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15 Steps towards Building a Great Product!

Note: I recently gave a talk at The Startup Leadership Program and shared thoughts on Product Management and how to go about building great technology products. The deck I shared is embedded w/t the post.

This for all founders & product geeks (that includes me too) who want to build the next great product. Sharing all this for #StartupKarma (Heard this from Bowei – ‘Continue to give away and help other entrepreneurs with a hope that it comes back to you someday!’) 

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The Background:
As a startup founder, one gets bombarded with advice on pitching, raising investments, growth hacking, marketing and so on. It comes to us through one-on-one interactions, posts we read or multiple startup events and meetups. Unfortunately there is very little or no advice that actually helps you build your product.

Over months, I have studied product patterns in several successful products (like Facebook, Twitter, Quora and so on). This has made me believe that building great products is not just about picking random ideas and shooting in the dark, its a art and science both put together.

Here is a step by step guide for building a great product. I have taken Twitter in this case to demonstrate the examples, however you will be surprised to see the similarities with other products.

Note: Don’t proceed without understanding #0; and without finishing #1 & #2.


#0 | Think: Product does Marketing
The thumb rule for any great product is that you don’t need to market it; it requires zero marketing spends. Instead, it is the users who spread the word, acquire more users which leads to high growth. High virality and strong engagement are the two striking characteristics of a great product. 

So here is the step by step guide towards building the next great product!

</end 0>

#1 | Think: What product are you building?
Have clarity about the product you are building. Make your product statement!

Here are the rules:

  1. Define your product in < 10 words. This is not your pitch statement, its your “product statement”.
  2. Be grammatically correct, include name of your product in these 10 words.
  3. No references with other startups / products. This cannot be “AirBnB for Cars” or “Facebook for Companies”.

Share this product statement with others. Does it communicate ‘everything’ your startup is going to build? If it does not, work on this again!

</end 1>

#2 | Think: Vision
Most startups have beginnings over a random idea (usually this sounds like a billion dollar idea then). Once those ideas get built in 3-6 months, the founders are lost and clueless on what next!

Have a vision around this product you are building. You can run out of ideas, but you can’t run out of vision. Build a product roadmap around this vision. (I mentioned it last year too – point 5 )

Make a note of the vision for your startup / company. Check if the product statement you wrote in Step 1 is the right to achieve the vision you just stated.

Now lets start with building!

</end 2>

#3 | Think: Atomic Unit of Product
I picked this up from Fred Wilson’s post which got me thinking for days on my our own product and even inspired me to rethink on our product / vision.

What is the atomic unit of your product? Example; Atomic unit of Twitter is a ‘Tweet’. For Facebook it is a status update. For Instagram it is a photo. For Gmail it is a email. For YouTube  it is a video.

Simple rules about Atomic Unit of your product:

  1. It has to be owned by you.
  2. It should be only one. More than one atomic unit? Signs of trouble!
  3. Your product statement and vision should be centered around this atomic unit.

</end 3>

#4 | Think: Features

Were always confused on figuring out which features to build and which to let go? Answer is simple – build features only around the atomic unit of your product.

Example., Twitter’s core features – reply, retweet, favorite & follow (a user who tweets) are build around its core atomic unit – “tweet”.

Rules to remember:

  1.  List down all features you can think / build around the atomic unit of your product!
  2. Strip down all the features you have on your product that are not centered around this atomic unit.
</end 4>


#5 | Think: Engagement
Want your users / customers to engage with your product – ensure that features you have selected to build around the atomic unit lead drive engagement.

Example., In case of Twitter, the engagement is Retweets, Favorites and Conversations that one can have around the atomic unit ‘tweet’. Similarly for Facebook it is – Likes, Comments, Shares and so on.

Don’t getting fascinated by engagement features around popular products and force-fit them on your product. Example., force-fitting the favorites like functionality from Twitter on your product.

