Emergic: Rajesh Jain’s Blog

Government and Politics: Interference and Opportunity

2011 will be remembered as the year that the government started cracking down and limiting the freedom of speech on the Internet. Perhaps shaken by the success of the India Against Corruption mobilisation via mobile and social media, the government fought back by cracking down on social media, TV channels and SMS. 2012 will see various court battles to determine whether India sees censorship in the China model, as one of the judged hinted.

India’s mobilisation and politics can also be changed via the coming rise in digital users. IAC was a good showcase of what can be possible. Given the large base of urban Middle India and the tools that they have to now organise, there is no reason for this segment to continue to stay apathetic to social and civic issues relevant to the future of the country.

Last Word

So, even as India’s Internet comes of age finally, our government, digital infrastructure  and regulation hold our usage back. I hope that 2012 sees these obstacles go. But given past experience, I am not optimistic. And yet, we as consumers will find our own paths to make the digital world an even greater part of our life.

Marketing: Multiple options

Digital media options are proliferating. Marketers now talk of paid, owned and earned media. Paid media is the search and display ads that companies run. Owned media is the properties that are created – for example, Facebook pages and mobile apps. Earned media is the multiplier effect from users spreading the word on their own through social media and other mechanisms.

There is mobile marketing with all the various options – SMS, voice, mobile Internet and apps. There is also social media. Email marketing is also growing rapidly in India. What is perhaps lacking is more innovation in how all of these options can be better integrated together.  For example, TV advertising could include opt-in options to drive permission marketing to the mobile.

As digital marketing options proliferate and ever greater percentages of the budgets shift, companies will demand even greater accountability of their spends. So, analytics will emerge as a by-product of the process with even sharper targeting of users. There is so much information that we are leaving in trails on the Internet and sharing that the world of microtargeting is now becoming a reality.

Entrepreneurs: Optimism Abounds

The past year has seen at least a few private companies like Flipkart and InMobi with valuations rising to the magical billion-dollar mark. eCommerce companies of all shapes and sizes have been at the receiving end of dollops of dollars. That is good. While there will be many failures, there will be a large array of entrepreneurs who will learn a lot from this process. Multiple models will be tried and morphed, and good always comes out of such experimentation.

A decade ago, there was a similar optimism but that window was too short and the user base was simply not there on the Internet. This time around, it is for real. There is a much better pipeline of funding available for entrepreneurs now – from individuals, angel networks to VCs. All we need to keep this pipeline running is a continuous flow of exists through M&As and IPOs.

What we need in India now is more investments into localised content and services. This will help drive more usage and advertising. The ad spends on the Indian Internet at Rs 1,500 crore annually are still now large enough to sustain a vibrant content ecosystem. Local languages and content will be critical in the next phase of the Indian Internet.

Continued tomorrow.

Mobile Payments: Mired in regulation

One of the big boosters for monetisation on the Internet and eCommerce can come from enabling mobile payments. Here, regulation by RBI and the payout regime from the DoT has ensured that mass-scale mobile payments remain a mirage.

Imagine being able to pay for a book you bought by just having it added it to the phone bill (or being deducted from a prepaid amount). If this process is simplified, then even an SMS sent by a merchant can turn into an actionable transaction with the consumer just smsing a Y to complete the purchase.

To make this happen, while the theory of mobile wallets happens, the process is simply too cumbersome. For sub-thousand rupee payments, we need a simpler process. Operators should have not to pay service tax and revenue share to the government on these charges. They can take a transaction fee (3-10%), and pass on the rest to the merchant.

Unfortunately, 2012 is unlikely to see much change on this front.

Bandwidth: Frozen in time

India’s data pipes scenario doesn’t look that good in the near-term. The wireline networks are almost entirely dependent on a broke BSNL and a meandering MTNL. As a result, we are not seeing the high-speed networks that should have been ubiquitous by now. By not unbundling the local loop (last mile), the government has forced private players to take the wireless route even for the last mile.

Reliance’s impending entry with their 4G networks will change the game. But it will take a couple years for that to happen at a national level. One would have thought that the existing 3G mobile operators would have fast-tracked moves, but that hasn’t happened. So, with BSNL and MTNL not doing much, RIL’s entry still some time away and the 3G networks not living up to their promise, things aren’t changing much.

