Month: December 2009

I was one of the few lucky ones who got to see a preview show of Avatar a few days before it was released. I liked the movie for the world (Pandora) that has been created and the amazing 3D. But the story lacked depth, and the love angle did not come through strongly. Nevertheless, it is movie which is to be seen – just to show that the impossible can become possible.

A few years ago, it would have been hard to imagine such a movie – for its scale, the detail and imagination in it, and the sheer audacity of the project. James Cameron has shown what vision and will (and of course money) can do.

Tech 7-11 is an idea I had written about many years ago:

How do we build a neighbourhood technology store which co-ordinates the actions of the various IT providers and provides services to small- and medium-sized enterprises (SMEs)? Think of a Tech 7-11, which combines IBMs one-stop, integrated solutions and Wal-marts physical presence, discounted pricing and customer focus. [I have used the term 7-11 to denote the store timings: 7 am to 11 pm. In addition, just as the 7-11 convenience stores dot the landscape in many Asian cities providing all the products that households need for daily life, so too will the Tech 7-11 provide all the technology that SMEs will need for their daily business.]

This week’s links:

• Mobile Internet Report: from Morgan Stanley. “The mobile Internet is ramping faster than desktop Internet did, and we believe more users may connect to the Internet via mobile devices than desktop PCs within 5 years.”
• What to expect in Mobile in 2010: by Jake Seid of Lightspeed Venture Partners. “We’re still a long way off from mobile-app developers being able to create true direct-to-consumer offerings like their cousins in the web world.”
• The Death of the PC: from Forbes. “Among corporate customers, the future is beginning to look very uncertain.”
• Telecom 2020 Vision: from Telecom Asia. “They point to M2M, LTE, all-fiber nets, smart enablers, the irrelevance of current mobile metrics, the end of pay-TV and an exploding universe of mobile apps, to name a few.”
• The Great Abdication: Consumer Internet, Venture Capital, and Angels: by Bill Burnham. “Anyone who has recently spent anytime fundraising for a consumer internet start-up in Silicon Valley quickly comes to an inescapable conclusion: there is effectively no Venture Capital available to Consumer Internet startups.”

There are two killer services that can help drive demand for home PCs and broadband:

• Education: Rs 100 per month for an hour of online education daily for kids, as an alternative for parents sending their kids to coaching classes.
• Mobile Social Networking: Even though this may seem counter-intuitive, a “mobile-first” approach to social networking can help drive PCs and broadband as people want a better experience.

In addition, there needs to be a lot more money in the value chain to drive content and services. Advertising spend is not enough to lubricate the innovation cycle at Internet companies. Something different needs to be done. Internet companies need to think beyond advertising and learn from the world of mobile VAS and get subscribers to pay small amounts of money.

Continuing on the theme from yesterday’s post, some numbers about Digital India and the Indian Internet:

• PCs: 30 million (growing 8+ million / year), equally split between Homes, SMBs, Large Enterprises+Govt
• Internet: 50 million (growing 10+ million/year), with 6 million broadband (256 Kbps) connections. About 50% access from cybercafes
• Ads: Rs 700 cr ($150 million; 3% of media spend)
• Transaction drivers: Tickets, Trades, Matrimony

The reality is that it is hard to make money on the Indian Internet.

• Top 4 Indian portals losing about Rs 150 cr a year
• Largest Indian Net co (InfoEdge) sales growth slowing
• Need to look beyond Advertising revenues, but few clear options
• Flat-priced Broadband (Rs 250-500 for 1 Mbps) availability is still very limited

It is quite amazing to see the difference between India and China’s largest digital companies. It just shows the smallness of the Indian market.

India’s largest Internet company is InfoEdge (which owns Naukri.com). Its revenues for the last quarter (July-Sep) were Rs 55 crore (about $12 million). The largest Indian mobile VAS company, OnMobile, had revenues in the July-Sep quarter were Rs 108 crore, of which India contributed Rs 83 crore (about $18 million).

