Here is the presentation.
Here is the talk that I had prepared.
Emergic: Made in India, Made for the World
Introduction
An important part of our future is being invented out in the world. And it is from that world that I want to share stories about two companies I am involved in. Between them, they cover the two most important screens of our interactive lives – the computer and the mobile. The two companies are Novatium and NetCore.
They are both part of what I call the Emergic Ecosystem. Emergic is about creating Emerging Enterprises which leverage Emerging Technologies to do good and well in Emerging Markets like India. Emergic Innovations will serve not just the emerging markets but will have a positive impact in the developed markets also. So, they are made in India, and made for the World.
[SLIDE 2]
About Me
Before I get to the stories, here is a quick word about my background and context. I have spent the past 16 years as an entrepreneur in Mumbai, creating India’s first Internet portals and now India’s largest direct-to-consumer mobile media. I have also made personal investments of $20 million in NetCore and a dozen companies to help put together the building blocks for tomorrow’s digital world.
[SLIDE 3]
Novatium Details
Let’s start by talking about Novatium and mass-market computing.
India has about 50 million upper and middle income households. But fewer than 8 million of them have computers at home. There are only about 5 million broadband connections to the home.
So around 30 million Indians have access to the net only from cybercafes. This has to change. Access has to come home.
To create a mass-market for computing, we realised that we had to address the twin problems of cost and complexity simultaneously. To do this, we went back to an old idea – that of the network computer.
[SLIDE 4]
The NetPC Solution
We took the guts of a mobile phone and created a sub-$80 network computer, which uses a standard keyboard, mouse and display. All processing happens over a broadband connection on the server. We added support for Windows and Linux terminal services thus making sure that every application out there was supported from day one. We intelligently split application processing between the client computer and the cloud server to ensure that user experience was as good as using a regular desktop.
Connectivity
Connectivity is becoming less of a challenge than it used to be in India. For example, two publicly-owned telecom companies now offer 1 Mbps connectivity to homes for just $5 a month. Private wireline operators too offer high-speed networks. So, we are partnering with telcos to bring computing and Internet to homes.
Ease of Use
What customers like is the simplicity of use. For most of them, the Nova NetPC is the first taste of computing – so they are delighted that their kids can now have computing at home rather than being required to go to cybercafés or be limited to the few minutes of access they get in their schools. For parents too, the Nova NetPC opens up new horizons – as they learn how to use a computer from their savvier children.
Affordability
The Nova NetPC costs only $100 upfront — including the display – and just $10 a month for the computing services and telecom connectivity. That is about the same as that of a mobile phone and monthly costs.
[SLIDE 5]
Go-to-Market
In the past year as part of a large pilot, Novatium’s NetPC is now in over 5,000 Indian homes. The rollout is now scaling up with a multi-pronged go-to-market strategy.
First, there are the telco partnerships where computing and connectivity are bundled together. Second, we are working with local cable and wireless access providers who can build and manage networks in neighbourhoods. Finally, we are also distributing a telco-independent variant of the product which has the browser locally on the client itself. This is sold directly via PC resellers to home users.
Our goal is to use these three pathways to reach millions of Indian home users. There are other verticals like SMEs, education and rural infocentres which also need a solution like this. In addition, the opportunity for Novatium is also to take its model to other emerging markets – and perhaps even some developed markets.
Multi-Monetisation Model
An innovation that we have brought in is the concept of value-added services in computing, which can enhance the revenue that can be generated from the home users.
Because we can control all desktops centrally, we can carry ads – customised to the location of the user and usage profile.
In addition, because we have a cash balance (much like the mobile pre-paid market), we are now able to offer content and applications for a small monthly subscription fee.
Summary
There are a billion non-consumers out in the world for whom simplicity of computing is as critical as affordability. And that is the market opportunity for Novatium’s NetPC, or as Newsweek called it in a cover story last year, the “unPC.”
Now let’s move on from mass-market broadband and network computing to the equally exciting world of mobile data. While the fixed screen at home is the focus for Novatium, it is the mobile screen that is the centre of NetCore’s MyToday service.
[SLIDE 6]
NetCore and MyToday
A couple of years ago, we decided that the world of mobile data needed a direct-to-consumer access, rather than being limited by the constraints imposed by all-powerful mobile operators.
We chose SMS as our starting point, and gave it a second life by using the power of free, push and permission to build the right of way to millions of consumers.
The advantages of SMS
On the web, the search box is now at the core of both Audience and Monetisation. The equivalent in the mobile world is going to be the SMS subscription.
What is interesting about SMS is that it is non-intrusive, can be read at any time and works on every mobile in the world. In countries like India, where people have a lower ability to pay, SMS is an ideal interaction channel. Other than Voice, SMS is the only way to touch India’s 300+ million user base.
MyToday is working to do just that. Subscribers to MyToday get the information they want from any of the 50 channels that they decide to opt-in for – from News to Cricket, from Health Tips to Beauty Tips, from Jokes to the best movies to watch on TV tonight.
All it takes is a single SMS to subscribe to any of these free channels. And these subscriptions, along with the daily habit and direct relationship they create have made MyToday India’s only Media on Mobile.
