Emergic: Rajesh Jain’s Blog

This week’s links:

• Searching for Scarcity: from Forbes.  “What is the scarcity that U2, the organic farmer and MIT are leveraging, and what does it tell us about our world?”
• A Letter to Aalisha:by Atanu Dey. “My friend Salil Naik asked me to write a letter to his daughter on her birthday.”
• Facebook vs Google: in Wired.”Today, the Google-Facebook rivalry isn’t just going strong, it has evolved into a full-blown battle over the future of the Internet—its structure, design, and utility.”
• Web 2.0 Five Years On: by Tim O’Reilly and John Battelle. “The Web is no longer a collection of static pages of HTML that describe something in the world. Increasingly, the Web is the world – everything and everyone in the world casts an ‘information shadow,’ an aura of data which, when captured and processed intelligently, offers extraordinary opportunity and mind bending implications. Web Squared is our way of exploring this phenomenon and giving it a name.”
• Ageing Populations: A special report in The Economist.”Age is creeping up on the world, and any moment now it will begin to show. The consequences will be scary.”

I read Matthew Glass’ book “Ultimatum” on the Kindle after reading this review in The Economist, which ended thus: “Mr Glass, who has worked in America and with human-rights groups, is familiar with the corridors and committee-rooms of power. He is good at portraying diplomatic brinkmanship and political in-fighting, and knows how policy gets made, all areas that a clumsier writer might have struggled to bring to life. This is a novel for politician and non-politician alike. And the ending is brilliant.”

I loved the book. It puts you into the head of the newly elected US President in 2032 as he faces multiple challenges, the most severe being the damage being caused by global warming and climate change.

There are some spaces that are going to be hard to enter and win:

• search (Google)
• news 1.0 (Rediff, NDTV, CNN-IBN)
• email (Yahoo, Google, Microsoft, Rediff)
• social networks (Facebook, Orkut/Google)
• video (YouTube/Google)
• jobs (Naukri)
• matrimonials (Shaadi/People Group, Consim/BharatMatrimony)
• cricket (Cricinfo/ESPN)
• finance (MoneyControl/Web18, Moneywiz/Rediff)
• local [voice] search (JustDial)
• travel (plenty!)

Some of these spaces have leaders, but not a dominant one, and as such are still open for attack. In addition, there are still plenty of other entry points. One needs to think ahead a few years, and think more along the lines of what I call the N3 Web (now-new-near Web).

The Internet and mobile businesses in India are still at a nascent stage. China has multiple billion-dollar companies in this space. By 2015, India too will have its share. This is the time for Vision and Will. And some Luck!

The two not-so-obvious things that can help the Internet growing again in India are:

• The Internet and mobile need to be thought of as a combo for services. It will be some time before Internet ad revenues are large enough to sustain the portal. (They are aboutRs 500-600 crore, with about three-quarters going to Google, Yahoo and Rediff.) The mobile should not be thought of as an isolated business, but in fact should be combined with the Net for whatever services are planned (content, classifieds, communities, commerce, gaming…). This creates a path to get higher audience numbers.
• Companies need to think of multi-monetisation.  On the Net, there are three primary options to make money: subscriber pays, ads and transaction fees. A fourth can be business services. It is critical that in the short-term the focus be on maximising the number of revenue streams that can help get the money in, thus minimising the need for external capital and increasing the longevity of the business.

Thus, according to me, a consumer-centric Internet business that thinks Net and mobile natively, and does multi-monetisation of its audience and technology platform is what has the greatest chance of succeeding in India. This is also an opportunity for newcomers without legacy to come in and disrupt the incumbents.

So, which spaces to enter? We will discuss that tomorrow.

There are three obvious and two not-so-obvious things which need to be done to get the Internet business growing again. The obvious ones:

• Reasonable, flat-priced (unlimited use) broadband needs to grow. I think the pricing sweet spot is somewhere around Rs 250 for unlimited use for 512 Kbps-1 Mbps connectivity. Actually, the last-mile conenctivity quality is not that much of an issue — in most cases, the pricing is. Metering Internet usage isn’t a way to explode this ecosystem.
• Computing and Internet need to get more associated with education and entertainment. This is where families who haven’t yet done so will start getting them at homes. Services don’t necessarily need to be provided for free — ISPs can bill for “value added services” as part of the bill, and revenues can be shared with the content providers. This ensures that content providers can get subscription revenue and not be dependent only on advertising, and ISPs can get additional upside than just the flat-rate data charges.
• Investments need to start flowing again in this space — the $500K-$2 million kind, which lets companies get started, and have enough runway for 18-24 months to show the business either works (in which case they will be profitable), or it doesn’t (in which case they fold up). A hundred companies need to flower so that we get a few to succeed, and become big.

Much of this is quite obvious to people in the space. I will add two more not-so-obvious point to this mix tomorrow.

