On Online Privacy, Snooping
We are gradually entering an age where data generated by an average person about her/himself will just be beyond anything we could have imagined twenty-years ago. From mobile phone towers to cashless transactions, we leave trails and pointers to ourselves all over the world now. There used to be a time when there were only a handful of touch-points for non-cash transactions, everything else was done using cash. CCTVs were a rarity, phones were connected to wires and not mobile and there was no internet.
We have not yet grasped the degree of this change in its entirety, while the impact it has on an individual’s privacy and safety is far beyond what we can imagine today. Just take the case of the internet, everything from your DNS lookups to requests made to another computer online is logged and in the case of unencrypted traffic it can easily be examined too. It is not just spyware and backdoors that are a threat these days, the entire intermediary infrastructure is open to abuse by both the good guys and the bad guys equally.
In a manner of speaking, privacy really does not exist and nothing is really a secret anymore. Any secure system is only as secure as its weakest link and our basic communication infrastructure is riddled with multiple weak points. Does that mean it is wrong to have an expectation or to ask for privacy? I don’t think so. As citizens of a free country we have every right to ask for it. More importantly, it is more important for enforcement and law to not criminalize the citizens of a country, by default, if they have to have an easier time of nabbing the bad guys.
Coming from that line of thinking, I don’t find the overtures by the government to somehow censor the content on the internet more as a case of having no idea of a scary new world than an outright attempt at curtailing dissent or any such thing. As people who publish content, we often don’t have a clear handle on how to deal with things that are written on our sites by the vistors and also what is written about us on other sites. If we don’t have a clear cut idea on this, it is easy to imagine the confusion of people in power, who have to deal with this on a much bigger scale.
I had a first-hand experience of this in 2008 when we were dragged into a case regarding some defamatory comments published on my then-employer’s website. Both parties in the case were well-meaning, but neither of them had a clear understanding of how these things work, nor did the people who were enforcing the law. I do advise a law firm on issues related to technology and I find the same problem there. Both law and enforcement are dealing with issues over which they have little understanding or clarity. When you work backwards from “this needs to stop,” you are a hammer and the world is full of nails.
The risk in all of this a blanket criminalization of anything anonymous or pseudonymous in the digital world as these are the favourite paths taken by people who abuse the wonders of the digital world. Laws are increasingly being made or drafted that look at abuse as the rule and everything else as an outlier. There are enough individuals and organizations that are willing to help governments and agencies bridge this crucial gap in understanding the inner workings of the digital world. I hope that we can find a better tomorrow where we can all work together to bridge the gaps and progress towards a healthier place.
Read MoreBWA at Rs 10 per GB is an invitation to ruin RIL
Medianama recently posted their analysis on the reported plans by Reliance Industries to roll out their BWA-based product at a bundled cost of Rs 10 per GB with their Rs 3500 tablet.
Since this is a topic that has been of some interest to me, I thought it was worth taking a deeper bite into the pricing and other factors of this offering.
As far as per-GB pricing goes, even the cheapest cost, even for fixed lines, is not to be found under Rs 30 per GB. Data on wireless (2G or 3G) is considerably more expensive, other than the sole exception of Airtel’s Rs 99 for 2GB plan on 2G. RIL could tap into RCom’s FLAG and also leverage RCom’s their ‘preferred’ status with YouTube to mitigate a bit of their costs, but that will hardly be enough to start making a dent on the pretty penny already spent in acquiring spectrum through the Infotel acquisition.
The comparison with fixed line broadband or Wimax is not entirely fair when in it comes to BWA. They have different cost structures. Traditionally, fixed line broadband is used by an entire household and is shared over multiple devices. A tablet, on the other hand, will mostly be used by one person. For this to work out, RIL has to sell aggressively to the demographic that currently contributes to Rs 200 ARPU on voice. You can see how the pricing makes sense if you compare it to a mobile phone.
The only problem is that online services in India don’t yet have the utility status that mobile phones enjoy, thus requiring an entire layer of content and services to be added for the users. It won’t work if you just give people cheap bandwidth and a cheap device. It is not that we have not had reasonably priced broadband in India for a while (BSNL’s DSL services now reach a lot of remote places in the country), we just have not had enough India-specific products and services for people to use in those places so far.
