Google is debuting “assistant” for Android by Fall 2012 apparently. I noticed today though that they already have “Siri” like capability for google search. See screen shots below.
When you search for something on google, you can see a mic at the end of the search. Click on the mic and you get a pop up saying “Speak now” which you can use your computer’s mic with to speak into.
If you are non-technical co founder at a startup that’s primarily a consumer web / SaaS or Mobile application company, there’s only ONE thing you should be focused on:
A plan to acquire, nurture and grow users (customers) with as little money as possible.
With a caveat – you should not use any of your technical cofounder’s time (once a week update / meeting to discuss progress is okay) to achieve your goal. If you do that, it takes away from building the product.
Dont waste your time on “legal paperwork”, “office space hunting”, “attending networking events” or “talking to lots of people to get advice”.
User acquisition involves multiple steps that you need to do in a disciplined fashion:
1. Understand, document and verify your user segments / audience / customers (demographics, usage patterns, usage behavior, etc.)
2. Put a plan to create awareness with as little budget as possible. Make the assumption that as a startup you will have some time but no money.
3. Document who are the key influencers (bloggers, reporters, analysts, etc.) you need to get in front of and when / where you plan to meet them to talk about your product.
4. Plan a content marketing strategy (blog posts, infographics, surveys, slide share presentations, videos, etc.) that will consistently help you build lots of content to help grow your organic traffic from search results.
5. Learn how to build, manage and grow a community of users to help build a great fan following for your company.
You can call this anything you please – Marketing, Hustling, Selling, Community building, User acquisition, etc.
Each of these are very measurable.
1. How many visitors came to your site?
2. What were the sources of your visitor traffic – blogs, organic search etc.
3. How many are repeat visitors, versus first time?
Nothing else matters. In fact if you do a great job at this, you will be as valuable as your technical co founder.
I think facebook is trying to be a country NOT a company. Therein lies its huge valuation.
1. A country with over 800 Million citizens that are all over the world.
2. A country which is rolling out its own passport called verified IDs.
3. A country with its own currency called Facebook credits.
4. A country which has citizens (users) who dont pay any tax to access any of its services or infrastructure.
5. A country where every corporation (Zynga, etc.) that wants to sell to the citizens who buy virtual goods pay a flat 30% tax on every purchase by a user – so yes the user indirectly pays.
6. A country whose benevolent dictator wants its citizens to know its social mission.
7. A country is very business friendly and is increasingly becoming more useful to them.
8. A country with privacy issues with its users to deal with.
If we were to revisit paid, owned and earned media and the impact on mobile marketing.
Most marketers are now building custom mobile applications (owned) for Android / iOs and will soon start to build them for Win Phone 7. Most are already ignoring the Symbian and Blackberry RIM.
During the days of television, print and radio paid was the choice of campaign spend, whereas earned was relatively small (less than 10%). Meaning, you paid for advertising alone and worked on your PR strategy to get your message out alternatively without paying for placement.
The days of the web changed that mix from only paid and earned to spending on your website (owned) which I think reduced the percentage of paid to 70% (from 90%) with 15% being spent on owned and earned slightly increasing to remaining constant.
With mobile applications being developed by marketers and social media engagement the owned portion of marketing spend is increasing even more to close to 25% of marketing budgets, and PR at a constant 15%, the spend towards paid media has further dropped to 65%.
The challenge with every marketer trying to develop their “owned” media channels is that they need
a) more resources (social media analysts & marketers and app developers) instead of campaign spend and
b) more “viral” techniques are being adopted to promote the owned properties.
Lets assume the viral techniques are getting more ineffective as more people try them.
Marketing budgets are increasing at a pace of about 5-7% annually for large companies and more marketers are being asked to spend more money on “owned media”.
What impact does this have on the future of marketing and more specifically mobile marketing?
1. I see the mobile advertising (both display and search) largely being used for promoting marketers “owned” applications – the main reason for that is the instant gratification that comes with an ad to download an application that possibly helps you more than just an ad for branding purposes. It is a lot more measurable.
2. I see many marketers being asked to “get more technical” and start building more “owned” properties since in the long run they are cost effective, easier to control and provide measurable value to the company.
3. Mobile ad networks such as inMobi, Google Admob, etc. will start to focus on helping marketers build, deliver and then promote these owned “applications and properties” since its in their best interest to get marketers to spend more money and make it a lot more accountable.
Update: Nick Burcher has written a book on this topic, and the except is available to review.
The mobile phone is fast becoming to 6 Billion people what the PC was to 2 Billion people – a communications device (voice and text), and entertainment unit (video, music, movies, news & information, gaming), a productivity tool (contacts, email, task manager and calendar), a gadget (camera, mobile wallet) and an Internet access unit (social networking, commerce, etc.).
