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Best advice any entrepreneur can ever get!

Last few months have been really hectic as we build our product, our company. Sleepless nights, anxious moments, multiple ups & downs, meeting people with or without expectations, lots of advice – good or unwanted (I won’t call any advice bad), and a list of endless attempts to get things right or at times even just to get things in place.

As an entrepreneur – you get lot of advice. On product, on user experience, on marketing, on capital utilization, on technology – through multiple sources like users, advisors, investors, other entrepreneurs, or by reading blogs, tweets and all sorts of information one would be exposed to.

In middle of this information or advice overload (at times) – I always end up remembering this one small story that I read few years back. Sharing this because I truly think this is a best advice any entrepreneur can ever get.

Here is the story…

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Once a king called upon all of his wise men and asked them, “Is there a mantra or suggestion which works in every situation, in every circumstances, in every place and in every time. In every joy, every sorrow, every defeat and every victory? One answer for all questions? Something which can help me when none of you is available to advise me? Tell me is there any mantra?”

All the wise men were puzzled by the King’s question. They thought and thought. After a lengthy discussion, an old man suggested something which appealled to all of them. They went to the king and gave him something written on paper, with a condition that the king was not to see it out of curiosity. Only in extreme danger, when the King finds himself alone and there seems to be no way, only then he can see it. The King put the papers under his Diamond ring.

Some time later, the neighbors attacked the Kingdom. King and his army fought bravely but lost the battle. The King had to flee on his horse. The enemies were following him. getting closer and closer. Suddenly the King found himself standing at the end of the road – that road was not going anywhere. Underneath there was a rocky valley thousand feet deep. If he jumped into it, he would be finished…and he could not return because it was a small road…the sound of enemy’s horses was approaching fast. The King became restless. There seemed to be no way.

Then suddenly he saw the Diamond in his ring shining in the sun, and he remembered the message hidden in the ring. He opened the diamond and read the message. The message was – ” THIS TOO SHALL PASS”

The King read it . Again read it. Suddenly something struck him- Yes ! This too will pass. Only a few days ago, I was enjoying my kingdom. I was the mightiest of all the Kings. Yet today, the Kingdom and all his pleasure have gone. I am here trying to escape from enemies. Like those days of luxuries have gone, this day of danger too will pass. A calm came on his face. He kept standing there. The place where he was standing was full of natural beauty. He had never known that such a beautiful place was also a part of his Kingdom.

The revelation of the message had a great effect on him. He relaxed and forgot about those following him. After a few minutes he realized that the noise of the horses and the enemy coming was receding. They moved into some other part of the mountains and were near him.

The King was very brave. He reorganized his army and fought again. He defeated the enemy and regained his empire. When he returned to his empire after victory, he was received with much fanfare. The whole capital was rejoicing in the victory. Everyone was in a festive mood. Flowers were being showered on King from every house, from every corner. People were dancing and singing. For a moment King said to himself,” I am one of the bravest and greatest King. It is not easy to defeat me. With all the reception and celebration he saw an ego emerging in him.

Suddenly the Diamond of his ring flashed in the sunlight and reminded him of the message. He open it and read it again: “THIS TOO SHALL PASS”.

He became silent. His face went through a total change – from the egoist he moved to a state of utter humbleness. If this too is going to pass, it is not yours. The defeat was not yours, the victory is not yours. You are just a watcher. Everything passes by. We are witnesses of all this. We are the perceivers. Life comes and goes. Happiness comes and goes. Sorrow comes and goes.

Now as you have read this story, just sit silently and evaluate your own life. This too will pass. Think of the moments of joy and victory in your life. Think of the moment of Sorrow and defeat. Are they permanent ? They all come and pass away.

Life just passes away. There is nothing permanent in this world. Every thing changes except the law of change. Think over it from your own perspective. You have seen all the changes. You have survived all setbacks, all defeats and all sorrows. All have passed away. The problems in the present, they too will pass away. Because nothing remains forever. Joy and sorrow are the two faces of the same coin. They both will pass away.

