Enough articles about Graph Search. Just one thing that Mark Zuckerberg said was striking.., “Graph Search is designed to show you the answer and not links to answers.”
For the record., check the last line from the most unnoticed post on my blog – Future of Search: A Search without Links: “Future of Search is not 100s of links on the search results page. Its one result – just exactly what you want.”
#ForTheRecord
Had predicted earlier that LinkedIn shall acquire SlideShare; Two years back I wrote that Quora should be acquired by LinkedIn, though that has not happened yet, I strongly feel its imminent to happen. Adding to that list, I strongly feel AngelList will be acquired by LinkedIn.
While LinkedIn continues to grow (it recently crossed 200 Mn users), Naval & Nivi’s efforts on AngelList have been spectacular. Over 100,000+ companies/startups listed, 2% of them are hiring (through AngelList) and over 200,000+ early adopters (which includes people who matter) on the platform. And there is speculation that AngelList is raising investments at a valuation of over $150 Mn USD.
Among few user trends I am noticing with regards to AngelList – People from startup community on Twitter are replacing LinkedIn profile links with AngelList.
Here is why I feel LinkedIn should acquire AngelList –
When Quora was small, its biggest challenge was to break beyond the startup community. I don’t foresee AngelList wanting to immediately expand beyond the startup community and its focus will continue to be startups for some time.
And yes these are the early trends. With that I include a possible acquisition of AngelList by LinkedIn to my list of Tech Predictions.
Over past few years I have been tracking technology trends, analyzing and love predicting things through posts on this blogs, on twitter or through my annual technology trends & predictions. I recently started tracking them in a attempt to see how good is hit ratio. Here are a few of those that really saw the light of day.
Other Tech Predictions mentioned on this Blog:
From 2012 Tech Predictions:
From 2011 Tech Predictions:
Last year (2011) learning coding was hot, may be it still is. Sites like Code for America came up; startups like Codecademy, Learnstreet, Udacity, etc came up that were focusing on building products that enabled others to learn coding in an interactive way. Then it looked like a kind of movement, a revolution in making.
Being a startup founder some of those effects trickled down to India – that made me seriously consider coding. And there were some other reasons as well. We started Wishberg by outsourcing product development to another company. As deadlines were missed repeatedly, this whole ‘founders should be coders’ effect started growing on me.
During this phase I did two things a.) started hiring our own engineering team b.) learn coding inspired by this noise. I started learning very enthusiastically to an extent that my bio read that I was learning to code. Going through multiple forums, registering on these websites, taking lessons on LAMP stack and so on. A bit of background, being a engineering student (though Mechanical) – I had some basic coding background. Few years back, I even built some basic websites, did a bit of javascripts, etc.
As we started hiring engineering talent I asked myself two questions –
I also checked with few technical founders who raised investments; few agreed that being a tech founder was probably a added advantage while raising money. But many of them also mentioned that post investment they spent more time finding product-market fit, doing business, improving their product, user experience, managing investors (many a times!) and eventually spending lesser and lesser time on coding themselves.
Eventually all startup founders end up focusing only on consumption side of product (front end user experience, improving funnels and conversion metrics) than the one under the hood. This is when I gave up my decision to learn coding and started focusing on learning design (user design and user experience) which is as core to product as technology is. I started spending more time understanding design tools, design patterns and implementing them on Wishberg. I am no where saying underlying technology, architecture, speed, and scalabilty are not important.
For online businesses, there is no doubt scarcity of good engineering talent; but there is more scarcity of product designers and even much more scarcity of product managers. Startup founders knowingly / or unknowingly start getting into product management role.
I have been a product guy for about 7 years and now feel that I should have learned design long back. Our team not just gets product documentation from me, but also product designs including all scenarios and exceptions. There is a certain clarity of thought which engineers appreciate and exactly know what is to be built – which save lot of time while shipping code / features. Every month, we look at data, un-design by removing clutter, remove additional clicks and aim to improve conversions on every step.
