on service tax issues. However he has confidence that both

RTBI and IITM can be counted on for support in times of need, whether financial or technical.

Ms. Sajina Rajesh, the managing director of Vastra, connected to RTBI and started the social venture by virtue

of living in the IITM campus since her husband is in the faculty. Though the company was incorporated in

2010, discussions on the venture started in 2009. Vastra specializes in producing high quality customized

institutional wear. Vastra manufactures and supplies uniforms to schools, hospitals, factories, restaurants,

security companies and recently for taxi companies. Manufacturing is done by outsourcing stitching work to

trained self-help groups in rural Tamil Nadu. Vastra provides high quality uniforms at competitive prices and

help rural women earn a living out of this.

The company is registered as Custom Attire (India) Private Limited since the name Vastra Garments was

already taken, however Vastra is currently used more as a brand name. Vastra connects with self-help groups

in Cuddalore, Kancheepuram (Manimagalam), Valsarawakkam and Velachery. The mode of operations evolved

as quality in the initial days was found to be a stumbling block. In the current mode of operation, much of

the cutting work is done in a factory setting within the city and final stitching work is done at the village

level for the uniforms. About 30 women are employed in rural areas and the city work force varies in strength

depending on orders to be executed. Vastra is servicing customers in Tamil Nadu and Kerala and has received

orders from Dubai this year (2013).

5. Vastra (Custom Attire (India) Private Limited)

The company has achieved break-even but is not looking for investors at present. Sajina felt the equity stake holders

might dictate terms to her on the running of the business and is looking for loans from institutions instead.

Aside from the initial investment from RTBI, Vastra was able to access a grant from Micro, Small and Medium

Industries (MSME) for operational expenses. In the early stages, two MBA students from IITM worked on a short

term project. The IITM faculty and staff provided valuable advice and support to Vastra in the ideation and startup

phase. Other incubated company founders also gave support to Vastra till their own enterprises became too

demanding of their time. Sajina stated that in the initial stages RTBI gave support for all incubatees especially in

the form of fund support and by giving valuable advice during the monthly review meetings. The element of risk

is always with the entrepreneur she said and in her case marketing for her product range was done by herself. All

orders for the implementation phase started through personal contacts and later she migrated to the web portal

India Mart from which she continues to get orders.

Figure 7

She has interacted with the technical team at RTBI for developing mobile applications and Management

Information Systems for monitoring production in rural centers and tracking payments, but these were all only

up to the testing phase. Turnover has been increasing steadily and in the 2012-2013 financial years it reached

Rs. 3.5 million.

6. Arogyam Organics Private Limited (AOPL)Arumugasamy, the managing director of AOPL has spent most of his professional life engaged in agriculture

related businesses. His stint at the Centre for Indian Knowledge Systems (CIKS, an NGO that promotes all

aspects of traditional agricultural practices) thrust him into this entrepreneurial role. CIKS had been marketing

organically produced food in a small way from their offices and after about 3 years decided to create a private

limited company to take this activity forward. As a measure of abundant caution, founders of CIKS were

formally not on the AOPL board of directors, but maintained advisory capacities. AOPL attempted to provide

both backend and front end support to organic farmers in Tamil Nadu. This meant providing inputs like certified

organic seed, fertilizers and plant protection materials. They would also pick up the harvested products directly

from farmers and sell to the end consumer. AOPL was able to leverage the farmers associated with CIKS in

the beginning as these famers had undergone training in organic agricultural practice and also certification

processes. The business model found support from RTBI and Villgro Innovations Foundation; however AOPL ran

into unexpected cash flow problems and reinvented their business model. AOPL products are now sold fewer

than two brand names Parambaryam and Bhojanam. All products are grown organically.

Figure 8

In order to stabilize the business, AOPL concentrated on non-perishables and traditional varieties. Rather than

source directly from farmers the current model sources from aggregators who do the first level of processing.

The processors are certified along with the farmers and share some of the risk along with AOPL of marketing

the products and also ensure good quality control. The crucial difference between the brands is as follows.

Bhojanam products (such as cereals, pulses, spices, millets, condiments, rock salt) are certified end to end

while Parambaryam are traditional varieties grown organically but not certified. The Parambaryam products

are well received by the end consumers though it is a new entrant compared to the Bhojanam brand.