Bandwidth remains critical because the Indian Internet usage needs to switch from intermittent to always-on, and from low broadband (sub-1 Mpbs) to real broadband (multi-Mbps). Until that happens, the usage will remain somewhat muted. For applications like multi-player gaming to take off, high-speed networks are critical.

Continued tomorrow.

From a post a year ago:

One of my favourite books (and movie series) is “Lord of the Rings.” And so, I can think of no better way to end this series than with three quotes from the movie that I feel epitomise my thinking and life.

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Frodo: I wish the Ring had never come to me. I wish none of this had happened.

Gandalf: So do all who live to see such times, but that is not for them to decide. All we have to decide is what to do with the time that is given to us.

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To bear a ring of power is to be alone.

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Even the smallest person can change the course of the future.

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This week’s links:

• 25 Big Ideas for 2012: from Wired UK. “Social design and Facebook’s next big move.”
• John Battelle’s 2012 Predictions: Among them: “Twitter will become a force as a media company, not just a platform for others’ media. To do so, it will improve its #Discover feature and roll out something like Flipboard.” and “Every major player on the Internet will have to do a deal with Twitter, and Twitter will emerge as a Swiss like, open, neutral player in the battle for the consumer web.”
• The Seven Habits of Spectacularly Unsuccessful Executives: from Forbes. “Habit # 1:  They see themselves and their companies as dominating their environment.”
• Management Team – While Building the Business: by Fred Wilson. “Building the business largely means building the management team. They are one and the same. Many founders are naturally talented at building product and building the user base. But building the company comes harder to them.”
• Identity Politics in India: by Atanu Dey. “The identity that matters most during elections is our identity as responsible citizens. We care not about the identity or the personality of the candidate but rather what ideas and ideals the candidate holds and whether those ideas will lead to social welfare. We care about honesty and decency, about public order and private enterprise. It is that identity of ours that we should wear proudly on our chests and act accordingly at the ballot box.”

Video : Variety and Vroom

If Facebook is synonymous with social networking, YouTube is the same with video. In terms of viewers, it is the 10^th largest TV channel in India, if one sees it thus. As bandwidth costs have become flatter, video usage has increased, both on wireline and mobile networks. Hundreds of movies and  tens of thousands of snippets are creating a varied video experience.

In 2012, we can expect much more Live Video. Already, one can see many events like – including the ongoing India-Australia series (should one want to, of course). Political rallies, some conferences are now being live streamed over the Internet, thus enabling reach independent of geography.

Video brings things alive in a way text simply cannot. And this opens up huge possibilities in India. We will start seeing made-for-Internet “TV channels” which bypass the investments required for distribution via cable and satellite. This has the potential to change many industries in India, from education to politics.

Continued next week.

Mobile: Missing Data

The mobile revolution in India has seen an amazing decade of growth. With nearly 900 million SIMs distributed to 500+ million Indians, the mobile has done for communications what the landline telephone never did. The voice revolution in India is finally complete. Pretty much everyone who chooses to be connected can do so for a small investment.

The next upgrade will come through the use of Data. This is where the operators’ 3G strategy has been confusing and disappointing. They haven’t really pushed 3G hard enough. The networks too are not delivering the speeds that they should. So, even as have devices capable of doing so much more, the usage of data and the ecosystem of content and applications is not growing fast enough.

Data plans for postpaid users need to become much more rational. To charge Rs 600 as operators want to do on a Blackberry data connection is irrational, even as they offer cheaper plans for BBM and email. Operators should replicate the i-mode model of open platforms and micropayments to drive the ecosystem in India. That is where the Rs 500+ data ARPU is going to happen.

Continued tomorrow.

Social: Surging

Social media, led by Facebook’s virtual monopoly, is driving the daily use of the Internet in India. One never wants to be away from friends and the extended family for too long! Old classmates are being found, photos are being shared and tagged, the day’s trivia make up the personal headlines. Social media is filling in life’s free moments – both on the Internet and on the mobile.

In some ways, Facebook has become what Windows was in the 1990s – the new platform.  The magnetic pull that it exercises with everyone else being there becomes hard to resist. Sites like Linkedin are doing the same for professional connections. So, no one is more than a few hops away.

The implications for other portals is that they have to start putting people at the centre. A new book, “Grouped” by Paul Adams, explores this theme in much more depth. The result is the news we read, the searches we do, the eCommerce portals we browse, the videos we watch – all of these will start having the filter of the social graph that we have so meticulously built. The web will become personal, through the lens of our friends.

