I had been internally debating whether or not this blog post made any sense. What precipitated my decision in the affirmative was this piece of news that I read on ContentSutra. As things stand today, I can sense a general environment of conjecture about Indian Web2.0 amongst its thought leaders. There is a continuum of opinions, with people’s reactions ranging from cautious disbelief to speculative anticipation. Different people (or organizations) seem to be taking divergent positions and while everybody has a right to a course of action that best serves their own interests, I wonder what this collectively means to the readers of this blog. For a big chunk of Webyantra’s readers have Web2.0 as their ‘occupational karmabhoomi’. Many of them are betting their lives & careers on Web2.0 and/or committing significant resources to carve out their livelihood in this space. Hence this issue needs much closer introspection, at least for the sake of that specific group of people.
Let me piece together a bunch of recent news item, or some of my own observations to give you a sense of what I am driving at.
Avnish Bajaj Says Social Networking Is “A Waste Of Time†In India – Avnish Bajaj surely knows a bit about the Indian internet industry; he is co-founder of Baazze.com, one of India’s biggest ecommerce site and now a venture capitalist, so when he voiced his concerns, you have to accord credence to his views. He did clarify later that he was referring to pure SNS sites. In fact its not just online social networking, he has earlierexpressed general skepticism about Indian Web 2.0, saying that our internet industry has not reached a state of maturity.
Sequoia Capital invests 7 million in Minglebox – Sequoia is a big name in venture funding of internet startups. They have internationally backed some of the biggest names in this business, so when their Indian arm invests a sizable sum in a SNS startup, that hasn’t really set the roads on fire (as yet) and is just one in an increasingly crowded space, you have to notice it. Personally I think this decision makes sense for them, for as an investor you have finite choices and if they have to bet on somebody in the Indian SNS space, Minglebox is a better choice than many of the others. But my main point here is that they are certainly not as skeptic as Avnish about Indian Web2.0.
Canaan Partner says Web 2.0 not high on its priority list– Canaan, another Silicon Valley VC firm said that while they are looking at the software & internet space, they are not hugely kicked about Web2.0; they are more aligned towards transaction based models. Canaan incidentally is headed by Alok Mittal, who surely has a good sense of the Indian internet space for he founded JobsAhead, before it was acquired by Monster.
Media/Entertainment industry hots up to internet (incl Web2.0) – One recent trend worth noticing is that the big Indian media companies (having huge reach through their TV channels)– Times, NDTV, CNN IBN, Reliance Entertainment are getting their internet act together. They obviously think that the internet is the next big medium after the television. In fact, its not just Indian media companies but foreign ones as well. Take the case of MIH India, which has been promoted by a South African media house, Naspers. MIH has made some high profile top mgmt hiring decisions, is committing serious advertsing money to their products- in general they are betting big on this space. I must add that the media companies are eyeing the internet space in general, but it’s safe to assume that they are partly influenced by the buzz around ‘web2.0’.
No dearth of VC money for internet space – You would agree that there is more venture capital money available for the Indian internet space that what the market can absorb. (in fact in India, that’s probably true not just for venture capital but for big ticket private equity as well); and the blame for this clearly lies with us- the startup guys, the entrepreneurs themselves, for not creating enough compelling products & services that can be considered ‘investment grade’ by owners of the capital.
So what do you think about all this? Are you confused about Indian web 2.0 ? I’d like to hear from you, specially if you are a Web 2.0 entrepreneur yourself. Or even if you are just a gazing onlooker….
I have my own point of view on this and a pretty strong one at that. but without being judgmental, I’d like to listen to what others have to say.
Well I for one am pro Web 2.0 because it works for me :).
For starters i get a lot of ideas , but only last month I thought that i should start working and stop thinking (rather than see ideas being done by others). So i launched my first 2.0 site ( http://www.indiantvschedule.com ) just took two weeks from idea to implementation. I did not expect any revenues as such ( this site requires 2hrs/month of work ) , but response i got was quite good , Many job offers and even more consultancy work offers. So looking at the response im now planning a new Web 2.0 Idea which i had for a long time …
So for me it lead to increased revenues and people taking notice. I cant say anything about Multi-Million Dollar companies but Web 2.0 shore does the trick for me.
Web 2.0 does work but monetization is a problem and will remain for some time.