You are just a witness of change. Experience it, understand it, and enjoy the present moment – this too shall pass!

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As an entrepreneur if you are building a product, I’m sure your vision for the company is to be the next Facebook / Google / Amazon or Apple. Startup journeys are long, it took Mark Zuck 2918 nights to be an overnight success before Facebook filed for its IPO, is it end of story – No.

Always stay motivated – for your next milestone. Keep rocking, celebrate every success and failure. Keep learning and moving ahead. At any stage of success or failure, remind yourself of these 4 words – “This Too Shall Pass.”

I was thinking of adapting this story to today’s world of tech entrepreneurship cycle, but left it as it is. Best wishes.

Bollywood & Startups: Emotion, Drama, Tragedy and more.

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India has two big fascinations – Bollywood and Cricket. I don’t follow cricket, for me its Bollywood and Technology. I have kept wondering how both of them are related (in a funny way).

So I finally put this up – sitting today waiting at the airport and during the flight time.

Startups and Bollywood

View more presentations from P J

This is made just for fun. Keep focus on your startup, keep building your product. And have lots of fun while you do that.

Google in its mid-life crisis!

Why Consumer Social Products should monetize at Scale

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This post is written in context of – why consumer social products should never monetize without scale.

1. Because Users sign-up in context of Product –
Every social product is more about users and their connections / contacts together with a context (its product use-case). Users expect to interact with their contacts with this context.

For Zynga, the context is playing games; for Quora, the context is asking questions. At this stage – nothing is more important that making the context important. Focus on building the product.

2. Because Engagement is more Important –
Only value a social product should provide to users is engagement (both frequency and quality is important). Hence, the only metric that matters for any social products is engagement. That should be prime focus for any social product in its initial 24-36 months.

Over a period of time this engagement should evolve in to habit. Habits are tough to break. Facebooking, Tweeting, Checking-In are habits.

A QnA site like Quora with about 1 Mn ‘engaged’ users is more valuable that 50Mn+ users on Google+ who don’t talk to each other..

3. Because you need to Learn from Others’ Mistakes –
Learn from successes and failures of other products. All (successful) social products monetized at scale, till then they were just building the product and even continue to do so today.

Majority (if not all) of social products who tried to monetize early have hit the dead pool or pivoted.

Don’t want to name any specific failures, but look around – there are many social products that attempted to monetize in its early days.

4. Because your Users won’t like it –
You like it or not – large social products & platforms eventually monetize with advertising products but with its own product context. Facebook did with advts targeting by demographics; Twitter with promoted accounts, tweets & trends; Foursquare by local advertising deals for check-ins; with a exception of Zynga that sells virtual goods.

At early stage, users would expect a better product experience; not advts. If you plan to monetize with transactional services like eCommerce – think about it. Will users want another service that spams them through sms / email or advertisements? You don’t want to put off your users.

It is a tough decision with a simple answer – Focus on what users want; not what you want or what your investors want.

5. Because your Merchants or Business Owners won’t be happy with you –

This is strange but true. Let me explain this with example – Imagine a hypothetical social product for shopping with 100,000 registered users. You sign-up with the top-20 eCommerce sites in India for monetization through affiliate model – you pat your back and give yourself a thumbs-up.

– Assume decent engagement levels @ 50% user base (50% of users login minimum 2 times a month).
– That is 12,500 users per week logins
– Take standard 1% ratio of conversion at merchant end
– Gives you 125 transactions per week; 500 per month
– That is about 25 transactions per merchant ~ approximately less than 1 transaction per day for eCommerce partner.

Consumers will not do eCommerce transactions every month. Next month, this picture might be more difficult.

4 of these 20 eCommerce services says, “Sorry! its not worth our efforts on integration and time spent. Please delist us.” Community is small, people change jobs fast and the word spreads quickly amongst the partners – “This product does not work!”

