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Mindshare predicts platform and media trends in 2014

Mindshare, is one of the leading media firms in the world with offices across 115 cities. It handles media buying and selling for brands such as Unilever, IBM, HSBC and Volvo among others.

The firm recently released its digital outlook for 2014 to predict trends across platform and media, consumer technology and digital marketing. YourStory presents to you this indepth report in two parts. First up is platform and media trends.

Read on for indepth insights.

1. New building blocks of digital content

Constant experimentation with the new building blocks is key to winning in mobile Thanks to the shift in consumption of digital content towards mobile devices, increasingly digital content is being packaged in smaller ‘building blocks’ which can be routed across mobile networks and suited to smaller screens. Examples of these new building blocks include Twitter’s ‘Cards’, short-form social video (Vine and InstaVid), ephemeral content (Snapchat), and Buzzfeed’s ‘Listicles*’ – which have enjoyed massive growth across platforms like Facebook and Twitter. The one thing that all of these new building blocks have in common is their inherent shareability.

The opportunity : Many brands have already tested some features of Twitter Cards, but there are 8 in total so we recommend testing all versions, and supporting these with paid media. Similarly, many brands have tested Vines and InstaVids, but there is more experimentation needed – with support from paid media.

2. Clipping & sharing live TV/gaming video content

livesharingpostheadReal-time sharing of live footage just got easier. New technology allows the capturing and immediate sharing of live content from video-based entertainment (eg TV and Console gaming), either by broadcasters, or by users themselves.
Twitter launched their ‘Amplify’ product in the UK at the end of 2013 which enables sponsors of programmes to work with broadcasters to distribute sponsored instant replays and footage in real-time as the content goes out on air. This can all be ‘amplified’ using paid media in the form of Promoted Tweets which will allow this instantly-distributed live content to be targeted to the most relevant audience.
Similarly, Playstation and Xbox’s new consoles also allow in-game footage to be shared in real-time – eg the goal you just scored in FIFA14.

The opportunity : Be one of the first brands to do a Twitter Amplify campaign and join the small but elite cadre of brands who are leveraging live TV content across social.

3. Ecosystem integration
Making the most of Google. The power of the entire Google ecosystem has yet to be exploited by most brands. Over time there have been more and more integrations between Google products – eg a single sign in across all areas – and recently we have seen a step-change in the level of integration. Of course this is largely driven by a desire on Google’s part to create more connected experiences for their users, but these developments have the useful side-effect for marketers of being better able to join the dots between content, search and social.

The most recent development has been the integration of Google+ ‘commenting’ with Youtube comments – effectively allowing a conversation about a piece of Youtube content to live and grow across both platforms. This particular development has been beset by ‘spam’ issues, however we believe that there is a significant opportunity for brands in the medium term. The reason for this is that social signals are becoming increasingly important in Google’s natural search algorithm, so an integrated approach to the entire Google ecosystem across content, search and social is gradually becoming more important for brands.

The opportunity : Explore a true partnership with Google to leverage each area of the ecosystem and measure the incremental effect of bringing all elements of their portfolio together, using content as the glue.

4. Mobile social networks & messaging

Messaging-Apps-SMSPrivate messaging makes a fight-back. Dedicated mobile messaging apps like WhatsApp, Snapchat and Kik are growing at a rate not seen since the early days of social networking. WhatsApp now has over 350m users globally and is growing exponentially. Meanwhile, Facebook stated in a recent earnings call that it was seeing a “decrease in daily users, specifically among teens”. So, whilst teenagers are still on Facebook, it would appear that they are increasingly turning to dedicated messaging apps which are more focused on private messaging. Essentially, teens are looking for platforms where they can be less inhibited than they are on Facebook. On Facebook there is always a risk that your parents or family could see sensitive status updates.

The opportunity : When a big digital trend develops in the teen space it is always worth brands watching closely. The opportunity for brands is clearly limited by the fact that currently there is no available media inventory. However, Snapchat did just hire Instagram’s advertising development director so it appears they are developing an advertising-based business model. In the meantime, it seems the best brand use cases on these messaging platforms are in mimicking or taking advantage of current user behaviours and acting like those users – eg Absolut.

5. Special interest social networks
Whilst Facebook has been busy cornering the ‘social graph’ market, and Google has been focusing on the ‘knowledge graph’, there has been an explosion of new community platforms which aim to corner specific vertical interest areas. People with very specific interests are finding that their specific interests are better served by bespoke targeted networks.
There are already thousands of examples of these special interest-based social communities – eg Learnist (essentially a Pinterest for teachers), Letterboxd (film buffs) and styledon (fashionistas).

The opportunity : Brands need to develop an understanding of the opportunity for adding value to users within these specialist vertical interest networks. At the very least – the depth of interest-signal to be gained by authentically working with these niche vertical communities should easily outweigh the relative lack of scale.

6. Paid-for digital entertainment content increasing exponentially
Brands must adapt to the new premium landscape. A few years ago, piracy was king in the premium digital content world. Nobody paid for digital content. Nowadays – whilst filesharing sites are still popular amongst younger demographics – it is the turn of premium content to be king. Paywalls around news websites (eg News International), premium versions of social networks (eg linkedin), and an exponential increase in people who are prepared to pay for music and film (eg iTunes, Netflix, Blinkbox) are all evidence of a bright future for paid-for digital content.

And with increasing numbers of users prepared to pay for streaming or downloads it means there is a corresponding decrease in advertising opportunities around the most premium content.
So how can brands reach these ad-free premium content audiences?

The opportunity : The long-term opportunity for some brands is to publish premium quality branded content themselves. But this is not suitable for all brands and also requires proper sustained investment over time.
In the short term there is an opportunity for all brands to advertise at the point of entry in to premium paid-for content – eg within Xbox Live – or to develop more integrated promotions with streaming partners like Spotify or Microsoft – eg to subsidise free streaming of movies.