Rules to remember:

  1. Drive engagement around the atomic unit of the product.
  2. Be innovate. Try multiple options to figure out the perfect fit around your product.
  3. Engagement should be measurable! (Example., 35 Retweets)
</end 5>

#6 | Think: Flexibility

Most startup founders I meet are not flexible. They don’t want to change their product and want users to follow a certain flow which they believe which is right. When asked why, most of the times the answer is “we don’t want to let user play around the product”.

Think twice. Your product should be flexible and your users ‘must play’ with your product. Your product should be flexible at its core – at its atomic unit! Example., Twitter lets you tweet text, a photo, video, post, location & in multiple languages. Others., Facebook lets your post a status that is a text, photo, video and so on. Same for Quora, Tumblr and the rest.

Rules to Remember:

  1. Give freedom to your user to play with your product.
  2. List down all formats in which a user can express the atomic unit of your product.

</end 6>

#7 | Think: Distribution

Key to success of any platform – distribution. Why does this come so late? – You need to build your product right before you even think distribution.

Most founders think distribution is ‘sharing on other platforms’. It is not! Before you even get to allow users to share & distribute to other platforms like Facebook or Twitter, get users to distribute on your own product.

Example., Retweet on Twitter, Share on Facebook, Upvote on Quora, etc are the best examples of on-site distribution.

Rules to Remember:

  1. Distribution should be centered around the ‘atomic unit’ of your product.
  2. If a user has not distributed anything on your product, very rarely would be distribute something outside of it.
  3. Don’t force-fit social in your product. Users will figure out way to share if they like something!
</end 7>

 

#8 | Think: Endorsements
Don’t we breath and live endorsements in our every day lives? Why do we forget to build that in the products we create. Great products use endorsements in every element – it brings out relevance & context to information.

Example., If you notice every element of Twitter has a endorsement if you are logged in. This includes – Retweeted by, Follow Suggestions, Profile Views and Search Results.

Rules to Remember:

  1. Endorsements work 100% of the time. Build them in your product.
  2. Anything that is not context is spam. (Said this earlier)
</end 8>
 

#9 | Think: User Psychology
Most entrepreneurs want users to love their product. Truth is, users don’t love your product. They love the content (or data) on it!

Example., We love to express ourselves on Twitter. Discover best answers on Quora. See moments shared by friends on Facebook.

So if you are building a product, remember to allow users to create their own content and discover relevant content. Don’t try to get users forcefully share something to Facebook or Twitter, it will not work.

Rules to Remember:

  1. Content should be expressed in the atomic unit of your product. Nothing else.
  2. Creation of content is much more valuable than sharing of content. 
  3. If a user has created some content on your product, has something he owns – he is engaged.
</end 9>

 

#10 | Think: Content Dynamics
Once you let users create content on your site, ensure you understand the content dynamics – most importantly that user’s need for that content to be seen! This is step 2 of user psychology – he needs activity around it that will keep him engaged through the features you have built around the atomic unit.

Example., If I tweet something on Twitter, who consumes that content? Not all of my 1000+ followers on Twitter, many of them may never notice it. But there are few followers who will retweet that and amplify the tweet.

You need to have features (again around the atomic unit of the product) that amplifies / distributes the content. And users who do these are your content curators! That is all one needs to know about content dynamics! 

Rules to Remember:

  1. Great content is created by just 1% of your users; That is amplified by 10% content curators – their actions make things go viral!
  2. When content from your product goes viral, in in true sense your product goes viral.
</end 10>
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#11 | Think: One Point of Discovery

Building product with above elements is important, and now crucial is to package that all in to a exemplary product design. The thumb rule here is simple – user should be able to do everything that has been mentioned here (till now) on one screen. 

Example., the logged in interface of Twitter, Facebook or Quora (though imo Quora still needs some improvements).  