Geek Example – The 2012 Formula 1 Season had 12 teams of which 4 had the winning Renault RS27-2012 engine on their cars. Yet there was only one winner – The Red Bull Racing team. The original Renault team (now Lotus Renault GP) which manufactured and supplied the RS27-2012 engine to Red Bull team stood fourth in overall 2012 championship. In fact Red Bull won the championship for last 3 seasons with the Renault engine. What really mattered – the product RB8 chassis. More importantly the people driving the product, its team – drivers Sebastian Vettel & Mark Webber, Team Principal and Chief Technical Officer.
Concluding Notes:
What engine you have under the hood (technology) matters. What car / chasis the engine drives (the product) matters more. But what matters most is who is driving / leading it. Don’t get over obsessed with technology, focus on product & design.
So all those who complimented us on Wishberg‘s product design & usability… need a hint on who was the person behind it? Yours truly.
Startup events and Investor talks today have this catch phrase – ‘Mobile First’. Its actually started two years back when Fred Wilson wrote a post that says “Mobile First Web Second.”
I recently tweeted, “Can write a post why ‘Mobile First’ is not a right strategy!”. The response to that made me write this post.
Why I said that?
There are some brilliant mobile apps created by startups in recent years, the biggest challenge for all of them is discovery. Few startups are working in this problem too – helping users to discover your mobile apps. The problem is – these startups themselves are struggling in getting users to discover them first.
Google’s Android has over 700,000 apps in Play Store. Apple’s iOS App Store has over 700,000 apps. Assuming these were unique, as a entrepreneur, your startup has to fight with over 699,999 competitors on user’s smartphone, who on an average has only 65 apps installed. Another trend, many users regularly uninstall apps they do not use; once uninstalled – it is very unlikely they will install it again!
Building a successful startup requires two skills – building a product and marketing it. I tweeted that few days back – “Building a product is one thing. Marketing it is another. Remember that!”
Building the Product
Product development in startup is not easy. Everyday there are at least 3-5 updates to the live web application. Even before users realize, they are using on the latest version of web app.
On mobile this is tricky, its impossible to send 3-5 daily releases for your mobile app everyday. Its even more trickier to get your users to download and upgrade the latest version of mobile app every time.
Marketing the Product
Turn around and look at web – what are the ways you can get your start up discovered – Natural Search, Paid Search, Display Marketing (Advt based or Behavior based targeting), Social, Email Marketing and so on. Most of these is very flexible, you can do it all.
On mobile, there is only one mode of discovery that works – Mobile Advertising. Its still not a easy mode of advertising; far expensive; spray and pray approach as its not intent driven (remember – no one is asking for your app!) like Google Adwords and extremely less efficient since its end result is not landing page with one-click sign-up, but its downloading the app, registering the user and retaining him as well.
Btw, I am a believer in products that are driven by value to customers; and not through marketing.
So how does one get Mobile Strategy right?
Glance through the smartphone and check the apps you are most actively using. Its Facebook, Twitter, Gmail, Evernote, Quora and so on. These are essentially web first, mobile later products.
Effective Mobile Strategy is simple – get your product right on the web, acquire initial users, iterate your product (fast), get it right quickly, ensure engagement is in place. Once you have users engaged on the web, they will see value in your product to download your app and stay connected.
Hint – Look at Quora. It was valuable to its initial set of users who were so engaged with the product that they were screaming for getting a mobile app. Quora launched iOS app in Sept 2011; Android App a full year later in Sept 2012.
As a product manager, know that driving adoption and driving engagement for a product are two different things. Don’t try to drive adoption of your product through mobile, its extremely challenging and next to impossible. Instead use mobile as a extension of your product to drive engagement.
Then what about WhatsApp, Instagram, FourSquare, Pulse, Angry Birds and others?
I don’t think anyone has defined this yet, so let me say what are truly mobile first verticals –
Yes. These products are not exceptions – they are truly mobile first products.
Wait, will VCs invest in my startup if I dump Mobile First approach?
Next time anyone suggests you or advises you to go Mobile First, just ask them tips to hack app discovery and drive adoption.