Anyway, let us work some more numbers to see how much money RIL can make out of the current plans.
To establish a base (reasonably flawed) benchmark, we will take Airtel’s assertion that their 3GB plan is one of the most popular ones and assume that a user on the new service will use 3 GB per month. For the sake of convenience, we will spread the cost of the tablet over the course of a year. This will mean that for the first year the user will bring in revenues of Rs 291 per month and the cost of data used on the service.
This gives us an ARPU of Rs. 321 for the first year.
Total first year revenue per user = Rs. 3852
Second year revenue per user = Rs. 360
Total revenue for 2-years per user = Rs. 4212
Even on a subscriber base of 100000 users in the first year, this will only bring in revenues under Rs 50 crore in the first two years. Considering that the spectrum alone cost Infotel well over Rs 12,000 crores, the outlook is horrible for the company. At a million users, the company has a shot at a marginally more realistic runway (if you can call two decades that), but I am not sure if those users are there for the taking and we are not yet taking into account the Rs 18,000 crore – Rs 20,000 crore that the company plans to invest in setting up the services.
As a thought exercise, let us bump up baseline usage a bit to 30GB per month. This will bring up the data costs in a month to Rs. 300. Add the device cost of Rs. 219 per month to it and you get an ARPU of Rs. 519 for the first year.
Total first year revenue per user = Rs. 6228.
Second year revenue per user = Rs. 3600
Total revenue for 2-years per user = Rs. 9828
This bumps up total revenue estimates for two years to around Rs 98 crores. On a one million user base it will recover the spectrum costs in a bit over ten-years.
The main takeaway from these numbers is that RIL really needs to get users to use a lot of data or/and get a lot of users from the word go. What stands in their way is that in reaching out to the people who are not already online, they will be dealing with the ceiling of the Rs 200 ARPU on voice segment. They won’t easily move up at all on this curve. Another data point that will be a cause for concern is the ARPU on wire line broadband. These have always been around Rs 600 – Rs 700 level, from information that is not easily available. That more or less keeps the ceiling a bit too low for RIL to succeed with this offering.
There is, though, an alternative way to go about this, which is to not directly charge for the device. Instead, you get a Rs 350 flat rate per month, on a 2-year commitment from the user. It will come bundled with 3GB of usage per month. You can buy more GBs like talktime for phones.
First year ARPU at 3GB data per month = 350 PM
Total first year revenue per user = Rs 4200
Total second year revenue per user = Rs 4200
Total revenue for 2-years per user = 8400
This should get them a much healthier Rs 84 crore in revenue with a better certainty that the users will continue with you.
If you bump up the data usage, the picture gets a lot more healthier.
First year ARPU at 30 GB data per month = 350 + (27*10) = Rs. 620 PM
Total first year revenue per user = Rs. 7440
Total second year revenue per user = Rs. 7440
Total revenue for 2-years per user =Rs. 14,880
In theory, this is the sweetest deal RIL can hope for. Around Rs 150 crore in two years is not a bad number to have in revenue, but it also requires users to consume data at a rate which is comparable to a more than moderate wire line data user at the moment. I also think that Rs. 500 is a major point of resistance for the average household to spend on anything beyond bare necessities on monthly basis.
There are a lot of factors that can change the equation for RIL, but knowing what we know now, it is very unlikely that the offering is a sustainable one in the long term for the company.
