Category Archives: Ideas & Thoughts

Rocket Execution

“It is not the idea, but the execution that matters”

For a long long time, the above principle has been the key to huge success, but for innovative entrepreneurs the above principle is seeing a generational shift.

I am reading a book called ‘The Dhandho Investor‘, written by Mohnish Pabrai – an iconic figure in the investment world, and the Chapter 14 in his book is titled, “Invest in Copycats rather than the innovators“. Simply because copycats are likely to show multiple degrees stronger financial returns to the investors than the innovators.

Despite active participation of people globally in consuming technology innovation at a higher rate than the previous year, stock markets continue to behave absolutely opposite. Such a contrast it is!

Having seen two pioneering software product startup cycles, and having witnessed both web and mobile evolutions very closely over last decade, I have come to believe that it is not the execution that wins the innovators anymore.

It is the “Rocket Execution” that keeps the innovator alive in today’s times.

Rocket Execution

Rocket Execution

I often state the term “Rocket Execution” in my conversations, however, people end up misunderstanding/ misinterpreting the term every single time. In a quick succession since yesterday, I read news about two young companies, which I truly admire.

Yesterday, I read about the next round of funding news of InMobi. InMobi team started early 2007 and pivoted towards current idea after a failed attempt. Let’s look at their statistics

165 countries (presence),
1000+ employees
$400 million revenue
750 million monthly active users
2.6 billion app downloads
126 billion monthly ad impressions (which is roughly 170 million impressions per second).

The company was valued at $1b in 2011 (within 4 years of existence). It is aiming to double the valuation in 2014 (within 3 years). Hopefully the next billion would be added in 2016 (within next 2 years). This is a classic example of ‘Rocket Execution’ because if you do not grow at that rate, technology innovation elsewhere will outpace you.

Today, I read about the $19 million funding news of Housing.com. A company that started around June 2012. Let’s look at their statistics

25 cities covered in India
12 co-founders (Whoa!)
900+ Employees
2000 houses listed per day
50,000 houses mapped in Bangalore
80,000 houses mapped in Mumbai

If you notice the quality of listings on their website, you will understand the value of listing 2000 houses per day. At this rate, the company will list 700K houses annually, which is not at all a bad number. But just 2 years in operation, the company is aiming to list 10,000 houses per day, 5 times the rate at which it lists today i.e. 3.5 million listings annually. This is another fantastic example of rocket execution. Scale before another technology innovation trumps your innovation.

If that was not enough, an interesting tweet from Navalkant validates the emergence of Rocket Execution little scientifically. It states

1999 – $5M to launch a product, 30M serious computer users.
2014 – $5K to launch a product, 3B serious phone users.
Leverage per $ is up 100,000x

So don’t get excited if you got a million users within a year, until the next million happened in 6 months and the next million in 3 months and so on. Rocket execution is the only way to leverage the never-existed-before power of the connected world.

Disclaimer – The published data is gathered through public sources and it does not reflect actual number that may be relevant now.

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Targetted Re-marketing – The Power of Network

Just a few days ago, I and Aditi went on to purchase a 32′ LCD TV at the SONY showroom in Lajpat Nagar market here in Delhi. The TV had an MRP of 49,999/- and their salesman gave us 20 dedicated minutes, explained about all the models very well and almost convinced us that it’s the best gadget in town.

Upon bargaining, the last price that he offered to us was 46,900/-, 0% Finance, No processing fee and a free subscription of Tata Sky for 2 months. Still at the end of our conversation I decided not to invest immediately coz we wanted to do research first on the options available in the market (one of those 10000 bad reasons that we give) and he just allowed us to go.

After that we checked out a few other outlets as part of our research. Later, we went on to buy other stuffs like washing machine, floor mat, water purifier etc. Bottomline is that we were still roaming in the Lajpat Nagar market for another 2-3 hours.

What I’m wondering is let’s say SONY wanted to offer further discount to me if I don’t go back to them within an hour? Is there a mechanism to do a perishable targetted re-marketing?

How good would it be if my movement within that marketplace could be tracked; for instance which are the shops that I’m entering after leaving one shop. Let’s say if all these shops had an OOH media/ equivalent, it would enable SONY outlet to bombard me with an Ad to avail further discount. Because I was almost prepared to do the investment, the continual marketing campaign has the potential to stimulate me to do the investment.

Re-Marketing
Targeted Re-Marketing

Owing to competition, it is a very common practice in our usual life to offer discounts at the time when the customer is on the verge of leaving the premise. However, when one-on-one personal negotiations are involved, many a time it’s the human ego that accounts for denial for further discount on the face though the seller still has the intention to convey further discount.