First the mobile phone replaced the phone booth and the pager. Email has already replaced faxes and postal mail. Given that 27% of emails are read using the mobile phone (up from 20% the previous year). I wanted to speculate all the “devices” that the mobile phone threatens and might replace.
1. Camera – done mostly. The camera market will be largely relegated to SLR, while point and shoot will reduce in # of shipments. With the announcement of the 41MP camera by Nokia, we are now getting high resolution pictures taken by the phone. This will accelerate the downward trend that point and shoot cameras are seeing overall.
2. Television – In the last few months, I have seen more people using their phone to watch movies on planes than ever before. Previously they would either watch it on their laptop or a portable DVD player with an integrated display. I can still see the need for television for the large screen viewing experience with an integrated audio system, but with projectors built into phones, they might soon be used for short movies.
3. Game console – In 3-5 years with motion sensing and gesture recognition coming to mobile devices, and built in projection, I suspect most game consoles (Wii, XBox and Sony Playstation) will go the way of the SLR camera. Hard core gaming will be for the niche market, while casual gamers will use the mobile phone as their primary game entertainment device.
4. Radio – The primary use of radio is during commute. Specialized radio units I believe are already passe, so this unit is also mostly done with. I suspect most kids born today will not even know that stand alone radio units can be bought. They will be a “feature” on the phone as are calculators.
5. Car stereo – With 3G and integrated music output into the speakers of the car, this device will also be relegated to low-end cars alone. Imagine having a “separate” MP3 device just for your songs – bizarre in 3-5 years. Most likely the phone unit will snugly fit into a slot where it will be both charged and can power the music / radio within the car.
6. Projector – this is just starting to happen, and will take longer than 3 years, but with Samsung announcing the new integrated phone / projector unit (its a start), there will be possibly no longer a need to lug large projectors for quick presentations which don’t require high resolution projection.
7. Cash / Payments – This will take longer because of ID requirements than necessarily mobile commerce. The average wallet today contains a government issued ID, a security badge (company / employer issued), a debit card, one or two credit cards and some cash. The cash and credit card can be replaced within the next 5 years, but ID’s will take much longer if at all.
8. Access (Security) device or other forms of ID – I can see the possibility of employers issuing limited ID card applications that function both as an ID and an access unit. They are easier to destroy and manage (if the employee leaves the organization) and cheaper than physical cards. I can also see insurance companies quickly providing their ID for insurance etc. on an app within the device instead of a physical card.
9. Flashlight – useful in countries such as India where you have power outages in the night.
10. Business cards – surprisingly this is taking much longer than most people thought it would. You should be able to bump your business card to another phone regardless of whether they have different platforms. It will happen in 3-5 years, but the business card is going the way of the fax – niche, used sparingly to make a statement, but not pervasive.
11. Keys – This is a lot more tricky. Given typically most people have 3-4 keys – car, home (front / back) and some cases office, replacing these will take a lot longer. I dont see this happening in the next 5-10 years.
If your phone really replaces all these devices, you will need a cloud storage and security because nearly 25% of phone are lost / stolen / dropped in liquid each year. So you should be able to walk into a store, buy a new phone and “log into” your phone, similar to what an IP phone does already.
For women, who have a larger purse or handbag with other items such as a makeup kit or lipstick, I am surprised that phones dont offer that yet (although the Micromax Bling does offer a compact mirror).
Now that all items that you carry daily on your pocket will be mostly replaced by the mobile phone, I think the laptop bag or backpack is next.
Disclaimer: This is an essay for me and my kids (who I am hoping read this). If you have been in India for long, you probaby know everything about the Indian buyer, and why they behave a certain way, you wont get much from this post.
For the longest time, even after India’s independence, the focus was on “self sustained growth”. To a large extent there was mistrust and fear of having to depend on other countries for anything. So importing was largely relegated to “must haves”. Consumption was limited to the bare minimum. India for large parts is a “supply driven economy“, which means supply was of limited constraint. The “customer” had to do whatever it takes to buy, instead of the “vendor” to do whatever it takes to sell. So selling is a largely undervalued skill.
Side note: It still bothers me to no end that most retailers turn customers away if they dont have exact change or if they want to pay by credit card.
Even after the liberalization efforts in the 90’s large parts of the economy still remain supply-constrained. There are exceptions – mobile telecom, spas (yes there’s an over supply here), etc.