Rules to Remember:

  1. Don’t build a product around design. Build design around the product.
  2. Minimize page views, clicks. User should be able to complete 75% tasks / actions of your product from the screen he is displayed where he logs in.
</end 11>

 

#12 | Think: Privacy
This point is intentionally left blank. That is all I have to say about privacy!

</end 12>

#13 | Think: MVP
Stop building minimum viable products, users won’t adopt them. Instead build more valuable products, I wrote a full post on this topic – the minimum viable product trap!

Still not convinced, here are some examples – 

  1. Bing is a good search engine (if you have not tried it lately, you should). Still we continue to user Google regularly and did not shift. Why? Because there is nothing more valuable it has compared to Google.
  2. Outlook, is now probably as fast as Gmail and with most (of the commonly used) features that users would expect. Yet Gmail continues to lead because Outlook provides nothing more valuable than Gmail.
  3. We did not move from Dropbox to Google Drive. Same., not more valuable.
  4. While in case of WhatsApp, we all moved not just from text messaging to WhatsApp, but also dumped Facebook Chat, GTalk and many other products. Why? – because it is more valuable!

Rules to Remember:

  1. Build something of value to users, that will drive adoption of your product.
  2. Build your product for real users, not for early adopters.
</end 13>

 

#14 | Think: Growth
If building the right product is the toughest thing to do for a startup, distributing it right is even more tougher. If your distribution plan includes advertising or spending $$$s – then you need to rethink your strategy. 

As a startup, you need to completely rely on any existing network to bootstrap your initial growth. Even the existing successful products have, some examples –

  1. Twitter: Live tweets at SXSWi conference displayed on large TV screens.
  2. Facebook: Opened initially in Harward, and more schools later.
  3. YouTube: Nike Advt went viral. Plus many users embedded YouTube videos on then popular MySpace.
  4. Gmail: It was a mail service from Google. Invitation Only. Anyone searching for email services on Google.com was shown advts for Gmail.
  5. Quora: Initially opened to Facebook Alumni network
  6. Zynga: Facebook Feeds.
  7. Dropbox: Invites by Email + Connect Facebook & Twitter accounts.

Rules to Remember:

  1. Bootstrap your growth on other existing successful & large networks.
  2. The networks could be online or offline. Focus on only one!
</end 14>

#15 | Think: Shipping Fast
Many entrepreneurs / founders keep delaying their public beta as they wait endlessly to build a perfect product. This can be very frustrating since the perfect product is always 2 or 3 more features away. Some of the common reasons I hear is – “What if early adopters don’t like the current version of product? what if they rant about it on Twitter?” 

Founders should also know that early adopters are very considerate – they know this is the first version of product that is being shipped. In my case, I rarely rant about early stage startups. To communicate something or to share feedback I shoot a email to the founders. In case I really like a product I spread the word for it. Yes, but I do rant if a startup has raised a Series A, in this case I assume you should have a product where silly mistakes are not acceptable 😛

Rules to Remember:

  1. Ship a Imperfect Product. Its OK!
  2. Collect feedback and ship changes fast. Ensure your write to your users and update them when feedback is implemented.
</end 15>

 

Concluding Notes:
Building products is not easy! Most of the time its shooting in the dark with no clear modelling that lets the product manager believe if a feature you are building will work or not. As startups, we are pressed on time and a wrong feature can cost us time & money.

It took me quite some time to study and understand these unique patterns in several successful products which includes Facebook, Twitter, Tumblr, Quora and others; finally had a chance to put that on a deck and now on this post. 

While this product management process has been personally very helpful for us at Wishberg; I plan to update this over time as I learn, understand and implement more. Would also want to hear your thoughts on this, please write to me on pj @ beingpractical.com on your learnings and inputs. 

Thank You!