The games of investing are simple. VCs will invest only if –
I don’t think any VC will invest in your startup just because you are Mobile first. Take any strategy – web first or mobile first; as long as you get the above two things right for your product – VCs will chase you!
Concluding Notes:
While I was drafting this post, two interesting posts related to this topic came up.
Fred Wilson wrote following in his post “What has changed“, – “Distribution is much harder on mobile than web and we see a lot of mobile first startups getting stuck in the transition from successful product to large user base. strong product market fit is no longer enough to get to a large user base. you need to master the “download app, use app, keep using app, put it on your home screen” flow and that is a hard one to master.”
Cristina Cordova put up some interesting stats about User Retention in her post – “The Biggest Problem in Mobile: Retention.”
Restating it again as concluding remarks: “Mobile Strategy is simple. Get your product right on the web, acquire initial users, iterate your product, get it right, ensure engagement is in place. Once you have users engaged on the web, they will see value in your product to download your app to stay connected.”
Update: I received few notes from startup founders to also include a important note in this article which I missed – ‘Even when you build a web application, design your product as a responsive web design’. I completely agree.
Life cycle of technology products is declining with years. It is about 20 years that the first Search Engine was developed. Since 1998 Google made Search Engine part of our daily lives. Paul Graham recently wrote a essay called – ‘Frighteningly Ambitious Startup Ideas‘. He says one of the best ideas could be a new search engine.
Even today we are searching exactly the same way we did 14 years back. Search for ‘keyword’, Google provides us with hundreds or thousands of links, and leaves it up to us to spend time finding out what is most relevant for us in those links. Why can’t Google or any other search engine provide us exactly what we need without the pain going through multiple links every time. I have said this many times – Search is incredibly painful. Users have got so used to it, they just don’t realize this.
So the answer is – Yes. Search is evolving, Knowledge Graph by Google is one of the finest examples how search needs to evolve. When you search of ‘Paul Graham‘ now on Google, you see much more than just 100s of links about Paul Graham through Knowledge Graph.
I may be wrong, but it appears that Knowledge Graph by Google is flawed by business design. Knowledge Graph is showcased mostly for keywords that could not be monetized by Google. This is clearly the way ahead for search, and direction Google needs to move (or is moving already) or perhaps any other startup that is attempting a new search engine. Don Dodge explains how just 1% of search market shares is worth over $1 Billion.
Future of Search is not 100s of links on the search results page. Its one result – just exactly what you want.
Google is undoubtedly the master in text based advertising with its Adwords platform (that continues to be the largest contributor to Google’s revenue). It relies on a two formats of text advertising – through Search (display relevant advertisements to users on search results page) and Content Sensing (display advertisements based on content on the page user is browsing).
With advent of Twitter / Facebook and similar such platforms, emerged another prominent format of text outside boundaries of Google’s prominence – ‘status messages’ or ‘short text content’ or even ‘short text messages’. This text format originates and is consumed as quickly as it is generated. Concise, one-to-all (FB / Twitter) or one-to-one (SMS or chat).
Twitter owes its success to its API. Back in 2008-09, while developers were building applications on top of its API, I read/heard many say – “APIs is the product distribution” or “APIs is product marketing”. However, no one said “API is the next Advertising” (in context of text based advertising).
Imagine this simple hack – post the ‘short text’ through API to Google. The service would intelligently interpret if the ‘short text’ has any intent-value and revert back with the most relevant advertisement which the developers can embed back in their application the way they want it as part of their core product experience. The API could have options for Geo / Context, etc.
Is the opportunity huge? Its massive! Facebook is already under-fire for not having enough on its monetization plate. FB is monetizing via demographic targeting, while millions of status messages with a intent-opportunity go without monetization everyday. Twitter faces similar challenges, wrote about this earlier. Instagram, for example – you see this amazing photograph of a Pizza, you immediately want to eat one – show a relevant advertisement. Or two people on a IM like Whatsapp – making plans of a vacation to Canary Islands. This list goes endless.
