It almost seems like they are in sync, Dancing if you may. The way we interact with machines in the neat future is going to be radically different.
This post originally appeared on the AFP newswire and has been picked up and published in multiple news outlets across the globe
by Staff Writers
Mumbai (AFP) May 8, 2013
It is seen as a land of entrepreneurs, economic growth and huge business potential, but India appears to be failing its promising startup companies which are struggling to find investors.
While there is no lack of ideas among the country’s vast young population, funding is declining from venture capitalists and rich “angel” investors, as they are known, who are often crucial to a young firm’s success.
“Risk-taking appetite from investors is low,” said Internet entrepreneur Nameet Potnis, who is trying to address the problem by setting up Nurtured.in, a platform to connect startups with early-stage investors.
“It is easy to set up an online business in India but very difficult to do business,” he told AFP.
Three decades after businessman N.R. Narayana Murthy and six other Indians sat around a kitchen table and formed leading IT outsourcer Infosys, the country is yet to create a favourable business environment for new entrepreneurs.
Just five percent of thousands of Indian startups get funds from sources external to friends and family, analysts say.
It is one of the toughest countries in the world for a startup to flourish, according to a 2012 report by US-based research firm Startup Genome.
Venture capitalists invested $1.09 billion through 222 deals in 2011, but this dropped by 30 percent to $762 million through 206 deals in 2012, according to researchers at Venture Intelligence, based in southern Chennai city.
The decline could not come at a worse time for the young Indian professionals and business graduates who are risking branching out on their own, after losing or quitting lucrative jobs amid the global downturn.
India’s own economic growth slowed to an estimated 5.0 percent for the fiscal year that ended March, its slowest rate in a decade, but that has not deterred many youngsters from trying to turn their ideas into businesses.
Some of India’s well-established startups include Nasdaq-listed online travel firm makemytrip.com, shopping website Flipkart and digital entertainment company Hungama.
In recent years, ventures have branched into areas as varied as pet care, gaming, restaurant guides and e-learning, and the startup bug is spreading into smaller Indian cities.
“More companies are coming up and not that much… money is being put in,” said Sampad Swain, an entrepreneur who founded “Instamojo”, which helps to sell digital downloads.
Jubin Mehta of Yourstory.in, an online site which tracks startups and entrepreneurs, said venture capitalists tend to look over 200 ideas before investing in one.
“Roughly 500 startups come up each month. And less than five percent — only about 25 — receive external funding,” he said.
Kulin Shah, an entrepreneur and former venture capitalist, said angel investors have become more demanding in the current economic climate, trying to avoid getting their money blocked in ventures for too long.
Angels are increasingly unwilling to fund firms that are clones of foreign startups or face intense competition, such as online car rentals, car pools and best-deal ventures, Shah said.
But too much caution can prevent investors spotting a hit, such as Nischal Shetty’s Twitter application “justunfollow”, which has more than three million registered users including 10,000 paid customers.
When he set it up three years ago, he generated revenues from day one despite a lack of enthusiasm from external investors.
“Angels asked me: how will you make money from this?” he said.
There are a few signs of hope for budding entrepreneurs.
In southern Kochi city, a massive glass-and-metal campus called “Startup village” is nurturing young engineers and aims to launch 1,000 Internet and mobile firms in 10 years.
Nasscom, an IT trade body, says startups are a “critical pillar” of the industry and last month launched “10,000 startups”, a programme which will shortlist and help fund as many ventures in the next 10 years.
“We have to create an environment where early-stage funding comes in,” Nasscom president Som Mittal said at the programme’s launch.
Millward Brown, has released its annual top 10 digital and media predictions, highlighting growing trends in the media sector.
They expect 2013 to be another dynamic year for online display, mobile and social media. Consumers have ever higher expectations of intelligent digital advertising approaches, and marketers will need to deliver more sophisticated campaigns to keep pace with what works.
You can view a detailed interactive version of the top 10 digital and media predictions on the Millward Brown website.
