Month: October 2010

We are the People of Middle India. We are the Uns. Unregistered voters, Unconcerned citizens. Undecideds. On election day, we take a day off. So, why should our elected leaders care about us?

Imagine if it could be different. Imagine the Uns coming together to create a Votebank. Just like some of the communities do in India. (Take a look at what is happening in Bihar and who holds the balance of power.) Imagine taking up a mission to get 50 good people into the Lok Sabha next elections. If the DMK and TMC can wield so much power that their 15-20 MPs, imagine what power can be exercised with 50!

Simplistic, Yes. Doable, Yes. For that, the Uns have to become the Uniteds.

Now that we have finally executed well during the Commonwealth Games, it is time to hold those responsible for the mess and loot prior to the games accountable. And on paper, we have various inquiries that have been instituted. The Organising Committee has already been indicted. The reports will be submitted, a few will be held guilty, asked to resign, sent into hibernation for a few years, and then made Governors.

What no one will then question is how such loot could have happened without involvement from the highest authorities in the land. Middle India would have moved on – because corruption has now become an acceptable part of our culture (just like jugaad). We paint all politicians with the same brush, and so we don’t really care. The looters have enough money to buy out and muzzle all voices for many generations to come.

We are so naive, so gullible. Like we were in the 1950s.

As I was reading one of the books written in the 1960s about India, I couldn’t help thinking about the challenges and the opportunities that people must have felt at India’s Independence. True, we started off Freedom with plenty of challenges — Partition, Gandhi’s assassination, Kashmir and the Princely States integration into India. It took a few years to sort them out.It wasn’t even clear at that time that India could stay together as a single country.

So, when the 1950s started and most of the problems were behind us, there must have been a sense that finally our destiny was in our hands. Looking at India now, I cannot help feeling that we made more than a few wrong turns as a country during that decade. None have hurt us more than the lack of investment in primary education. As my friend, Atanu Dey, once put it, “All we needed to do was to educate one generation of Indians.” And we failed them. That blunder continues to haunt us even today – and we still haven’t got it right. And we still don’t hold those who made the blunder accountable.

It happened quite literally to me. I had gone to Metro and was walking down one of the side roads near St. Xavier’s High School and College. And I saw Raj Mahal, the restaurant. Long forgotten, it was a place I used to frequent while at school every once in a while.  And so for old time’s sake, I went in, sat in the seemingly unchanged restaurant, and ordered a Bread Pakoda. It was almost going back in time three decades!

As I walked on that lane, I came across the Second Hand Bookshop. That lane was full of bookshops, from what I remembered – old and new books. (The other good place for buying used books was on the street at Fountain.) And as I went inside and browsed some of the books, I came across the Indian History section, and picked up two books on India written in the 1960s for about Rs 60 apiece.

Memories have a funny way of coming back!

From a post a couple years ago:

The 5 Phases in the life of a Customer Relationship:

1. Non-Customer and Competitor’s Customer: This is the universe of customers that need to be targeted. They can either be first-time customers in a category, or they could be competition’s existing customers. Need: Branding and Lead Generation

2. Future Customer: This is where a subset of the non-customers have become interested and could be prospected to become a customer soon. Think of this as ‘dating’ or scouting. Need: Engagement

3. New Customer: This is where the customer has just begun a relationship (‘marriage’). The first month or so can be thought of as a ‘honeymoon’ period with the customer. Need: Onboarding

4. Existing Customer: This is where the customer needs to be retained, delighted and harvested. Else….think ‘seven-year-itch’! Need: Servicing and Engagement

5. Ex-Customer: This is where an existing customer leaves to become someone else’s customer (‘divorce’). Need: Branding and Lead Generation

The opportunity in India lies in thinking how the mobile can be leveraged at each stage of the customer relationship.