There has been a radical shift in Internet (read content) over last 10 years, but web-monetization still continues to be same old method – either search or display. Companies involved in mobile advertising copy-pasted the web model to mobile. Web/mobile monetization models are ripe for disruption. While such kind of API based advertising requires a long-tail of advertisers, like the one Google has. But it will be difficult to under estimate startups who would want to get a slice off such very large opportunity; which otherwise will be Google’s lost opportunity….
We all have our stories about Telecom Operators or Mobile Service Providers. I prefer to tweet and receive a call than just calling on customer support and waiting on long hold times. There is so much outrage on Twitter / Facebook against Telcos. Love-hate relationship. At times I end up feeling that the job of Social Media teams of telecom operators maybe more difficult than… err.. Alaska Crab Fish Jobs.
Despite the amount of outrage / complains / feedback, we have wondered multiple times – why do they fail to understand their customer’s agony/pain? How can they just goof up at times on plain simple things?
The answer is ridiculously simple. Most decision makers / process managers / folks in management working at Telcos are given mobile connections which are either not-billed or payed by the company itself. So their employees never or very rarely do any interactions with their own customer service staff like their customers do.
Telcos, there is one phrase extremely popular in the tech startup ecosystem – “Eating your own dog food.” It simply means – use own products / services exactly how your customers do.
To cut the story short – “Telcos, please stop paying mobile bills for your employees. Let them do it for themselves. Treat them as your customers and just see how your processes become more efficient and customer satisfaction scores improve. Eat your own dog food. Please!”
Few days back ( last week of July 2012) – NDTV filed lawsuit against Nielsen for manipulating TV & viewership data. Medianama highlighted few key notes from that – posted here. Later learned that even Prasar Bharati was considering legal action against TAM.
All of this reminded me of one of the posts I wrote last year (May 2011) – “Isn’t it time to re-look how TRPs are measured?“. Re-posting the same with small edits to reflect change over recent events and few additional notes.
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This post is dedicated to John Wanamaker, credited for setting advertising standards and considered by few as father of advertising. John Wanamaker died in 1922. Had John lived today – he would have some interesting quotes to share on RoI in digital advertising. This post is inspired by one of his very famous quotes – “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
The term RoI became a buzz word ever since Digital advertising started to gain prominence in last few years. Talk to any brand manager today on digital spends through any channel – Search, Social, Display or Email – his quick conclusion on effectiveness of any campaign will be based on ROI. Online advertising has taught digital media professionals to be ROI-driven.
Pitch any campaign today on Digital – both Brand Manager and the Digital Marketer sound no less than a Investment Bankers trying to advice its client on a multi-million dollar deal discussing on its investment, returns, profitability and more. The same Brand Manager or Media Buyer will simply look at TRPs of any channel/program and allocate about 50% of its media spends to Television, distribute a significant chunk between Outdoors, Newspapers, Radio and leave a minuscule 5%-10% to Digital.
Well, this post is not about how Digital Medium today is perceived as ROI driven. This is very unlikely to change in coming years, maybe it is standard now. The question to raise is – isn’t it time to re-look how TRP ratings are measured rather than blindly accepting the reports as provided?
First – to know more about what is TRP and how they are measured using people meters – read this excellent post on Television Point.
For those who have not seen a People Meter – here is one below:
credit: image source
Here are some questions usually asked about the authenticity of TRP ratings –
And in world of digital economy, let me add few more questions to above arguments –
In today’s world anything that happens in offline world leaves a footprint online. Absence of digital footprint for “people meter” wants me to question the proliferation of such devices in real world.
The DTH Effect –
Direct-to-Home (DTH) or Satellite Televisions are today immensely popular amongst masses. In India – its reach is 44 Million subscribers in November 2011; and India is probably the world leader in DTH subscriptions now. 44 Million would be a better representation of viewership data – compared to the dismal < 10,000 people meters installed in India.
aMap works with DTH service providers – but it is unlikely to capture data across all subscribers and might be following the people meter approach. Brand Managers are believed to be more inclined towards TRP ratings provided by TAM for decision making while aMap ratings are for reference.
Its most unfortunate if DTH platforms are unable to track viewership data. That is like Air Traffic Controllers saying – there are 500 planes in skies today – we are unaware of their origins & destinations, can confirm with pilots only when they land.