Read MoreThe Great Promotional Mailer Overdrive
Contrary to what seems to be popular sentiment on the internet, I actually like advertising as long as it is not overly intrusive, has some form of relevance to things/services I am interested in and is not spammy. As a result I don’t at times unsubscribe from promotional mailers sent to me by various companies and in certain cases I do actually check out most of the offers. Of the many that I subject myself to, I like the efforts of both ICICI Bank and Ebay. So I figured it will be a good idea to track one of these companies for a month to check for volume for and quality. Below is the list of mailers ICICI Bank has sent me through November:
ICICI Bank:
Nov 30: Refer iMobile to 5 friends and get Rs. 500 Nov 30: Just activate iMobile and get a Free Voucher worth Rs. 500 Nov 28: Get 5x reward points for online recharge of Mobile, DTH and Data Card Nov 27: Get 5x reward points for online recharge of Mobile, DTH and Data Card Nov 25: Special Privilege: Rate of Interest now reduced on your ICICI Bank Credit Card Nov 23: Refer iMobile to 5 friends and get Rs. 500 Nov 20: Get a Gift Voucher worth Rs. 500 just for activating iMobile Nov 20: ICICI Bank presents Home Loans at fixed rate of interest for the first 2 years Nov 18: Discovering Malaysia is now 5X more rewarding Nov 16: Prepaid Mobile Recharge at your fingertips! Nov 16: Count on us to cover your medical expenses, with the Family Protect Premier Insurance! Nov 16: Money Manager Nov 14: Rs 100 off on tickets Nov 14: Presenting Culinary Treat - Minimum 15% savings on dining Nov 12: Personal loans Nov 9: Cashback travel vouchers Nov 8: Redeem payback points Nov 6: Activate imobile Nov 2: Get Rs 500 Cashback Travel Voucher by spending on your ICICI Bank Debit Card Nov 2: Get 3 exciting gifts absolutely FREE just for activating Internet Banking!
- 20 mailers in a month are a few too many for my liking.
- They don’t seem to do much of a finely tuned campaign. I am already using imobile, same is the case with internet banking.
- Quite a few repeats.
- The tracking is sub-par
- Copy quality is average
- 23 mailers in all of November, 2011
- A lot of effort is put into the creatives, they are really well done. Copy quality is also good.
- They are pushing deals/offers really hard. Not surprising, since they seem to be flavour of the current boom (or bust).
- The tracking is meticulous on the campaigns. Opens and clicks are tracked, I am assuming so would be
transactionsconversions. - Other than offers/deals, most of the mailers are content initiatives. They categorize existing items on the site.
Ice Cream Sandwich On Samsung Galaxy S
The phone is now well over a year old and has been good to me. Sometime earlier this year I managed to dead boot it (a condition where you wind up corrupting the bootloader itself) and it had to be revived with a JTAG pinout. I was running a rooted and lag-fixed stock Gingerbread ROM on it for a long time and was quite satisfied with it. The primary reason why I love this phone has been how abuse-friendly it has been so far. I tend to drop my phones and carry them around without any screen guards or cases. This one has been dipped in water once, keeps falling on the ground at regular intervals and is not treated with a great deal of gentleness. To survive all that and to still keep going gets my loyalty any given day.
By 2.3.4 itself I had decided to hold off until Samsung releases (or leaks) a build of Ice Cream Sandwich (ICS) for the phone before I do any more experiments with the new ROMs. Over time, I have come to dislike most of the heavily modified ROMs and it also tends to be a bottomless pit, you keep trying one after the other and waste a lot of time on it. When Google announced the release of ICS to the developer community, I was expecting a wait of a few months before a stable enough build was out for the SGS. But, things have changed a lot on Samsung’s end since I bought the phone over a year ago, when it was on Froyo and took forever to get a stable, non-leaked official Gingerbread build out.
Early in November Onecosmic on XDA Forums had released a build from AOSP codebase. I tried the beta2 release and found it to be quite stable, but the battery life was the worst I have ever had on a mobile device. It would not last more than 10-hours if I was lucky and it meant that I had to carry around my old Nokia E71 as a backup phone. But things changed dramatically when Teamhacksung released an AOSP build of their own late November. The first build I tried was build5, which was a vast improvement in battery life over the Onecosmic build. Build6 was the best I have ever had on their releases with the phone being at its fastest best. I am running build7 at the moment, but it has not been as snappy as build6. There are a few things that don’t work well (video recording, front-facing camera), but it is very stable and “force close” is not that rampant and I can now easily go a full 24-hour day of normal usage with 12% battery left on the device.
I have tweaked a few things to get that kind of life.
- Force GPU rendering: Off
- Window animation scale: Off
- Transition animation scale: Off
- Email service: Disabled
- Exchange services: Disabled
- Google Plus: Disabled
- 2G networks only
- Turned back on Window animation and Transition animation.
- Email and Exchange services are still disabled.
- First run after new update was awful, got barely 10-hours of battery life.