1. Facebook‘s monetisation drive will provide new, richer advertising opportunities for brands.
2. Social media listening evolves from monitoring to insight.
3. Emergence of ‘mobile remotes’ make it a central pillar of smart communication plans.
4. The great paywall makes for scarcity of premium eyeballs.
5. Omnichannel marketing helps brands build on meaningful moments of engagement.
6. Social TV grows up and becomes part of the narrative rather than a conversation about the narrative.
7. Mobile advertising in Africa tackles the smartphone divide.
8. Greater collaboration needed to make the most of real-time optimisation.
9. Better aligning of online display with objectives.
10. More meaningful mobile engagement via apps and actions.
See the complete report below.
To explore these predictions in more detail, click here to download a Pdf copy.
Source: Millward Brown
Note: This article originally appeared on Lighthouseinsights.in as Facebook Gifts, Will It Impact Indian Social Gifting Startups?
Last month Facebook made a quiet re-entry into its previously mildly successful segment ‘Gifts’. Back in 2007, Facebook had introduced virtual gifts which could be sent to a friend for any occasion, these gifts cost anywhere between $1-3. In 2008, Jeremy Liew of Lightspeed Venture Partners had quoted, “Since there were 322 gifts available for sale when we completed our last survey (Jan 8th, 2008), that implies that Facebook is selling just over 270k digital gifts per week. At $1 per gift, that implies an annual run rate of just under $15m.”
This time around, in 2012, Facebook has managed to take the gifting business one step further and facilitate offline gifts. How exactly did Facebook manage this? Besides its vast resources, Facebook has managed to scale Facebook Gifts across its platform by building on the expertise it acquired through its acquisition of Lee Linden and Ben Lewis’ Karma app.
To begin with, Facebook has decided to limit the value of Gifts on its platform to below $50. “Fifty Dollar deals sound like a small portion of the eCommerce market”, says Yariv Dror, StoreYa.com (Facebook store platform provider) CEO, “but our numbers show, that 57% of the millions of products that have been imported to Facebook using our platform match this figure of $50 and below.
In September, I did a post on Social Commerce and where it was likely to be heading.
Facebook Gifts and India
By entering the physical good space, Facebook will not only be competing with retail giants such as Flipkart, eBay and the hoards of other ecommerce companies in India but against a multitude of startups like Badhai, 99presents, Giveter and so on. Badhai allows users to send gifts vouchers to their friends; they have recently added group and social gifting. 99presents helps you find products your friends from across different eCommerce sites like Amazon, Flipkart, Etsy, ThinkGeek, etc. While Giveter recommends gifts based on its own secret sauce and the recipients’ Facebook likes.
For those who want to ride the Facebook Gifts wave here in India, as of now there is no news on when the feature might launch in India but Facebook is accepting proposals from Vendors who might want to sign up to offer products as a part of Facebook Gifts. If you want to sign up as a vendor, you can do so here.
India has a substantial number of Facebook users and the model that Facebook Gifts follows might make it relatively easy for them to penetrate the market rather quickly. Facebook does not have the delivery logistics that Flipkart does. Hypothetically, this could be a possible hindrance for Facebook Gifts to grow. How do they overcome it? They ask vendors to sign up, these vendors already use their own logistics providers, and Facebook only brands the gifts for e.g.
[Image credit: Techcrunch]
Facebook gifts hasn’t launched in India, yet. And when it does, instead of looking at its impact on companies in social gifting space in India, I believe it could have a significant impact on all ecommerce segments in India.
Further to its commerce ambitions, Facebook has also launched a new feature called Collections which is currently being tested with certain select brands like Pottery Barn, Wayfair, Victoria’s Secret, Michael Kors, Neiman Marcus, Smith Optics, and Fab.com All Facebook reports that Collections enables Facebook users to not only like, but collect, want, or buy products that brands share through images on the social network.
Would love to know your thoughts about the new features Facebook has recently added.
- Facebook Gifts: Now On IOS Devices (allfacebook.com)
Social commerce has a simple value proposition, i.e. it makes it possible to measure and manage word of mouth.
Multiple studies into this subject have thrown up some interesting findings
- 62% of online shoppers have read product-related comments from their friends on Facebook
- 75% of shoppers who read social sharing comments have clicked on the product link in their friends’ Facebook posts, taking them to the product page on a retailer’s website
- 81% of consumers who purchase products they learn about through social sharing are valuable social sharers themselves, thus creating a cycle of sharing and buying.
- 32% of visitors are more likely to stay and shop on a site that shows activities of shoppers who have purchased there.