7. The Internet of Things

iotPhysical objects become internet-enabled and connected. Gone are the days of computers, smartphones and tablets being the only objects to connect to the internet. Today, nearly everything around us from fridges to light switches & TV remotes to cars has the ability to become an inter-connected web object. Today there are 12 billion devices across the world that can connect to the internet, but by 2015 Cisco predicts that there will be 25 billion – jumping to 50 billion by 2020 (almost 7 times the number of people of the planet). As an example, UPS fitted trackers to all their delivery vans then analysed the route data. They calculated that vans sat waiting to make left turns equated to 206 million minutes of idling time. As a result, they re-routed their delivery routes to minimize left turns and saved more than 1.5 million gallons in fuel.

The opportunity : The opportunity is in using the data produced by internet connected devices to enhance consumers’ lives, making tasks quicker more straightforward or adding genuine value. Additionally, there is an emerging opportunity to create branded apps which tap in to connected objects (eg branded recipe app for connected fridges) For brands there is also potential to work with partners who are taking a leadership position in this space. For eg Telefonica/O2, who in 2013 signed a £1.5bn deal to deliver smart meter systems in the UK. Their aim is to install 53m smart meters in UK homes by 2020 which could become the predominant platform for ‘the internet of things’ in the home in this country.

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5 Ways to Boost Innovation

Creativity and innovation are often stymied because there just aren’t enough resources.

One of your responsibilities as a pragmatic leader is to make sure you remain within budget while ensuring your team is performing at its peak. You can’t throw every dollar at a project. You can’t get people all the support they would have in an ideal world. The sad truth is that supporting one project often means diverting resources from others.

You have to cut costs, save resources, and keep in step with a budget, all while trying to sponsor creativity and fuel innovation. It’s no easy juggling act.

Here are five strategies that will help you do it.

1. Forget about the bells and whistles

While Google and other tech companies have in-house chefs and ping pong tables, there’s no need to follow suit. You won’t be able to inspire much more creativity or innovation with expensive toys, nice workplace amenities, and other small perks.

In fact, employees may end up taking advantage of all the gifts and, worse, get used to the office luxuries. Too much of a good thing can even demotivate your team. Improving their equipment and adding little perks become the main goal, rather than the work they’re supposed to be doing. This happens all the time.

2. Don’t sew your wallet closed

Leaders often err on the side of too much cost-cutting. Too much belt-tightening can undermine the progress of your most important projects. When people feel they don’t have access to the resources they need to do their job, their enthusiasm will weaken. They may start rethinking whether they really want to stick with you and your agenda. To sustain momentum and move ahead, you have to make sure, as far as possible, that everyone has the tools they need or at least the possibility of attaining them in the future.

3. Don’t use more resources as a goal

Some leaders tempt teams with the promise of more resources if they can meet certain goals. That’s fine if the team can meet the goals, but it’s a different story entirely if they fail. Then they’re missed their goals, they don’t get their resources, and they end up feeling disappointed and resentful. And they can always argue that the reason they failed is because you didn’t give them enough resources to start with!

4. Educate and listen to the team

During projects, leaders should be very clear about the size of the budget, what’s going where, and why. If your expenditures aren’t transparent, team members may see certain purchases as wasteful or grow aggrieved when their bid for new resources is turned down.

The best way to figure out if your team is happy with their access to shared resources is to simply ask them. You may wish your team could work on vapors, but they can’t. You cannot afford to be insensitive to their needs.

5. Balance the allocation of resources

Don’t vacillate between feast and famine. Find the sweet spot where your team has the resources it needs to move ahead, but isn’t kicking back on your welfare system. Facilitate what they need, and scrutinize what they want. Don’t slam on the breaks and then hit the gas. Find a steady pace.

As a pragmatic leader, you need to make sure your group’s access to organizational resources doesn’t fall below a certain threshold-;from “hungry” to “discouraged.” There is no science here. There are no quantitative metrics. You have to be intuitive and sensitive to your group’s level of motivation and creativity.

Simplify Your SEO Program : 5 Strategies

The SEO industry is in a constant state of flux depending on Google’s algorithms, but that doesn’t mean that you need to revamp your entire strategy every time a new update rolls out. Instead, use the following five strategies to implement a simplified SEO program that’ll stand the test of time — no matter what changes the search engines make.

Focus less on keyword research. “Old school” SEO put a heavy emphasis on keyword research, requiring that webmasters spend hours measuring anticipated search volume against the relative competitiveness of each query. Not only does this take an excessively long amount of time, it’s becoming a far less viable approach as Google restricts the amount of keyword data made available to SEO workers.

Instead of wasting time chasing data that isn’t readily available (or accurate, when it can be found), simplify your research process by brainstorming a list of the keywords you believe your customers are most likely to search for and building content around these phrases. Check your stats after a month or so and then either add more content for phrases that are performing well or refocus your efforts on a new set of potential search queries.

Use SEO tools effectively. Even if fields such as page or post meta descriptions don’t have the SEO impact they used to, it’s still worth including them from a usability standpoint. If you write an extra-compelling meta description that displays in your search results listing and causes a user to click through to your site (versus your competitor’s), that’s a win for your site in terms of both overall performance and SEO.

Instead of coding these fields by hand, look for SEO tools that’ll simplify the process for you. WordPress extensions such as Yoast SEO (free) or All-in-One SEO (free) make managing blog SEO a snap, while programs such as QuickSprout Tools (free; paid versions available) or Moz SEO ($99+ a month) help you to tackle other SEO processes from a single, centralized location.

Invest in viral content pieces. Backlinking is a continual challenge for the SEO world. While it’s important to obtain backlinks from well-regarded websites, it’s best to do so in a natural fashion. But even if you do pursue links as part of an SEO campaign, you’ll find that the backlinks that will do the most for your site’s performance are also the hardest to get!