Contrast this with China’s largest digital company, Tencent. Its revenues in the previous quarter were $493 million (abut Rs 2,300 crore).

So, comparing domestic revenues, China’s largest digital company is  27 times India’s largest digital company ($493 million vs $18 million).

Something for us to think about…!

I recently read “The Increment” by David Ignatius. It is a fictional setting about Iran and its attempts to build nuclear weapons. Here is a snippet about the book from Publisher’s Weekly: “When Harry Pappas, the new CIA chief of the Iran Operations Division, receives an unsolicited e-mail from an alleged Tehran scientist who calls himself Dr. Ali that implies Iran has in fact continued with its nuclear weapons program and is an imminent threat to global peace, he shares the information with his superiors only to find an administration bent on warmongering. Having vowed never again to play a role in a senseless conflict that could potentially kill thousands of innocents, Pappas, whose only son was killed while serving in the second Iraq War, must somehow identify Dr. Ali, get him out of Iran and mine his knowledge before the U.S. blunders into another unnecessary war.”

The book took some time taking off, but once it does, it is very good and fast. Plenty of twists and turns to keep one engrossed through to the end. What also helps is that the topic is also quite contemporary.

For the most part, the governing Congress party is having a free run in India. The Opposition parties (BJP, the Left Front) are beset by their internal difficulties, and as much there is little co-ordinated action to keep the government in check. It is the stupidities of the government (two recent examples: leaking the Liberham report, deciding on Telangana at 11:30 pm at night) that seem to be creating their own counter-forces, rather than anything the Opposition in India is doing.

Six months into the new government, one has to feel let down. (And this is not just because I supported in the BJP in the elections.) India needs big, bold vision with speedy decision-making and flawless execution to get us moving along the path of development. We seem to be getting none of the above, even though the government has to worry little about what its opponents are doing.

Given that India’s real Opposition parties seem to be in slumber, is there something we can do to organise? The role of an Opposition is not to oppose, but to provide alternative viewpoints as needed. In fact, if the government does right, it needs to support it. We seem to be missing a culture of sustained and deep debate on issues that are of national and far-reaching importance. What can we do to change the situation?

I wrote this series seven years ago:

Imagine a New India. A million computing and communications centres, each with 10 or more computers connected to the Internet, dot the landscape, making them accessible to everyone across the country. Every Indian is computer-literate, and can email, browse the Internet and compose letters. Citizens can make bill payments, obtain ration cards, check land records, and do other interactions with the government easily and efficiently. Computers in small- and medium-sized companies make them real-time enterprises, ensuring instant updation of information and making them integral parts of global supply chains.

What separates the dream of a New India from the reality of today is the digital divide. It is this rubicon that we have to cross, this divide that we have to bridge. Even as we think of India, the same challenge is present in every other emerging market. There is an opportunity – one last opportunity – for them to use technology to leapfrog into the New World – provided we leverage existing and emerging information and communications technologies smartly.

This opportunity will come through leveraging disruptive innovations.

This week’s links:

• Innovation in India: from the New York Times. “Many Indians are disappointed that the country has not quickly moved up to more ambitious and lucrative work from answering phones or writing software. Why, they worry, hasn’t India produced a Google or an Apple?”
• How do Innovators think: from Harvard Business Review (via Atanu). “We’ve found that 15% of executives are deeply innovative, meaning they’ve invented a new product or started an innovative venture. But the problem is that even the most creative people are often careful about asking questions for fear of looking stupid, or because they know the organization won’t value it.”
• The Price of Gold: by Egon von Greyerz (via Keith Hudson). “Gold is not going up. Instead gold is doing what it has always done, namely maintaining its value and purchasing power. What we are seeing currently is the total annihilation of paper money whether it is Dollars, Pounds or Euros etc.”
• Apple’s Game Changer: from the NewYork Times. On Apps. “Thanks in large part to the iPhone, introduced in 2007, and the App Store, which opened its doors last year, smartphones have become the Swiss Army knives of the digital age.”
• The Rise and Fall of MySpace: from Financial Times. A fascinating account.