Now, the same scenario at scale;

– On a 1Mn user base: 8-10 transactions per day to every partner
– On a 10Mn user base: 80-100 transactions per day to every partner
– On a 100Mn user base: 800-1000 transactions per day to every partner. OMG!

Exercise extreme caution when you decide to monetize your social product. The timing is as important as how your monetization plan.

Also because Sean Parker said so –
From the movie – The Social Network. When Mark Zuckerberg, Sean Parker and Eduardo Saverin discussed on TheFacebook’s monetization in its early days –

Eduardo Saverin: Hey, you know what? Settle and argument for us. I say it’s time to start making money from TheFacebook, but Mark doesn’t want to advertise. Who’s right?
Sean Parker: Um…neither of you yet. TheFacebook is cool that’s what it’s got going for it.
Mark Zuckerberg: Yeah.
Eduardo Saverin: You don’t want to ruin it with ads because ads aren’t cool.
Mark Zuckerberg: Exactly.

—

Sean Parker: “You don’t even know what the thing is yet.”
Mark Zuckerberg: “I said that exactly.”
Sean Parker: “How big it can get, how far it can go. This is no time to take your chips down. A million dollars isn’t cool. You know what’s cool?”
Eduardo Saverin: “You?
“A billion dollars.”
That shut everybody up.

This holds true for every social product. You don’t know really know how a product shapes up it its journey that starts from minimum viable product.

Note: Sean Parker has said that the movie The Social Network is work of fiction.

Google+ may be miles away from being a great Social Product!

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A Product Manager’s view – Why Google+ may be miles away from being a great Social Product!

There are various reports on super adoption of Google+, earlier about 10 Mn users and today it reaching 50 Mn users. The key question is – How many users are engaged there? Also echoed by The Lean Startup author Eric Ries while Facebook has 750Mn active and engaged users.

I am trying to tell myself that first signs of product usage and assumptions change over time. It happened with me for Groupon where the business model was innovative, but not scalable; for Quora post initial adoption; for Twitter (where I was a early adopter) but found no one else there and stayed away for 2-3 years before becoming active again.

Same happened with Google+ my first reaction was Facebook killer, then next was Twitter killer – and over a period of time with my Product Manager’s hat – I feel that it may be miles away from being a great Social Attempt!

1. What is Google+? No one cared to answer!

A standard product management and product marketing practice is to tell consumers what the product is. The world knows about Facebook, despite its 750Mn+ active users – every time you visit Facebook homepage it tells you what it is.

Facebook – Facebook helps you connect and share with the people in your life.
Twitter – Follow your interests. Instant updates from your friends, industry experts, favorite celebrities, and what’s happening around the world.
Flickr – Share your life in photos.
YouTube – Join the largest worldwide video-sharing community!
Foursquare – Check in. Find your Friends. Unlock your City.
Quora – A continually improving collection of questions and answers.

While for Google+ – No one cared to answer what product use-case it solves or what should users are expected to do on it.

2. How does a user access Google+ ?

Users access Facebook on www.facebook.com; Twitter on www.twitter.com; and so on – is it www.google+.com?

And to prove this point – look at Google+ suggestions on Search –

Accessibility is a big question mark for Google+. The correct way to access Google+ is plus.google.com – which a technology early adopter shall ‘probably’ remember – but even he or she will end up accessing (most of the time) Google+ from within GMail on the notification bar at the top.

This point is also related with next set of arguments – User Psychology & Naming & Identification Psychology. I feel these factors are extremely important to consider while building any consumer product.

3. User Psychology for Consumer Products

For any Internet or mobile product – consumers are quick to label it with its strongest product use-case – which is typically the recall product value of the user. Simply stated for a normal user –

“I visit GMail to check my emails!”
“I visit Google to search the web.”
“I visit Facebook to view what my friends are up to.”