TRP Measurement – Its time to Change!
Fundamentally – People Meter approach will always be poor representation of the population. As spends on digital media start increasing and reaches a critical mass, sooner or later TRP measurement will be questioned by same decision makers who accept it blindly today.
Existing global players like Nielson, TNS, & others involved need to look beyond people meters – either with a better people meter / larger base for viewership data / or else a Government, TAM or another Neutral agency making it mandatory for DTH service providers to track viewership patterns.
Fortunately or Unfortunately, the future of TRP & GRP measurement will be digital. Here is overview of how possibly TRPs will be measured in digital world –
There may be ways to authenticate user viewership patterns. Instead of focusing on data collection through people meters, with same efforts & resources – it will be possible to crowdsource viewership data for programs and channels across millions of users – all in real time. The challenge for this apps will be – what incentive will consumers have to report such data.
Had toyed the idea of crowdsourcing public data – on Twitter / Facebook in real time to develop a WRP (Web Rating Points for Television Viewership). But for now this too might be a challenge – currently it is reflection of TIER 1/2 audience hooked on to Social Networking, which too will be a poor representation of diverse India (maybe another set of ratings that will be questionable like TRPs); Another challenge being – its far more easier to create duplicate accounts on Facebook / Twitter and further much easier to manipulate ratings.
Like many internet products today follow the rule – mobile first, web later; Television viewership in few years will be – digital first. And so will the viewership ratings or measurements too. You never know – maybe a Hulu.com or YouTube.com will provide us the future TRPs. Please glance through some of earlier thoughts shared on – The Future of Television.
Even in India, we are seeing a bunch of startups building products around Television Content – like iStream, iDubba, WhatsOnIndia, others. There is definitely some opportunity here for viewership tracking when ‘digital first’ television behavior picks up.
Future Prediction – by the year 2022 (exactly 100 years after John Wanamaker passed away) – people meters and traditional TRP measuring practices will be obsolete. They will be measured through digital medium! John Wanamaker would have proudly said – “Thanks to Digital, I know exactly which half of my advertising money is wasted!”
This post is a update to one of my earlier post written about a year ago on similar lines.
Multiple new products, investments and its always a good thing for the ecosystem which matures with time. Indian tech industry is changing at a rapid pace, its only fair to go back and recheck those predictions and ensure to keep it up with the times.
Meanwhile, predictions that came true:
Predictions for 2012 onwards:
Product based Ecommerce companies:
Flipkart, HomeShop18, Infibeam will continue to grow; and (no brainer now) that Flipkart will emerge as the market leader amongst the Indian players. I expect Flipkart and these leaders to attempt the following –
Though many criticize the Samwer brothers (Rocket Internet) for creating copies of successful business models – I see nothing wrong in that. How different are any of the other ecommerce sites with their Amazon.com ambitions? Rocket Internet fellas are aggressive risk-takers, investors and amongst their bets on Indian market, Jabong.com has potential to enter in the top 3 / top 5 spots. At some point of time – they may consolidate Fabfurnish.com and HeavenandHome.com into Jabong and set a stage for IPO or an exit through acquisition (Amazon.com?). Rocket Internet is as smart as any other investor when it comes to getting acquired. Watch them!
Marketplace models like Ebay, Indiatimes, etc may face tough competition owing to their helplessness to control key factors like logistics, operations and product quality; precisely what funded startups are keen to build on.
There are now niche plays coming up – Ecommerce services for Tier II/III towns. Most likely candidates to struggle, conceptually sounds great – but the on-ground reality is much different. Will they not accept user orders if customer is from Mumbai or Delhi? I know you talk about ambitions of Tier III youth, age bracket 20-35, etc – but do they require iPad? if yes – why will not Flipkart serve it.
About Amazon’s India plans – I mentioned of the same in this post about about Junglee.
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Vertical Ecommerce and More –
Many ventures who have raised between $2Mn to $5Mn – are yet to move beyond the 500 transactions per day mark even after a year. Few yet to cross 200; scalability is must for any Ecommerce venture to succeed. Verticalization of ecommerce has happened before time.