Here are some numbers which speak for our success.
[SLIDE 7]
The Numbers – Subscribers, Advertisers and Enterprises
- Our free SMS subscription service, MyToday Dailies, has grown to 3.7 million subscribers in less than 2 years – all via word-of-mouth. We continue to add thousands of new subscribers daily.
- We send 13 million SMS everyday – accounting for 4% of India’s SMS traffic.
User behaviour
We had Nielsen do a survey of over 2,000 of our subscribers. The results show how SMS has become Media for MyToday’s subscribers.
The average age of the subscriber base is 25 years. 75% of the 3.7 million subscriber base is less than 30 years. Nearly 80% belong to SEC A and B, the top strata of Indian society.
75% of the subscribers read every SMS that they receive. For the vast majority, MyToday has become the primary source of receiving news and information.
40% of subscribers read the ads that follow the content, and 30% of them have taken action on the ads that they have seen. No other medium comes close to generating awareness or response as SMS ads tagged to targeted content that subscribers want to read.
[SLIDE 8]
Monetisation
This Reach and Right-of-Way is helping us drive multi-monetisation of the MyToday audience. In the past one year, we have worked with over 150 advertisers who have run more than 250 campaigns to showcase what’s possible and deliver results. In addition, we are enabling lead generation to help our subscribers fulfil their needs. We are also now starting a new revenue stream by offering paid channels via a cash balance that subscribers keep with us.
The Platform that powers MyToday is also being used by Enterprises, Operators and Publishers creating additional revenue streams for us. Enterprises can use the platform for a full-suite of mobile marketing solutions, including advertising and Invertising.
Invertising
Invertising is Invited Advertising. Invertising works because customers want to stay connected with the brands they like, the shops they visit, and the companies whose products they buy.
So, while advertising helps in acquiring new customers, Invertising is about reducing the incremental cost of contact while creating ongoing engagement with them. Advertising will tell me when a new mall opens near my house, while Invertising can ensure that I know what’s happening there every weekend – as an SMS that is delivered to me on Friday afternoons.
SMS is the perfect channel to deliver Invertising because of its simple, always-on, always-available attributes. And that is exactly what FabIndia, an ethnic Indian garments retailer, is doing. It sends out multiple SMS every month to its subscriber base telling them about what’s new in their retail outlets. (In the past month, I have visited FabIndia stores twice thanks to their hotline with my wife!)
Most recently, The Economist has started a daily SMS service telling opt-in subscribers about the stories in the magazine in order to get them to go online more often, and sample and subscribe to the print edition.
[SLIDE 9]
Growth potential – the making of a VAS Operator
The free SMS subscriptions are the foundation to building massive, direct-to-consumer reach. This creates the right-of-way, which can be monetised in multiple ways as we have just seen.
Creating a prepaid model with consumers such that cash collection is independent of the mobile operator is the next step. This creates an equivalent to today’s mobile operator – except that the focus is not on Voice, but on VAS.
We have also created our SMS Infrastructure at mobile operators – one of the handful of companies globally to have done so. This gives us tremendous control on quality of service besides giving us nearly infinite SMS capacity.
It is then one short step from there to becoming a mobile computing operator, a sort-of data MVNO, focusing on high ARPU enterprise customers and youth.
Summary
The Mobile VAS operator model is, thus, a direct path to consumers through the mobile ecosystem which can build a large audience and bring to life two scalable revenue streams on the mobile – advertising and subscriptions (where the user pays).
[SLIDE 10]
Emergic Philosophy
So, these were the two tales from India which have many things in common. Both started with Big and Ambitious Goals. They focused on the non-consumers in the domestic market whom they could delight with services which were simpler and cheaper. In doing so, they are both being aided by the limited legacy of other solutions. They are enabling consumers to leapfrog to a better future.
There are many large unsolved problems and opportunities in markets like India. In fact, some of the Emergic Ecosystem companies are taking on these challenges – using emerging technologies to create new enterprises in emerging markets like India.
- mChek is using mobile payments to help ‘bank the unbanked.’ The latest issue of Technology Review has a detailed story on mChek.
- Rajshri Media is creating innovative video ad models which go beyond pre-roll and post-roll to monetise free Web viewers of their hundreds of Bollywood films.
- Midas Communications has created low-cost wireless broadband solutions which have been deployed not just in India but also in dozens of countries globally.
- Intelizon has created a sub-$15 solar light to add 2-3 hours daily to the lives of families in rural homes, a substantial portion of whom do not get regular supply from the power grid.
Innovations – Made in India – Made for the World
So, whether it is Novatium’s NetPC or NetCore’s MyToday or some of the others I just mentioned, there is an opportunity for investors and entrepreneurs to do good and well in addressing the needs of hundreds millions of underserved consumers with the latest ideas in technology.
Think of them as technological Black Swans which can drive the creation of the next Microsoft or Cisco or Google. They will emerge not from the US or other developed markets, but from emerging markets like India. Emergic Innovations are a harbinger of things to come – Made in India, Made for the World.