Then in the late 90’s the IT boom hit. Demand from abroad (largely US) was terrific for outsourced resources, so Infosys, TCS, Wipro, etc. had to focus on securing constant supply of good-enough engineers. Their efforts went on training them, transporting them, feeding them etc. not building sales talent to sell. That’s changed dramatically over the last few years, which is uncomfortable for all the IT outsourcers, except Cognizant.
So the Indian business owner (sweeping generalization alert) looks at most places where demand exists in plentiful so there’s very little effort or energy required to market or sell. (Side joke: The average Indian businessman thinks marketing means going to the market and buying stuff). So they never really gained the knowledge or expertise in marketing, wooing and selling to the customer. There were exceptions – largely in the CPG – consumer product goods (FMCG – fast moving consumer goods) segment.
So, the sales person is largely undervalued. Its very typical to have sales people paid less than 1/2 of delivery heads, or technically savvy operations people. They are literally treated as lower class citizens.
The smartest of the people hence tend to focus on being engineers, doctors, etc. leaving people that “like to talk a lot” focus on selling. The smart ones also picked up MBA’s from top Indian management schools and either end up in financial services or FMCG, but that’s changing too.
That’s the primary reason India does not have a sales culture. Its rare and there are a few exceptions. Those companies tend to be viewed not very positively by most Indians, which explains why they dont attract top talent.
Will that change it the future? I think it has to. The global market for products and technology is forcing most Indian entrepreneurs to start to sell in US, UK, etc. They are now trying to attract top talent for sales and *gasp* pay them top money.
Something interesting is starting to happen among the B2B companies that are starting / getting funded in India. Companies that have a larger price point (> $1000 per month for e.g.) are all either a) moving to the US (company founder, key employee) or b) they are hiring larger inside sales (telesales) teams and teaching them how to sell outside India. There are exceptions (Visual Website Optimizer) but I am seeing more companies moving to US to seek faster adoption in the early stages.
By B2B (Business to Business) I mean companies that sell to other businesses, either small or large. There are enough documented issues selling in India to businesses, some of which include:
1. An extreme focus on cost by Indian businesses, which results in much lower (or non-existent) profit margins.
2. The inability to find good, trained sales professionals
3. The “request” by many “decision makers” to be paid a kickback, which if not paid, results in unpredictable sales cycles
There have been many company founders (OrangeScape, InterviewStreet, Mobstac, etc.), who all started in India, sold to their first few business customers here in India, but have now either moved to the US or are focusing on the US market alone.
Besides the fact that early adopter companies are largely there in the US, many or all of the issues listed above tend to go away bringing mostly issues of upfront investment on sales resources as the primary barrier to a US only distribution strategy.
So what does this mean for new entrepreneurs looking to start B2B ventures in India?
1. Dont. Seriously. Find easier and more fun things to do than sell to Indian businesses (This is a personal opinion alone).
2. If you still insist on doing that, get an awesome sales director / manager from a kick-ass company to head up your sales efforts sooner rather than later and help create a detailed training plan to hire, train and manage new sales professionals.
3. Look to partner and ride an existing distribution channel that exists. Tally has an excellent list of re-sellers / partners who you might want to talk with.
One last thought – Entrepreneurship is hard. Dont make it harder by choosing a distribution strategy that’s even harder.
In the 1990’s if you had an idea, a great team (two engineers, one sales person) and 2-3 prospective customers (I know this because I got a term sheet from a large VC firm with this set of requirements) you would get funded (either by an angel investor or a VC).
In the 2000’s the bar was raised to a working prototype and customers actually using product, with a great founding team, not just idea – even for angel investors. You needed to have a great idea, prototype product, some customer usage and a great team.
In this decade (2010 – 2019) the funding bar has been raised even further. With incubators putting in seed money, angel and venture investors are coming much later than 2 guys and a prototype (product-market fit). There are exceptions of course, but they are rare.
E.g. When YCombinator puts $20-30k you get to prototype and maybe some traction. Then you get another $150K from Ron Conway and Yuri Milner that could last you one more year to 18 months to not only build product, but show some momentum (Customers, repeat usage, maybe even some revenue, etc).
So when entrepreneurs hear that there’s a startup frenzy in the bay area, with very high valuations and insane amounts of funding, they think its for idea and prototype. Many complain to me that they have a prototype (not just idea) and have been building their company with the Steve Blank’s customer development methodology, and are still not getting funded.
Most have even their profile put together on Angel List, but are still not getting any interest.
The bar has been raised and its possibly forever.
The other issue many have is they believe they are past the “YCombinator threshold”. “I have a prototype already and we have been working on this for 1 year”, is what I hear.
There’s no threshold for “Ycombinator” that you have possibly crossed.
I believe even if you have been funded (Interview street was funded before they were accepted by YC) there’s a good reason to apply to an incubator.