Predict more consolidation in Ecommerce industry in vertical investments. Simply for the following reasons –
Few players who have launched multiple sites for focused ecommerce approach, other than doubling costs of user acquisition, the only notional benefit it brings to table is SEO. This might not be even proved in Indian context – though a different vertical, we see that Shaadi.com with single brand focus is as popular as Bharat Matrimony with its multiple brands.
Another trend in Ecommerce is online grocery shops – at this stage most of the ventures are focused in single cities, the challenge for every startup in this domain is to replicate this operations in every city, every locality they expand into in a same or much more efficient manner. Unaware of any investments made in this vertical yet; I’m guessing investors are also looking at same – scaling beyond 2 to 3 locations.
Ecommerce for kids – someone shared a joke with me ‘Probably the rate at which online baby stores are coming up is greater than growth rate of India’s population.’ Very little differentiation between existing players, some of them already moving towards a franchise model (which probably beats the economics of online stores).
Amongst vertical investments – many have happened till date in Fashion. This is an interesting space, however already crowded with no differentiation left. Increased cost of user acquisitions, operations and logistics along with Series B or follow-on investment crunch will take a toll on few players. Funded players will try many things – new brands, labels, etc. The question always will be – what differentiation to bring to table? what exit for investor?
There is also a serious talent crunch with many funded ecommerce players, not just at junior but at middle and senior management levels. Another trend that will come up soon is acquihire deals.
Trend you will notice soon – the last slide of pitches will now read acquisition by Flipkart, instead of Amazon. But in an early ecommerce market acquisitions of competition really makes no sense – will write about this some day.
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Group Buying / Daily Deal / Coupon Companies:
Post the Groupon IPO, the obvious was out – this is not a profitable business to be in. Even the leaders moved away from the Group Buying space – tells us the story of Group Buying or Daily Deals. Has suggested last year that funded players will grow, they did but by pivoting to product driven horizontal ecommerce.
The Groupon IPO spoiled the party for many others who were waiting to be acquired by Google Offers or Living Social. Amazon is know to build large profitable businesses, though Living Social has raised a massive $800 Mn+ in investments till date – its fate might be uncertain. Either hit the dead pool or an acquisition by Groupon itself at a very cheap price!
Back to India, there is nothing much left to say now for this vertical, its just a matter of time when large me too companies who joined the party will start calling it quits. Ebay who experimented with it silently abandoned its play, others like Times, Rediff, Mouthshut will too have to review their presence in this vertical in some time.
Some significant players who made presence felt in the couponing space are – online recharge players like FreeCharge & PayTM. It is too early to comment on their exit, however its a interesting vertical (specific only to India) to watch for following reasons – operators doing something fundamentally wrong as own customers pay bills outside, multiple players have entered the segment, players need to retain consumer interest without causing deal fatigue.
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Online Travel Companies:
Not much changing in travel landscape. As mentioned last year – Yatra & Cleartrip are clear IPO exits. Last year MakeMyTrip and SAIF acquired Ixigo, Yatra & Cleartrip might as well look at smaller acquisitions in this space, particularly players in holidays/vacations – the likes of mygola.
It has been a while that Naspers/MIH has invested in ibibo; with ibibo.com focusing only on games from now, it might look at some kind of exit with Goibibo.com. Meanwhile, Naspers / MIH / Ibibo might look at acquiring one or two startups either in gaming/travel domain to solidify these two verticals, or to expand in to new verticals since they clearly indicate focused growth now with Gaming (Ibibo), Travel (GoIbibo), Ecommerce (Tradus) & Automobiles (Gaadi).
RedBus.in is the clear leader in online bus ticketing space, it will continue to be IPO candidate or hot acquisition target. Owing to high valuation of RedBus, its now noteworthy competitor TravelYaari will be in better position to be acquired – in all probability by Yatra / Cleartrip or GoIbibo.
Repeat – Dear Railway Ministry, please list IRCTC on stock markets. Massive opportunity.