Interestingly, eventhough all the shops are the part of a single network called “Lajpat Nagar” there is no tracking of the user that’s happening in the real world and I feel that this is where digital world has the edge. On the internet for instance, if I move from one webpage to another, I carry an identity either in the form of an IP or the cookie setup on my machine that can be tracked, simlarly in the mobile world I share the same base station and the mobile number.

Good news is that, Google has just done it for the marketers – leveraging the power of their own Google Adwords Network. This is just so amazing! So close to the real world practice.

It would really be interesting to see how such a model can be scaled down to either the brick and mortar real-estate network or the mobile network. For me it’s a great tool to do targetted marketing for the perishable needs.

Perhaps the last mile of advertising world.

Taxi bidding service – Any sense in India?

At the recently concluded NAVTEQ LBS Challenge in Las Vegas, I learnt that Taxi4me – a mobile taxi ordering service from T+1 solutions (an Estonian company) won the grand prize.

Taxi4me

Pic credit - http://bit.ly/lAgv

Taxi4me helps consumers connect with trusted taxi companies. This mobile application will get you a trusted Taxi service for your desired trip. The expected time and destination is sent from a user’s mobile phone to a taxi brokering server. Local taxi companies then submit competitive bids and proposed routes back to the consumer.

The idea at the outset seems to have potential. The emergence of various radio taxi / rent-a-car companies surely indicates that the need has risen manifolds in the recent times. However, it will be interesting to know what Indian users think about it.

If you have used a taxi service ever, what has been your experience about it?

Do you think you will use such a service for your taxi need?

How would you prefer to book a taxi the most?

  • Call
  • SMS
  • Internet

Anything other problem that this service still doesn’t address?

Why Sat Nav(s) are not for Indian consumers?

While there is no first hand data available for India, there are survey results by AA (Automobile Association) members for US. The behavioral aspects of the consumers in that region, certainly reveal interesting facts when correlated with the habits of consumers and the geographical challenges in India.

The survey conducted with 7,380 drivers in November 2008 revealed:

1. Approx. 75% of respondent who have Sat Nav still carry a road atlas.

Isn’t it worth noting? This clearly outlines the fact that majority of the drivers fear that there is a possibility to get mislead by the Sat Nav (Personal Navigation Device or PND).

This is even important to note because the navigation and exit signs on road are very well marked in US and the addressing system is extremely systematic compared to the Indian scenario, where even most local residents may look confused in guiding you to your destination location, forget about the navigation device. We all know for one how badly does India suffer with the navigation planning where road names are not marked on the roads at all and the notion of exit signs doesn’t exist accept at a few places.

In essence, the promise of Sat Nav or the manufacturers to take you to your destination without getting lost is an absolute fallacy. In fact PND users have themselves communicated that these devices actually force you to go in a particular direction. They feel that it creates utter confusion  and adds to the indecisiveness on-the-move and leads to higher chances of getting lost on the road.

Satellite Navigation Device

Satellite Navigation Device

2. 30% of respondents confirmed that their Sat Nav has misguided them, 4% strongly agree that they are worried about getting misguided while 47% disagree that they are worried.

More than the majority i.e. 53% confirms to the explanation above i.e. about being misguided by the PNDs in real-time and it wouldn’t be a surprise if this percentage is more than 90% in the Indian scenario. In fact, it would be a surprise to see the actual percentage of people who are being guided greatly by these devices.

3. 22% of respondents agree that their Sat Nav device sometimes distracts them when they are driving. 33% seemed confused about it.

Breaking of traffic rules, poor driving habits and lack of patience among drivers are not new things to any one who has driven on Indian roads.

Add to this the visual noise across cities due to  unregulated/ corrupt adverting policies, the banners and hoarding are one of the major sources of distraction to these drivers.

Not to discount the fact of increasing mobile usage while driving among the drivers again.

Hence driving in India demands utmost focus, it is now very important to understand if there is really any room for additional distraction due to Sat Nav devices for the Indian drivers?

[Soon startups like CashUrDrive and Govt. initiatives allowing the advertising on moving vehicles will increase the reasons for distraction even more on the Indian roads.]

For the reasons above, I think the cost of device is not only in terms of hardware/software but also the cost of updating the maps/ data and the additional helplessness that they contribute to the driver on-the-move.

______________________________

However, there are other interesting insights about Sat Nav(s) that you might want to have a look at:

44% of the respondents use it very frequently. 54% belive it to tbe the best device for their car, 49% are worried that it might get stolen – Sheer love with their device, isn’t it?

