Ever wondered why everything (about the internet) from the USA is great and that from Asia is weird or funny? Why innovation on the web is the prerogative of US based companies? These are the questions that Benjamin Joffe seeks to dispel in this very popular presentation (shared on slideshare). Benjamin is the head of Plus8Star, a Beijing based consulting company that focuses on mobile & internet related ‘innovation arbitrage’ in China, South Korea & Japan. The presentation focuses on new business models in online communities and their evolution. As many of the popular global social networks grapple with their monetization strategies, they would do well to take a leaf out of their oriental counterparts. Consider this- 2007 revenues for Facebook was 150 mn, while that for Cyworld (largest SNS in Korea) was 200 mn, for MIXI (largest in Japan) was 100 mn and for QQ (largest in China) was 520 mn! QQ’s reach is almost the same as Facebook (200 mn users). The key postulate put forth is that business models for online social networks in China, Japan & South Korea are far more evolved than in the west, probably because those societies have very high digital dependencies. Do check out the slide deck … some of the facts/figures are going to hit you like a sledgehammer.

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So the obvious question that you are likely to ask- what about India? How do the Indian examples stack up on this scale? Indian SNS figures actually pale into insignificance when put alongside these staggering numbers. Out of a total base of 30 mn Indian internet users, the most optimistic figure for users of social networks (Indian & global sites put together) is about 10 mn. Orkut, the biggest player in India reportedly has 7 mn users, and Facebook has 1.5 mn users. And none of the Indian homegrown websites have more than 1-1.5 mn users. These usage levels are way below the thresholds required for successful monetizations in online communities, which need a critical mass for the numbers to kick in. Lack of vernacular language content is a huge bottleneck in achieving those break-even numbers. The sheer diversity that exists in our country- different languages, ethnicities etc, coupled along with the colonial hangover for English takes a heavy toll here.

And what about perceptions of quality & innovativeness for products coming out of India? Well, given India’s overriding image as an outsourcing backend to the world, it’s not hard to imagine the typical stereotypes about India. In my role as one of the founders of a global website which is being built out of India, I’ve had quite a few notable experiences on this count. Some of these experiences are fascinating, while some are downright unpleasant. However at this point in time, I’d rather focus on my work, than get swayed by such considerations. I’ll probably touch upon them later at a more opportune moment.