 

Search Engine Optimization or Traffic Hijacking

Search Engine Optimization or Traffic Hijacking – What really goes on Page 2, Page 3 and beyond…
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With online advertising getting more and more driven towards performance based metrics – the ways to channelize affiliate marketing for performance have taken some interesting turns – and no one is taking a notice of this. Online marketers seem to be so focussed on just numbers through its media partners and not really on how they are achieved.
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So putting ahead here a case with its example which I discovered today. Right or wrong – I will leave it for someone else to judge! – but this might be true for many brands in India.
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But for the fact – delivery of some performance based marketing is getting blurry. It looks more like attempts of good SEO techniques exploring more than what they should have since Online Marketers are have not yet noticed it. This might be controversial – but eCommerce services and mostly travel (OTAs and Airlines) companies may be paying up some performance marketers for just no reason.
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Example – Jet Airways
There are significant number of searches for “Jet Airways” and related searches everyday on Google and other search engines. The most valid websites that user would expect are – of course www.jetairways.com or www.jetlite.com – and then there are list of websites which are without any doubt not owned by Jet Airways – that appear on Page 2, Page3, and beyond.
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Here are few of them are listed below, each one of them uniquely optimized for related search terms consumers will use while they are searching for “Jet Airways” –
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The above listed web sites are just few of the many – I did not explore much. One look at most of them – and you will realize that are built to get free extra revenue through display advertising and affiliate marketing.
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So why should a brand like Jet Airways (or your brand) worry about –
  1. Loss of Traffic
    The above websites are SEO optimized for search queries related to Jet Airways. No doubt they are ranked well, hence receive significantly higher traffic – which originally should have been received by Jet Airways website by default (in event this websites were absent).

    These websites are so well optimized that they might be taking about around 20%-30% (or more) of traffic that was meant for Jet Airways itself.

  2. Loss of Revenue
    Loss of traffic also means loss of revenue! No further explanation here.
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  3. Paying from its Pocket!
    Many of these websites are running affiliate tracking codes (mostly for Jet Airways itself) – which means indirectly Jet Airways is paying affiliate commissions for this diverted traffic originally meant for them. Are such affiliate cookies kept live for a longer period (say 30 days)? Imagine the loss of revenue.
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  4. Loss of Brand Value
    Frequent internet users directly reach destination websites, unsure how a normal internet consumer will react to this or if loss of brand value can be attributed. I landed on one of such websites today – first reaction – “What happened to Jet Airways website today?”
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So whats the big deal…
Instances mentioned above can be termed as traffic-hijacking through SEO – originally meant for the brand; but routed through another destination and then asking the brand to pay for it!
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SEO is all about playing with Google rankings – Google’s job is done when they show first 1-2 results accurately, the next results are optimized to rank better. Building such optimized landing pages by product companies like – Ixigo, Cleartrip, MakeMyTrip, Yatra, ezeeGo1, goIbibo etc should be fine – as in any case these websites clearly have a business model and have a service to offer directly to consumers.
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Disclosure –
Jet Airways is not singled out here in this post. I am a frequent flyer with Jet Airways (part of JetPrivilege for about last 5 years) and personally very satisfied till date with its services. The above example stands true for many leading Airlines and OTAs as well.
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Takeaway…
Are you a consumer facing brand in India – Google search your brand name and view each and every search result of your first 100 rankings!

Why Indian Languages Failed to make a mark Online!

Why Indian Languages have failed so far to create much desired impact on Internet?

With due respect to companies & entrepreneurs working in Indian /Indic languages – let me put practical thoughts on Indian Languages proliferation in Indian Online industry. Technology is nice, great infact – we love it when we type in English and the text gets converted to an Indic language. Technology does makes us say – WOW!, but it is not enough to assume that millions of Indians will adopt it and it would bring about an revolution in Indian Internet Industry.

Revolution in Indian Internet Industry will be when about 100Mn Internet users in India grows to 500Mn (not in next 20 years, but in next 3 years) & about 1XX Mn Mobile Internet users grow to 500 Mn (not in next 10 years, but in next 2 years). Hope the revolution of this sort does happen – but will acceptance of Indic languages lead to it – answer is definitely NO! The ecology for this change is simply non-existent in India today; and is far from created.