Continued tomorrow.

eCommerce: Rising

Undoubtedly, the biggest story on the Internet in India is that of the dramatic rise of eCommerce. People are becoming comfortable buying all sorts of things over the Internet. Companies have also set up better logistics for distribution and collecting money on delivery. Consumers are willing to trust sites since they can choose to only pay on receipt of the goods.

For an India that is urbanisng and hasn’t had as much choice, especially in smaller towns, the Internet eCommerce sites are a godsend. More than FDI in retail, it is these sites which are the real disruptors for kirana stores. Daily deal sites and discount portals which offer branded goods at lower prices means that eCommerce also becomes a fun activity in the search for the best price.

The challenge for Indian eCommerce sites like Flipkart and Snapdeal will be the investments that they will have to do to fill in the missing elements of the Indian logistics value chain. Amazon can rely on UPS for delivery and the credit card companies for cash collection. Indian companies have to do all of this themselves for the most part to ensure tighter control on delivery, as also set up warehouses closer to the customers. Much of this should improve as third-parties start offering all of these specialised services.

For now, discounts and free shipping supreme, giving Indian consumers a veritable treat if they choose to buy online.

Continued tomorrow.

I used to do a Trends list every year until a few years ago. Then, inexplicably, I stopped. Perhaps, it was more out of disappointment at the slow pace of change in the Indian Internet and Mobile Data space. Things are finally changing, as users, money and tech are helping bring about an acceleration in the use of the Internet in India.

The last few years have seen an acceleration in the use of the Internet in India. Starting with the convenience of ticketing (train, air, movies, bus) to the use of social networking and video, the Internet is becoming part of our daily lives – but with services that didn’t exist a decade ago. So, the Internet in India is following a different trajectory from what happened in the US, where it was the content sites that first rose to prominence.

In the next couple years, the Internet in India will reach over 200 million users with the majority of them accessing it via their smartphones and tablets on 3G and 4G networks. Social networks will current more than 100 million of us together.  Video use on the Internet will rival the reach of TV’s most popular channels.

In this changing world, let us take a look at key trends for 2012.

Continued tomorrow.

From a series I wrote a year ago:

This week’s links:

• Mobilizing for a resource revolution: from McKinsey Quarterly. “Over the next quarter century, the rise of three billion more middle-class consumers will strain natural resources. The race is on to boost resource supplies, overhaul their management, and change the game with new technologies.”
• Could coding be the next mass profession? by Roy Bahat. “There is a new opportunity emerging for young people to do productive, entrepreneurial, satisfying work: they can learn to code.”
• Pratap Bhanu Mehta Interview: in Business Standard. “The global economic crisis is such a huge opportunity for India. People are looking to invest in places other than China. Shouldn’t we have been taking advantage of that. Doesn’t the leadership understand that almost all the things it wants to do by way of welfare and rights depend on government revenues increasing at the rate of 20-30 per cent a year? How do you increase that if you don’t have growth?”
• T N Ninan on the root of corruption: in Business Standard. “…the hyper-ventilating leaders of an anti-corruption movement who roiled the waters for most of 2011 have not thought it necessary to say one word about how it is government-induced market distortions that lie at the root of corruption in so many sectors, and how reforms of the 1991 variety might provide solutions — indeed, better and more lasting solutions than sending Lok Pal hounds after every babu who yields to temptation.”
• The CEO in Politics: by David Brooks. “In sum, great presidents are often aristocrats and experienced political insiders. They experience great setbacks. They feel the presence of God’s hand on their every move.”

One India I have been thinking about is taking a few days to actually travel through Uttar Pradesh to get a better sense of what is happening. Maybe, even attend some of the rallies of the leaders. It is an India that is very different from what we in Mumbai are used to. Even though we have the municipal corporation elections in mid-Feb here, they are no match for the excitement of what is happening in UP!

Another aspect I am curious to understand is the impact of Urban Middle India. Is there really an aspirational middle class that is willing to look beyond caste and vote for a positive agenda (in case one exists)? Is this class large enough to really make a difference in the electoral outcome? Or has this class, like we have been told, switched off and seceded?

All in all, we are in for an exciting couple months ahead, culminating in the budget. And once that is over, we need to get ready for the next set of elections. We (as in our elected representatives) need to elect a President and Vice-President. And once that is over, we are on to Gujarat and the next set of states. Election excitement aplenty! Hopefully, in all this, we will also get some reforms and decisions to move India forward.