AOPL was launched in 2008 and has currently only five employees and their reach to farmers are through the

eight certified processors. AOPL had started retail outlets and now have withdrawn from creating franchisees.

Products are moving in urban markets in Tier 1, 2 and 3 of districts like Tanjavur, Tirunelvelli, Kaur etc. in Tamil

Nadu. Once the operations stabilize AOPL will expand to all four southern states and go back to direct sourcing

from farmers to increase profits. There is a business plan to raise investment that talks about achieving sales

of Rs. 750 million in three years.

AOPL has had minimal level of interaction with RTBI and IITM, largely because of the agriculture focus.

RTBI has a technology focus, and AOPL needed business inputs and help with contacts and investment.

Arumugasamy acknowledges help from RTBI staff on reworking the business model along with an intern from

the Villgro Innovations Foundation fellowship programme (http://www.villgro.org/fellowship). He did not take

up space in IITM Research Park as he felt it would be a drain on scarce resources. Last financial year saw the

business turn the corner and Arumugasamy is concentrating on attracting investment for the next phase of

growth.

Umesh Sachdev and Ravi Saraogi graduated from Jaypee University of Information Technology, Noida and

started their entrepreneurial journey working on mobile theft security. During this period they took part

in competitions and won prizes and recognition. Their interest and work turned to speech recognition and

related technologies and they started Uniphore. The company was incorporated in 2008. The slow uptake of

internet services in rural India has many reasons.

Entry cost of PC/laptop

Power availability

Internet connectivity

Content predominantly in English

Vernacular content is urban centric

Inability to have village level content on the internet

Software corruption is frequent

Hardware support is not on hand

Keyboard interface is challenging

Mobiles address all these issues and Uniphore entered the space with speech related technologies that

specifically address the content and interface issues. The first level of services they delivered to rural areas

involved working with Reuters Market Light. This engagement opened up several new areas of operation

and emboldened Uniphore to invest into local language speech recognition and speech based value added

services. The local language technology were good to replace input from the mobile keyboard and end

users could talk their way through an Interactive Voice Response System(IVRS) menu instead of punching in

numbers or text. This facility makes the mobile far more useful in the hands of an illiterate or innumerate user.

Uniphore is now serving customers in banking (including micro finance), Agriculture, Health care, Retail,

Insurance and Government sectors. They have been active in Tamil Nadu, Kerala, Andhra, Karnataka, Orissa,

Maharashtra, West Bengal, Madhya Pradesh, Uttar Pradesh and the National Capital Region. Recently they

have been approached by Airbus and Intel and have thus extended their geographical reach to France and the

United States of America. Uniphore is positioning itself to harness the power of voice and data and convert

any mobile device into an enterprise delivery platform. They have received investments from RTBI, Technology

Development Board (TDB), National Research Development Corporation (NRDC) and Villgro Innovations

Foundation. They are in the process of raising investment and want to grow into a Rs. 1 billion company with

200 employees having their services reach a 100 million people in the next three years.

7. Uniphore Software Systems Private Limited

Figure 9

Uniphore have made use of interns and fellows from the IITM ecosystem and other educational institutions. Umesh

as the CEO of Uniphore has given talks and participated in many events outside of the IIT Madras ecosystem. He has

benefited from the mentorship and knowledge of the IIT Madras faculty and from Villgro, NRDC and other individuals.

Field work through research projects in collaboration with the IITM department of Computer Science also helped with

developing a reference database for local language. He felt RTBI could help in connecting to next stage of investors and

said that technology support from IITM was good and felt that the RTBI brand needs strengthening. Umesh says he

has been inspired by Mark Zuckerberg. The awards and recognition garnered by Uniphore can be seen at http://www.

uniphore.com/about-us/awards-recognition.html.

Reuters Market Light is a pioneering mobile phone based, highly personalized, professional

information service specially designed to support the farming community. It provides expert

information to farmers at every stage of their crop cycle, right from pre-sowing to selling of the crop

thus enabling them to take informed decisions.

Farmers receive crop advisory, taluka specific weather forecasts, local market price information, local

and international commodity information and any other agri-rural information relevant to the farming

community, direct to their mobile phones.

