Over the last few weeks I have had a chance to go to Mumbai, Delhi, Chennai and Hyderabad from Bangalore (besides Goa) via 5 different airline carriers – Kingfisher, Indigo, Spice Jet, Jet Airways and Deccan (Kingfisher’s low cost carrier).

There has been a boom in Indian aviation business in the last decade and over 30 new low cost and full service airlines have benefited from the growth.

All the major airports in India were in major need of renovation and they are all in various stages of it.

My assessment of the airports is based on 5 criteria:

a) Ease of access / location – how easy is it to get from the airport to where I want to get to – including taxis, mass transit options etc.
b) Availability of restaurants – not being much of a shopper, in many cases I am rushing in from a meeting or rushing out to catch a flight, so grabbing healthy food is very important
c) Overall cleanliness of the airport
d) Speed to get to gate – time it takes for checking in, security clearance, etc.
e) Availability of waiting lounge space (or waiting areas in general)

Of the major airports, Hyderabad is the BEST by a mile. This is a totally new airport, so I am sure Mumbai and Delhi (which are undergoing major upgrades) are going to get better. The airport has been privately built and managed by GMR (which also is working on Mumbai, where unlike Hyderabad it does not have a clean slate to work from).

Even though Bangalore is new (a month newer than Hyderabad), it just pales in comparison to Hyderabad. Its smaller, more cramped, less clean and has a lot fewer options for good food (or shopping).

Of the others, Delhi and Chennai are the worst so Mumbai gets ranked in the middle.

Why I like the Hyderabad Airport:
1. Access is good, and getting better. There are buses, taxis, an upcoming Metro project and they look spanking new and clean. Mumbai is the worst and absolutely crowded. It took me more time to drive 4 miles out of the airport than to fly from Bangalore.

2. Lots of good food options (especially since most Indian flights are delayed by at least 15 min minimum to an hour plus at the worst case). Delhi is the worst in this regard.

3. Restrooms, pathways and aisles were all very clean and constantly being cleaned so I was impressed with their overall ability to keep it well maintained. Bangalore airport, on the other hand already looks old. Delhi, Chennai and Mumbai were all dirty even though both Delhi and Mumbai are relatively new.

4. Its a little further away from the city (similar to Denver or San Francisco) so options for a train are not yet great, but you have lots of taxis and buses that were reasonably priced. Bangalore is comparable but the traffic once you get into the city just stalls.

5. It was fairly fast to get in and out and you did not get overwhelmed at the exit (which happens even at the new Bangalore airport with the number of unsolicited visitors offering taxi or transport services).

In terms of the airlines between Kingfisher and Jet Airways (both are full service) I preferred Jet – very hospitable staff and more punctual. Among the low cost carriers there was not much to choose from, but SpiceJet is moderately better than Indigo and I would not at all recommend Deccan.

1. Advertising spending in India is roughly one-third of that in the US and Europe.
2. There are now more Indian homes with television sets. India’s 119 million television households
comprise about 60 per cent of the total households in the country.
3. About 50 million receive cable-television services, leading to a penetration of about 42 per cent.
4. The Indian DVD market now exceeds 1.5 billion
units (not DVD players) per year. This figure is expected to grow to 4.5 billion units
per year by 2010.
5. Total Indian Advertising market = $111 Billion in 2005, $150+ Billion in 2008.

Back to the Bay are by Friday. Hope to catch up with everyone there. Wonderful 2 months here in India. I need up upload images.

Saw AdMob numbers and some of the analysis both pro and con after that. I have to be in VentureBeat’s camp – AdMob is onto something (at least in India).

Granted India figures #2 in Admob’s advertising geography with about 349 Million requests. But that’s part of the story.

Lets get some facts first, (some of this information is proprietary, not confidential from the carriers who I spoke with).

1. Total subscribers in India = ~240 Million, growing at  15% annual, most of the growth (over 60% of that is rural, not urban, which most carriers are claiming is “saturated”, not sure I buy that).

2. By Technology GSM providers have 66% market share, the rest are CDMA. Most of their data networks are still as ancient as the US carriers (GPRS anyone?) and hence slow.