Having worked in the Internet domain – we have repeatedly heard that Indian languages to be the next thing. These predictions actually looked more like “me-too” product offerings – thats worked-in-US will work-here-too. Because China has Baidu does not mean we need one!

Coming back to Indic languages, in my opinion – the languages space has been highly misunderstood. We saw several efforts in this direction over years:

  • Rediffmail introduced feature to send and receive emails in multiple Indian languages many years back. However the usage of this service is not more than 1% of overall service. Ajit Balakrishnan, CEO, Rediff.com said earlier – “Lets not assume that (Indian) users want Indian Languages!”
  • Microsoft started offering its Windows Operating System and MS Office Suite products with Indian language versions since last few years. The adoption rate of same is questionable – to my best positive guess it will be still <0.5% of overall installations.
  • Keyboards / Input devices with multi-lingual keyboards were at one time were hailed as innovations to drive computing to rural India.
  • Indian fonts also saw its own best days when they were introduced to the market.
  • Bi-lingual (English+Hindi) mobile phone keypads were once a rage. Nokia introduced a series of phones and around same time we saw a huge interest in mobile applications working on Indian languages

Most of these services/launches were well received, were thought and perceived to be game changers. Maybe at times even I did think in same way – but while I have studied this space and have interacted with few wise people in Indian & International scene – Can strongly put forward the conclusion that Indian Languages will NOT make a mark in Computing, Mobile or Internet domain. It will not happen very soon – the ecology for such change to happen in India does not exist.

Here are of fews considerations that makes me form such strong opinion and conclude on absence of ecology favoring Indic languages adoption:

Diversity of India:

While this is what makes us proud of India – this is one of the strongest reasons why Indic languages have failed to make a mark.

Consider emerging markets like-

  • Brazil: Over 99% of population speaks in Portuguese
  • Other Central & South American countries like Argentina, Venezuela, Peru, and many other countries have Spanish as the official language with over 90% population in these countries speaking in Spanish.
  • Similar with French – it is widely accepted in many European countries as official language.
  • Consider China – it is as diverse as India, but all most popular versions of Chinese languages are based on standardized version of Mandarin (based on Beijing dialect)

Consider India – while Hindi is leading official language, but no single language has adoption across the country. State governments have endorsed respective regional languages as official, Hindi failed to find the common ground – but English did!

How Innovation starts in Local Language:

Take market like China – The innovators, the early adopters, the influencers, the decision makers, the entrepreneurs – all of them DON’T KNOW English!  So innovators developed softwares, websites, products in Chinese; early adopters used Chinese products and so did the influencers, decision makers, and everyone else in China.

Take India – we know our Mother Tongue (our Mother Tongues are different) + we know English!

English is Aspirational language!

English is an aspirational language. Nothing official about it!

It can be confidently said that the percentage of users who will read/write/speak English language will keep growing for next 50 to 100 years. The same cannot be said about Indic languages.

How new users are learning computers:

For applying to government jobs that involve computer related work, few state governments in India have provided guidelines / benchmarks or minimum criteria based on examinations/programs acknowledged by them. Once such program with examination is MS-CIT for Maharashtra Government.

Had a chance to visit once such center – the communication with students may be in local language – however many users prefer to give examination in English language and during their classes learn computers that have English versions of Windows / Office and other software applications.

Indian languages are complex; Do not follow standard / global script:

One of the most favoring factor for languages like French, Spanish, Portuguese, etc was the fact that they followed alphabets from English language (ABCD…XYZ). No additional fonts, hardware or input devices were required to be created when uses adopted computers usage in these languages – both reading and writing.

In contrast, all languages in India do not follow standard script and are very complex to input and still be grammatically correct. To a small extent, another disadvantage is – like English we cannot drop vowels (AEIOU alphabets) to make shorted and communicable form of any Indic language, an convenient SMS lingo of Indic languages could not be developed.