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Online Car Rentals:
Just two years back we saw host of daily deal sites, in last month we have seen about 4 investments made in Online Car Rentals space – Ola Cabs, Savaari, YourCabs and TaxiGuide. Predict Ola Cabs to take a lead in this space – and be a possible acquisition candidate for Uber.
This prediction is not based on the fact that they have raised highest of the lot – because its strategy is right. To be successful in this space, they need to concentrate only on the top 8-12 metros, 90% of their target customer base is in these cities. A smart online car rental service will start only in cities where fleet cabs like – Meru Cabs, Easy Cabs or others have significant presence and created the market. For now, more cities just looks good on paper.
Time will prove this right or wrong – as for now, this vertical has just started showing signs of growth (and already getting crowded). It kind of makes sense for Ola Cabs to make a small acquisition in this space and expand quickly.
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Advertising Networks – Web / Mobile:
Last year I suggested that this particular vertical is hinting saturation of market. Out of the existing lot (Tyroo, Komli, Ozone Media, AdMagnet, and other players) – clearly Komli has grown out of India and with its series of acquisitions (Aktiv, ZestAds, AdMax) is trying to position itself as large digital advertising company in Asia, indicating its preparation for an IPO or could be acquired by large agencies like WPP, Dentsu, Publicis or similar.
Unfortunately for India, there is not much technology play in advertising networks, most end up working in model similar to agencies (except the creative part). But few niche technology players in this domain are Sokrati (Paid Search) and Vizury (Display Re-targeting). Both have raised smaller investment rounds earlier and could be good acquisition targets; unlikely for Komli for its partnership with Efficient Frontiers (for search) and display re-targeting has been mastered by many now. Of all players, Ohana Media* could be a acquisition target – its behavioral marketing techniques that combine audience data across channels is amongst the best differential technology available in India today.
Tyroo recently acquired DGM India for $0.6 Mn. DGM was India’s largest affiliate marketing company – a small acquisition size may play spoil sport for couple of startups wanting to monetize through shopping / affiliate related models and currently looking to raise funds.
InMobi continues to be the hot IPO candidate in this space. Google acquired AdMob when advertising on mobile web was at its peak time; current mobile advertising focus is shifting towards in-app advertising, which might even make it a acquisition target for Google (Android) or Apple (iOS devices). New players like Vserv or others would have to build a product sweet sport – number of publishers, impressions available per day and so on, very early days for them.
Guruji seems to now have completely focused its efforts on AdIquity – its mobile advt yield optimization and mobile RTB platform (similar to Pubmatic, but for mobile). Good strategy, may provide exit for its investors by a quick acquisition by InMobi or even by Pubmatic or other web based RTB players like Rubicon Project). As Google continues to mess up its core product – search, it is high time Guruji re-look its search business, not for India but for the world (like duckduckgo).
Pubmatic – is IPO bound. Last year I mentioned them as a potential acquisition target. Its obvious Google spoke to them before acquiring Admeld, they reportedly reject Amazon’s $300 Mn acquisition offer.
*full disclosure – I was earlier associated with Ohana as head of product & marketing. the name was skipped last year due to my association.
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Education:
Many people in investment circle say repeatedly that Education along with Healthcare are hot segments ripe for disruption. Well it is, and a majority of them don’t have a clue what that disruption will be (this includes me). There are already multiple investments made in this Education domain till date, most of them unfortunately will be write-offs and struggle for their next institutional round.
Startups / Investments in Education sector can be classified following segments –
a. Entrance Tests (Online test preparations services)
b. Online Applications (Choose college, careers for India & Abroad)
c. Virtual Classrooms, Online Tutors (self explanatory)
d. Hardware Plays (Education Devices & Tablets)
Startups in A & B –
Startups in C –
Startups in D –
Education by nature is largely offline category and service oriented. Most of these startups are attempting to package them as products, but will be largely service driven plays behind curtains. Investors care about multiple returns on their investments – will they get 10X returns, I doubt.
