mGinger

Few posts back , I had written about Onyomo - a local search engine for Indian cities. mGinger has come up with a business model of targeted SMS advertising albeit with a catch. The end user selects what category of ads he/she wants to receive and earns money on every SMS received. mGinger folks write about the chicken and egg problem in their blog. Maybe they should get in touch with OnYoMo. There could be some interesting synergy when you can receive ads based on your sms search results and the sms search results are based on a) your interest and b) your location. I think SMS advertising is not for big impact; a Nike user will not switch to Adidas with an sms ad. Infact, I believe sms is suitable only for local deal advertising i.e. discounts, new products, etc.

Asking people to sign up for ads to earn money is so stone age. And passe. Whether it works , time will tell. I am more interested in the way mginger is trying to attract new users - through social networking sites and word of mouth. Lets see how far it goes.

On a more cautious note, mginger is still in early early beta stage, so website will be down and you may not get enough ads to pay your bills , as they claim. On a pessimistic note, online media spend last year was not more than 300 mn USD. What amount of media spend was sms based? I would be surprised if it was in multiple tens of millions USD.

Ooh la la la ole o

Many years ago, in ancient 1994, Intel faced a problem it had not anticipated as a company which made microprocessors. A minor floating point flaw in Pentium could give you a whopping error rate of one in nine billion random FP calculations. The bug was caught by a professor , and systematically exposed by others. As expected Intel chose to downplay it initially. Public outcry followed and internet jokes abounded. IBM recalled Pentium shipments. Intel eventually gave up and offered free replacement to anybody who wanted one. It was an event which made Intel realize the power of its brand ; and the responsibility which comes with it.

It was all down to the "Intel inside" marketing campaign , launched in 1991, which depicted this logo on all PC's with an Intel microprocessor dubbing it "the brain" of computers. Consumers knew they were buying an Intel computer. Intel has since grown manifold , and despite hiccups, remains the most dominant hardware company in the PC world. Contrast this with the cell phones you buy. Do you know who makes the "brains" of cellphones? The power of branding , or lack of it, at work again.

Arguably, there is no Indian IT company which can claim to have a strong global brand. Few people in India ( outside the Bombay Stock Exchange , that is) would have more respect for the Infosys brand than the IBM brand although both may now be competing in the same software services domain. ( Check out the IBM ad on TV. Isn't it snazzy? )I think this is one area where Indian IT companies have failed miserably.

So it gives me great pleasure that the Kingfisher "king" will finally give us an "Indian" Scotch. Raise a toast! Lets hope we get a few Vijay Mallyas and "Ooh la la .. " marketing from Indian IT companies.

Micro-VC

Micro-VC , not exactly a revolutionary idea , has been discussed here . Basically, it is VC for new micro-ventures. One could define these ventures more specifically, but generally these would be profitable in a duration of 1 year , risk would be lower than in traditional VC , technology may not be cutting edge , and business model would be relatively more stable. An example - a real time price tracking mechanism for buyers/sellers of agricultural produce in a large district level mandi(market). Or an urban transport solutions system for white collar workers in a large metropolitan area. These ventures may never get acquired or publicly listed , the means a traditional VC depends upon for rewards, but they would have a greater chance of consistent profitability.

The government , for its part, could give generous tax concessions to the profits made by the micro VC firm and give them preferential treatment in fund raising from public sector financial institutions.

I think it has some relevance for a country like India where substantial entreprenurial energy could be unleashed with easy availability of fair-risk capital to the masses.

How the mighty have fallen.

If you have not read this NY times article, you must. It is time the Web2.0 wannabes learnt a few lessons :

• Architect- Your website for scale. The boundaries should be designed to be elastic.
• Spend - A few more bucks on quality backend infrastructure. If you are broke, at least plan to relocate.
• KISS ( Keep it Simple, Stupid) - Everyone uses dynamic content, but should you? And where?
• Listen -First to your user,everyday, then to the ad agencies, whenever possible.
• Filter - Advice about new technology or new features coming from anyone who is not a regular user. Or not an engineer.
• Resist - Overinflated Ego. Undue pressure from investors. Rigidity.
• Ideas- Are good. Execution,though, is better.

Friendster's example clearly shows that first mover advantage can get you to the top. But it can't keep you there.