Even Devanagari script is very complex to be standardized for its multiple languages on a input device like keyboard; even if it were – all languages in India are not based on Devanagari; while in China most Chinese languages have standard Mandarin script.

Internet was built on Content; Indic languages lacked adoption by early movers:

Internet was built over years – the most popular activity till date on Internet has been creation & consumption of content – through content sites, social content, or services & products that communicate through a content (language). While content was created in other global languages based on English alphabets from early days of Internet – it took a long time before content in Indian languages started appearing on Internet. By the time ability to create content in Indian languages was available – English had taken a mighty lead in its adoption as Internet’s mother-tongue for India.

In early days of Internet in India, most early adopters had English as first/second language. It made more sense for these users to adopt English language than create content in Indian languages as content was readily available elsewhere to. Most early and popular Indian websites too focused on creating content in English.

Even if they were to adopt Indic languages – the question will always be – which one to start with?

Indian Languages are great for Consumption; Not for creation!

As users we consume all regional languages through other Media – Television, Radio, Newspapers. Its very easy to consume on traditional media and the ecosystem exists for – content (TV programs, news content, audio content for radio), publishers (multiple TV channels, news papers & radio stations) and advertisers (promoting products in Indian languages). There is huge amount of content produced, audience availability & consumption, and advertiser interest.

Indic languages are great for consumption; not for creation! Ask yourself –

  • How many times have you sent an official email in Hindi? No business may deny communication in lndian language if it gets you more business – but did you send?
  • How many times have you sent an email to an friend in any Indian language?
  • How many times have you composed and sent (not forwarded) an SMS in Indian language?
  • You may talk with your friends in any language – like Hindi, Telegu or Bengali – but did you write email to them in that language?

No Rewards for creating Content for Publishers

Even if large publishers now take efforts to create content in local language – the cost & economics associated with this may not justify the efforts. The questions to ask would be –

  • Is there audience that would accept content in Indian language. If there is – are they online today?
  • Are advertisers willing to include these in media buying plans, develop creatives in multiples of Indian languages – would the right advertisements be displayed to correct audience?
  • How will they get traffic? How will they optimize for SEO? If they post an message on their Facebook fan page – will the users reply back in local language or in English?
  • The monetization – how will they?

Monetization for local language content publishers:

Should we charge consumers to access our content in local Indian languages – that will not work. The debate if content should be free or paid has been ongoing since we have known – its best concluded that content should be free as it has been.

Coming to online advertising opportunities, agencies and publishers need to take extra efforts if they have to cater most of the Indian languages – the time and effort required in doing so may not justify the returns on many metrics.

Even current large publishers like Yahoo, BBC, etc having local Indian versions of its service – feature display advertisements in English itself and have comparatively less advt spots than their English versions. Many small and medium publishers will rely on Google Adsense for revenues – but Google does not do any wonders here. No robust technology available to content sense Indian languages – and even if it were available – there are no advertisements available in languages to match up and show them in relevance. Fill rates for advt-spots would been lower and with fewer revenue generation options – small publishers will think twice before putting efforts on creating Indic language content.

Take a look at large portals in Brazil, France, Spain or China – the ecology exists with an huge array of content providers, publishers and advertisers communication through respective local language.

Literacy Rates of India:

While most predictions about Indian languages are made that it will increase penetration of Internet users in India – we forget to acknowledge the fact that there still exist an huge population that is illiterate. Unfortunately, 35% of world’s illiterate population is in India.

As of 2007, India’s youth had literacy rate of 82%, while that of Chinese youth was 98%. Literacy rates are based on an individual’s ability to read and write, not on his ability to understand or use computers! Hence the addressable Internet market in India for any language will be far lower than the entire population.

Our Generation is learning to give up Indian Languages:

Few factors around us might be making us give up our inclination towards Indian Languages. One of the strongest is influence on Cinema / Bollywood – Indian audience is bombarded with promotions of movies close to its release date, most promotions today feature names of Indian Movies in English characters!