What this study shows is that social commerce is that social media content can generate strong word of mouth which can be manoeuvred to generate sales.
The power social commerce can be understood using referral economics of word of mouth. Let us take an example of Apple Computers to understand this better
Facebook and social commerce
Forrester Research’s Gina Sverdlov has done an extensive study on THE FACEBOOK FACTOR – Quantifying The Impact Of A Facebook Fan On Brand Interactions. According to her, “Using regression techniques, the study provided evidence to support the insight that your Facebook fans are more your most valuable customers.”
(customer value = purchase value + referral value)
“Specifically, the study found that fans of a range of brands (the study focused on Coca-Cola, Blackberry, Best Buy, Walmart) are significantly more likely than non-fans to
- Consider buying
- Purchase (79% vs 41%)
- Recommend (74% vs 38%)”
What is equally important to understand here is that boosting the number of fans on a Facebook page (Hilariously chronicled here: Arre Sir, We Will Get You 2250 Fans. That’s Our Headache!) isn’t the solution to exploring the commercial aspect of your page.
While dealing with Facebook fans always remember:
- The power of the Like button is not that it creates fans, it IDENTIFIES them.
- Your Facebook page is like a honey-laden flower that ATTRACTS your most valuable customer and lets you target them.
Instead, reward your fans. Use your page to drive up engagement.
- Why Social Commerce Rocks and FB Storefronts Fail (jonburg.com)
- The new rules of social commerce (tech.fortune.cnn.com)
- Social Commerce: Leveraging the Consumer Evangelist (aaramshoppro.com)
- eBay Acquires Svpply To Solve Its Social Shopping Problem (fastcompany.com)
India’s most famous E-commerce company Flipkart (they aren’t the biggest, that would be mjunction) has been around since 2007. Over the last 5 years, they have emerged as a clear favourite among customers owing to their almost delightful customer service.
Indiamart introduced Cash-on-delivery back in 2001 and then discontinued it in 2003. Flipkart reintroduced Cash-on-Delivery and this feature has now become one of the most crucial payment methods for Indians shopping online.
The point here is, back in 2007, Flipkart started with selling books online. Five years later it has steadily scaled its business by foraying into categories like computers & peripherals, CDs & DVDs, games, home and kitchen appliances, mobile & accessories, personal and healthcare equipments ( I am sure there they have added more recently, the latest being baby products).
Indians can be frugal by nature, and getting deep discounts with the added benefit of free home delivery drove Indians to shop online. Along the way, Flipkart managed to delight its customers with fast deliveries.
Now in the 3rd quarter of 2012, things look different. Flipkart now wants its customers to shop for a minimum of Rs 300/- to avail of free delivery (Flipkart website – How much are the delivery charges? Flipkart provides free delivery on all items if your total order amount is Rs. 300/- or more. Otherwise Rs. 30/- is charged as delivery charges.)
Flipkart is also no longer the cheapest options available online. Below are some screenshots of randomly selected products from Flipkart’s top selling categories:
This brings us to an important junction, if people came to shop on Flipkart for price concessions and delivery convenience, why are they still here. The answer to that could very well be Flipkart’s most important product category yet, “Trust”. Flipkart has managed to build a Reputation (dependable and quick), which has created Brand value (reliable and delightful), which over time has built consumer Trust in the brand.
It is this trust in the brand that is being subliminally reinforced by their newest Advertising campaign “Don’t shop it, Flipkart it” (the complete Flipkart Advertising Campaign, August 2012)
Another perspective by Alok Kejriwal – Flipkart ads on TV – are they building the online category at their own cost?
Do share your thoughts.
- Flipkart – More of a Window Shopping portal… (trak.in)
- Flipkart – Received $150M in Venture Round funding from Tiger Global Management and Naspers (8/24/12) (sfluxe.com)
- India’s online retail giant Flipkart raises $150 million from Naspers (buzzom.com)
- Indian e-commerce service Flipkart shoots for profitability by 2015, after mammoth $150m round (thenextweb.com)
What are the reasons that some startup succeed while some fail? Why do products instantly attract a multitude of users while other still lag at user acquisition, even after considerable marketing expenses?
The answer to this can be a variety of reasons such as user interface, design, customer service, utility value and sometimes even price. But very often one feature that gets left out is the impact and support of the community around.