This information is further customized:

as per the individual preferences of crops, markets, and location of each farmer

aligned tightly with his daily work schedule

in a mix of relevant local and international content

as per the stage of his individual crop cycle

in his local language

through SMS

across all handsets and telecom operators

http://www.reutersmarketlight.com/about_us.html

Rajesh Kumar, the founder and CEO of Aaum, is a graduate from the Mechanical Engineering Department of

IIT Madras. For six years after graduation he worked in various industries and studied towards a management

degree. He started Aaum Analytics and was earning revenues before coming into the RTBI fold. Incorporated

in 2008 Aaum works on three strand of research Advanced Analytics, Competitive Intelligence and Livelihoods.

The first two strands are heavily industry centric and the third strand of livelihoods addresses rural issues.

Aaum has engaged with finance, insurance, pharmaceuticals and retail sectors in the industry providing

Advanced Analytics and Competitive Intelligence services. Aaum has also engaged in rural livelihood services

since early 2008. They have promoted livelihood upliftment, implementation services, livelihood studies and

feasibility studies under Livelihood. The Livelihood initiatives are with Government organizations, NGOs and

major Corporations.

For government organizations Aaum has provided assessment of NREGA in 5 districts, 10 blocks, 40

panchayats with the Tamil Nadu State Government and the Ministry of Rural Development. Aaum has gone on

to do evaluation of NREGA and its relevance to Village requirements, performed audit and consultants role in

reviewing and strengthening the grass root level implementation, strengthened Gramasabha and Social Audit

Committees (SAC) activities, facilitated better financial inclusion, deployed key performance indicators, built a

real-time MIS system to provide live data access and improved monitoring of NREGA program.

Aaum has created a credit scoring for Self Help Groups. Most of the field work is done in partnership with Non-

Government Organizations (NGOs). Aaum has leveraged multiple technology platforms to create databases

that can be mined for information to create effective livelihoods and enterprises. Corporations with CSR focus

on Livelihood in rural areas are also good partners for Aaum to work with. Aaum`s research wing continuously

monitors and studies the initiatives and issues that affect livelihood development.

Aaums mission statement is To enhance our client value by providing consumer insights. Currently about

90% of the business is with industry. In the future this may become 100% and the Livelihood services will be

offered free as a CSR activity. Aaum plans to attract investment and wants to work in partnership with firms in

Australia and Singapore and is targeting to grow by four times year on year with this strategy.

Aaum has had well over 20 interns from IITM and over 30 interns from other institutions like IIM and Anna University.

Though Rajesh gets invited to IITM or ICSR functions he has only attended two PAN-IIT meets. Rajesh has received

mentorship support from IITM faculty and from IFMR. He believes that RTBI and IITM have strong networks but lack

dedicated people to think about what is good for the incubated companies for business creation

8. Aaum Research and Analytics Private Limited

As part of the interview a short survey was conducted with all the 8 companies. This consisted of identifying

a) the services offered by RTBI and b) whether these services were offered by the IITM ecosystem or other

agencies during the phases of ideation, implementation and investment/growth. The respondents were

asked to give simple yes or no responses as to whether they used a service or not during the various phases

of growth. The consolidated table with results summed up for the 8 companies is in Appendix 1. This section

contains relevant issues that the survey points to.

Totally, across the various phases, the companies have used IITM services 198 times and those of others 114

times. This is in line with what was often stated by the interviewees that they wanted to be part of RTBI to take

advantage of the IITM ecosystem.

The companies use the IITM ecosystem services heavily during the ideation phase and then lower their

dependence. By the growth phase they have built up many skills internally and are less reliant overall on

external agencies and the IITM ecosystem.

Table 6:Companies indicating usage of services

Year IITM Ecosystem OthersIDEATION PHASE 83 28IMPLEMENTATION PHASE 70 45GROWTH PHASE 45 41

TOTAL 198 114

B. Survey Results

C. Usage of services

Table 7:

Use of services during Ideation Phase IITM Ecosystem OthersFree discussions with IITM faculty 8 3Mentorship support 7 3Prototype /Product Development /pilot launch 7 1

Enabling Equity funding /loan access 7 1

Infrastructure support within RTBI 6 2

All the companies required discussion with the faculty during the ideation phase and the dependency was

spoken about by all entrepreneurs. Mentorship, product development and access to finances were heavily

used during these phase by all the companies.