Now it is extremely difficult for any product to have a “and use-case” for a product –

“I visit GMail to check my emails and Social Networking.” – No!
“I visit Google to search the web and Social Networking.” – No!
“I visit Facebook to view what my friends are up to and also searching the world wide web.” – No!

“And use-case” works for features that support any product’s core value. Features that would be to better manage emails (for Gmail), to better display search rankings (for Google Search), to show more types of friend’s activities (for Facebook) and so on.

Google is aiming to take on Facebook with a Social Networking product. But launched it like a feature on Google Homepage (Search) & Gmail (Notification Header). In current avatar, Google+ is a feature – and will gain traction as much as a feature can. It will not gain identity as a social-networking stand-alone product.

Also note the big failures of other “And use-cases” –

“I visit Facebook to view what my friends are up to and also Buy Local Deals.” – Deals was abandoned by Facebook
“I visit Facebook to view what my friends are up to and also to check-in in places” – Places as stand-alone attempt within Facebook failed, but as feature is gaining traction.
“I visit Gmail to check mails and Buzz up articles.” – Google Buzz… remember?

“And use-cases” work for B2B products, but have never worked for any consumer web product.

4. Naming & Identification Psychology

Social Graphs & Social Networks are all about giving identity to users. Currently, Google+ itself needs an identity. Users think and will continue to think of Search when they think of Google, and it is virtually impossible for them to perceive Google as a Social Network.

How consumers relate with social activities – “Are you on FB?” “Can you tweet this?” “Let me share it on FB” and so on. The terminology “Google” or “Googled” is built over last 13 years – will be impossible to change from search to a social context.

For sake of Product identity or for its different product use-case, Google+ should have been outside of Google identity with its own identity (probably a www.plus.com if it was available). But the lure of exploring existing user-base is too difficult to give away – and if that logic was to succeed Yahoo! would have still been the largest internet company in this world. They tried to do everything under Yahoo! brand name (Yahoo! Search, Yahoo! Shopping, Yahoo! Finance, Yahoo! Hotjobs, Yahoo! This & Yahoo! That), but for consumers Yahoo! was and always remained a content play.

Even Google’s largely successful consumer products outside Search – Gmail & YouTube were successful because consumers saw it as an independent product identity outside the core of Google’s Search. While Google Video, Google Buzz, Google Answers – all failed. I am strong advocate of one-product = one-identity for consumer web businesses.

5. Social Graphs are occupied; No place for Google+ to fit in

I mentioned in my previous post Building Awesome Social Products – successful social products are reflection of people’s offline behavior in the real world. Similarly – successful social graphs are also reflection of people’s social relationships in real world. Social Products reflect activities, Social Graphs reflect relationships.

A typical user’s social relationships involve –

Close Relationships – Friends, Family, Friendly Colleagues (present and past) – more importantly people you know personally.
Professional Relationships – Colleagues, Business Relationships, Partners
Loose Relationships – People you know, but they probably don’t know you. Celebrities, known professionals, domain experts

Facebook covers Close Relationships, LinkedIn covers Professional Relationships, Twitter covers Loose Relationships. So if Google+ is trying to create a new Social Graph, it will be a struggle (big struggle) – simply cause there is no use-case for a new social graph. Social graphs are distinct; by nature, by user behavior and are established over a period of time.

Features don’t make a product success by itself and expect it to later evolve in to a Social Graph; Instead having a use-case for social graph is essential and the features should evolve.

6. It is important to know whom to kill – Facebook, Blogs, Twitter, or what -?

Google+ though it presently looks like a Facebook killer – it is not. None of my friends are using it the way they use Facebook, instead I see more updates from technology adopters in Silicon Valley – and the posts look like extended tweets (beyond the 140 characters). I follow these technology adopters on Twitter, and hence my own assumption that probably it is a Twitter-killer.

