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.

Identity 2.0

Chances are , you have not heard about this service. Call it Trust 2.0 or Identity 2.0 , the central theme here is verification - in this case of a person or her work. It may yet turn out to be a killer theme globally as well as in the Indian context.

Indians are definitely not alone in fudging resumes , as this NY Times article shows. I feel more credit card fraud probably happens in US/UK than in India , and some recent call center cases gained much more adverse publicity courtesy the anti-outsourcing brigade.

There are some startups out there building job referral sites, that is , akin to LinkedIn, you could refer someone you know for a job opening. I think this is not a fool proof solution for the majority. And here is why.

The number of white collar jobs in IT/ITES companies in India is a fraction of the number of students graduating each year in different fields. An even smaller fraction is the number of students deemed "employable". Sure, there are lot of smart kids coming out of colleges. But given our demographics, the "also-rans" are huge in number. This leads to competition , but mostly at the entry level. Once you cross the threshold into an MNC or an Infy/Wipro/TCS/likes and bag a handful of years as experience, its pretty much your world for the taking.

If you don't know what I am talking about, go visit the open walk-in for a big software company in Bangalore. Someone I know almost got killed in a stampede during one such walk-in.

Job consultants have been around in India for a long enough time. But most of these smaller shops have a really bad reputation for screening quality freshers. Their screening process is as transparent as a wall, inside jobs are common, and test administration is closer to a farce. No wonder IT/ITES companies discover fudged resumes and poor communicators down the line.

The pressing need ,or shall we say opportunity,therefore, is of an identity verification cum selection company, targeted mainly at freshers in IT/ITES and having the following three attributes : 1) Inviolability 2) Transparency 3) Flexibility. Doas any such company exist in India?

India and the Internet

While browsing aimlessly, I stumbled upon this piece of data at http://www.internetworldstats.com/stats3.htm. You might already know some of these figures , but being a DI freak, I made some interesting observations-

* There is a strong correlation between internet penetration and economic development. Japan, SouthKorea,Singapore,Taiwan and South Korea at the highest tier; Bangladesh,Myanmar,Nepal and some central Asian countries at the lowest tier; while China,Indonesia,Phillipines and Thailand form the bulk of the middle tier. India, with 3.5% penetration, is still way way closer to the lower tier than the middle tier.

What is mind-boggling, for me at least, is that this correlation holds even when you look at figures from Europe ; with Nordic countries leading the pack followed by western europe and then central and eastern europe.

* Pakistan, India's never-to-be forgotten neighbor, increased penetration by a staggering 9000% over 2000-2007. Even though it started off with a small base, this is a stupendous achievement nonetheless and something India could look at. I personally think for too long the IT mandarins in the Indian government(both union and state) have focused on aspects like outsourcing and FDI without looking at domestic penetration as a critical component.

* Broadband penetration in India is around 0.1% but is growing the fastest(about 20% per month). No prizes for guessing if this growth is primarily urban or rural. Why do MTNL and BSNL ,both public sector companies, continue to the most dominant broadband ISP's? My answer- existing infrastructure and right of way. Can we have a fairer playing field please? 256 Kbps isn't exactly the fastest, I could do with 2-4 times more. I want to live my SecondLife minus the display hiccups and work from home.

* Worldwide, urbanization and Internet penetration are correlated. Countries of Western and northern Europe and US are more than 80% urban and penetration is close to 70%. I think this makes sense , with the much higher urban population density a good incentive for ISP's , especially broadband. With more than 50% of India's population continuing to be rural by 2025, more than 500 million rural people would live on the other side of the digital divide. Maybe Intel is right- WiMax is the way to go in India. After all, who is going to lay DSL cables in 0.5 million villages with fewer than 10,000 residents each?

*Add the fact that 40% of India is below 15 years of age, you get a closer picture of who you are designing your website for.

Next up , I will look at the split of young,urban internet users across different segments.

Do It Online - The Indian way

What do www.seventymm.com , www.compareindia.com and www.hungrybangalore.com have in common?

These are all internet ventures targeted at the Indian consumer albeit none of them is an online shopping site ( remember the baazee wannabes?). Indians just don't like to shop online, partly because there aren't a whole lot of really good (read cheap) deals available. Moreover , buying something more expensive or long lasting than an FMCG tends to be a see-touch-feel collective family shopping exercise for the vast majority who are "just" able to afford the widest TV, the hottest (literally) microwave or the tallest hatchback. This is the biggest reason Dell has not been able to make a dent in the Indian PC market. Note how even the advertisements position these goods for the whole family. This is the reality of a developing country with a growing,family oriented, middle class.

Does this make internet ventures obsolete? Far from it. Each of the three companies I listed above , I suspect , understand the psyche of the internet savvy Indian consumer. They address real needs - searching and renting a movie title for your movie buff daughter , comparing brands of washing machines for your mom(sorry, barring exceptions, this is a decision that moms make in most Indian households. Call me sexist if you will.) or ordering late night dinner from a restaurant 10 km away. None of these ventures claim to be substitues of real shopping , rather each provides a service where either a) Brick & Mortar mom-pop stores are unreliable,non-existent or unorganized , like movie rentals and food delivery or b) the website is just a precursor, like compareindia, to the actual shopping. Note the common theme is that the stakes for the consumer are minimal if the product- a movie rental or a family dinner- turns out to be lower than expected quality. And no one ever lost anything by visiting a comparison only site. The same lower stakes will make customers fickle- don't expect them to stick if your services ( delivery time for dinner , for example) are not of the best quality every time.

There are others , online bus ticketing (www.redbus.in) and comparing real estate ( www.magicbricks.com) , which are taking a similar approach and are worth a dekko.