A vibrant community can be a magical marketing and sales tool for a startup. While it is imperative for a startup to have a great product/service, an enthusiastic community around it can aid the company in garnering more attention, providing insights and gaining critical early feedback
While in India, our ecosystem surrounding Startups is still in the nascent stage, there are communities developing in Bangalore and around the Delhi/NCR region. One of the biggest problems facing tech entrepreneurs in India is the relatively small number of early adopters. In an excellent article about the “two speed” state of Indian market adoption, Mukund Mohan writes, “The Innovators (less than 1 % of the population or 12 Million individuals) in India (entrepreneurs mostly) who conceive and develop products for the Indian market and the early adopters (less than 5% of population or approx 60 Million individuals) together make up the entire “early adopter” category. Unfortunately less than 30% of them have both the interest, and the desire to be early adopters of technology.”
If you are a technology company, how do you build a community around your company?
1.Start early; make the community an integral part of your system: Start a blog before you actually launch and let people know what you are doing. Building a community takes time. Be patient.
2.Value your initial customers: Those first few people who sign up for your product are there out of choice, they have found your product and they are sticking by it because they love it. Treat them well. Value their feedback.
3. Let your customers know they are special: Marketing dollars might get you signups but word of mouth will get you user engagement. Don’t just value customer feedback; let your customers know that you are ‘listening’ and that you value their feedback.
4.Establish a mutual relationship: Once your community starts growing, as difficult as it might be, acknowledge contributions and hold events where your customers can interact with you or your team. This can act as a cohesive force and take people beyond just a bunch of people using your product
In a day and age when online customer loyalty isn’t really high, a community around your product can not only be your loyal user-base but also your very own cheering squad.
Do share your thoughts.
- Freshdesk launches Future Fund to help startups provide better customer care (thenextweb.com)
- You can’t skip over early adopters (giffconstable.com)
- Startups and the Value of Vibrant Communities (markevanstech.com)
- Rackspace Startup Program Spotlight: FastCustomer (rackspace.com)
- Give Startups Some Love: Test Out Their Apps (techinasia.com)
I read this question on Quora and thought of adding my perspective to it. I am going to address the point of key differences between these two countries and their eco systems.
1. In India, our ecosystem surrounding Startups is still in the Nascent stage. Most people would say that the ecosystem is absent, but I don’t think as of today (May 2012) that is the case. We have certain IIT’s(Indian Institute of Technology) running incubators, we have Accelerators and Incubators such as http://themorpheus.com( who are in their 7th batch) and we have multiple VC’s investing their money in Indiann startups.
2. Though the First wave of Tech innovations in the US came around 1997-2001, we in India were a little late to catch on and had a good run around 2002-2005. These companies either had decent exits, got acquired or went to IPO’s. Which brings me to the important point, in India we are Now seeing second generation entrepreneurs. These people have seen the ups and the downs and are willing and able to mentor the current crop of entrepreneurs. This segment would include fantastic people like Mahesh Murthy & Alok ‘Rodinhood’ Kejriwal.
3. One of the biggest differentiating factors between being a (Tech) entrepreneur in the US and in India is that, in the US, failure is celebrated. In India, that may not be the case. In India we are very particular about the importance of “Completing one’s Formal Education”. Until the turn of the millennium, if an Indian girl/boy told their parents that they were “dropping out of school” to take up entrepreneurship, life would be very difficult (not impossible, but extremely difficult) for them. This mindset is also changing and most students are already forming small companies and servicing clients well before they are done with college.
For more on answers on this question, you can go to this link on Quora
You can also Follow me on Quora
Let me know your thoughts.
- How to build a community around your startup (nameetpotnis.in)
- India- A Re-emerging Economy (buzzeratbiz.com)
- Defining and discussing the meaning of “jugaad” (designmind.frogdesign.com)
- Why Good Enough Is Better: Lessons In Simplicity From Emerging Markets (fastcoexist.com)
- Build a company that’s social from the beginning. Create your social media accounts as you grow to develop an early fan base. Whether it’s limited to only a twitter account or you want to indulge various mediums depends on the nature of your product, but the important thing to remember is that you should use your account for more than just marketing. Get the word out, engage your prospective customers, find employees, and you could even solicit potential partners.