All of these challenges go away if you redirect your efforts towards producing viral-style content pieces, rather than proactively seeking link sources. As an example, one well-produced infographic could go on to earn you hundreds of backlinks from great sources — with no extra effort on your part beyond the initial creation of the graphic and any early seeding of your content that you decide to do. While it’s true that you won’t “go viral” on every content piece you create, just a few wins using this strategy can do more for your site’s external SEO than weeks or months spent trolling for backlinks.

Use responsive website design. When you use responsive website design on your site, both your desktop and mobile site versions come from the same URL — only their relative displays are altered. Contrast this with hosting two separate sites for desktop versus mobile visitors. If you have two separate websites entirely, you’ve got to run two separate sets of SEO campaigns. Using a single site that displays differently depending on the platform can cut your SEO time in half!

Outsource repetitive monitoring tasks. Finally, consider outsourcing some of the repetitive monitoring tasks that are a part of any good SEO campaign. For example, a few of the tasks you could pass on to others include:

  • Checking your monthly search engine results page rankings (if you don’t already have a tool that does this for you)

  • Conducting competitive research on the keywords and keyword phrases your competitors appear to be targeting

  • Making sure all the content on your site is accessible to the search engine spiders

  • Adding new page links to your website directory (if they aren’t added automatically)

  • Monitoring SEO news sites for algorithm changes that could require your attention or substantially change your strategy

When outsourcing tasks, you can work with either SEO agencies or individuals who are knowledgeable about these tasks. Be sure to do your research and understand the relative pros and cons of each option before bringing on a person or a team to assist with your SEO. Instead of simplifying things, failing to do the proper due diligence could actually make your SEO strategy more complicated than ever!

Have you implemented any of these strategies? Or are there other things you’ve done to simplify your SEO strategy? Share your thoughts in the comments section below!

These 7 Trends Will Make You Incredibly Optimistic About The Internet Business In 2014

JP Morgan analyst Douglas Anmuth and his team are incredibly optimistic about the Internet industry in 2014.

In an email he just sent out to clients, Anmuth says that Internet stocks increased in value 78% during 2013 thanks in large part to seven “key” trends.

He says, “We believe those underlying dynamics should continue in 2014.”

Here are those key trends:

Mobile revenues will catch up to mobile usage.

In 2013, it finally happened: people use the Internet more through their mobile devices than they do through their desktop computers. But even though mobile usage was up, popular mobile products still did not have as much sales as desktop products. Anmuth and his team think this will start to change in a big way in 2014. He says users will become more savvy and comfortable with mobile devices. Apps will become more functional. More desktop sites will become mobile-optimized. This trend has already started, as mobile shopping on Cyber Monday was up 28% year-over-year to $5.8 billion.

 

jpmorgan2014chart01JP Morgan/Comscore

 

 

The kinds of ads you see in you Facebook News Feed are going to start showing up everywhere.

Facebook makes the majority of its advertising revenue selling units that appear in its “News Feed” – that center column of photos, status-updates, news stories, videos, and ads you see every time you open a Facebook app or go to Facebook.com. Twitter also makes almost all of its money through ads that appear in-stream. Anmuth and his team believe that in 2014, more companies will start to make such “Native Ads” their primary ad unit. Yahoo and LinkedIn will make the shift first. This is a positive trend for the industry because in-stream, “native” ads have “significantly higher click-through rates than traditional display ads, which leads to higher pricing over time.”

 

How Popular Are Native AdsJP Morgan/eMarketer

 

 

Advertisers will pay a lot to reach you on the right device at the right time.

Smartphones and tablets aren’t making it so people get on the Internet less through the desktop. They are making it so that people are on the Internet more during the day. Studies show that people use their tablets in the morning, their desktop computers during the day at work, and their phones at night. Companies like Google and Facebook are busy making tools that not only allow advertisers to specifically target you with an ad – but target you when you are using a particular device at a particular time. This will allow advertisers to target consumers when they are in the “right mood” to see a product and complete a transaction.

 

When people use which Internet-connected deviceJP Morgan/Comscore

 

 

Advertisers will finally be able to make apples-to-apples comparisons between Internet ads and TV ads, and Internet ads will prevail.

For a long time, Google, which owns YouTube, did not allow the companies that measure how popular TV shows are to use the same tools to measure how popular online videos are. In 2013, that changed. And then, when the apples-to-apples comparison between YouTube and cable channels finally came out, it was revealed – in a language that TV advertisers understood – that YouTube is massive. For example, among males aged 18-54, it is bigger even than ESPN. Now that TV advertisers can see this, they are going to do two things. They are going to spend more on Internet advertising to reach audiences on the Internet, and they are going to spend more on Internet advertising to convince the audiences there to turn on the TV – where they will see TV commercials.

 

YouTube reach versus cable networksJP Morgan/Nielsen

 

 

It will become more common to buy goods like food or wallpaper online because shipping will be more immediate.

Right now, 10% of all retail spending is done online. That number is going to increase in 2014, Anmuth and company believe, because e-commerce companies are getting better at shipping goods the same day they are ordered online. Companies are doing this two ways. Pure e-commerce companies like Amazon are building more local distribution centers. Traditional retailers are allowing online shoppers to buy goods currently held in inventory by local stores.

 

The 2014 ecommerce opportunityJP Morgan/US Census/Forrester Research

 

 

Amazon and Google have lots of spare computers, and more Web companies are going to pay to use them in 2014.

Google and Amazon have massive server farms located all over the world. These server farms aren’t even close to being maxed-out by Amazon and Google products and services. So, Amazon and Google sell some of the spare capacity to other Web companies. Netflix, for example, is powered by Amazon computers. The JP Morgan analysts think that more companies will buy Internet computing capacity from Amazon and Google this year. Anmuth says this will create a “virtous cycle” in which businesses pay less for infrasctructure, charge consumers less, and bring more consumers online.

