ASIA FOCUS : ENTREPRENEUR VIEW

Non-monetary incentives

Allowing managers' input into company policy can help offset lower salaries

Innoviti Embedded Solutions is a Bangalore-based venture specialising in consumer electronics and telecom products. Set up in 2002, it has patented six short-range wireless technologies and developed the world's first wireless adapter for dial-up modems, commonly used to access the internet in India.

Innoviti's chosen sector (telecommunications hardware products) and its major target market (India) are not focus segments for venture capitalists today, who are primarily looking at funding back-office operations of service companies.

The bootstrapped Innoviti hence needs to conserve its limited capital, and pays its core team at sub-market levels. All management team members other than the three co-founders are eligible for stock options, which are based on commitment shown and results delivered. But the company's product focus and long-haul revenue growth mean that stock options are merely a "hygiene" factor.

Innoviti has hence used a non-monetary incentive, a shared vision for the company, to retain its core team.

Innoviti was created based on the founders' ideas, but the vision for the company has now moved beyond simply their notions of how things should be done to include other team members' thoughts and what they want to do.

This opportunity for immense personal impact on the company's future has helped Innoviti keep the core team intact since the venture's startup.

To ensure this approach's effectiveness, innoviti hired managers with high levels of initiative, integrity, self-confidence and determination, all traits Mr Agrawal considers necessary to survive the churns of a new venture in its early years.

All members of innoviti's core team have extensive experience in the telecom sector in India and the United States, and show the same level of confidence as the founder's in their chosen approach to management.

Bangkok Post
Sunday January 28, 2007