What Can Cause Us to Fail

I was having a conversation with a friend last week when he asked me a seemingly innocuous question: What is the one thing that can cause us to fail? I thought for a minute and replied: Reliance on a single revenue stream. He argued that a business must have focus. My counter-point: At the early stage of a new industry, it is not obvious where the value creation will happen and what will be the dominant business model or revenue stream. In that scenario, one needs to be able to try out multiple different options and get quick learnings as to what will work and what will not. At that stage, it would be suicidal for a business to just bet on a single revenue stream assuming that is the only one which will work.

In our own mobility business,  we currently have two revenue streams: one derived from the audience that we have created via our SMS channels (SMS ads), and another from the technology platform that has been built (bulk push and invertising for enterprises). Both of these have helped us grow through the year. An exclusive dependence on just mobile ads would now have made the going tough for us as companies cut their media spends dramatically. Going ahead, there are a couple more streams that we need to explore: creating a cash balance for subscribers to pay for content and services, and white-labelling the SMS publishing, subscriptions and delivery platform for operators and others globally.

Meetings with Customers

The best learning in business comes from meetings with Customers (or prospective customers). Too often, we want to just talk about the products and solutions we have to offer. Instead, by listening to the problems and challenges that they are facing, we can come up with both features that the market needs and how to position the solutions one has.

The seven meetings I did in the past week has helped enlighten me on how to position the mobility solutions we have better. It was not one meeting that did the trick, but the collective pointers that come up in the various conversations.

That is why, it is so important for top management to go out and meet with customers. When I look back, this is probably the single biggest mistake I made in 2008. Meeting with customers is something which should never be delegated — and even more so, when a new business is being built.

mGenie

A colleague, Alok Ladsariya, pointed me to the illustration accompanying this story in The Economist.

The theme of Mobile as Magic Lamp is something I have been talking within NetCore for the past 3 years. As I tell them: we have to be the Genie that makes the mobile a magic lamp, a sort-of mGenie. This illustration by Claudio Munoz is the perfect articulation of the vision.

Growing Mobile Data and Value-Added Services in India

I wrote earlier about India’s Red and Blue Mobile markets, and ended by saying that “the action (and value) going ahead in India will be not in Voice but Data and VAS (Value-Added Services) in India’s most valuable Red Market.” The question is: how does that happen? How can VAS become a bigger opportunity for mobile operators and the rest of the ecosystem?

There are five things that need to come together to make this a reality:

Reasonably-priced Flat-rate Data Plans: The US leads the way here. From being a laggard in the use of mobile data, the US is now showing the way with all operators having flat-rate data plans. In India, the right price point, according to me, is Rs 100 per month. A plan like this will encourage the use of the mobile Internet and other services, and create the necessary pull for companies to start building out mobile data services. Operators will benefit from large-scale adoption of data plans.

More Spectrum for Operators: Mobile operators in India have to make do with much less spectrum than almost anywhere in the world. The big cities, especially metros, have a severe shortage of spectrum. And so, mobile operators tend to focus on using the spectrum for voice rather than data. This needs to change. A worry is that even when 3G comes along (and that date still seems a year away – as it has been for the past 3 years), operators will focus more on voice than VAS given the spectrum constraints.

Better Revenue Shares for Off-deck VAS Players: Mobile operators need to encourage off-deck VAS players and provide them support for billing. In this case, the billing fee should be 15% or so, rather than the 50-75% that is currently the norm (and which can continue for on-deck services). This will encourage VAS players to create a wide variety of services, since it provides a revenue stream where subscribers pay rather than a complete reliance only on advertising.

Separate VAS from the Government Fees: VAS should be treated separately so that operators don’t end up paying the 12-15% of topline as revenue share to the government. In fact, for VAS, service tax also needs to be applicable only depending on the actual service. For example, if my cash balance as a subscriber is used to pay for a book purchase, then it does not make sense to pay nearly 25% taxes. In that situation, the mobile operator is acting more as a mall than a telecom operator.

Creation of a VAS Operator Licence: I have elaborated on this point in an earlier post.

Taken together, these steps can help drive mobile value-added services in a big way in India. A combination of factors stunted the growth of the wireline Internet and eCommerce in India. We have an opportunity to ensure a different ending in the mobile space.

Blog Past: The Emerging Internet

I wrote this post about a year-and-a-half ago. In it, I described my vision of the world to come in the form of the shifts that are happening:

Behind the PC to Mobile shift, there are four key elements to my philosophy about this ‘Emerging’ Internet that I want to elaborate on in this Tech Talk. First, even as the PC Internet has been wonderful in helping us navigate the Reference Web, it is the mobile Internet will help us build sensors into the Live Web. Second, what search was to the PC Internet, subscriptions will be to the mobile Internet. Third, advertising as the dominant business model on the Internet will give way to “invertising” on mobiles. Finally, this new world will first be visible in emerging markets like India – and in this new world will rise the next Google.