3. The top carriers: Airtel, Vodafone (Essar/Hutch), BSNL (and MTNL) and Reliance. # of subscribers of data plan on the mobile is about 1% in GSM and less than 0.7% in CDMA – that totals to about 1/2 Million (about 1-2 million, had a typo). Less than 115,000 subscribers of Blackberry.

4. Dominant handset is Nokia. 90% handsets are purchased separately from the carrier hence there are no “subsidies” – This is important – why? The handsets listed by AdMob in the top handset list EACH cost over Rs. 7500 and most cost over Rs. 15000 or about $200 – $400. These can only be afforded by fewer than 0.5% of mobile subscribers or about 2 Million people.

5. The major metros are over 80% of “Internet traffic”. So which mobile sites get all the traffic – #1 is video (You tube & Porn), #2 is News (indiatimes, rediff), #3 is social networks (Okrut, Facebook), followed by services (jobs – naukri, etc.)

6. By Demographic: Given the price of handsets, data plan fees, propensity to have more time, the only market segment that’s even going on the Internet to view those Admob ads are: Urban professionals and College kids.

So why are marketers saying they are going to RUSH to mobile advertising & skip the PC? – Disposable Income growth.

If you can afford $100 for a phone in India, put up with poor Internet connection on your phone, handle the small form factor and still pull together 300+ Million views, you ought to have 2 things – time and money.

For many of these professionals and students the mobile is their entertainment, information source, their way to keep up with friends, etc. Most use it during commute – which tend to be long.

BTW, the other segment that’s possibly going to get on this bandwagon of the web is the Urban off-the-grid crowd, if only they can get their headsets off the Nokia mobile radio . Fat chance in the next 2-4 years is my prediction.

I always wonder how 9/11 has changed the world for the average person outside the US. Traveling by plane reminds me of the changes on a fairly frequent basis. Before that tragic day, I would consistently be “a few minutes early” at the airport. Not after. Usually an hour is normal.

I walked into Bangalore International airport (the new one) the other day for my weekend jaunt with 4 other friends. We were traveling to Goa on a Spice Jet (South West equivalent) 130 pm flight. We were at least an hour early and it seemed fairly empty. We all walked up to the entrance with a copy of our eticket (you cannot enter the airport) without a printout of the eticket – (yes, it defeats the purpose of an eticket, I know) and our ID. I had my California Driver License with me.

The amazing thing about carrying identification in India is most everyone carries a “real copy” of the ID. Not the original. So imagine that you have a CA Driver’s license like I do. Now, make a color photocopy of it and laminate it – there’s your ID – and its very widely accepted. Most real id’s are stored in bank lockers for security and no wonder – it takes you days to get a duplicate one if  your original ID is stolen or lost.

I was thinking to myself that we came to the airport fairly easily so we had to expect something to go wrong soon.

Turns out one of my friends had no ID at all. In fact the only thing he had was a 15+ year old copy of his driver’s permit. This was a one page document with a 15+ year old photo of him with lots of hair (he’s lost quite a bit now) and the copy was also 15 years old, folded in 4, torn on the edges and the folds.

Another friend only had 2 Credit cards with his photo on the corner left of the card. This credit card was issued by a local bank and the photo was also over 5 years old.

Another of my friends claimed he left it in his other wallet.

So walking up to the entrance I was expecting quite a stir and thought we might have to catch a later flight, while we waited for them to get their ID’s.

The guard at the entrance was keen to see our paper copy of the ticket. Imagine an armed reserve forces personnel with a serious mustache in official uniform. He looked at this thing for what seemed like a few minutes, and then looked at the 5 of us and nodded. No words, no looks just a nod.

We all stood in line to show our ID, with me going 3rd. He looked at my buddy with the credit card ID, glanced at the name and gave him a go ahead.

The next part was amazing. While we all were ready with our ID, he simply said – “Why are you showing me so many, I dont have time, go ahead. One person’s ID is enough, dont waste my time” – translated from Hindi.

He did not check any of our other ID and just waved us all through. I was obviously amazed, but none of the others were.