 

content stored on Amazon's serversJP Morgan/Amazon

 

 

The insanely competitive online travel industry is expanding to mobile and overseas.

Anmuth and his analysts believe four factors will drive consumers to use online travel agencies more in 2014. 1) Heating-up competition between big companies like Priceline and Experdia will force them to buy more ads and offer more deals. 2) Sites that sell tickets to consumers and sites that help consumers find sites that sell tickets are becoming the same thing. 3) Online-travel booking is getting more popular in international markets. 4) People are starting to book travel from their mobile devices, and for more than just that same day.

How to do business in rural India?

India’s fast-paced growth has been a topic of much debate and discussion in the last few years. As a result of booming sectors such as IT, there is a growing sense that the country is emerging as a global leader. As a result, at times India is being touted as the mecca of ‘Jugaad’ innovations – a term used to describe the process of finding innovative solutions to problems with limited resources.

However, as only 12% of India’s population lives in cities, the remaining 88% of people are not reaping many of the economic benefits from the country’s evolving leadership status and associate growth. Rural poverty remains rampant; as a result, innovative thinking is required to meet the needs of India’s majority.

At Ennovent we spoke with Mr. Pradeep Kashyap, the CEO and Founder of MART – India’s leading emerging markets consulting firm about the opportunities and challenges of creating innovations for rural Indian markets:

The term ’India Shining’ has been given to India’s progress in recent years; does opportunity exist for entrepreneurs in rural Indian markets?

Yes, significant opportunity exists in rural India. ‘India Shining’ was a term coined by the government to showcase the economic development of largely urban India. However, in more recent years rural growth has outstripped that of urban. For example, in recent years fast moving consumer good (FMCG) growth in rural India has been around 17 – 18% as compared to only around 11 – 12% in urban India. This is also reflected in industries such as durables and automobiles.

Rural India is now a one trillion dollar economy – equal to the economy of Canada or South Korea. If you add towns with populations below one million then the rural and small towns economy accounts for 75% of India’s GDP while the 50 top cities representing urban India contribute only 25% to the country’s GDP.

What are the factors driving consumption in rural India?

Approximately 800 million people live in rural India of which at least half earn less than USD 1 per day. The other half earn between USD 1 to 5 per day. There are only 50 million ‘rich’ people in rural India – meaning those that earn more than 5 dollars per day.

The consumption story in rural India is being driven by different factors in varying income segments. The rural employment guarantee scheme has added significantly to the purchasing power of the poor through the 6 billion dollars paid as wages annually. Simultaneously, the wage rate for private work in rural India has also gone up because of the higher wages paid under the Employment Guarantee Scheme; the poor are getting more days of work at higher daily rates.

Similarly, the middle-income segment has benefitted from better road connectivity. Youth living in these areas have bought motorcycles and taken up more lucrative jobs in nearby towns. The rapid urbanization has also benefitted the rich farmers who have sold their land at exorbitant rates to real estate developers particularly around the metros.

Doing business in rural India is often termed as challenging. Could you give your thoughts on how entrepreneurs can cope with distribution and other related challenges?

Rural India is diverse, heterogeneous and spread over half a million villages – this is a daunting task for any marketer. However, there are only 100,000 villages with populations of over 200 people. These villages not only account for 50% of the total rural population but also account for 60% of rural wealth. If companies begin by focusing on these 100,000 locations first the distribution nightmare can be effectively tackled.

Additionally, rural India can be categorized into 3 development segments with the most developed states being Punjab, Haryana, Maharashtra, Gujarat and Kerala – with all the remaining states are being in the developing category. Due to the higher per capita income, it is recommended that companies begin by focus on rural areas in the developed states first and then move across the country.

What are the lessons entrepreneurs can learn from large brands such as Ghari or Thums Up that have successfully penetrated these markets?

Most multi-national companies make the mistake of bringing international brands and tweaking them slightly for rural consumers – however the rural eco system is significantly different. For example, running water is not available and high voltage fluctuations and power outages render traditional products such as washing machines and televisions unattractive.

Regional brands, on the other hand, offer customized solutions. Jolly TV has captured the market in Uttar Pradesh by offering a battery backup and voltage stabilizer system. The battery gets charged when electricity is available and the television runs on battery when the family wants to watch programs during power cuts. Ghari detergent customized it’s offering by studying the water map of India to add softener and whitener according to the quality of water.

Entrepreneurs have to realize that each state in India is the size of a country in Europe and therefore it is important to develop product and marketing strategies state-wise. Engaging regularly at the grassroots level with consumers also gives entrepreneurs’ deep insights and feedback on how customers perceive the value of the product, which is otherwise not easily available.

For international entrepreneurs working in low-income markets looking to establish their footprint in India what is your advice to localize their business model?

The most important point is that international entrepreneurs must co-create products in partnership with local communities to understand and incorporate on-ground realities. As a result, hiring local talent that understands the culture and consumer behavior of these markets is key. I would also recommend that since India is a large country, entrepreneurs should first pick one state to begin operations and then consider expansion.Rural India is developing quickly. To succeed in such remote communities, small and large enterprises alike must be localized, offering innovative product and services based on a strong regional background. Early-stage enterprises also require a strong support network from innovation accelerators such as Ennovent and consulting firms such as MART. It is through the provision of a range of financial and non-financial support services that the best innovations for sustainability can succeed in low-income rural markets.

Content is Key to Internet

Internet landscape in India is transforming very fast thanks to mobile penetration. The latest IAMAI report says India has 200 million internet users. As of June 2013, India had 873.36 million mobile subscribers of which 176.5 million users accessed internet through their mobile device.  Every month India adds three million mobile internet users.