Did you notice that – Ghajini, Dabangg, Golmaal, Rajneeti, or many latest blockbusters from Bollywood came out with posters/promotions focusing with name of movie only in English (or Hinglish). And so are television programs and contests .

While sending SMS’s even to our friends – its easier to type a local Indian language in English (Hindi + English = Hinglish), not just for Hindi but for all languages.

We are slowly learning to give up Indian Languages when it comes to usage on Mobile or Internet.

The Litmus Test for Indian Language Usage !

Amitabh Bachchan on KBC (Kaun Banega Crorepati) asks viewers a question for winning 1 Lac, users are expected to send SMS KBCQ followed by options A, B, C or D.

One fine day if he declares that only SMS in local languages will be accepted. How many users you think will send the answer as  (केबीसी क्यू क, ख, ग, घ)  or any other local Indian languages? Will there be a SMS responses go up or fall drastically?

For a simple message like this – there will be multiple variants in multiple languages.  Try composing this on your phone in Hindi or in your own mother-tongue. Now – Did you get my point about Indian Languages?

Concluding Notes:

There is definitely a pain area that has to be addressed here knowing the potential that can be unleashed will be tremendous. The challenge that needs to be addressed is not about creating a tool to translate content to Indian Languages or simplifying the creation in Indian Languages – but it is about creating an ecology that enables creation, consumption and monetization of Indian Languages!

Notes from above article:

  • Indian languages are based on complex scripts – it may be easier to read content, but not to create it.
  • There is no common ground for one Indian language – hence English takes a lead and will continue to.
  • Although there are technology innovations that lets one type in English and then auto-translate in a local language – but the minimum criteria to use the same is knowledge of English!
  • For Indian languages – it would definitely be the Mobile Story! Mobile Penetration in India is already about 50% of entire population – is the rest 50% a addressable market is questionable – even the new mobile operators in India have to prove themselves.

But with Indian youths – 82% literacy rate and high mobile penetration already are key factors. A solution for proliferation of Indian languages usage needs to be out before English becomes the De facto communication medium and an lost opportunity for Indian languages!

Social Buying: Attack of Clones & Indian Market

Group Buying in India: Attack of the Clones

Happy, Merry and Cheerful on success of Groupon. Social shopping was the way forward, most of them spoke of this since mid-2007; however the way Groupon solved the puzzle, no doubt earns them a success.

Came across Andrew Mason’s take on Groupon Clones on TechCrunch and through links stumbled upon Sanjay Mehta’s review on one of the India offerings – Wanamo that incidentally was also one of Groupon clones. An interesting discussion between Sanjay and Wanamo’s founder follows the review.

So back to my crunching game – how large can Social Commerce or Group Buying become in India. What potential lies in it?

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Current Scenario:

Market Stage: Chicken or Egg? Still nascent stage, but already crowded – too many chickens and too any eggs.

The Players: Snapdeal, Wanamo, Mydala, Mobstreet, Grabbon, Koovs, Group2Deal, and others I haven’t noticed yet.

First Thoughts: Star Wars – II. Attack of the Clones (or Cousins). Incidently one look at all of them, and you see all design elements, features and placements are similar with each other and with Groupon. A few of them actually ripoffs.

What would differentiate: Quality of deals, execution of ideas & ability to innovate this space.

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Group Buying: What is the market size in India??