18-24 age group is most likely to have Sat Nav (43%), while 25-34 age group is least likely to have Sat Nav (38%)

Men are more likely to own a Sat Nav (47%) than woman (30%).

And that the SatNav device is the most wanted gift item in the west.

______________________________

While I do not own a Sat Nav, after hearing the bad stories from the users, I do not even want to have one. It will however be interesting if someone has some good stories after using it in India.

[Source]

Micro funds: Innovation for Angels/advisory startups

You may have heard about VC/ PE funds, Angel funds, Seed funds, Ycombinator model funds etc. Have you ever heard about any Alpha fund?

Get ready to take your ideas off to an alpha stage with the entry in 2009.

Recently founded New York based consulting and advisory firm HermanBlackbook has introduced New Platforms fund to promote application developers to build interesting applications on top of platforms like Twitter, iPhone, Boxee, AppNexus, Trulia etc. for a minor equity stake in the company.

The interesting and not-so-interesting thing about this fund is the amount of investment. It will range only between $1-3000. While it may sound very interesting to some developers, some of them will sincerely throw away a laugh at it. However I still feel it as a Micro fund for ideas to reach the startup stage and anticipate the rise of such funds in India very soon too. VC wear offers $100 fund, read more.

It is indeed interesting to see dynamism and newer ways to utilize the money in the investor’s circle; a question that comes to my mind is what need does this small amount really solves for an application developer? Is it his Coffee/ beer/ pizza bills to attend Xcamps? or the electricity/ home rent for a month or the software license cost?

Though it shouldn’t ideally be software license cost because most programmers usually explore open source platforms for prototype anyways and also an idea should demonstrate the lesser cash burn per month before it creates twinkle in the eyes of at least an angel investor and thus to get selected.

I have never been to US (or Silicon Valley), hence do not really know the needs of the app developers in that region but for India I think this can be a rocking idea. A little modified version could be to invest in some of the killer startups hanging at the helm of death along with the advisory that newer startups like Morpheus Venture Partners bring. Arranging to invest such small amounts shouldn’t really be a big deal and works perfect in Indian scenario and hence they demonstrate their skin the game before talking about the stakes in the company.

Even more, India has a huge pool of risk-averse angel investors; they can certainly take bets with these smaller amounts. Big business houses like Reliance, MiH, Bennett & Coleman, Bharti etc. should also learn something from this. Actually I’m learning to respect his initiative more and more with the length of this post.

Here is what Darren Harmen (founder Herman Blackbook) blogged about this initiative.

Of course I’m aware of the challenges that lie ahead, still I may like to explore a little modified version of it in Indian geography when I’m capable of doing so.

Would you?

LBS – The key to GPRS usage

Telecom companies in India should take note of it very very seriously.

We all know the state of GPRS usage in India today, inspite of bringing the rentals down to zero and the data usage costs down dramatically, the mobile broadband is yet to take off and help these Telco(s) build some serious dollars.

While all the big bet is around the mobile audio and video, it appears that location based services may be the appropriate answer.

Why?

Perhaps the answer is very simple. Perhaps, it lies in our general behavior i.e. that of the consumer.

Services other than text messaging and push email are “special purpose” applications requiring creation of a new behavior, such as watching video on a handset or vehicle navigation. Very much like voice, text messaging and push email are general-purpose communications applications.

One can argue that “where am I?”, “where are things I want?” and “how do I get there” are general behavioral patterns and thus lead to general purpose applications under LBS bouquet.

And one can argue that general-purpose apps obviously have broader appeal. It is therefore, conceivable that location-based services might have more potential, for these obvious consumer behaviour.

Let us also look at the study below:

Mobile application usage

The study clearly indicates that the local information and Maps/directions are the most wanted services in US. But how does it look like in India?

Local Information: Local search has come out to be the next hot thing after the social networking in India. JustDial, AskLaila, OnYoMo, Guruji, Ziva, KhojGuru etc. are some of the testimonies to it.

Maps/Navigation: The place for map/navigation is still wide open and to be tapped in India. The only strong contender today are Google (with it’s wiki approach) and Nokia (with it’s controlled content approach). RouteGuru in near future? Only the time will tell.

If not pictures, numbers says it all

1. There will be 28 million U.S. mobile broadband subscribers (primarily using third generation platforms) by the end of 2008, about 14% of all wireless users – Researchers at Yankee group estimate.

2. Strategy Analytics projects total end-user spending on location-aware mobile services in North America will expand from $110 million at the end of 2006 to $2.2 billion by the end of 2011 at a CAGR (Cumulative Aaverage Growth Rate) of 72%.