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SaaS Products:
The fascination for SaaS products continues with investors and will go on for some more time. Since these investments are in very early stage, it will not be appropriate talking about exits. No one has tried to classified SaaS products yet (not to my knowledge) – but let me attempt it as following:
There are Consumer SaaS products that follow a freemium model – Dropbox, Evernote, Hootsuite, Skype and so on, and there are Enterprise SaaS products.
Restricting only to Business SaaS products – Type 1 SaaS startup will maximize its revenue per user as its customers continues to grow, spends more on advertising, hire more, use more hosting, etc. Type 2 SaaS startup will require more clients to maximize its revenue.
Amongst Indian SaaS products, currently Interview Street is probably in the best position to be acquired (may be by LinkedIn). Freshdesk is also a great product, that has a long way to go building a differentiated model from its competitors (which are in plenty). Another Indian SaaS startup I am a big fan is Practo, but it might take them a while to be considered for acquisition since technology is yet to transform health industry, most big giants in health-care yet to embrace tech.
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Online Gaming:
We will continue to hear of online gaming for few more years, examples of Zynga or Rivio (Angry Birds) for some more time to come. Will there be a exit for any player – No. Take clues from Zynga’s $200 Mn acquisition of OMGPOP – it takes a hit game like Draw Something (massive traction with over 10Mn installs in first 30 days of launch, and cross 50Mn+ early this month) to be noticed and get acquired.
Same happened with Rivio for Angry Birds. The key is simple – keep building till you get that winning game on hand.
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Online Matrimony:
Nothing changes here. Bharat Matrimony is profitable play to my knowledge and is looking for its IPO towards the end of this year or early 2013. With Shaadi.com – unsure of its IPO happening any time soon, just as Ias mentioned last year, very unlikely before Consim Group.
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Online Classifieds:
JustDial as known by everyone is heading for IPO. The online-offline model and discovery through phone & web seems to have really worked for them. Really wanted to write something about other players in this segment, but they seem to be busy monetizing more through Google Adsense – so leaving them to rust in peace.
The whole hype about Craigslist was probably the reason why everyone got on to this play. Having said that, not just in India – but globally the online classified vertical is now open to disruption – there are interesting startups like Taskrabbit, Zaarly and more.
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Applications:
Waiting for an Kodak (Oops, I meant Instagram) moment? You may see it soon with Saavn. Amongst all the apps I have seen till date, Saavn is the hottest in terms of distribution, reach and usage.
Tweeted this once – Flipkart should acquire Saavn. There are multiple synergies – Saavn has a vast catalog (subset of Flipkart’s digital service Flyte) and Flipkart has no mobile presence for its digital service. Rather than building a mobile app, waiting for its distribution, Flipkart can start monetization with Saavn’s near 10 Million users from day 1.
Expect in next year or two, this section will have more (and interesting) names!
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Other Exits related to India –
No Clear Exits:
My list of no clear exits has some new names. Like last year – SMS Gupshup, PayMate, mChek continue (read: what problems are mobile payment services trying to solve); will add SeventyMM, SatNav & MapMyIndia to that list (Google Maps and GPS on smart phones has played flattener for their offerings). For reasons mentioned earlier – majority of players in Online Classifieds & Education vertical have no clear exit plans. Also Onward Mobility (if continue with offline distribution of their apps) is on the list.
Have taken off Guruji from the list – for reasons explained above. They will exit for AdIquity, not for its search business.
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Concluding Notes:
All views are personal opinions indicative of on-going trends, don’t take them too seriously. I was outright rejected by one VC when applied for role as technology (internet + mobile + new media) investment analyst for lack of relevant experience. A top consultancy firm thought it was in our mutual interest not to join them 😉
The only unfortunate part of this post is taking names of startups/companies, many of them founded / managed / invested in by people I know personally and have great respect for; few as friends, entrepreneurs & acquaintances. Having said that, I analyze trends and will be really happy to be proven wrong by passionate entrepreneurs. When it comes to investors, admire those who have placed their bets on companies or products where exits are/were not obvious. That is what risk-taking is all about!
Cheers till them. Will revisit these predictions next year.
Have a different opinion, would be great to hear. Write to me on pj@beingpractical.com / follow on twitter.com/beingpractical.com