A week or so ago, I met a couple of VC friends and we got talking about the Internet business in India. My contention was that this is perhaps a great time to build a hybrid net-mobile consumer media business — if one is willing to invest $5+ million over the next 2-3 years, and think out-of-the-box about what needs to be done.

The current crop of portals (horizontals and verticals) are too few and for the most part, unexciting. They haven’t yet become “utilities” (daily must-visits) in our lives. The content is quite insipid, and there seems to be little innovation happening on the Internet front from the larger players. For the smaller ones, it has become almost impossible to raise any kind of capital from angels or VCs, thus leading to an almost complete stagnation of the Internet base and usage in India. This has been compounded by a fall in ad revenue for many of the companies as the economy has slowed.

What can get us out of this and where are the next set of opportunities? More on this tomorrow.

This was the column that began my Tech Talk columns in November 2000. It was a vision to get India to 100 million Internet users in 3 years. Ten years later, we are still at only half that number. This is what I wrote then:

 There are 5 components to building a mass market Internet and making it a utility service:
- Access Device: Multiple options are becoming possible for accessing the Net. What will be the mode of access? Will it be the PC, TV or cellphone?
- Access Network: The telephone company still makes Rs 25/hour when we connect to the Net — significantly more than the ISP itself! Are there alternatives?
- Community Centres: 1 million telephone lines going into PCOs serve the communications needs of 75% of India. Can something similar happen with the Internet in India?
- Payment Systems: Few Indians (about 3 million) have credit cards, fewer are keen on using them on the Net! Can we eliminate billing and use pre-paid? Are smart cards the answer?
- Applications and Services: How many Indian sites make you visit them daily?

This week’s links:

• On Education: Two interesting posts by Koshy and Atanu.
• Four Pillars of an Open Civic System: by John Geraci. “What we really want (or what I really want anyway) is not simply government transparency, but an open civic system - a civic system that operates, and flourishes, as a fully open system, for whatever level we happen to be talking about - federal, state, city, neighborhood, whatever. And transparency is a big part of that open civic system, but it is still only one part.”
• Jeff Bezos at Wired conference: An interesting collection of quotes. “People over-focus on errors of commission. Companies over-emphasize how expensive failure’s going to be. Failure’s not that expensive….The big cost that most companies incur are much harder to notice, and those are errors of Omission.”
• The Start-up Guru: Inc magazine on Paul Graham. “His company, Y Combinator, is a hybrid venture capital fund and business school that invests in, advises, and, literally, feeds 40 or so early-stage businesses a year. Investments are small — less than $25,000 per company — but Graham supplements the money with smart advice, introductions to later-stage investors, technical help, and a sense of community.”
• The Power of Mind Mapping: from Forbes. “Mind mapping, a form of visual outlining, may seem superficial, but once mastered it provides a powerful tool for managing information overload and the hyperbolic multitasking of the modern world.”

I will remember this London vacation for the time I spent with Abhishek.On work days now, I hardly get to see him since he tends to sleep by 8 pm. In London, it was just him and me for the most part during the day. We would walk together for long stretches, travel on trains and buses, or just sit together eating some food in Starbucks. He was full of questions, and I did my best to patiently answer each of them. He was also a little worried at times that we hadn’t left anything behind in the taxi, bus or train - ever since I lost a bag in a Singapore taxi during our vacation a year ago.

The last day that we spent with my school friend and his family (wife and 11-year-old daughter, Nisha) was also an especially memorable one. When we temporarily parted mid-day (they had a booking to go see London Dungeon), I noticed a tinge of sadness in Abhishek’s eyes - he had gotten so friendly with Nisha. That evening, we sat in their hotel room and watched as Nisha taught Abhishek a few card games - and Abhishek actually learnt to follow the instructions given!

I don’t know what Abhishek will remember of this vacation, but for me, there are many moments which will stay on for a long time.

For much of my life, Vacations were something that I never really bothered about. Now, I am already looking forward to the next one - so I get to spend more time with Abhishek!

Food was one of our concerns given that we eat only Jain food (no onions and garlic) and in Bhavana’s case no potatoes either. On the first day, we ate lunch and dinner at Govinda’s (near the ISKCON temple) on Soho Street. The food was excellent. Dinner for the next three days was with friends - home food on two of the days! Another couple places which we sampled were on Drummond Street (Chutney’s and Ravi Shankar). Both serve vegetarian fare, but the Jain options are very limited.On our first night in London, we had gone to the nearby Sainsbury’s and stocked ourselves with plenty of bread, cereal, fruits, chips and juice, to complement some of the stuff we had taken from India. We’d keep sandwiches with us to eat through the day along with biscuits and nuts.

So, overall, food was much less of an issue than I thought. The kitchen in the hotel ensured that we’d have our full breakfast early in the morning before we set out for the day. It also meant that Bhavana could make her very special self-made Indian tea whenever we were there! And after 17 years, I was back to doing the dishes.

Tomorrow: Memories