3. According to Nielsen Mobile, LBS grew to account for 58.2% of total application revenues, up from 51.4% the previous quarter.

While service providers have taken the local search seriously, it still goes perfect via USSD and the SMS medium. The personal navigation however definitely demands for a mobile broadband. Isn’t it the right time that they should take us really seriously?

Eye on future with location context awareness

Today we are divided into two types of world.

  1. The wired and
  2. The wireless.

All of us have seen both the worlds growing beyond imaginations. While the wired world has stepped into its adulthood, the wireless world is still in its infancy in terms of the actual value to be derived from it.  And the whole world (from both the blocks) is now betting on the wireless world for the next big thing to happen.

Worldwide more than 3.7 billion active SIM cards are distributed and approx. 1.5 billion people use internet. [Source]

Unlike the wired world that encompasses immense muscle (computing) power; wireless world is weaker in contrast. But we know that both the worlds have to converge eventually. And if they have to converge, they will have to play in each other’s blind spot but leveraging each other’s unique abilities.

What is it that makes the wireless world so unique?

Mobility


What greatness does the mobility brings?

Dynamic Location Context


What is it that makes the wired world so unique?

Computing power


What greatness does the computing power brings?

Rich applications


Do wired systems bring the power of dynamic location contexts?

No.


Do wireless systems offer rich applications (reliable and scalable as well)?

No.


Before, we all falter in our business strategies; shouldn’t we ask ourselves a question, “Are we building the businesses for the future? If we are, then have we considered the importance to both the worlds?

In the current model where users communicate, they don’t have a way to track the location context of the recipient. Interesting question to ask is: Why do we need location context awareness in the applications of tomorrow?

  1. It provides a visual element to any service and thereby leads to high user participation.
  2. Takes participation to the next level i.e. to that of collaboration.
  3. Enables transparent tracking of users in the physical world, bringing stickiness to service.
  4. Brings highly dynamic, current and accurate information.
  5. Opens up location contextual revenue models.
  6. Creates Hyper-local advertising opportunities.
  7. Ubiquitous birth to the social networking element.
  8. Quick integration with other Location Based Services.

Also both the worlds are already seeing paradigm shift in the consumer behavior and needs.

· From static content to the dynamic content

· From the need of availability of a service to the hyper-local availability of it

· From push (segmented) marketing to the pull (permissive) marketing

Businesses can certainly harness the power of location context awareness. However, the business models in the wireless world are indeed immature to project anything significant. Will they be subscription based services? Or the ad driven models will flourish? Nobody knows.

While initially a wide range of business models will coexist, ultimately advertising-based models will prevail due to the perfect fit with the local search and content-driven social context.

Key challenges in mobile marketing


1. The mobile marketing and advertising ecosystem is highly fragmented and more complex than it is visible. While many companies are trying to claim a piece of the market, much of the activities carried out are still in an experimental stage, and players are constantly looking for new business models and revenue-generating services.

2. The current economic downturn will also restrict the mobile advertising industry for some more time as marketing budgets decrease and advertisers put their money into proven channels.


Mobile advertising predictions

Telecom analyst firm Berg Insight makes five predictions for the mobile advertising market.

1. Ad-funded business models will become a new paradigm in the discount MVNO segment of the mobile communications market. Price sensitive young consumers with low income will be most inclined to accept ads in exchange for voice minutes or text messages. Incidentally this group is also highly interesting for major advertisers.

2. Smart phones will boost traditional Internet advertising revenues. A significant proportion of mobile advertising revenues will actually derive from mobile Internet users accessing conventional web sites. Internet advertisers are going to need to adapt by creating campaigns that work with multiple devices and display sizes.

3. Idle-screen will eventually become the largest mobile advertising channel. Virtually all consumers carry a mobile handset wherever they go and check out things on the display many times per day. Embedded advertising on the idle-screen and in the user interface would provide an unmatched exposure.

4. The current economic downturn will hold back revenue growth but not innovation. There is still going to be much innovation in the mobile space that will create new channels for advertisers to reach out to consumers.

5. Size will matter in the race for market leadership. Financial strength will be especially important if the market develops more slowly than previously anticipated. Existing digital and mobile industry players will have a major advantage over venture capital funded start-ups, many of which will have difficulties to find financing.

            According to Berg Insight’s Mobile advertising and marketing report, 2nd edition, the total value of the global mobile marketing and advertising market was €855 million in 2007, and it is forecast to be worth €6.1 billion in 2013. [Source]