1. Usage of services: Ideation Phase (Top 5)

2. Usage of services: Implementation Phase (Top 5)

Table 8

Use of services during Implementation Phase IITM Ecosystem OthersFree discussions with IITM faculty 7 4Enabling Equity funding /loan access 7 4Infrastructure support within RTBI 6 1

Interns provided from IIT 6 5

Mentorship support 6 4

Companies reported that they continued to depend on the IITM faculty during this phase as many of the

product/service offerings underwent changes in design/process. Access to finance continued to be important

and aside from mentors, interns from IIT and outside became almost equally important. The companies at this

stage were almost fully dependent on infrastructure support (space, power, internet and other office services)

provided by RTBI and the exceptions were those that located their operations outside for differing reasons.

Table 9:

Use of services during Growth Phase IITM Ecosystem OthersFree discussions with IITM faculty 5 3Interns provided from IIT 5 3Mentorship support 5 4

Enabling Equity funding /loan access 5 2

Infrastructure support within RTBI 4 4

Discussions between faculty and entrepreneurs continue to top the list in terms of service usage. However

by now companies are also looking at external support. At this point companies have got internal systems

in place and also make use of external agencies for mentors, interns and for different types of infrastructure

support. The overall dependence on the IIT M ecosystem comes down but there is a dependence on IITM

financial support especially raising investments whether debt or equity

3. Usage of services: Growth Phase (top 5)

The following observations emerged from the data gathered during the survey. The data collected included

aspects on employees, markets, financial status, and perception of the RTBI-IITM relationship aside from

services usage described previously

1. Free discussions with the IITM faculty received the highest ranking from the companies incubated during all

the three phases whereas entrepreneurial and leadership development received the lowest.

2. None of the incubated companies utilized the IITM library or other library facilities during their incubation

process at RTBI.

3.All the support services provided by the IITM ecosystem were availed during the Ideation phase (except

library).

4. No incubated company relied on any external agency for technology transfer

5. Incubated companies relied more on external agencies for Legal Services and Leadership/Entrepreneurial

development rather than the IITM ecosystem

6. Across all phases the IITM ecosystem contributed more services to the incubated companies surveyed than

external agencies

7. The incubated companies have made good use of RTBIs exploratory initiatives to enter both urban and

rural markets at the lowest cost

8. The CEOs also admitted that with good external investors the companies benefitted with their presence on

the board of directors

9. The number of rural employees (398) in the companies exceeded that of non-rural employees (172)

10. Majority of the companies have received external investment and were looking to gather more. Those that

didnt were not looking to raise investments.

C. General Observations

11. All the companies were selling to the urban markets and three were in rural markets as well.

12. Interviews with RTBI personnel have not been described here in detail but the key points for improvement

brought up were i) ability to identify the individual needs of the incubated company and to provide for them

ii) assigning high quality mentors iii) easier access to finance and iv) providing other common support services

like administration, finances, human resources and other logistics like travel and purchase.

13. The companies were divided on their perception of the IIT Madras- RTBI relationship. Half the companies

perceived RTBI as being within the IITM ecosystem. The remaining half saw RTBI and IITM having an

intersecting ecosystem. (in figure 10 below four have opted for A and four for B, none for C)

Figure 10

RTBIRTBI

RTBIIITM IITM

IITM

=

A B C

CONCLUSIONS AND RECOMMENDATIONSIn this study, a short history of Technology and Business Incubators abroad and in India has been presented.

The reasons for setting up RTBI and a quick overview of its initiatives and the companies that it has incubated

have been described. The portfolio of services offered by RTBI to incubated companies is listed. RTBI and

its funding partners and finances have been touched upon. The companies incubated and how a select few

were identified for this survey has also been discussed. A survey of these companies was undertaken and

confirmation that they have leveraged the IITM ecosystem obtained. In interviews the CEOs have confirmed

that they have engaged with students, faculty, and other campus resources for the betterment of their

enterprises.