What is going to be interesting is what happens once the elections results come out on March 4. First will be the spin each party gives to claim victory. Football-like results will be trotted out – 3-2, 4-1, or whatever. Once we get past that, we will need to get down to the harsh realities of what comes next.

Will there be a re-alignment of forces at the Centre as perhaps an SP replaces the TMC? If the Congress does really well, will it go for a mid-term poll? If it does badly, will it replace the Prime Minister? Will the Budget give a push for big-bang reforms as many from the world of business have been asking for?

Hopefully, the elections will provide some clarity on the way forward. What hits the economy hard is stasis. India cannot afford another 2-3 years of policy paralysis and governance deficit. We are digging ourselves into a hole that is getting deeper by the day.

Continued tomorrow.

We get filtered news through the English media on the UP elections. In most cases, it is what the parties would have us believe. So, stories emanate about how internal surveys show the Congress leading, and another report has the BJP focused on 243 seats of the 400+ in the state. It will all boil down to the Muslim vote, some say. Will it be united or will it split? And so on.

What I find surprising is that every party is playing the same game of caste arithmetic. I wish, and I accept that this be living in fantasy land, one of them would have chosen to create a clear positive campaign centred around good governance and development. For example, the BJP could have adopted a slogan like “Uttar Pradesh Ki Dharti, Gujarat-Bihar Ki Niti, Aap Ki Tarakki.” But we may still be a few years ahead of thinking beyond caste to economic growth as the primary aspirational agenda.

So, the game goes on. Elections, they say, are all about addition. And Indian elections like those in UP, are all about adding castes and sub-castes!

Continued tomorrow.

The real battle, of course, is in Uttar Pradesh. From the reports and hearsay, here is what I have gathered. BSP and SP are in tough fight for first place, with both expected to get 120-130 seats. In essence, the BSP is expected to lose about 90 seats from its 2007 tally. These spoils are what everyone is going after. BJP and Congress are in race for 3^rd and 4^th place, with both hoping to get in excess of 75 seats so they can then decide who forms the government.

Things could still change dramatically. In UP, caste matters more than anything, and there is a lot of attention all the parties are paying to their candidates and campaigners to ensure the right math. It is a seat-by-seat fight.

On election day, what will make all the difference is the get-out-the-vote operation. In a four-cornered contest (not counting the smaller parties who are also in the fray), victory margins are going to be wafer-thin, so that party which does a better job of getting its supporters out to vote will have a significant advantage.

Continued tomorrow.

Elections in India are always fun. No one really knows how voters think, and yet everyone tries to speculate. Voters get wooed in multiple different ways through all kind of sops. It is both political theatre and a celebration of democracy, as commentators repeatedly remind us. And every bunch of state elections is a “semi-final” for something or the other.

And so we have yet another exciting electoral extravaganza in store for us.  All national decision making is in suspended animation till the results are declared on March 4, and the Uttar Pradesh scenario plays itself out. In a frenzied way, we are fed stories every day of the caste calculus, and which way the winds of change are blowing.

The other four states – Uttarakhand, Punjab, Manipur and Goa – suffer by comparison to UP. And yet they are also important. A lot has happened in the past year in India, and people now get to vote. Each state has its own dynamics, so it may be hard to decipher a national mood, but there will be plenty of indications as to what people are thinking.

Continued tomorrow.

I wrote a series similar to the one I wrote this week a year ago:

Every year is different. Every year brings with it its own set of ups and downs. Many times, during sad moments, we ask why it is happening to us. The corollary to that is that we never do so in happy moments. Over the years, I have learnt to take the ups and downs, the happy and sad moments, in my stride.

The early years of being an entrepreneur in India in the 1990s were very difficult. That is where I learnt to recognise and accept failure. In some ways, it also taught me to experiment and try innovating – because more than anything else, it is the fear of failure that prevents us from trying something new and different.

Through the years, I have now learnt not to worry about failure. As I tell people, in my entrepreneurial life, I have probably failed with 15 ideas that I have tried to create. A few have succeeded, and that is what the world sees. But these successes were built on the failures that I learnt to accept and build upon.

And so it will be with 2011. There are many fresh ideas I have both in NetCore and on the Political front. Some will succeed, but some will fail. It will be for me to apply the lessons I have learnt through the past two decades and create something India and I can be proud.