Expecting another ID check at the ticket counter, I had it out for the boarding pass. Nope, I did not get a chance to even go to the SpiceJet counter. My buddy went and got the boarding passes for all of us.

Okay, so much for security I thought.

Well this is step 2 of airport security in India. You next go through the security check and baggage screening. Every bag you carry on board gets a tag which gets an official stamp after it clears X ray screening. If the screener forgets to stamp your bag and you try to get on board, you’re outta luck – you have to go back and get it scanned again & stamped.

After this, you get the boarding call, where the boarding pass and your bag get screened to see if you have been “stamped”. Still no other security check for ID.

After you get your boarding pass reviewed, you get on a bus to get to the plane (most planes dont have aero-bridges).

Finally there’s another review of the boarding pass at the foot of the stairs to get on the plane. You’re boarding pass gets a final check here and one in every 4 passengers gets another boarding pass “check”  on the plane by the air hostess greeting you.

No less than 5 checks each time you board. So why do I still feel mighty insecure on the plane?

As most marketers would advice you: market where you customers are. The top 3 ways to spend your money in marketing is dramatically different from marketing spend in the US.

To recap the US spend:
1. Lead Generation: 45%
2. AR & PR: 25%
3. Marcom: 5%
4. Events: 25%

So how will I change this in India for a software company (regardless of Internet, B2B, B2C, or enterprise software)?

1. Lead Generation: 55% – switch from mostly web marketing (SEM, SEO) to advertising on radio, print and if you can afford it Television.
2. AR & PR: 10% – stick to Press mentions and regionals, magazines. AR is mostly a waste of time spend in India, even in the enterprise. Unlike US and Europe where analysts like Gartner tend to provide 30% of your inquiries, India mostly ignores analysts and “experts”. They like reports, whitepapers, etc, but wont pay for analyst time on research consulting.
3. Marcom: 2% – Costs are a lot less in India for brochures, white papers, etc.
4. Events: 33% – Depending on if you are consumer software or enterprise software, I’d advice you to plan a series of events locally to “meet and greet”. Most people want to know you are “a real company” and not a fly-by-night operator.

So here are my tips on the top 3 ways to market your company:

1. Affiliate Marketing: Inorganic traffic acquisition is hard and mostly hit-or-miss. I would rather hire a Business Development / Marketing professional and partner with a top 20 list of a) Cybercafe providers like Sify, etc. b) Online media properties like Indiatimes, Rediff, etc. and c) Social networks and community sites like Orkut, Cricinfo. You might have to share percentage or revenue, or Pay-per-click or pay-per-action, but its a lot better than search engine marketing on Google. Traffic in these sites is predictable, proven and diverse. They offer the quickest path to prospects for your organization.

2. Contests & Games – Mobile Marketing: SMS in particular is very prevalent regardless of the enterprise or consumer demographic. Try to integrate your contests and games with general public events like cricket or launch or a movie etc. to get topical traction.

3. Regional events (Breakfasts and Dinners): If you are in a major metro like Mumbai, Bangalore, etc. then plan on having multiple city events since distances are large and traffic is unpredictable. I would divide the city into 5-6 regions where most of your customers are and plan on having events in each region. Like most Asian buyers, Indians like to meet people face-to-face and rarely (less than 1%) purchase major or minor items online or over the phone.

Correction:
1. I hit the publish button too quick. There are many sources for # of Internet users in India.
a) Rediff: 38.5 Million, growing at 40%
b) InternetWorldStat: 42Million in 2007, 60 Million in 2008, Growing at 28%
c) Hindu: 37 Million in 2007

As I talked about it before, the the number of broadband subscribers in India is small..
1. Only 28% people have broadband access at home. Of these, over 75% have only 256 Kbps. The growth of broadband is less than 15% annually – granted this is the fastest growing of the lot but in absolute numbers still small.

2. About 10% of users come via Cyber Cafe’s. For Indian Social networks and gaming sites, this is nearly 60% of their traffic.

3. Most work related Internet is heavily monitored and restricted which means your users are primarily spending time coming via home using dial up.

So, your India internet strategy better be slow and steady.

I saw this very cool chart on advertising from Erik on Techcrunch (via First Round Capital)

Newspaper spend in US is about 10% of total advertising spend and is receding at 7% YoY.

