Three 2009 Decisions: Decision 1: NetCore’s Focus on Profitable Growth

We (the management team) had two choices for NetCore: one, keep growing our MyToday subscriber numbers even though there was little immediate opportunity to monetise them, or two, focus on overall profitability and ensure that subscriber growth remained in check. We decided to go for the second option – ensure that we converted a significant monthly deficit at the start of the year into a reasonable surplus by the end of the year.

It was not an easy decision to make. We had, for the past two years, focused on growing subscribers and building a significant consumer business in the mobile space. But what we realised early on in the year was that ad-based revenues would take a long time coming because of the twin factors of the economic slowdown, and SMS being a new medium. I could have continued to invest money into the company, but as a team we decided that we had to ensure that the investments we had made needed to be converted into a business that could grow profitably.

So, we reined in costs, and focused on growing our enterprise revenue streams in both mobile and mailing. New ideas were temporarily put on hold as we focused on meeting needs of existing enterprise customers to ensure we had a solid foundation. We ended 2009 with three straight quarters of growing profits.

Now, we have a good foundation to build on – without worrying about raising external capital to fund business operations. Our twin challenges for 2010 are to convert the growing enterprise revenue streams into cash engines, and build a consumer business that can combine both reach and revenue.

Tomorrow: Decision 2

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.