- Maintain a Blog. Everyone loves a success story. People love to read stories of people who start off from the bottom and work their way up. Tell your story. Connect. Create lasting relationships. All this while keeping your stakeholders informed about the developments within the company and a sneak peek into things to come.
- Focus on the platform that’s most important to you. Analyse the strength of your product and choose a platform which complements it. Pinterest might not work for some, as could be the case with Youtube. Keep in mind that content is very important and stretching over too many platforms might dilute your message.
- Consistency creates recall. Ensure you product has similar handles across multiple platforms. This breeds recall, which over time can create brand value.
- Identify key influencers and treat them like they mean the world to you. Every product has early adaptors, treat them with love, and incorporate their suggestions. Remember, they are not getting paid to do this; they are doing this because they love your product.
- Most Important: Drive traffic back to your website. Creating a community on Facebook that never visits your website might not be the best idea. In most of your posts, ensure you link back to your website. Give people a reason to come to your website, find ways to engage them there, and help them get into a habit of coming there. Goes without saying that you should ensure you have social plugins to enable users to bring their friends onto your site.
- Rackspace Startup Program Spotlight: Friendeo (rackspace.com)
- Instagram for $1 Billion: What to Do in the Absence of Owning a Hot Social Startup (socialmediatoday.com)
- ‘Revenge’ website IsAnyoneUp.com finally closes (favouritedailynews.wordpress.com)
- 4 must have foundations to grow your social networks (slideshare.net)
- Social media new year’s resolutions (marketing.yell.com)
Post adapted from Sankalp Forum
As an entrepreneur, scaling your business is both an exciting and difficult task. You have a great idea, a great team, and an interesting business model but moving from 5,000 customers to 500,000 and then five million is a complicated and capital-intensive process. For enterprises that aim to create social impact, an added component is that the product or service also serves to impact a social issue. How do you convince an investor that your business is the one to invest in? How do you learn the investor’s language so that your business is communicated as a viable and scalable prospect? Most importantly, how do find the investor best suited to your business?
Here are five tips to get the most out of your investor-entrepreneur relationship:
1. Understand Your Business Model Investors want to know that you know your business inside out. A great pitch comes from someone who doesn’t need to look at their PowerPoint. Being able to cite your financials from memory will really impress an investor and differentiate you from other promoters. Providing a clear understanding of where you are now will convince an investor that you can accurately predict where your business is headed.
2. Identify the Relevant Investor With the mushrooming number of seed stage funds, impact investors, angel investors and venture philanthropists, in addition to mainstream venture capitalists and private equity funds, the investor landscape is becoming increasingly complex. Find the right investor faster by knowing exactly what level of funding you require and what investors work in that bracket and what they are typically looking for. For example: high net worth individuals typically look for return on investment, while venture capital funds look for financial returns in addition to scalability and exit.
3. Accept That You Have Competition It is highly unlikely that your business model is unique and no one has ever thought of it. Chances are that investors have seen it or something like it before, considering they see hundreds of business models a year. What they are betting on, however, is a host of other factors that differentiate you from your competitors and your ability to leverage these. Therefore, don’t hide that there is competition, just prove that you can do it better.
4. Remember That Investors Want to Grow Your Business Investors are interested in investing in models that are scalable. An asset-heavy model where a large percentage of invested capital is poured into infrastructure is far less attractive than an asset-light model where the product being invested in can be replicated without a long gestation period.
5. Go to Market When You Don’t Need the Money The best way to get an investment is to show the investor that your business will be fine without their money. Plan ahead. Start your investor outreach a year before you will actually need their investment. Don’t obsess over receiving investment, obsess about increasing your revenue. Investors will fund you the moment they feel that you will succeed without their money.
Read the original post at the Sankalp Forum Blog. The information in this post is based on workshops and lectures at the Sankalp Residential Bootcamp held at ISB Hyderabad. All rights reserved and Copywrite Sankalp Forum.
- VCs to Young Treps: ‘Show Me the Money’ (youngentrepreneur.com)
- Crowdfunding – Paving way for entrepreneurs ! (techbiztrends.wordpress.com)
- How Can I Fund My Startup? A Back-to-Basics Look at the Options (thenextwomen.com)