Google+ still does not have a clear proposition – and is trying to overlap between all three Social Graphs (Close Relationships, Professional Relationships & Loose Relationships) without taking a clear positioning against one of them.

I am personally not happy with the killer-suffix (no products killers have ever killed anyone – they are still trying to kill iPhone & iPad). But its also important to know who your competition or what your benchmark really is. Or you might just try running behind all, but never able to catch up with any one of them.

7. Developer APIs will not enable Social Graphs; Instead Gmail invite contacts are more powerful.

There has been lot of noise about speculated Google+ APIs for developers to build applications and its release dates or so on. Developer APIs will provide access to features – posting an Google+ update, ability to do +1 through applications, and so on – but this sounds (unfortunately once again) like Twitter APIs or FB app APIs that allow you to post status updates and share pictures and so on. Most importantly, Google+ will not be able to build a Facebook Connect equivalent.

Today Social Graphs when referred are mostly Facebook explored through Facebook Connect (unless you write some algorithms on top of them to bring context to your product). F-Connect allows applications & developers to enable Social Graphs (of friends); which clearly explains why 1000s of applications prefer to have Sign-up with Facebook buttons.

Google+ has multiple circles (friends, acquaintances, doctors, techies – and you can delete and rename any other circle); relationships in these circle are mutually not dependent on each other – and hence cannot be explored even if Google+ comes out with a API to access them. Let me explain this below –

a. A user Larry might add another user Zuck in friends circle; Zuck may add Larry in My Gang circle. Hence social relationship between them is not mutual (as friends).
b. Further Larry might name his friends circle as Buddies; Zuck names his friends circles as Pals; Hence the social graph definition itself is flawed.

This is a huge flaw – Through APIs the developer’s applications cannot reach mutually accepted graph of both connections (mutual friends) or an validated status of their relationships (close friends, professional or loose). Hence at this stage it would be more preferred to use the Gmail Invite Contacts module – for simple reason that it is more powerful and treats all contacts at a same level (a social graph of email contacts / connections).

8. Not the best attempt at Social Networking

Google already knows so much about its users – whom do you chat (on GTalk), whom do you mail (on Gmail) or who are my most contacted people in real world (on Android). Google could have actually used a lot of this data, recommended people with circles (I still hate sorting people in circle all the time, but pre-cooked circles by associations would still have been so much better).

With Google holding so much data and wanting to go ahead with a strong social product; it is expecting users to do it again from scratch. Makes one feel that Google+ is a half-baked attempt.

Facebook users usually have about 150 to even 5000 friends. Usually added over years, and all added at a same level – ‘Friends’. However cool the task of adding people to circle is in execution – to add those many people again to circles is a pain. While most people that users see on Google+ are those who are discovered through the people you follow. Every time to add someone to a circle is little more effort than just adding as a friend (on Facebook) or just following the user (on Twitter).

Circle looks like Twitter lists – People get added on them once, later everyone forgets which user is put in what circle. And while the News feed (or stream) stays common for all – the Circles might as well be forgotten just like Twitter Lists.

The next point makes it more clear – why it is not the best attempt at Social Networking.

9. Real Capabilities of Social Graphs (or Networks) are absent –

Get this right – Friends (or Connections!) are the minimum one expects out of a Social Network. What stands out are the capabilities to engage those connections. Remember Orkut? – it had all connections; but Facebook just made the engagement so much better.

Ability to discover Friends or Connections in context –
Google+ has done a simple job or fetching contact list from GMail and enabled it with the painful process (yes!) of adding to circles. But by enabling discovery of friends or connections who are active on Google+ – the suggestion engine for friends could have been so much better.
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Example –
1. I end of following lot of product enthusiasts & early adopters. There are mutual connections that could be added to my circles – which currently not recommended.
2. My Gmail contacts list have endless email addresses of people I really don’t want to follow in circles or on any social network. So a smart recommendation based on whom I chat with, mutual friends, top contacts on Android and others need to be made discoverable.
.

