Looking Back At 2011
This year easily qualifies as one of the toughest I have had after 2007. Almost everything that was planned and attempted for this year has either not worked out or not done well at all. The good part is that I have learned much, the bad part is that the entire year is almost a complete write off. It is back to the drawing board for 2012. Meanwhile, here’s wishing everyone a wonderful 2012.
Read MoreProgress 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.
Read MoreProgress Report: January, February
2011 has been good so far for the company. I did accomplish much of what the surge towards the end of December was meant to accomplish, but it also saw the failure of a very promising alliance that could have taken it in a different direction. The sliver lining in the failure was that I did stick to processes that had been put in place to prevent us from chasing down rabbit holes, even though the fact that the scenario for its use did materialize is saddening. But we survived that phase, got over the disappointment and managed to chart out a future course that is stronger and steadier, even though it may take a bit longer.
We also managed to release MarketVision. The product still has many rough edges. It is a case of naked product development, where you are developing the product in full public view. For someone with nearly a decade's experience in building online products, the website we have is not probably the best advertisement of that fact. But it is just a first step in some major plans we have for the company and the platform. The degree of finesse and flourish the site deserves has to wait for a bit longer while we sort out some other critical parts of the business. We won't keep everyone waiting for too long for the presentation to match the fine quality of the content.
The first quarter of this for me has been all about realigning the company's revenue stream to the changed priorities. A consulting-based organization has a tougher time bringing in recurring revenue and in doing a great job every time you always walk that fine line that empowers clients to work on their own (reducing their dependency on you), while hoping that the transformation you bring about is worthy enough to attract other potential clients. The going has been good so far, but the targets are also stiff, for this is also the year (around June) when I want to reduce the complete dependency on me to keep the show going and bring more hands on deck.
Of course, it is not possible to do only consulting to realize that end. At times we do wind up doing things that I have sworn not to get into. The important thing, though, is to now accomplish the next threshold in escape velocity. By now I don't have any doubts about being able to sustain this, comfortably, as a one man operation. The next target, as mentioned earlier, is to scale it by introducing more bandwidth and remove the equivalence of the company to me. In all this, timing and choices are critical. If you don't have a clear enough picture, it is easy to lose sight of what you are trying to accomplish.
Lastly, I think I am slowly moving out fully into the 'build' part of the entire early stage ecosystem. When I started out, I wanted Frontiernxt to be a major enabler in it, now I really doubt that I have the stomach for it mainly due to two reasons: 1) I don't know and understand enough about a lot of the required things to be able to guide and help others effectively. 2) The ecosystem itself is quite murky and translucent at best. It is tough to get a handle on real value of anything here unless the hype and the cooked books are taken out of the way. One of the best things my father ever taught me was to never run your wheels into a pothole full of water, for you never know what depth it actually hides underneath the surface. And these waters are really murky.
Instead, I will try and do my part to ensure that in whatever we do and companies that we consult with, we will try and promote and suggest Indian start-ups if they have a product that is worth pushing. It may not be the most amazing of things to do, but I think that is the best value I can provide in that chain at the moment. And, most importantly, I am promoting a value proposition that is known to me.
Read MoreIntroducing Market Vision
This is a post that should have been made a while ago, but, as the saying goes, “better late than never”.
Market Vision is the first proper full blown product that I am building as the first step towards realizing the vision behind Frontiernxt. The aim with Market Vision is to engineer fine product experiences in the financial domain and the website is the beginning of what is, hopefully, going to be a great journey. The market for what we are looking to do is big enough, but it also comes with the challenge of being extremely fragmented. This is not a segment that can yet support a big sized play and monetization is hard if you are going to play only for the consumer market.
Hopefully, by going on a more measured path we should be able to handle the challenges a lot better, but we have to learn and adapt constantly. This is already seen in the fact that we have had to change our business model twice along the way, even before we had launched. Some of the market segments we were hoping to exploit, on a closer examination, turned out to be areas with negligible growth prospects. I am glad we could do a course correction at this stage than later when it could have been much harder and costlier.