Trends

The media in India is focusing a lot on e-commerce portals for the past few years but there is a considerable amount of activity in the content space too.

Content portals are not limited to news and entertainment alone. That was true a decade ago but now there are several speciality portals, or verticals, in content space – lifestyle, automobile, education, sports, health. Comscore reports repeatedly demonstrate that the consumption of content portals is on the rise. This is expected because internet now is used by all sections of the society – students, professionals, retired people and women.

But there is a huge misconception even today that internet is largely for English speaking people. We at Oneindia have been investing in the language space for over a decade now. Language portals did not take off for a long time because internet penetration was limited to Tier-1 cities. Today, with mobile internet being available at affordable prices, we see a huge surge in consumption of various online services, leading to a number of trends as described below.

1. Infographics

The attention span of readers is shrinking by the day. Alerts from Facebook, Twitter, SMS, and phone calls all interrupt you while reading long-form content. Users want to get the same amount of information but not necessarily in text form – especially as an infographic.

Creating good infographics can be expensive as you need resources with various skills. A designer cannot create a good infographic unless an analytics person presents the information.

2. Content for mobile

Earlier we created content for the desktop user. Mobile data in India became popular by way of SMS; many SMS companies grew aggressively but they died because of the government regulations (SMS limit and DND list).

According to the latest reports, the mobile internet user base is bigger than the desktop internet user base in India. The presentation of content has to be different for a mobile and tablet device. Are publishers geared up for that?

3. WhatsApp replaces SMS

We love anything that is “free”. WhatsApp was the perfect product we were looking for. BBM from BlackBerry offered a similar functionality but limited the circle to BlackBerry users. The cross platform availability of WhatsApp is very attractive. Major political parties are using WhatsApp for interacting with their volunteers. Content publishers should look at generating content to share on WhatsApp with the hope it would get viral.

4. Responsive design

Responsive design (RD) is one of the best ways to render the same content differently depending upon the type of device. While RD is not difficult for simple sites it can get tricky while implementing for complex sites. The best way to tackle RD is by coming to terms with what will be displayed for desktop user vs. a mobile user. It is not necessary to display every pixel of your busy homepage for a mobile user; instead render a simpler version of your homepage for a mobile device while still maintaining the same URL.

5. Content for social media

Content publishers will have to pay a lot of attention to social media users. Facebook penetration in India is very high and the digital marketing team has already started treating it as an important referral source, may be even more than Google.  This means you will need to have a dedicated social media team, just as you have SEO team.

6. Local language

The mobile internet penetration is increasing in non-urban areas. These consumers will want to read content in their local language. In fact, many e-commerce services will need to have a language version to serve this big user base. Local content in local languages on the mobile will be a truly amazing combination.

7. Elections and social media

I have written on my blog about the effect of social media in the upcoming Lok Sabha elections. The election fever can already be felt on social media. Political parties and politicians will be using social media mainly as a two-way communication tool. They will keep a tab on the voter pulse through this medium. The advantage of social media is that politician can see the reactions first hand and in real time.

8. Video

The user base for online videos is very large because literacy doesn’t play a factor here. According to Google, almost one-third of the YouTube viewers in India access videos on their mobiles and spend over 48 hours a month on the website.  The popularity of online videos among all age groups is immense.  Earlier, YouTube was the primary platform to watch videos; today Facebook and Google+ have considerable amount of video content. Video has always been popular it will only get more popular in 2014.

Overall 2014 will be an exciting year for content players in India because of the growth of mobile internet, upcoming elections and increase in use of social networks like Facebook. Content publishers have a lot of work to do in 2014!

Small Business, Big Vision

There is so much written these days about how to attract investors that most entrepreneurs “assume” they need funding, and don’t even consider a plan for “bootstrapping,” or self-financing their startup. Yet, according to manysources, over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it.

According to the book, “Small Business, Big Vision,” by self-made entrepreneurs Adam and Matthew Toren, it’s really a question of need versus want. We all want to have our vision realized sooner rather than later, but it can be a big mistake to bring in investors rather than patiently building your business at a slow, steady pace (organic growth).

In fact, most of the rich entrepreneurs you know actively turned away early equity proposals. Too many founders are convinced they “need” equity financing, for the wrong reasons, as outlined in the book and supplemented with a bit of my own experience:

  • Need employees and professional services. Of course, every company needs these, in due time. In today’s Internet world, enterprising entrepreneurs have found that they can find out and do almost anything they need, from incorporating the company to filing patents, without expensive consultants, or the cost to hiring and firing employees.
  • Need expensive resources up front. Many people think that having a proper office and equipment somehow legitimizes their business, but unless your business requires a storefront, everything else can be done in someone’s home office, or a local coffee shop, on used or borrowed equipment. Consider all the alternatives, like lease versus buy.
  • Need to spread the risk. Some entrepreneurs seem to get solace and implied prestige from convincing friends, Angels, and venture capitalists to put money into their endeavor. If nothing else, these make good excuses for failure – no freedom, wrong guidance, etc.

On the other hand, there are clearly situations where your needs call for investors. Even in these cases, all other options should be explored first:

  • Sales are strong – too strong. If you are not able to keep up with demand due to lack of funds for production, and your company is too young for banks to be interested, you will find that investors love these odds, and are quick to go for a chunk of the action.
  • Your company has outgrown you. Some entrepreneurs are quick with creative ideas, and even excellent at managing the chaos of initial implementation. That’s not the same as instilling discipline in a larger organization, where most the challenge is people.
  • You need a prototype. When you have invented a new technology, you need expensive models and testing, including samples for potential customers. If you don’t have the personal funds to make these happen, investors might be your only option.
  • You need specialized equipment. If your solution depends on high-tech chips, injection molding, or medical devices, and you can’t get financing from suppliers, giving up a portion of the company to investors is a rational approach.
  • General startup expenses are beyond your means. Investors are not interested in covering overhead, unless they are convinced that you have already put all your “skin in the game” (not just sweat equity), and have real contributions from friends and family.