South Mumbai Bookshops

My favourite bookstore – like for many others – is Strand Book Stall at Fort. The collection is simply amazing, and every time I go there, I find something to surprise me. Even though other bookshops are bigger, there is something about Strand which enables discovery. They almost seem to know what will sell. In that diverse mix is a book for every taste. Abhishek too has started liking Strand – after he discovered that they a few snakes and reptiles books! So, now for the last two Sundays, we have been going there as he samples the children’s section books and decides what to buy. The rule we have set is: no more than 1 book per visit.

South Mumbai also has a few other good bookshops. Crossword is quite literally a stone’s throw from my house at Kemp’s Corner, and Oxford, at Churchgate. I really want to like Crossword, but something about it holds me back. We do visit Crossword often, but mostly it is for Abhishek to add to his small cars collection. Oxford is much more of a rarity in terms of visits. On my visits to Taj, I also used to stop by Nalanda. I guess it will be sometime before that happens.

And then there’s Amazon.com — the bookshop which is in the neighbourhood of everyone! My use of Amazon is now two-fold — to buy fiction books to read on the Kindle, and order the newest titles in case someone is coming over from the US to Mumbai.

Why Founders / CEOs should Blog Daily

All it takes is 15 minutes daily. That’s under two hours a week – about the length of time taken to got for one business meeting and get back to office. Blogging can probably open up as many opportunities as a good meeting can — in a way one cannot directly imagine.

I think blogging daily makes a big difference — it makes blogging part of a routine for both the blogger and the reader. As to the question of what to blog daily, there is no shortage of things to write on — as you can see from this blog! While RSS readers can easily surface the new posts of a blog within hours of them being written, a blog updated daily at a fixed time gives a feel of a good newspaper. (In India, newspaper reading is far from dead — and in fact is growing very nicely.)

A blog helps the founder / CEO make connections which otherwise would not be possible. It gives people one is meeting a better understanding of oneself. And it works great as a follow-up discussion in meetings — one can send links to posts written outlining views on topics discussed. For a growing company, the ability to get an undiluted view across can be extremely useful.

Of course, the challenge remains: how to get readers to the blog? I tell everyone I meet for the first time aboutmy blog — and the fact that it is updated daily. Hopefully, their first visit ensures that they become regulars — given that there is something new daily.

So, try it out. It does not take as much time as one thinks it will take. And the returns can be many times over the time invested!

India’s Red and Blue Mobile Markets

The Indian mobile industry is about to face four key disruptions in 2009:

  1. New Operators will launch services
  2. Mobile Number Portability will get rolled out in phases across circles
  3. 3G licences will be given out and first services will commence
  4. MVNOs will be allowed

Put it all together, and a new landscape starts to emerge. Even though the incumbent operators are very powerful, these disruptions will be unsettling to all of them.

I look at India’s 325 million user base (and going to 600 million in 3 years) not as a single market, but as comprising two — a Red Market, and a Blue Market. The Red Market is the competition-filled urban battlegrounds (top 40-odd cities in India), which would account for about 100-150 million subscribers. The Blue Market is the rest of India — a potential market of upto a billion subscribers, of whom only 15-20% have actually got a mobile phone.

The Red Market subscribers got a phone in the first decade of India’s wireless rollout between 1995-2005. They have been using Voice and P2P SMS for between 3 and 13 years. They now want to do much more with their phone – and their time is now coming. The Blue Market subscribers need a phone because that’s their only form of connectivity to the outside world — it is Voice Access that matters more to them than anything else.

Incumbent Operators in India are now focused on the Blue Market – and are not doing much about the Red Market. Their belief is that the Red Market has been conquered, and all future growth is only going to come in the Blue Market. This is where they are wrong.

The four disruptions that we just outlined are Game-Changers. The action (and value) going ahead in India will be not in Voice but Data and VAS (Value-Added Services) in India’s most valuable Red Market.

India needs Ratan Tata as Prime Minister for 5 Years

Extraordinary times demand extraordinary action. That action can only happen with extraordinary leadership. India’s political leadership has failed us – time and again. We are facing crises on two fronts – terrorism and economic. More acts of terrorism will shutter India for global businesses. If India’s growth stutters, then will dampen aspirations for millions of Indians to rise above subsistence levels. Not only don’t we have an Obama, but we have multiple layers of the likes of George W. Bush. And that is not going to change irrespective of which party is in power. If India has to come out of this, we need a systemic change – and that can only come if it starts right at the top.

We do not have the luxury of creating a new political force in India – that will take a decade or more to happen. What we need is the equivalent of the NSG Commandos, who were called in when the realisation dawned that the Mumbai police with lathis and rifles could not take on a handful of terrorists armed with AK-47s, grenades and shielded by hostages. The NSG Commandos came, cleaned up the mess, and then handed it over back to the civilian authorities. That is what we need India’s new government led by Ratan Tata to do – and we cannot wait a decade for that.