A big trend I have noticed in the last few months is that almost every Venture Capital (VC) company in India is looking to either invest in or build an “incubator”, which can help early stage entrepreneurs. There are already several of them in India, including Morpheus, The Startup Center, CIIE at Ahmedabad and others. I would imagine that by December of 2012, we will have at least 10 very well funded incubators all looking to guide, mentor and help young entrepreneurs through their initial stages. This will go a long way to help the startup ecosystem in India.
The flip side to this is the amount of choice that startup entrepreneurs will now have. I can easily see many entrepreneurs spending days and months trying to figure out which incubator is the best for them. The answer to the “right one” depends on multiple criteria including your background, what space you wish to build a company in, how big do you wish to build your company into and other related factors. Outside of these criteria, there are others that are dependent on the incubator itself.
Most Indian incubators offer a combination of some cash and mentorship in exchange for 8%- 12% of your company. Some incubators require you go to their office location and spend 3-6 months with them, yet others will prefer you stay at your own office / location. Some do offer design talent, technical resources, and others offer a bevy of informal advisors.
So how does an entrepreneur evaluate incubators? I decided to put together a simple (not comprehensive, initial cut) spreadsheet of the list of things to consider before you decide on your incubator. I would imagine an entrepreneur would use this sheet to write down things that are important to them in an incubator by and then rank their choices by their evaluation of each incubator.
While I personally believe the top 3 criteria are (a) ability for the incubator to help your company gain momentum (customers, hiring, resources, etc), (b) ability for the incubator to help you raise money and (c) quality of the network the incubator possesses which provides you access to other entrepreneurs, venture capitalists and resources that you might need to scale.
Here is a simple spreadsheet I put together and if you believe you need to add more criteria, feel free to drop me a comment on my blog.
| # | Criteria | Notes | Importance | Incubator 1 |
|
1 |
Background of the incubator founders | This is the most critical factor. If you have incubator founders, who have not successfully built and sold companies before, then it’s a warning signal. Do they have an entrepreneurial background that’s proven? |
||
|
2 |
Amount of capital the incubator has raised | Not very relevant, but it gives you a sense of how many companies they might fund | ||
|
3 |
Number of companies in each batch | Fewer companies in each batch is usually better because each company gets more mentorship and time with the incubator executives | ||
|
4 |
How many companies have they funded so far? | This gives you a sense of their track record as an incubator. | ||
|
5 |
How many of their companies got follow on investment? | This is another critical metric for most founders. You are going to an incubator for experience and help with funding. If most of their companies do not get follow on funding, that’s not a good sign | ||
|
6 |
How deep is their network of venture and angel investors? | You want to understand the relationships the incubator has with follow-on investors so it makes it easy for you to raise the next round | ||
|
7 |
How good is their existing portfolio of companies and their founders? | The existing cofounders of their portfolio company will be great resources to network and advice | ||
|
8 |
How much time do they provide to each company per batch | At the early stage you need a lot of time with the mentors on all aspects of the business. If their time is unavailable then the value of the incubation is limited | ||
|
9 |
Have they successfully helped a company grow in your space? | Its important to see if they have a portfolio company in the same broad space as yours. For e.g if you are an eCommerce company, look for others they have funded so they know the issues and can help you early to avoid obvious mistakes | ||
|
10 |
What is the deal offered? | How much money will they give you, what % of your company will they take from you are important parts of the structure | ||
|
11 |
How long is the program? | Most incubators have 3-6 month programs, which should give you enough time to get your company to a seed / series A stage of investment | ||
|
12 |
Can you work out of your office or do you have to relocate to the incubator’s city / office? | Some of the incubators require that you move to the city where they HQ are located so you have access to their resources, others will let you work from your own office |
I had a good friend who was deploring the state of payment gateways in India. As someone that has dealt with Times of Money (DirecPay), EBS, CCAvenue, HDFC Bank, ICICI, Citibank and Axis Bank, I can attest to that pain. Its amazing that the state of payment processing is so arcane and filled with issues.
The issue is not just one of payments BTW. I constantly hear people complain about lack of a very good “X” in India. X could be a angel investors, incubators, bloggers, engineers, <fill-the-blanks>.
Problem is most people actually underestimate the effort required to build quality and consistency. What you see in the payment gateway is a simple set of forms that accept a number, check if its valid, authorize it and return an accept / reject status message.
The “behind the scenes” is painful. The multiple layers of the onion that you have to peel are the ones that really are painful. So most superficial jingoism that starts at the front-end of the startup fades when the real pains come to the front. Which happens in the first few months.
Which is the main reason most startups fail within the first year.