The RTBI IITM relationship is complex and driven by the founder/chairman of RTBI and this has created

much of the success but has also had pockets of criticism by the CEOs of the incubated companies. What

is undeniable is that RTBI has been able to provide the incubated companies complete access to IITMs

capabilities as a university. From the data and interviews this relationship has been exploited by the incubated

companies to good effect for technical solutions, mentorship, financial access and market penetration. All

this has happened despite the stark differences in perception of the RTBI-IITM relationship by the incubated

companies. One can conclude that the companies are not concerned as much about the relationship as how

best it can be utilized for the betterment of the company.

Recent developments at IITM have taken up the issues represented by the RTBI personnel. An incubation cell

at IITM has been created. This cell will provide all support services for all the incubated companies in IITM

including the ones in RTBI. (IITM has three other incubators). An IIT Madras Entrepreneurship Forum has also

been created. This forum consists of Alumni and other professionals who will offer high quality mentorship to

all enterprises in the IITM ecosystem.

At present there was no indication of documented criteria used by RTBI to assess company performance

and this seems an area that will have future importance. It is now established in this study that the linkages

between the enterprise and IITM have a positive relationship to the enterprises performance. Going forward

these linkages may form the basis of metrics for success/company performance (these systems exist at the IIT

Madras Research Park for other companies occupying space there). Social Impact studies can identify another

set of metrics that can attract venture philanthropic investors to the companies incubated in RTBI.

RTBI and its success in incubating social enterprises is largely due to leveraging the IITM ecosystem. RTBI has

also evolved over its inception to identify and create those processes and systems that work to drive social

enterprises to success. This demonstrated ability to evolve from continuous learning will stand all social

enterprises incubated there in good stead.

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Sajina Rajesh, Vastra, Chennai, July 2013

Rajesh Kumar, Aaum Analytics, Chennai July 2013

INTERVIEWS

This study would not have been possible but for the kind cooperation of Prof. Ashok Jhunjhunwala of IITM

and Lakshmi Vaidyanathan of RTBI. Prof. R Nagarajan faculty coordinator CSIE has provided the much needed

moral support throughout the study period. The help and support of Latha Suresh and Marie Banu of Centre

for Social Initiative and Management (CSIM) along with Nelson Vinod Moses of Billion Bulbs is gratefully

acknowledged here. PrithaGopalan gave time from her busy schedule to glance at the draft report and I thank

her for that. Jessica Seddon was available sporadically but gave very fine inputs to make this study better

and thanks to Villgro Innovations Foundation for the IDRC supported funding. Kushant, Ajit, Mani, Umesh,

Arumugasamy, Rajesh, Sajina and Sreejith all made time available from their entrepreneurial duties to talk to

me and undergo the interview. Many thanks to all of you.

ACKNOWLEDGEMENTS

Table 4:

Sr No.

Support Service offered at RTBI IITM Eco Others IITM Eco Others IITM Eco Others

1 Discussion with IITM Or outside faculty 8 3 7 4 5 32 Infrastructure support within RTBI 6 2 6 1 4 43 Interns provided from IITM and others 5 2 6 5 5 3

4 Mentorship Support 7 3 6 4 5 4

5 Prototype/Product Development/Pilot Launch

7 1 5 2 2 1

6 Collabration within the RTBI incubated companies or others

4 2 4 3 3 3

7 Entrepreneurnial/Leadership Development

1 2 0 3 0 1

8 Project Planning & Management 2 1 2 2 0 09 Financial Accounting Procedures 2 2 1 2 2 310 Legal Services 2 2 1 3 0 411 Copyright And Patent/IPL 2 0 2 2 1 212 Rural linkage for services and products 5 2 3 3 2 313 Marketing And Sales Strategies/

Visibility4 1 4 3 2 3

14 Enabling Equity Funding/ Loan Access 7 1 7 4 5 215 Access to IITM or other library 0 0 0 0 0 016 Inhouse company structuring 4 1 2 0 1 117 Sharing/Encouraging of relevant

knowledge5 1 2 1 2 1

18 Technology transfer 2 0 1 0 1 019 Connecting with right people 6 0 6 0 4 220 Formatting of board/governance

support4 2 5 3 1 1

Total use of services during various phases

83 28 70 45 45 41

Total use of IITM 198Total use of Others 114

APPENDIX 1: RESULTS OF THE SURVEY

Ideation Phase

Contribution by (1=yes,0=no)Implementation Phase Growth Phase

IITM Eco=IIT Madras Eco system

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