My partner in crime for the project is Deepak Shenoy, who has been in the financial domain for a while now and has a primary background in technology with the cherry on top of being a two-time entrepreneur. He is a well recognized voice in the financial community in India and he drives the core of the project. I got to know Deepak through Twitter and his blog and much to my good fortune he is someone who is a real pleasure to work with.
In the model that Frontiernxt looks to follow, I tend to keep an eye out for domain experts (in places other than technology) who can benefit from having with them an enabler in the internet domain. This can often be a dicey proposition if the fit is not right between the parties involved. There have been many half-starts, conversations etc before this and I can now see how important it is to find the right person/team to work with.
The website currently is very much a work in progress. It can even be called an alpha, but a start up that is at the stage we are it, labels are only of academic interest and there is a premium on sinking or swimming fast than to see how elegantly we can do it. We are focussing mostly on pushing out quality video and textual content at the moment; in the days to come we will sort out the various niggles in the user experience department.
Take a look around and let us know what you would like to see, what you don't like and even what you like about it.
Read MoreAgenda For 2011
The end of 2010 was quite a hectic affair for me. I was involved in a challenging build and a much-needed restructuring of the company at the same time. Eventually, the build ate up all of my time and I start 2011 having to work out a strong plan for what I want to do with Frontiernxt. Somewhere during the build I got off Twitter (I log in to read up once in a while, but rarely), disabled my Facebook account and shut down my many other distractions. I have done something similar a while ago, but nothing that has lasted this long a period of time.
When I reviewed the past two years, what I discovered was that most of my problems could be easily interpreted through three things:
1. Clarity: How clear are you about what you are doing. It may mean five different things a couple of years down the line, but what does it mean right now?
2. Execution: How well can you execute on the clear vision/idea that you have.
3. Closure: One you start building/planning something, finish/close it.
Looking back, I see way too my unclear ideas, things half-built and products that were not completed. There is only one underlying theme to 2011 – which is to change all of that.
Read MoreNov/Dec And Year-End Review
2010 has been both phenomenal and difficult, or, in some aspects at least, phenomenally difficult. When I left Network 18 two years ago I did not have too great an idea as to what I wanted to do. There were a few concepts, ideas and then some, but there was nothing concrete. If anything, the two years have been a continuing education. It has made me realize how little I knew beyond the tiny niches that I had specialized in. Within a big company, then term 'generalist' is easy to don, outside it, knowing a bit about a lot of things just don't make you one of those. You have to know your stuff and know it well.
To be honest, it has not been a struggle financially. Yes, it is not as lucrative as it would have been if I was still with a big company, but I had tracked and anticipated my expenses well and did maintain a very good balance. Where I did struggle was with having a definite purpose. There was no coherent whole in everything that I was doing that aligned well with an overwhelming desire to do something substantial. In short it was pretty OK, but it was also all over the place.
A month ago that scenario finally changed. It has been written about in a previous post, so I won't go into that again. The formal switchover should happen early January 2010. I am pretty excited to finally have this direction in place and can't wait to get going.
The personal angle aside, 2010 has been an interesting year for the domain that I do most of my work in. We had yet another year of looking eagerly at the unrealized potential in a lot of segments – mobile, e-commerce, broadband and media. While a lot of the early excesses have now thankfully been curtailed, most of the above mentioned segments don't seem to have a strong story behind them. Mobile has the strongest revenue aspect going for it but it has plateaued, broadband is a mess and media – well – the less said about it the better. I can't really look at any significant event – save the listing of Makemytrip.com – from the year.
I could, though, call Android as a significant event, but that story is just getting started. The amount of momentum behind the platform is incredible and the key factor is that even though it may not be worthy in terms of an user experience comparison with the iPhone, if you are switching from one of the other platforms, it is a significantly better offering at a substantially lower price point compared to Apple's flagship phone. For most users in countries with a massive population, the iPhone is priced out of their reach. As the process of building Android devices gets easier and simpler over time the platform will only take off even further from here.