- Changed modem to JP5 and battery life is back to normal. 11-hours on 55% battery, Wifi on all the time, more than 2-hours already on phone calls.
- Trying out the Thunderbolt scripts, even though the jury is divided whether they work or not. It seems a lot smoother for me.
Progress Report Q2, 2011 And Early Stage Adventures In India
It has been a while since I did a progress report, the last one was in February of this year and I guess this is a good time to get back into the habit and also add a few points on the general experience of trying to find my way in the early-stage ecosystem in India.
A quick reading of the report card would find that I have given myself a good grade in making a living on my own terms outside the confines of a big company. In making the model scale, it is a sub-par grade and in making worthwhile inroads into the early-stage ecosystem in India I’ll have to fail myself. The net result of the report card is that I have been forced to review everything that I do and make an attempt to find a different way of going about it. The key takeaways from these are that you can’t realize the big Indian opportunity without big spends and that big spends without a product experience that does not have an actual resonance with the masses won’t go too well here. On the investor’s front, you can’t make things work purely on effort (where I have failed), nor can you make things work by throwing only money at it (where most traditional investors seem to fail).
The early-stage ecosystem requires the investors to contribute in at least one of the following means:
1. Effort: Help a new set-up with code, administering technical infrastructure, increase the effectiveness of marketing efforts through your personal network. There are no limits to what all you can do for an early-stage company, but there is certainly a limit in terms of how much you can do.
2. Capital: It is the lifeblood of all companies and there is simply nothing out there that you can replace it with. Everything else is an add-on on top the capital you can deploy as an investor. Advice and mentoring is easy to do, but putting your money where your mouth is, is much harder.
3. Connections: Shorter lead time is a major competitive advantage for any early-stage company. Even if you can effectively brandish the other supreme weapons of an early-stage company — pricing and execution advantage — extended lead times can kill even the best priced and executed products.
Since cash-flow is king, every deal that closes sooner, than later, makes it that much easier for an early-stage company to survive. If, as an investor, you have the connections in place, conversations on a sale can start at middle management or at the senior management level than start from the board number listed on the company website.
4. Clarity: A lot of early-stage success is related to being able to see the larger opportunity and being able so say “no” to a lot of things. Larger, more established companies have the ability to absorb leakages and distractions due to failed projects a lot better, but for an early-stage company these are blows that are hard to recover from. When you are strapped for cash and are living on a month-to-month basis it is so very tempting to do side projects that bring in much-needed revenue. The ability to see through clearly in such circumstances is invaluable.
For me, the attempt at getting into the early-stage ecosystem from an investment/incubation point of view was always going to be a great learning experience. The contribution on effort was the greatest, capital was second best. Connections worked out a bit better, but it deserves a fail. But the most spectacular failure was on clarity. Probably, the most damning of the failures is something that can’t be addressed in the points laid out above, I will attempt to address that now.
When you do start engaging with an early-stage set-up you should be very clear about what exactly is the scope of your engagement. You can be in it as an investor/mentor or you can be a part of it as one of the founders, as a part of the core team. The two choices mean two distinctly different roles and in mixing them up I made what is the most fundamental of mistakes. You can be a doctor or you can be a patient, but you can’t be a good doctor to yourself when you are the patient.
The immediate plan is to fix the problem with the lack of bifurcation and try to become an enabler instead of a stumbling block. The difference between the two can be missed quite easily. The longer term plan requires capital to be raised. It is hard to operate in the Indian market without money if we are looking for scale since a lot of the work often involves creating a market in the first place. This means that what the valley leans on a lot, network effects, is almost impossible to taken as a factor here. Excellent products can die a quiet death due to this factor. It is unfortunate, but it is very true too.
Effort is also not a major factor in India. There is no oversupply of ideas or products and money is often seen chasing good ideas that are hard to find. Effort deployed as a filtering mechanism works well only when there is oversupply, thus creating a premium on filtering-driven efficiency. We just don’t have that in India.
That said, raising capital either for a venture or to invest is much easier said than done and more importantly, it requires you to be well connected in the right places, which is not exactly my forte. But, there seems to be no other way forward than to give some form of this a shot. Hopefully, before the year ends, I should have something in place in this direction.
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