Compare this to advertising spend in India:

1. Newspapers (46%); growing at 6% annual. (household reach = 65%)
2. Broadcast and Cabel TV 41% growing at 8% annual (household reach = 55%)
3. Internet (<1%) growing at 30% (household reach = 10%)
4. Radio (5%) growing at 10% annual

and now for the kicker:
5. Mobile (<0.2%) and growing at 80% (household reach = 25%, but growing at 25%)

Indians still love newspapers and subscriptions to physical printed news are increasing not decreasing. The word among the marketers is that they may completely miss the Internet and move direct to the Mobile.

This is very specific to Bangalore and if you have not lived in India or not visited here, most of this may be “interesting” at best for you. Another warning – long post.

That India has changed significantly & dramatically in the last 10+ years is obvious. On the flip side people & attitudes are changing slower (or resisting change) is also very clear. I have this new theory that the Quality of Life (QoL) in Bangalore has not improved, but the Quality of Stress (QoS) has changed a lot.

In Bangalore now, you get a very high Quality of Stress compared to what you got 10-15 years ago (if you dont get the slight irony in this, its me not you – (grin)). Its stressful for the average individual but the quality of stress is very high. I’m not sure many people want this quality of stress, but they are plunging head-first into the global rat-race.

Quality of Life (QoL) to me is not the same as standard of living. Complex material things like telephones & communication, television, automobiles have all dramatically improved here. Simple wants on the other hand, like electricity, water, accessibility of roads, etc. are finding it difficult to keep up with the dramatic growth. The standard of living is improving leaps and bounds for the new industries (like technology) and that rising tide is lifting most other boats. But is increasingly being challenged by the dichotomy of simple wants not being met. The reason is that 50% or more of the population requires simple not complex material things.

QoL on the other hand is “well being” felt by a individual or group of people, according to Wikipedia.
“The first is a physical aspect which includes such things as health,
diet, as well as protection against pain and disease. The second
component is psychological in nature. This aspect includes such things
as stress, worry, pleasure and other positive or negative emotional
states.”

So QoL = physical aspects + psychological aspects. I notice that the physical aspects are a net neutral to slightly positive (see the previous paragraph). Within the psychological aspects; pleasure (with material acquisition) is greatly improved, but there’s more stress now and its very high quality stress.

Let me explain my theory with some examples:

1. Buying a home: Homes were a lot cheaper and loans were harder to come by a few years ago. What’s good is that now if you can breathe most banks will give you a loan to buy a home. The price of real estate is much higher, but the quality of basic home construction is better. The challenge is that if you are 2 income earning home, most accountants advice you to keep you “basic pay” small and “perks” large to avoid a large tax burden. Since mortgage interest is the only deduction to offset taxes, many folks buy a much larger home than they ever imagined (this part is not very different from the US).

The trouble is buying a larger home in India has a lot more variable costs. So most people I know who own large homes are more stressed about traffic near their home, water, electricity & maintenance.This may sound like “rich people problems” but its a lot more stressful than before.

Their “standard of living” has no doubt gotten better, but the quality of stress is now higher. Some would argue its MORE stressful now.

2. Buying a car: You had 3-4 choices of car 15 years ago. Now its an amazing variety of local and imports.  Thanks to the financing boom, loans are again a lot easier to get. So you get better cars and they are easier to afford (not cheaper to afford, just easier). But the flip side of the problem is that almost everyone with a salary can afford one, leading to 2 million vehicles in Bangalore, a 10 fold increase in 7 years. Now people are more stressed about the length of their commute, road rage and their car getting “dinged” daily.

Again, the standard of living has been enhanced, but the problems its brings are stress of a higher quality.

3. Kids and school: 20 years go public or private were two choices for schools and the “standard” of instruction were limited to 3 – Central government, State government or British.
Now there are 7 different tiers & tons of choices – Foreign-owned International, Local-owned International, State standard, Central standard, British standard, Charter and home tutoring. Most parents I know work from 8 to about 8 in the evening (if you are in the technology field, you tend to bring work home, since conference calls with the US are during the evenings and nights local time). So parents tend to choose the school based on its relative brand cachet and sign up for the “most school they can afford”. It comes with it a unique Indian variant of “keeping up with the Joneses” – you have to sign up for sports / games / activities that are aligned with the “status” of the school. Years ago I’d play cricket at the corner of my street or the playground a few blocks away. Now horse-riding, roller-blading classes are the norm – which is an alignment with global standards, I agree.