Stream or Newsfeed –
The most important discovery tool on any Social Platform is Newsfeed. In its current stage – the Stream on Google+ is very Twitterish – a timeline of all people you follow.
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Facebook raised the standard with algorithms that help you discover feeds that is most relevant to every user, ranking every story contextually around a user. Newsfeed makes or breaks any Social Product and single most important activity & engagement enabler for any Social Product or Social Graph.
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Communication or Chat –
The most cut-copy-paste feature of Google+ is chat – where user can chat with contacts he otherwise can also on Gmail or Gtalk. Quite honestly, this is the most ridiculous feature, with no context to people any user has put in his circles.
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In context of chat (or video chat) – expecting users to do Hangouts with webcam is a big No. Hangouts are not conversation starters, but should be featured alongside as planned video conversations.
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Ability to drive Traffic –
Remember Google Buzz? There was nothing wrong in the idea – attempting a Digg or Facebook Share or Tweet Share. Once a user Buzz’ed an article – it was critical to reach his Social Graph and drive viral traffic to that article. This story failed cause of poor dissemination of activity in user Social Graph. Google should learn lessons from Google Buzz chapter.
.
Social Networks like Facebook & Twitter are popular with publishers or businesses due to their ability to drive traffic to their own websites. While few publishers have added the +1 button to their webpages – still drives only an insignificant proportion of traffic to them; and lot of unclarity on how the dynamics of +1 button works for publishers and its benefits to them eventually.+1, Like, Share, Tweet this – are big distribution mechanisms for a Social Network. Should be given its required TLC.

As mentioned earlier – the product use-case should be driven by features; and not the other way round. Google can always come back and say – we are working on this. But hey, if a product is coming from a product & technology resource-heavy company like Google – even user expectations also very high.

Even these are early days for Google+, web is dynamic and consumer interests change quickly and Google can still do lots of changes quickly and innovate, possibly even work on the above arguments if they agree with it.

This post is written over last several days with some last minute additions on stats before hitting the publish button. Meanwhile Facebook has launched a series of new features, which looks like they are (over)reacting to Google+. Facebook, you are miles ahead, don’t make mistakes, please.

Building Awesome Social Products

The Biggest Innovations never solved any problem!

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Being an entrepreneur is exciting. And one question you hear often is – “What is the consumer problem that you are trying to solve?”

We try to reserve our weekend lunches for some awesome conversations over products, companies and where the world is heading in connected world. Last Saturday, Anupam Mittal (Founder & CEO of People Group, Entrepreneur behind Shaadi.com), my co-founder and myself discussed this over lunch – “Did Google or Facebook solved any consumer problem?”

Our interaction inspired me to write this post –

Solving a problem and creating a market are two different ways to look at any company or any product idea. Products or Companies that solve a problem are the Million dollar companies, while products or individuals who look at the industry from a radically different approach – are the most disruptive, innovative and create Billion dollar opportunities as they grow.

My conclusions were –
– The biggest innovations never solved any consumer problem
– The founders or entrepreneurs had a different approach to the industry
– In almost all cases, the entrepreneurs did not belong to the industry, had little or no experience in that industry.

Further thoughts are embedded in this SlideShare presentation –

Biggest Innovations Never Solved Any Problem

View more presentations from P J

Have a different approach. Think different!

Lets Blame It on Rio (and not the Ecosystem!)

What problems are the Mobile Payment Services trying to solve?

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When I heard of Twitter founder Jack Dorsey’s announcement of mobile payment startup – Square, I loved the simplicity of the service. Few months Jack Dorsey tweeted that Square is processing transactions worth $1Mn per day – that is a cool revenue run rate of $10Mn per year for a two year startup (Square charges 2.75% charge per transaction when paid through credit card)

With very little knowledge of how offline transactions work in US, but it is definitely a card driven economy. Coming to Indian scenario – unsure if any Mobile Payment Services company in India will declare the value of transactions it processes per day. For a country like India, although the opportunity for mobile commerce looks huge – unable to relate if existing mobile payment services are trying to solve any consumer problem.