I’m concerned about the businesses dependent on advertising though, for the following reasons:
1. Over supply of ad spots -> will result in lower spot prices and ad revenues will be far lower than estimated.
2. RSS -> I’m not going to websites at all for my news requirements. I get pure text full news articles in my aggregator and thus it cuts out a significant portion of the ads on news sites, blogs etc. And I have bad opinions about anyone who tries to circumvent this (eg. Economic Times).
3. AdBlock -> Prevents almost 60% of the ads from reaching me.
I like Canaan partners’ philosophy of investing. VC want their returns in 3-4 years and transaction based business models would be a relatively safer bet.
BTW, did anyone find the fact interesting that India has 2-3 VC deals everyday compared to 20 for Israel and over 70 for US?
cheers
nilesh
Web 2.0 for Web 2.0’s sake is bound to fail. However, if companies are able to harness the
power of Web 2.0 – intensive user collaboration, superior user interfaces etc to their advantage,
they are bound to succeed.
-Navaneeth
http://www.findmyghar.com
Well, there is serious VC money flowing in the streets in India.
Amit, you have hit the nail on its head, by taking the initiative of sharing the blame. The biggest problem with Indian Entrepreneurs (me too) is that we are not creating anything of serious value. All we crib about is the lack of interest from the VCs in our ventures. We got to stand up, create products/technology/markets which affect a lot of people and make the best out of it, Web2.0 or no Web2.0.
Pingback: Web 2.0 and India at Blogbharti
Well, Web 2.0 features like collaboration are great for companies. But someone has to implement these techonologies in the company. I work in Switzerland and most people in my company don’t know anything about Web 2.0.
Regarding Indian Web 2.0 startups and whether they would work or not…you’d better damn well try to make them work or we will always be referred to as the Back-Office of the world. We should concentrate on making Web 2.0 sites which are not India-centric, but are good enough for the world.
More Info on “Booming Social Networking in INDIA”
http://www.wittysparks.com/2007/04/28/booming-social-networking-in-india
Couple of thoughts :
1. Capital is not a main driver for business establishment. Gone are the days when only a rich man could come out with new business. So VC or other investors are not so important as they were earlier.
Like Vikas said, it doesn’t take much time /money to rollout new service – I am on similar trip, try and see what hits. My current thingy is http://www.whospoke.com – a service to know others opinions.
2. Why be a ‘Indian’ web2.0 – Skype never started as Dutch service, or Google as US search engine….
Unless our target audience is geographically limited, why not consider and build business for global audience.
3. Static web –> Web service —> Web 2.0 : Web2.0 is like Webservices of the corporate technologies. A web2.0 service allows to mix with other’s services and build new mashed up service. That is the promise of integrated yet distributed functionality versus monolithic functionality.
But how many are true web2.0 services ?
> But how many are true web2.0 services ?
I am working on http://www.mixercast.com (based in India), I believe it’s entire idea is around Web 2.0/Media 2.0.
Anyway, some of my thoughts:-
1) There is loads of VC money in India for different reasons. One of reasons is low cost of operation. $7 million is huge amount for any Indian startup, most of the Indian startups can operate in much less than that.
2) India internet-space is not yet ready for consumer services (paid or direct-revenue from users). For technology startups, I suggest think of white-labeling (whether its Media 2.0, Web 2.0 space). In coming years, you can go consumer-site.
2) Lack of new ideas and innovation in Indian startups. We still target North America or try to replicate concepts for Indian space?
3) Mobile market is cool and but there are challenges f.ex. hard to crack a good deal with operators, data-services are expensive or not available on most of the phones.
4) I agree with Madhu’s points (previous comment). Web 2.0 is a platform where you build application by using/remixing web-services or through syndication or through mash-ups.
We need to understand that Web 2.0 is a better way of doing things for users, that’s it. In future, another term would be coined and hyped and people would try to use those terms to market their product. These things would keep happening. IMO, as long as we solve a problem in a better way, we are cool.
We also need to understand, there are enough and different-kind-of problems to be solved in Indian internet space.
Check this out: http://www.flickr.com/photos/abdulqabiz/322217402/
a company is using Web 2.0 term to attract talents, notice there is nothing like Web 2.0 in that advertisement 😉
4) I agree with Aviash Bajaj on social networking thing. I guess, it’s cool today and addictive, but not sure how long it would go. I guess, user-base for any social-networking website in India would never grow exponentially.