Which brings me to Google – a company that is seriously underrated for how good they are. I can imagine them actually not being too put off by a lot of the negative press about being a one-trick-pony. It affords them a bit more of wriggle room as they come under increasing scrutiny from a variety of bodies. While they are often portrayed as a sort of Alice in wonderland for geeks, a slightly drier look at the company would show them as quite calculating and precise. I can't imagine the romance going forever for Google, but it is a certain bet that 2011 won't see the end of it.
Then there is the 500-million member social gorilla called Facebook. 2010 was the year when they dominated the airwaves along with Apple and Google. I am still not sold on the opportunity size for the company and I think the second market valuation is hugely inflated due to investors who want to buy in (still a reasonable bet to make good money on an IPO if you have deep enough pockets to participate in a round) and the fact that very little is actually known of the company's balance sheet, other than strategically leaked bits of positive information.
The problem for me with Facebook is simple. Without the audience there is little value in the product. I stopped logging in a month ago and disabled my account a almost two-weeks ago. I am yet to notice any major problems as a result of opting out. If I were to do the same thing with my primary Gmail account, all hell would break loose. Facebook is a massive time sink that generates a massive amount of junk data. I also have issues with the numbers that regularly get posted about Facebook. Strange thing is that Youtube is not too far away from Facebook in terms of traffic, but you would not value Youtube at $50 billion any day.
I think that by end of 2011 Facebook will have to present at least the first formal steps towards an IPO. I guess we have already seen this process being kicked off with a more polished and suave Zuck in the public appearances. I may very well be proven wrong about this, but Facebook will have a very Digg-like situation if they don't do the IPO jig by 2012.
AOL/Yahoo!: I am still holding out on the assumption that Carol Bartz knows what she is doing. Even though everyone is aghast at the relentless 'sunsetting' that has been making its way through the product line, the fact is that Yahoo! is a horribly inefficient set up. You won't realize the extent of this until you have worked with the company (we were a syndication partner at Network18) and the mess that their Indian operations are just a reflection of their global mess.
At the same time, I won't hold that assumption for any longer than end of 2011. Three years should be enough to restructure a ship even the size of Yahoo! and it is necessary to see some real hints about the direction beyond the usual corporate gibberish. I do get the feeling though that Bartz has a limited timeframe to do what she is trying to do – failing which she will probably be pushed into looking at a sale. I know it does not entirely make sense, but I guess the game is to cut flab, show real results, shore up valuation and go for the sale if the direction dance fails to find its steps.
AOL – the less said about it the better. It has an all too familiar smell about it now. A stellar 'narrative' backed by really no great connection to reality. I was willing to give Tim Armstrong a bit more of rope, but the recent acquisition of About.me brought back many strange memories. Trainwreck in slow motion from a company that has a dreary past in the M&A and restructuring world.
Twitter & the locationistas: Twitter has seriously disappointed me. I have previously defended the company and the direction in which they are headed, but it can no longer be done. They seem to really have the dog-chase-car-gets-car problem. It is a great platform with a very engaged audience, but they need revenues and strong growth in that to keep going. They just seem to be making things up as they go along. Till the end of 2009 there was the anticipation of the product heading somewhere. 2010 was a case of a loss of that momentum for the product. Yes, they have strong growth in the user base, but that by itself is an useless metric to judge things by.
The locationistas are just plumbing and not products by itself. The only hope in this line of business seems to be an acquisition when the going is good. Honestly, I don't think any of the new companies have the legs to go it on their own. LinkedIn used to be a favourite on that front, but they seem to have stagnated more than anyone else. Groupon seems to be fun at the moment, but it is too early in the day to say if they can sustain the pace they are keeping now.
It looks pretty grim by those standards, so let me stop the doom and gloom and look at what would I like to see next year:
1. Some sense in broadband/3G pricing in India. The current levels are atrocious. ISPs/operators have to take a hit on the margins, else we will have another boring year.
2. A genuine location-based social network in India.
3. A better start up ecosystem in India.
4. An investor/VC to fund an online-only media website in India run by a handful of good journalists.
5. Television content on the net, without ads. I'll gladly pay a premium for this.
Have a great 2011!
Read More