When deciding whether and how an investor can help you, remember that finding outside investors requires a huge amount of time and work, perhaps impacting your rollout more than working with alternate approaches and slower growth. Perhaps you really need an advisor rather than an investor.

Even under the best of circumstances, working with an investor requires give and take. More likely, you now have a new boss – which may be counter to why you chose the entrepreneur route in the first place. Maybe that’s why bootstrapped startups are the norm, rather than externally funded ones. You alone get to make the big decisions on your big vision.

[Book Review] Disciplined Entrepreneurship: 24 Steps to a Successful Startup

Many believe that entrepreneurship cannot be taught, but it is possible to teach people how to make great products and thus create a successful startup, as clearly illustrated in the insightful and actionable guidebook, ‘Disciplined Entrepreneurship.’

Bill Aulet is the managing director in the Martin Trust Centre for Entrepreneurship at MIT and also a senior lecturer at the MIT Sloan School of Management. He has launched initiatives like the MIT Clean Energy Prize, Energy Ventures Class, Regional Entrepreneurship Acceleration Program (REAP), “t=0” Entrepreneurship Festival, Beehive Cooperative, Entrepreneurs Walk of Fame, Corporate Innovators Sponsor Group, and Global Founders’ Skills Accelerator.

Bill has had a 25-year track record of success in business himself. He has directly raised more than $100 million in funding for his companies and led to the creation of millions of dollars in market value in those companies.

Many of the case studies in the book feature the company he founded, SensAble Technologies. The other case profiles in the book are from Aulet’s course, with startups in sectors such as footwear, water filtration, furniture shopping, baseball fantasy games, wind turbines, bio-sensors, landfill technologies, silent alarm clocks, arts education, skin care, digital marketing, and e-commerce for handicrafts.

The book also has a companion Web site (http://disciplinedentrepreneurship.com/) with case studies and other resources. Entrepreneurship is a team sport which can be taught and should be considered a legitimate profession and discipline, according to Aulet.

The book covers many iterative loops along the startup roadmap, and the steps are illustrated by Marius Ursache. It is not knowledge that sets you free, but action, Aulet explains. To begin with, entrepreneurs must have an idea, a passion, and preferably a tech breakthrough.

One chapter is devoted to each of 24 steps in the startup toolbox, and I have summarised them briefly in Table 1 according to six themes; each chapter makes for a superb read and is backed with references and resources.

Table 1:  Steps to a Successful Startup

Theme Steps Activities and Items
Customer identification Market segmentation, beachhead market, end user profile, TAM size, persona; next 10 customers Primary/secondary market research (users, benefits), word of mouth channels, qualities of customers, top-down and bottom-up determination of total addressable market
Customer offering Full life cycle use case, product spec, value proposition, core definition, competitive positioning Product acquisition/installation/payment, brochures and mock-ups, USP (‘secret sauce’ – eg. network effect, UX), meeting customer needs better than existing offerings
Product acquisition by customer Customer’s decision making unit, acquisition process of paying customer, sales process mapping Decision makers and primary/secondary influencers, budget cycles and times, adjacent customers, sales activities over near/medium/long term
Monetisation Business model, pricing framework, lifetime value (LTV), cost of customer acquisition (COCA) Models to capture value from customer (eg. subscription, licensing, ads), price points and ranges, charges and recurring fees, top down costs of lead generation and conversion
Product design and development Identifying key assumptions, testing assumptions, minimum viable business product (MBVP), proof of purchase List assumptions in the market and customer mindset, test through observations and polls, design basic product which customer will pay for and give feedback, demonstrate intent to purchase and engage
Scaling the business Calculate TAM size of follow-on markets, develop a product plan Determine product features for beachhead market, determine adjacent markets and product changes needed

Aulet distinguishes between SME entrepreneurship (more focused on non-tradeable jobs such as running a restaurant, with linear growth rates) and innovation-driven entrepreneurship (with investments, more risk, and potential of global exponential growth and profits).

He also highlights the unique nature of ‘two-sided’ markets which need two kinds of communities to succeed, for example buyers and sellers (e-Bay) or readers and advertisers (AdWords). This calls for multiple total addressable market (TAM) calculations and persona descriptions for each.

“Beachhead TAM calculation is your sanity check that you are headed in the right direction,” Aulet flags off in the beginning. It is a combination of customer base and estimated product price. Value proposition itself is a combination of how the product makes life better, faster, cheaper or less risky for the customer.

Entrepreneurs should stay out of the ‘reality distortion zone’ and not fall victim to their hope and hype; dealing with customer feedback – even from naysayers – will help focus on real solutions, Aulet advises.

‘Core’ aspects of the startup would be unique features such as network effects, outstanding customer service, lowest cost or best user experience. This will then need to be backed up with business models such as up-front charge, hourly rates, subscription, license, ad support, reselling of analytics, transaction fees, tiered models, shared savings and franchise.

Pricing should be flexible for a range of customers, example for early testers, lighthouse customers and co-creators. Lifetime value calculations are important to gauge the long-term viability of current and future products, and go hand in hand with calculation of customer acquisition costs.

Once a product has been launched, the startup founder then needs to address the challenges of building company culture for the long term, HR strategies, cash flow skills, and corporate governance.

“The world needs more and better entrepreneurs because our world’s problems are becoming more dire, complex and ubiquitous,” Aulet concludes.

The book has a number of witty and inspiring quotes, and it would be nice to end this review with some of them.