Back in 2006, when penetration of mobile phones in India was growing at an exponential pace – with falling talk times, it was predicted that India will be one of the largest telecom markets in the world. Well, that has surely come true. In internet world – there was another wave of prediction. Analysts & Enthusiasts found another buzz world – mCommerce which was supposed to be a multi-billion dollar industry by 2010.

With time, the definition of Mobile Commerce is itself a cliche’d.

Is it mobile commerce when a consumer books a airline ticket online, gets a confirmation and PNR number on to his mobile number . Displays the PNR ar airport counter and gets ticket?
Is it mobile banking when consumer receives confirmation of debit/credit transaction on his mobile
Or is it when the discovery, intent & transaction for a product/service starts and ends on mobile phone?

The definition is now debatable – but with mobile communication included, online transactions and services have scored a big mile.

The proposition of Mobile Payment Systems is (or was) very simple:

Offline Merchants – Allow consumers to walk-in to any shop with his mobile phone, buy stuff and make payments
Online Merchants – Tie-Up with multiple online eCommerce/Travel portals – allow them to purchase products through their payment service
Own Marketplaces – Create own marketplace on mobile that combine eCommerce, travel, utility services etc and enable payments for such transactions through their own system

Honestly, this would have sounded amazing to everyone back then. Undoubtedly very huge potential – Offline retail transactions are worth billions of dollars everyday, Online Merchants wanting to reach out to very high percentage of consumers who have not come online due to lack of internet connectivity and mobile device seemed very logical, & of course with own marketplace strategy they too wanted to own a sizable chunk of users/revenue and be a destination for commerce.

The mobile boom did happen. It is very difficult to find someone these days without a mobile phone. But then why is it so rare that we don’t get to find people using mobile payment services as it was predicted earlier.

Trying to analyze why did this zillion dollar plan on paper did not translate to even millions of dollars in reality. Here are few thoughts, there may be many other reasons as well that contributed to this –

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Limited size of Market –
With 95% mobile subscription in country on prepaid, and average ARPU of less than 200 INR (& steadily declining with time) – mobile payments or transactions is definitely the last thing on such user’s mind. Addressable market for this service is considerably very small and will be a subset of eCommerce market.

Active Credit Cards in India are declining –
According to recent numbers published in this TOI report – number of active credit users in India has tumbled down from 20.7 Million (in March 2008) to 10.8 Million (in November 2010).

eCommerce Services discovered Cash on Delivery –
India is a cash driven economy and most eCommerce services have realized this by today. COD accounts for anywhere between 30% to 60% of transaction for players who have enabled it. IVR payment mechanism also has widespread acceptance for ordering directly through call center.

Banks play their own Game –
In fact they already have started playing their own game. Banks are launching their own mobile banking applications and promoting it aggressively. That leaves mobile payment services out of their own play-field.

The 3G Magic may not happen –
The 3G magic shall happen to other services, but in my opinion nothing dramatic will happen for mobile payment services companies. There is simply no connection between acceptance of 3G by consumers and why ‘new consumers’ will subscribe to credit cards or link up their bank accounts to a mobile payment service company. They will fight for existing consumers between competition and the banks.

Radical shift to app-economy –
Smart Mobiles & Tablets devices are making a huge difference to the way consumers are accessing services on handheld or portable computing devices. With advent of app-stores and in-app payment systems – the mobile ecosystem has grown more radically than any of these players would have thought about.

Money was always Mobile –
If the pain point that mobile payment systems were (or are) trying to solve was allowing consumers to do transactions wherever & whenever they want – then this consumer pain never existed. Money in whatever format – cash or card was always mobile.