There are three core issues why the democratic process in India is not good enough to respond to the situation that we face. First, the politicians – well, what can we say about them. We knew they were bad, but until now their (in)actions didn’t hurt or kill us. The current system needs a cleansing – not one party being replaced by another. Second, the bureaucracy and institutions built during the British times needs to be dismantled. The ones in power stay in power because of these institutions – the two feed on each other. This nexus needs to be broken. Third, we need a massive investment in education so that the ignorant among us don’t elect the incompetent back into power. Taken together, it is a chakravyuha that can never allow for good governance.

What we need is a Ratan Tata and his team of handpicked NSG Commandos to parachute in, fix the core of the problems, and then hand it back to civilians who by then would have the good sense to know what politicians need to be elected. Five years in power will give this team the ability to put in place policies, institutions and infrastructure which future governments will be able to build upon. This is the Change India needs.

There are five key areas that this Real Government should focus on:

  • National Security: Make us feel safe again, and make our enemies fear us.
  • Infrastructure: Use Indian and global capital to build the roads, ports, high-speed trains, power plants (solar, please) that we so badly need.
  • Education: Just get government out of the way.
  • Governing Institutions: Make them autonomous and accountable.
  • Urbanisation: Stop being proud of India’s 600,000 villages and build 6,000 new cities.

Do this, and the rest will fall in place.

Now is not the time for incremental solutions. Now is the time for disruptive innovations. The way to make this happen is for the Congress and BJP to come together, put aside political aspirations for five years, and get Ratan Tata and a group of 300+ competent leaders into Parliament in the next elections. Rahul and Narendra (or for that matter Mayawati) can get their turn in 2014. By then, we will have an India that can be governed, an India we can be proud of, and an India the world truly respects.

I know this seems well nigh impossible. But so does what happened in the past week. India faces extraordinary challenges. Let us bring to the highest post of the country someone who is not overawed and has solutions. Let us be led by someone we look up to. We have given six decades to our politicians. Let them give half a decade to us – to one man who can make a difference.

Many decades ago, we united under one man to a New Dawn free of foreign powers. The time has come to unite again as one nation to purge ourself of the domestic powers that have ruled since then. We are lucky to have in Ratan Tata a leader today who has the stature, integrity and a lifetime of achievement. Let us hand the reins to him and create a New India together.

Mumbai: Why This Time is Different

As one watches the aftermath of the terror attacks in Mumbai, there is a sense that this is a tipping point in how Indians think about and respond to both terror and our politicians.  This time around, there is no going back to ‘business as usual’ for a number of reasons:

The Location where it happened: South Mumbai (which is also where I live) has long been seen as above everything – be it floods or terror strikes. There was a sense of “but nothing can happen to us” in people here. This illusion has now been shattered. It is like some people came into our home and did lots of damage in front of our own eyes.  The brazenness of the attack and the audacity of the terrorists has finally hit us.

The People who died: This time around, it is not just the unknown innocent bystanders who got killed, but people whom we knew. Talk to people and they all have their stories of someone who was either there at the Taj, Trident or Oberoi on Wednesday evening, and miraculously escaped or wasn’t so lucky. So, the pain is more personal, and has impacted people who have a Voice rather than just a Vote.  Harsh though it may sound, not all lives (or deaths) are equal – some are more important than others.  This time, for the first time, the People Who Matter couldn’t but help think that it could have been them in there.

The Way it happened: It was not a few bombs going off and us watching just the aftermath of the rescue operations. This time around, it was, as a friend put it, ‘a reality show unfolding live on TV.’ For three days, there is little else we could talk and think about. Every step the terrorists and the commandos made was played out in front of our own eyes – against the backdrop of institutions we knew.

The Backdrop of the Elections: Suddenly, national security has become issue number 1. Even as elections are happening in some states, there is a national generation election due within the next six months. After a day of show of unity when the top politicians travelled together from Delhi to Mumbai, those in power have realised that this is an issue (even more than the Economy) which can result in them being voted out. The campaign for Elections 2009 has already begun.

Enough is Enough: With more than a dozen terror attacks in the past few years across India, there is a yearning for the tranquil that the US has experienced after 9/11. Yes, we will all have to give up a little bit of something. But that is a small price to ensure the safety of our near and dear ones. If the US can do it (ensure safety for its citizens), why can’t we?

The Obama Effect: Even as the US is set to usher in a government under Obama with an incredibly smart set of people, we in India are increasingly frustrated by the incompetence and brainlessness of an increasingly large number of our politicians. Obama has made us a yearn for Change – Dramatic Change – in our own country. He has shown us not if we the masses rise, we can bring about Change.

Put it all together, and there is a palpable sense of outrage and fear in people – outrage because of the failure of the politicians and bureaucrats to prevent such attacks, and fear because there is no guarantee that this will not happen again somewhere else in India in the next few months (or weeks). There is also a tremendous sense of Pride at the armed forces – whom we saw in live action through the days. Put it all together, and these mixed feelings create a restlessness within. That’s why it is not like previous times. This time, it is different. And if out of this, we finally get a government of the people, for the people, and by the people, then those 195 deaths will not have been in vain.