“Entrepreneurship is not only a mindset but a skillset.” – Mitch Kapor, Founder, Lotus

“While the spirit of entrepreneurship is often about serendipity, the execution is not.” – Joi Ito, Director, MIT Media Lab

“Ideas are a dime a dozen but great entrepreneurs are what create value.” – Paul Maeder, National VC Association

Financial inclusion: Banking the unbanked.

Pic courtesy: http://www.currencyofprogress.in

Pic courtesy: http://www.currencyofprogress.in

We recently wrote a post on YourStory on how financial inclusion poses a very real business opportunity for startups. In this post, we delve a little further into the social aspects of financial inclusion and the burning need for empowering India’s underserved sections.

Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, has defined Financial Inclusion in these words, “…the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players.”

In an emerging economy like India, financial inclusion becomes a question of both access to financial products and also the knowledge about their fairness and transparency. Many people who fall in the unbanked category are not adequately informed about the nature of the financial services that might be available to them. Having proper delivery systems and information sharing mechanisms are important for promoting financial inclusion, but at the same time we can’t afford to ignore the demand side factors. Many regions, segments of the population and sub-sectors of the economy have a limited or weak demand for financial services. Their level of inclusion can only be enhanced once issues related to demand side have been addressed.

Government initiatives – heart in the right place but are the effective?

The Government of India’s agenda of inclusive growth is reflected in the kind of policies and regulations that the policy making and regulating institutions, like RBI, IRDA, PFRDA etc. have been developing over the past decade. There has been in multifold increase in the number of back branches, especially in rural areas; the branch network was around 8,000 in 1969 and now it is more than 89,000, spread across the length and breadth of the country.

The KYC norms for bank accounts with smaller sums of money have already been relaxed. In rural areas, new account holders can be introduced by local citizens. Public Sector banks are providing poor and marginalized sections of the population with a choice of a ‘no frills account’ where the minimum balance is nil or very small, but with restrictions on number of withdrawals etc., to facilitate easy access to bank accounts. Aadhaar can also be very useful for financial inclusion, as it provides all the citizens of the country a rather foolproof way of proving their identity in an easy and seamless manner.

However, these initiatives for strengthening financial inclusion are yet to have a substantial impact on the lives of the excluded population. Over half the Indian population is unbanked. Only about 55% of the population in the country has a deposit account and around 9% has credit accounts with banks. According to data from Reserve Bank of India (RBI), India is the home to largest number of unbanked families (more than 145 million). There is only one bank branch per 14,000 people. The total number of villages in the country is estimated to be more than around 6 Lakh, but the number of scheduled commercial banks (SCBs) and Regional Rural Banks (RRBs) stand at only 33,495.

Financial inclusion for small businesses – a possible solution

In all the hype about welfare initiatives for the bottom of the pyramid population, an important segment that often gets missed out is the small businessmen. According to the MSME ministry, there are around 26 million small enterprises in India, and only 5% of them have access to capital. Moreover, 94% of these are not even registered and have minimal records, making it even more difficult to establish income and expenditure tracking, required by the formal sector.

According to Tom Hyland, Co-Founder & Partner, Aspada Investment Advisors (an early stage risk capital fund for innovative businesses targeted at underserved communities), “The market for small business finance in India is significantly underserved by the formal sector, as often the only real source of capital is from an informal moneylender. Local banks often insist upon a significant security or/and collateral cover in addition to formal lending being a cumbersome, relationship driven process.” According to Tom, there is a dire need for lending models that provide much-needed working and growth capital to small businesses that would otherwise face difficulties in accessing funds and for which few alternatives exist beyond informal sources.

The effectiveness of this solution is that players working on financial inclusion will find it more lucrative, while masses will benefit from the trickle-down effect. Tom substantiates that, “Small merchants are the backbone of the Indian consumer economy, and improving access to credit for them is critical in order to sustain and improve the livelihoods of people (most of whom belong to the low income segment) that are employed in this sector, especially if credit tightens due to an economic slowdown in India.”

Some interesting work but lots remaining

Last year, YourStory covered the story of Kinara Capital, a young, nonbanking finance company (NBFC) that lends to micro and small businesses led by Hardika Shah. Kinara focuses on lending to those that are too big for microfinance but too small for commercial loans and reduces lending risk by acquiring reliable borrowers by plugging into existing supply chains, such as that of retail chain, Mother Earth. In the next five years, Kinara hopes to expand their portfolio to 20,000 loans, to create 100,000 new jobs, and to impact one million lives.

Another interesting player is Vistaar Finance, that targets the missing middle segment, consisting of customers with an annual income of Rs 120,000-1,000,000, which is not effectively served by the formal financial system. Vistaar has 2 primary lending products – Small Business Mortgage Loan of upto INR 20 Lakhs for upto 7 years and Small Business Hypothecation Loan of upto INR 60,000 for upto 2.5 years. They have a unique credit methodology wherein templates of cash-flow assessment are created by studying an overall sector, thereby by-passing the need for such statements for each borrower within that sector. These are then validated for individual borrowers by studying income, ability, intention, business sustainability & credit behaviour through non-traditional income documents & reference checks.

Learn more about the nuances of inclusive growth and find out the best ways to expand financial inclusion in India at FIPS 2013 – a global conference on Financial Inclusion & Payment Systems. FIPS is being organised at Eros, Hilton Hotel, New Delhi on 24-25 October. Connect with FIPS 2013, http://fips.eletsonline.com/2013/

Start Up Phases and Tips

“Entrepreneurs are able to walk the fine line between being focused yet agile, and visionary yet reactive,” the authors begin. “Knowledge alone isn’t power, it’s potential power. Knowledge combined with action is power,” they explain.

Starting up is a mix of art, science and business. It involves the steps of questioning, observing, hypothesising, experimenting and analysing – with lots of creativity and instinct thrown in between.

“You must become a scientist and look at your startup as a science experiment,” the authors advise. I have summarised the authors’ startup phases and tips in Table 1 below; each chapter explains them in more detail.