The stress that these come with require a full time nanny who has to shuttle the kids around (since parents are at work) and a car to shuttle the nanny around. Dependability and security of the kids (with the nanny and driver) become more of a stress and whether the kids can get to the activity “on time” thanks to traffic.

Better problems but more high quality of stress. What do you think?

If you are part of a startup or have a new product and are looking to expand into the “India market”, here are some tips on what I have learned over the last couple of months.

Some basic facts for you to keep in mind:
1. Although India has over a billion people, fewer than 1.5 Million people work in the “Information Technology sector”. These people tend to be the early adopters of technology followed by students in high schools and colleges. The financial services and retail sector employees tend to be the early majority and the rest are mostly laggard in terms of adoption of new Internet related technologies. However the latest in cell phone or mobile technology seems to be the anomaly in this pattern.

2. There are about 150 Million personal computers in India, and 42 Million of these have Internetconnectivity. 2.5 Million broadband connections at home. Fewer than 5% of these broadband connections deliver more than 1Mbps. India has ~260 Million cell phone users and of these about 550,000 people have data capable smart phones (Nokia and Blackberry have the most market share). The average broadband connection costs about Rs. 500 (about $12)/month, and tends to be a barrier for adoption, besides being unreliable and inconsistent.

3. Most (Over 85%) of people accessing the Internet do it at work (where broadband is available). Most companies have restrictions on accessing the Internet from work including proxies, disallowing downloads and in some cases restricting usage to certain websites. So, you are better off having a pure play “in the cloud” service than one that requires downloads. The other major source of traffic is from Internet kiosks where people pay by the hour to surf the web.

Here is what I have learned over the past few months:

1. Ensure you have a “mobile strategy” to reach the early adopter demographic: Like most other European countries, SMS has the biggest usage among the target demographic of 17 to 24 year olds. Young Indians tend to be “out and about” and tied very little to their desk or PC, so they surf the Internet, chat with friends and communicate primarily with their cell phone. About 12-14% of these folks tend to have a job at a call center, or retail, etc. so among this subset of wage earners, disposable income tends to be fairly high, since they stay with their parents.

2. Even with mobile the lowest common denominator (voice) is the one you have to support. The 24-35 demographic has 3-4 different segments – Urban professional, Urban off-the-grid and Rural. Urban professionals tend to use the Net & SMS more than Rural or the “off-the-grid” crowd. The Urban off-the-grid tend to use their mobile for mostly voice calls. Rural tend to be the same. Since incoming calls are free, most people prefer to receive than send calls.

3. Cater to local tastes in application usage. This is a very obvious one, but an important point. Broadly speaking, Indians love Bollywood (local movies), cricket for entertainment. They are voracious news junkies in general, but tend to read a “physical newspaper” more than surf the web for news. Horoscopes and astrology applications do very well in most urban and rural areas. We assumed that maps and directions would be good applications for India, but found out that most Indians, “ask around” for directions and recommendations so the use of maps and weather tend to be far and few between.

4. Assume over 80% of your demographic is coming via 56Kbps connection: Broadband at the office is fairly restricted. More people access the Internet via cell phones than PC’s in the large metros (Mumbai, Delhi, Chennai, Kolkatta and Bangalore) since they tend to have long commutes.

5. To market you company, traditional media beats Internet consistently in India: To get your word out and awareness of your company / service / product you are better off using traditional media – newspaper, television and radio (not necessarily in that order). Since the number of people using the web is small, the chances of reaching your target audience (albeit very focused) is very small. Over 50% of cell phones are less than 18 months old and over 40% of them have FM radio capability according to newspaper reports. Looking at the street everyone has their headphones on (even while driving) or is reading the newspaper. The best way to get your word out is to market virally or advertise.