Known group buying websites in India: 7, Estimated: 10
Average Transaction Size offered:  Rs. 500 (80% of them are under Rs.400)
Average Successful Coupons sold: 50 (as claimed)
Current Cities Catered: 4 (Top Metros only)

Total Market Size: 10,00,000 INR per day = 1 Million INR per day
Thats a kewl: 365 Million INR per year or 7.3 Million USD per year

These numbers are assuming that all ten Group Buying services see 50 Transations per day in all 4 Metros. This is were the analysis starts…

Will this model be successful in India… NO (Not till the point attack of clones continue)

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Why Groupon succeeds and has potential to grow:

  1. Original concept & product. First mover advantage.. and its huge!
  2. Groupon has plans to move to 100+ cities across world
  3. Groupon sells about 200 to 2000 coupons per day from $10 to $125 in each city
  4. They are already in 45+ cities as of today

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What Group Buying services in India need to re-think upon & probably revise their business strategy:

  1. It worked in US, it will work in India too approach
  2. The front end UI has been adapted/copied. Hopefully some player has built a robust backend too.
  3. India does not have 100 (or even 20+) highly penetrated ‘Internet’ cities. It would pinch beyond the IPL cities (Cities with representations in Indian Premiere League – IPL Cricket) on both sides.. Consumers & Partners.
  4. Most rely on Social Media for marketing & buzz. Good.. but Social Media is notoriously known for buzz and communication, and not conversions. However for Group Buying deals – this might just work if the deal fits right.
  5. Most deals in US are for Food, Spa, Coffeshops. Unlike US, in India we have choices not just in restaurants but also cuisines… Punjabi, Mughlai, Goan, Chinese, Indian Chinese, South Indian, Goan, and so on. Deals, typically on food & restaurants need to be much wider to appeal to wider audience.
  6. India.. We still don’t know how many users we have (Claimed 50 Million Internet Users)
  7. Others concerns – Internet Transactions, Security, Credit Card Penetration. But for the kind of audience they choose.. this might not be significant issue. But would be when they expand to more cities.
  8. Indians by culture and by nature love to bargain by themselves! And take pleasure in doing that :-)
  9. We love to choose – don’t we? One deal per day might not fit our appetite.
  10. Cricket & Bollywood; Cricket & Bollywood; Cricket & Bollywood
  11. You are not alone to solve these problem.. at this early stage itself you have huge competition!

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Ending Remarks:

So now that you have started, get started on the execution. Few cues to work for this model in India are:
Multiple Deals in a City, Payment Options, Alternate Revenue Channels like Advertorials & Advertising, Go beyond Internet… (Mobile) and much more.

Innovation and adapting to Indian market will hold the key for Group Buying services. And they need to execute that fast, as many deep pocketed services that are remotely and closely associated to related domain (like city event trackers, and hotel review sites… & you know who else?) will find it much easier to replicate this business model overnight.

A clone will be clone… so Innovate & Differentiate :-)

Adapting to how consumers think offline (in real world)

Driving is fun for me and a great stress-buster ever since I discovered it (discovered… stress). And throughout the day I at least check one automobile site besides being a huge follower of Team-BHP since last 2-3 years now; and amongst the portals, Carwale.

While talking with a friend who was trying to finalize a car to buy, I realized there such few instances of how differently people think and how conveniently we develop an online product.
And I checked multiple sites, screenshots below.

car-portals

Most of car portals provide users only 2 options – Select Cars by Manufacturer or Select Price Range. With some noted differentiations by Carwale & Gaadi that have tools to recommendation a car.

Just one basic flaw in this which I realized post my conversation with a friend who said it straight – “I can spend up to Rs. 12000/- per month in the EMI.”

This was exactly that I thought while I purchased my car. Wouldn’t it hold true for most of the middle-class Indians who thrive on hatchbacks and mid-size sedans as well? Over 80% of new automobile purchases in this segment are done through Car Loans paid in EMIs.

  • Could the right product approach for Indian price conscious market be this as well?
    o    Allow users option to enter the amount they can spend on EMI per month
    o    Change EMI period and Down payment and show relevant options to users.

Something like this:

emi-recommendations

The reason I like this approach is that’s the way consumers think while buying, and it also allows consumers to see more options when they stretch their budget :-)

Everyone wants to have a have a piece of German Engineering, but what they buy is different alright!
PS: Ignore my design skills.