The book is packed (almost half of it) with illustrations but not all of them add value and the book could be much shorter; more industry examples for the principles would have been a good addition.

Table 1: Agile Startup Phases and Tips

Phase Insights
Understanding Agile Philosophy Have fun! Understand and align with your motivation. Grapple with reality. Be prepared for highs and lows. Understand the scientific method. Focus on problems and not just solutions. Listen to customers and don’t worry about embarrassing yourself. Launch to learn. Fail fast and often; beg for forgiveness rather than ask for permission. Understand and contain risk early.
Understanding Feasibility Repeatedly ask and examine whether customers will buy your product/service. Double your worst-case scenarios. Test mock-ups. Go beyond the idea to a product/service. Ask open-ended questions in surveys, not leading questions. Go beyond surveys to actual observations. Are you offering a cure, painkiller or vitamin? Think like a VC.
Customer and competitive strategies Ride the wave or create it. Understand the market and the customers’ pain points. Ask people “what sucks” about your product. Focus on core customer segments. Draw up a competitive matrix. Beware of fast followers.
Revenues and profits Draw up a comprehensive business model (eg. inventory, sales, contractors, office costs). Examine hybrid revenue models. Balance variable and fixed costs. Get the minimum viable product into the market fast. Calculate how much runway you have left. Monitor KPIs.
Marketing Get the positioning right. Go to press only when ready. Use different strategies for old and new markets. Sell wants, but deliver needs (“emotion + reason”). Address customer needs not just product features. Test messages. Leverage guerrilla tactics (eg. Red Bull’s stunts). Create and frame customer personas. Promise but overdeliver.
Team building Sign a ‘pre-nup’ with co-founders and partners. Find the right people, get them to the right positions. Align visions along the company’s evolution. Be prepared to move aside and let professional managers take over from founders in the scale stage. Design the vesting stages, amounts and periods carefully. Delegate but don’t abdicate. Form an advisory board.
The Startup Pitch Develop the tagline, one-liner, elevator pitch and full presentation. End the pitch with a call to action. Get used to rejections and learn from them. Strengthen the use-case scenario. Reiterate key takeaways. Stress the hot buttons. Fake it till you make it. Don’t dumb it down but aim for simplicity.
Investors Show traction, otherwise you are just a ‘wantrapreneur.’ Show your obsession with the company. Pick your investor based on portfolio match. Find the balance between money, power, control and lifestyle. Dialogue with serial entrepreneurs, startup experts and industry veterans. Chart key milestones. Use demos to pitch effectively. Fundraising alone is not a sign of success; valuation isn’t everything. Factor in long-term defensibility of the product with your team.
Building the business Nail it before you scale it: get the business model right. Jot your thoughts down to track key issues. Sharpen a sense of clarity and purpose. Manage meetings effectively. Be prepared for the worst, expect the unexpected. Be your own customer. Thing big, but also execute the smallest details. Design a short rallying mantra which is inspirational, aspirational, attainable. Evolve your metrics. Your network is your net worth. Leverage the underdog story, and a tangible enemy. Guard your reputation. Hire other rainmakers also. Be frugal but not cheap. Know when to quit, there is no shame in shutting down.

The authors identify five kinds of risks faced by entrepreneurs: product (will the technology work), market (will people buy it), financing (can you get off the ground and thrive), competition (are there fast followers/incumbents), execution (can you pull the whole thing off).

“The most important thing you should do as an entrepreneur is to turn assumptions into facts as quickly as possible,” the authors advise.

A solid customer-acquisition strategy is one of the most important aspects of the go-to-market plan. The value proposition must be 10X better than that of the competition, and a moat strategy will be needed to build sustainable competitive advantage (eg. via patents, secrets, speed, brand, cost advantage, regulations).

Marketing is one of the hardest things to get right in business, making it a common startup killer, the authors caution; marketing is as important as product development for a startup. “Luck is not a plan,” the authors add.

“Marketing that leads with emotion and justifies with reason delivers sales,” they explain. Customers buy with emotion, but also justify it with reason.

Entrepreneurs should factor in a range of parameters such as customer acquisition costs, customer switching costs, customer lifecycle value, length and cost of sales cycles, serviceable available market, and serviceable obtainable market.

In the entrepreneurial journey, it is important to get alignment with the team’s basic human needs: certainty, variety, significance, connection, growth and contribution. Startups offer employees a unique mix of flexibility, challenge, variety and the feeling of accomplishment.

“Investors are an indispensable part of the startup landscape, especially when it comes to technology companies,” the authors observe. Seed investments are usually less than $2 million; VCs typically want to own 20-40% of a company in exchange for a $2-10 million investment.

The authors also cut through the media hype about startups by explaining that almost 98% of startup work is monotonous and painstaking; there are many near-death moments; there is a strong sense of isolation; and there can be severe family pressures.
The average age of an entrepreneur is 39, and rather than physical age the most important success factor is emotional age and resourcefulness. Having sounding boards with mentors and other entrepreneurs is a big help.

“It’s not a startup until you build something, and it’s not a business until you sell something,” the authors conclude. “Building a successful business from scratch is nothing short of amazing. Start living your entrepreneurial dream,” they add.
It would be fitting to end this review with some of the useful inspirational quotes in the book:

Plans are useless, but planning is indispensable.” – Dwight Eisenhower
When you assume, you make an ass out of u and me.” – Oscar Wilde
Every business has two major functions: innovation and marketing.” – Peter Drucker
If I have seen further than others, it is by standing on the shoulders of giants.” – Isaac Newton
Simplicity is the ultimate sophistication.” – Leonardo da Vinci
Skate to where the puck is going to be.” – Wayne Gretzky
Fail fast, succeed sooner.” – David Kelly, CEO, Ideo