Most of folks on social-networking sites are not serious (just fun). In general, people don’t socialize on-the-site or off-the-site. Users would get bored and would never use the site, New users would join, they would do the same..
-abdul
I agree with Avnish Bajaj, but only to the extent where WEB 2.0 is misunderstood as AJAXified web interface and no-value social Networking site. WEB2.0 is primarily inducing user participation in content generation.. we have likes of mouthshut.com which has set new benchmarks. A social networking site, can either be specific or targeted networking ( like ryze.com, slashdot.com ) or should have some paddling going on underneath.. like what is google doing with orkut.
As far as VC funding deluge is considered… it is limited by individuals’ ability to discern out an opportunity from illusion.
I am surprised when I heard about 7 million deal of miglebox. I guess this is toooooooo much money for any start-up anywhere.I am still looking into facts related to this deal.
Coming to indian web 2.0 sphere I feel there is too much talk about to little.I dont know single web 2.0 based company creating value in India.Market is crowded with me-too types.Too many people tryiing same thing in same way.
Why is it so?
Becoz we lack a right ecosystem. Most of us never experinenced web 1.0 .Tell me how many engineering colleges,schools,insitutions,companies have a descent working websites? (IISc website sucks so does indiatimes ).Even indian webportal who have people and money lack innovation and loosing users month after month.Indian consumers are still learning to google and yahoo messanger.Most of them use internet for transaction orineted utility based activities.Advance users will never except badly executed copy of global ideas/concepts.
Does that no opportunity in Indian market? No. It means you have to work hard to innovate.Build something worthy.Somethingting that is long lasting that have value for user and creator.
I totally agree with Abdul and Madhu.Beauty of internet is that it make whole world your consumer.So while indina market reach its threshold just create something for global market.You will not only generate more wealth but also get prepared to serve indian comsumers in future.
I am just an onlooker… 😉 But here’s my two cents worth.
1. What kind of monetizing can be done with a Web2.0 idea? The usual ad based revenue seems to be drying up, what with RSS feeds, and AdBlockers.
2. What EXACTLY differentiates Web2.0, from Web1.0 and before? I, for one, don’t really know. Not sure, how many others (except folks who are MAKING these apps), know the difference.
Cheers,
R
Exploiting the long-tail to make money is what everybody talks about when making money. I don’t think it works well in India, because few people actually spend money on buying things on the internet. Which means fewer people click on advertisements and thus lower worth of advertisements.
a good make meaning or a service that bridges the ga will work, SNS is waste, In India there is no LonelyGirl 15 or non1 is lonely at all, there is more to do offline n online, Indians have a life, friends, group so tools like Social networking, you tube will not work here, not just yet!
My Question is if Fropper, Zapak or any of this are doing well why do they need 1 2-3 Million USD TVC and outdoors? No Internet firm has been able to gather a genuine active base of millions of users by TVC’s or Billboards!
Hi Jim. Photos i received. Thanks
Hi Amit,
I came across your blog recently .. great job. I have just started writing a blog http://www.techtrends.in, which i hope to be in-depth analysis on Internet/mobile opportunities in India.
Anyways, with regards to this post and Web 2.0 opportunity in India.. There are 2 gating factors to growth for Indian Web 2,0 startups, market size and competition from global incumbent.
I have a post focusing on the 2nd issue. In short there are 2 main questions to answer.
1) Do sites with global user base and/or global content diminish or add value for Indian users?
2) Can a global incumbent go-to-market and/or attract visitors more easily?
As a part of this post i have a presentation on slideshare.net .. great app by the way 🙂 You can go see it at http://techtrends.in/2007/06/30/which-%e2%80%98india-only%e2%80%99-sites-will-succeed-in-india/
Best,
Gaurav
Here are some good Indian web 2.0 sites:
http://www.Varthe.com
http://www.BollywoodSamachar.com
In addition to this blog, I think that Indian Web 2.0 has good impact on Indian Real Estate websites. If we take good care of our website while doing SEO and add web2.0 sites, it will increase website ranking in Indian region as well as Globally. I have seen its good impact on this website: http://myrealestate.in
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