When I left the big company job in 2008 to start on my own, it was not the ideal scenario be venturing out. The global financial meltdown was well on its way and it was becoming increasingly clear that chasing the digital opportunity in India was going to be an uphill task. Now, about two years down the line from then, it has been an interesting experience to look at what all I've wanted to do and what all I have wound up doing.
Most of the time after I quit in 2008 was spent talking to various people across the ecosystem. I met other guys in the start up space, a bunch of investors, company heads etc to get a feel of how it all actually works at ground zero. It is one thing to have a 'feeling' about how it all works and entirely another to put that feeling to test in the real world.
Two things made this period even more difficult. 1) I am not a very social person. This is a considerable drawback when you are trying to run a business on your own. You can fake your way through it to an extent by putting your game face on, but that won't measure up much to someone who is a natural at it. 2) I have little natural inclination or an educational or family background in business. I had to learn most of what I know from scratch.
I tried poking around various product niches then – some of the ideas I came up with were pretty OK, others were beyond ridiculous. But I was willing to let go of my biases and prejudices (which I had in plenty) and give opportunities and ideas a decent shot. It did not take very long for the realization to dawn that the product space in India Digital is tiny, and very little of that was not easily replicable. Given enough money and/or persistence, anyone could be overrun.
The market itself was another problem. We are price sensitive to the point of absolute absurdity. Quite often, perception is a larger factor in ascertaining a justifiable cost than actual benefit. Customers are often willing to accept a lower value/quality product at a higher price point from a behemoth than a higher value/quality product at a much lower price point.
Then came the bugbear of the opportunity size. The one billion-strong Indian opportunity is absolute bunk. It exists only in the imagination of outlandish product pitches and investors who want to buy into it. Spare a Naukri, most other larger players are nothing but marketing-driven plays. They acquire customers at a significant costs and then attempt to outlast the competition. Deep pockets ki jai ho!
There is a reasonable opportunity in India in terms of execution, which has been demonstrated well enough by companies like Flipkart, but it still needs a pretty significant chunk of cash to be put into the system before you can get going. Which was my greatest problem – how could I actually go about financing all of these things that I wanted to do?
When I looked at my own concepts, I did not feel there was anything concrete there that deserved to be funded. I would not have invested in myself. Hunches are nice, but they don't make a business plan and I did not want to misrepresent or inflate the picture I had in mind and con someone into putting up the cash to fund what could rightly be called indulgences. Thus started the story about 'building websites'.
What I was sure of by then was that we could not aim for anything at scale for a while to come and our main source of income had to be something else than the products we were looking to build. The only place where that was possible was in the service-oriented niche. Even there things were not easy. Even though there is an ever-growing opportunity for vendors who service the online space, the market is an absolutely crazy one.
To compete in this market requires you to fight both the vendors who will get business by driving down prices to levels that are unimaginable and the big ticket guy whose pricing is 80% the brand and nothing else. Because of this I decided to give the 'site building' market a miss and aimed instead to build upon something that is a lot more nascent, with the market being at least two-years away from bringing on the pricing massacre in that niche.
In retrospect, it is easy to claim our tryst with Elgg, the social networking platform, was well thought out and a logical conclusion. The reality was that we actually stumbled on to it by accident. A project we took on had the requirement of the particular platform and over time we became really good at using it. It made sense to build on our expertise in the platform and earn our bread and butter from it, which is what we have been doing for a year now.
This has enabled us to incubate about three different products at the same time, all of which are in different stages of development (or disarray, considering the shape some of them are in) and it is an act of will and gymnastics at times to pull all of this together at the same time. It could probably be a lot easier to fast track all of this by focussing more on 'building websites', but I am still very averse to that. Even though, when asked what do you do, I find it to be the easiest answer to give others.
The coming year will be a hard one. Like every small scale venture that reaches the level where it can sustain itself, I also find myself in a situation where it is imperative to go for broke or be happy being the tiny tot. It has become near-impossible to scale this any further with existing resources, but that also does not mean that we have the liberty to go on a spending spree. Much of our edge is in how lean we are and I don't want to compromise on that – yet.
One of the greatest learnings of these two years has also been the importance of picking the right people to work with. This extends to not just partners and employees, but also to the customers you choose to work with. A good customer who works with you is well worth forgoing two who will make your life miserable. The same goes for partners and employees. Choose them wisely.
Six months down the line I will revisit this post and do an update on how far we have progressed by then. It has been such a journey that I can't even make any predictions about where we will be by then. 90% of what I am doing right now is not something that I had planned. How I wanted to go about doing it is probably the only consistent bit in it and six months down the line I think the story is likely to remain the same.