This week’s links:

• Where ideas come from: from Wired and Economist.
• Riding Asia’s digital tiger:from McKinsey Quarterly. “Asia is the world’s hottest area of Internet growth, but the dynamics on the ground vary widely by nation.”
• India Digital Media Outlook 2010: from WebChutney.
• Android and Mobile Computing: from Newsweek. “Android is the kind of runaway smash hit that techies spend their careers dreaming about.”
• Praying for a new kind of Indian Conservative: by Sadanand Dhume in the Wall Street Journal. “But in some ways Indian politics remains frozen in time. Unlike virtually every other major democracy, India has no responsible right-of-center party to speak of.”

What is needed is the equivalent of an i-mode for India. While i-mode’s 91% payouts made Japan the pioneer in mobile data, my belief is that a model wherein content and service providers could get 70% of the end-user payment can help drive data services in India. While AppStores do offer that, the “app market” in India is still quite limited. The challenge for AppStores is collecting money.

Here, then are the parameters of the problem that need to be solved:

• Collect money in small tranches (say, Rs 150, or $3) independent of the mobile operator for a collection cost of no more than 10%. This problem is not as simple as it sounds – most Indians do not have credit cards, don’t use their debit cards, and some many not even have a bank account. The lowest common denominator they all have is cash. What is needed is akin to a “cash conveyor belt.”
• Pay out 70% of the end-user price to the publishers (content and software)
• Run a profitable business with a gross margin of 18% (20% less 2% service tax)

The opportunity in India is to target 100 million users who are willing to pay Rs 50-100 ($1-2) per month for mobile data services. No one other than the mobile operator has solved the problem of collecting and billing for small amounts of money.  India needs an alternative micropayments and publishing platform to help drive the mobile data ecosystem. Therein lies the biggest set of opportunities for intermediaries, content providers and software developers.

One clear opportunity in India is in the eCommerce space. As the Internet user base grows, the convenience of shopping from one’s home (or office) combined with attractive deals will grow the market. The key determinant for success for hard goods will be the efficiency of the value chain (logistics of speedy delivery). Winners are already starting to emerge in the space, but these are still early days.

The second opportunity will emerge in the mobile data space. With the combination of high speed networks (3G), smartphones with high-resolution displays in the $100-$200 space (watch for Android to make a big impact in the coming months) and nearly-flat-priced data plans (Rs 100 per month for almost unlimited usage), the mobile data space is going to see rapid growth in the coming years.

One obvious monetisation approach is advertising. But, the bigger opportunity will come from  consumer micropayments. What is needed is a revenue share model akin to the AppStores – where 70% of what end users pay goes to the application developer. In India, the figure for VAS is much less than half of this, on average. This is what needs to change to create an innovation cycle that can drive a new billion-dollar market.

Continued tomorrow.

To make money via advertising, the Internet opportunity is about 10X the mobile opportunity today in India. But the challenge is that the bulk of the money in this space goes to Google and Yahoo (with Facebook likely to be a strong contender in the future). That leaves a much smaller quantum for the local Indian companies.

In addition, the cost of selling Internet advertising is also high – should one choose not to rely on the ad networks (Google AdSense, for example). Ad Networks provide the lowest monetisation for a portal, so over time, there is little option but to build one’s own sales team. And that is an expensive proposition.

In the mobile space, the operator is the enabler for almost all of the MVAS revenue, and as much keeps the lion’s share of what end users pay. Again, this leaves much less money on the table for the content and service providers than what they would like – and what they need to build large businesses.

Is there a way out?

Continued tomorrow.

There is a market that is a magnitude larger than Internet advertising in India – and even that barely existed a decade ago. Mobile VAS (value-added services) accounts for consumer spend of about $2 billion (Rs 9,000 cr) in India.  With a user base that is also about 10X the Internet base in India,  India is one of the few “mobile first, PC second” markets in the world.

These are the two big digital opportunities – advertising and transactions. In the first case, businesses pay to reach audiences. In the second case, consumers spend money. Margins vary – based on whether it a ticket that is being paid for, or a mobile game is being downloaded.

Both these markets have challenges going ahead. And therein lies the new set of opportunities.

Continued tomorrow.