I see and hear of Mobile Payment systems usage in India only in the context on prepaid recharges & utility bill payments. But that was not what they aimed for, correct?

To sum up the article –

Money was always mobile; the consumer pain point mobile service providers were trying to solve never existed!
These businesses were way ahead of time; and in most scenarios got investments before validation.
mCommerce model evolved differently and in a way that kept such players outside the ecosystem.
mCommerce will evolve along with eCommerce; will go hand in hand – but definitely not before.

In my opinion this vertical is classic case of ‘ahead of time’, ‘investment without validation’, and ‘dynamic changing ecosystem’. Lesson for entrepreneurs and investment managers – make sure your companies are a part of “validated ecosystem” and solves a “valid consumer pain.”

Why Foursquare is better for Local Businesses than Groupon

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While Groupon has redefined local business and is in news for its fastest billion dollar revenue + its $700 Mn IPO, from a long term perspective I think Foursquare is a far better bet than Groupon.

Some of the many criticisms of Groupon –

Socially unconnected users
Concerns on validity of Business Model, just 3 years and now a IPO
Merchant side issues – 75% discount on products
Not much metrics available for merchants, no user contact information
Are new consumers acquired or are they deal seekers only
No technology barrier, 100s of Groupon clones have hit across the Globe
Though not many players are as large as Groupon, LivingSocial; Merchants have a choice
Intensive feet on street business with huge sales force.
Groupon Now – merchants are able to create own deals through Groupon

Take case of Foursquare – they could possibly over throw Groupon.

My contention is that any platform and service that can empower merchants to run business and acquire consumers (new/repeat) will be able to overthrow Groupon in long run. While Groupon clearly demonstrates that local deals work, Foursquare has the technology & product to take it to the next level and give a tough competition to Groupon where it hurts most – at supply side (Merchants or Local Business Owners).

The biggest ‘cry’ we hear against Groupon is merchants complaining – its only the existing customers who use Groupon coupons for deals, and new consumers are not acquired/retained.

On the other hand, Foursquare –

As a product, consumers checkin at all locations and businesses (small, local & large)
Foursquare need to move beyond check-ins for two reasons
> In sometime real consumers (not technology savvy early adopters) will not find value in badges & points.
> Foursquare will need to have a monetization model that works!

Foursquare has valuable insights about users for the merchants – people who have checked in. They just need to quickly enable self-serve platform for business owners with a global sales footprint.

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Foursquare can just topple off Groupon and with its solution for merchants that covers every pain they have with Daily Deals services like Groupon, Living Social and 1000 others only for one reason – Business owners know who are new/repeat customers

They can enable deals for individually and for specific type of customers
> Consumers who check-in for first time
> Repeat & Regular customers
> Consumers who have not checked-in since last 30 days
Decide what deal goes live when based on user interest, inventory available, and so on

More than that, they can –

Decide how much discount they should offer. To whom.
Take private feedbacks from customers on service
Push deals to customers on special occasions like birthdays & more
Pass on details about business Facebook & Twitter presence to customers – so that they can stay connected.
Analytics – who checks in, cost of acquisition of new customers, competition overview in same location

And most importantly – Foursquare should give ability to businesses to generate coupons, pass on to consumers in vicinity or existing customers which users can redeem immediately.

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In short – daily deals websites exploits local merchants. Foursquare can empower them!

The pitfall – Foursquare does not have a global sales footprint to enable this. Though technology savvy merchants back in US might adopt it, the business would scale when 1000s of merchants across the world are able to enable it. But again, thanks to the 8 Mn+ users – Foursquare already knows which businesses are popular and when they should start.

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If I had a million dollars and choice to invest in Groupon or Foursquare – i would surely bet on Foursquare!

My Prediction – Groupon or some player who has intention to venture big in local deals space will eventually acquire Foursquare or a majority stake.

being practical

syntax error.,, unpractical world

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