Four for Friday (15)

This week’s eclectic, interesting reads:

The hall of shame? A list of VCs with no female investing partners.

One step closer to Eternal Sunshine Of The Spotless Mind? The forgetting pill.

The case for the e-book as a more intimate literary experience.

Mark Zuckerberg as an autocratic dictator? You don’t say.

The Power of Us

Summer in India brings not only juicy mangoes but also the prospect of frequent planned and unplanned power cuts. The euphemism “load shedding” tries to hide the fact that the grid is unable to shoulder the demand for electricity. This demand is rising with India’s rapid economic growth. This economic growth also means that fewer and fewer Indian citizens have the time to take their utility companies to task for failing to deliver a reliable power supply. However they do now have the means to have spent a reported US$ 22 Billion on power back-up equipment such as inverters that store power in a battery while there is supply, or generators.

This is my third summer on Twitter. Come summer time, my Twitter stream floods with persons complaining about power cuts in the middle of a workday stymieing productivity, or in the middle of the night interrupting resting hours. On May the 4th, after seeing a few tweets, I suggested: “May be you guys SHOULD tweet #powercut with location. The infographic will highlight the need for investment. To many people.” Within a few minutes, an enthusiastic techie, Ajay Kumar had created a site with an Ushahidi backend to track such reported powercuts. Within seconds we had our first report – from Gurgaon, a new, modish town which is in the national capital region but whose powercuts are legendary. It has not stopped since. These reports mainly came from Twitter users reporting power cuts with their locations  and a hashtag #powercutIndia. In the first 24 hours, the hashtag reached an audience of over 98000 people with over 157000 impressions. In the next couple of days, Ajay and I took the decision to move to a proper own domain – www.powercuts.in. On the website persons can also report anonymously; this allays privacy concerns and security risks that were highlighted to us early on by some Twitter users. Soon a design firm provided us with a logo and is now developing the website further. We set up a Facebook page and one of India’s leading dailies, Times Of India, wrote a piece on the project.

From idea to execution, to the actual build-up and success Power Cuts In India is a crowd-sourced, open data project. This means everything we do is out in the public domain. The Wiki details in one place all the work and credits. An open document collates ideas on how to improve the data collection and what possible uses it can be put to. At the time of writing, we are testing SMS based reporting and smart apps for smart phones are in development. Purely on voluntary basis from enthusiastic donors of their expertise and time, who believe in the project.

Naturally there has been curiosity as to why so many of us, including Ajay and I, would give so much of our time to collate this information. Typically I have been asked why such monitoring is needed, since everyone knows how bad the power situation is. The short answer is that situational awareness allows specific responses. Whether from government, from utility companies, from investors or from citizens themselves. One of the most recent examples in another – admittedly acute, not chronic like the power cut situation – setting was seen in Libya.

For me, the project is a beautiful example of how the power of social media can be harnessed to take a simple idea into execution and how web and social technologies can build a resilient backbone for a project. The rapid prototyping and release of the website by Ajay deserves a special mention too. And with rapid prototyping come iterations and incremental changes.

These are being made based on ideas suggested through our open document. Collective wisdom continues to shape and define the project. We are all aware that this should not become yet another urban India project but also rolled out to villages where issues related to linguistic diversity as well as lack of literacy may be a problem. This awareness is feeding into design and reporting protocol related to SMS reporting and smart apps in development. With mainstream media carving a narrative out of something happening on the web, more citizens in India are getting to hear about the project as evidenced by reports now coming in from more regions than just the metros or individual towns where some of the Twitter users are located. SMS reporting will enable even more persons.

What can a corporate firm learn from our experience so far?

First, social technologies can be unpredictable in their scope, reach and success. When the Power Cuts In India project was rolled out, a Twitter user pointed out she had suggested the idea three years ago. But it did not take off then. However when I mentioned it on May the 4th, it did take off and is now growing by leaps and bounds. This unpredictability of uptake can be unnerving for those, who like to predict both the trajectory and the time line of their “social” undertakings.

Second, when an idea gains traction, crowd-sourcing can be benevolent or damaging. In case of Power Cuts In India, it has been benevolent so far. HSBC’s experience from a few years ago was bracing and different.

Third, “social” is not concrete, fully formed. It is amorphous, iterative. Or in the words of Field Marshal Helmuth Graf von Moltke: “Planning is everything. Plans are nothing.” Before launching into “social” an organisation needs cultural readiness. And comfort with amorphousness, iteration and tweaking in response to feedback.

Regardless of where you are, you can contribute to the project by sharing your views here. Or on this post.

Further reading:

An old post on the use of Twitter in emergencies/ acute situations.

Power Cuts In India in media:

Times Of India

PC World

CIO Magazine

Yahoo News

LiveNewsIndia

One India (online in Tamil)

Trak.in

The Daily Dot notes that for all its resilience, the web still needs electricity.

WiredCPU

TechGoss

Paant.com

Geo-spatial World

Social Media Guru

BBC – on Social Media for Social Good in India – features PowerCutsIndia (video)

 

Start-ups do not need a marketing budget, or do they?

Two deservedly well-regarded investors, Fred Wilson and Brad Feld, have written about why they think start-ups do not need a marketing budget. Both are deliberately a little controversial. Fred Wilson writes, for instance, that: “I believe that marketing is what you do when your product or service sucks or when you make so much profit on every marginal customer that it would be crazy to not spend a bit of that profit acquiring more of them (Coke, Zynga, Bud, Viagra)“. Brad Feld says that “every time I hear the word “marketing” I throw up a little in my mouth“.

Par for the course for the intertubes, the nuance is lost. Take a look at the reactions on those two posts, and you will see people agreeing with the top-line idea they seem to see: start-ups do not need marketing budgets.

Which is patently not what Fred Wilson and Brad Feld are saying. For instance, later in his post, Fred Wilson goes on to say: “Early in a startup, product decisions should be hunch driven. Later on, product decisions should be data driven”. … Clearly people like that rule. Here’s another. Early in a startup you need to acquire your customers for free. Later on, you can spend on customer acquisition“. And Brad Feld goes on to say: “When I think off (sic) all of the companies in our portfolio that are growing like crazy, they all spend money on marketing. However, it’s driven by an obsessive focus on the customer and the product, rather than a “marketing budget” or “marketing initiative.””.

My view on the matter? Every business, no matter what stage of life it may be, needs marketing. And all marketing costs money. It is smart to budget for it. Smarter still to ensure you deliver what you promise.

In its essence, marketing is no more than:

a. promoting your product/ service,
b. to a group of people who either need it or are amenable to be convinced they need it, and
c. who have the ability to pay for the product/ service.

Ben Casnocha and I are in agreement when he says good marketing is good, bad marketing is bad. What is bad marketing then? “Bad marketing” could simply be if any of the above three elements is missing, or if any or more of the following is true:

a. you don’t have a product/ service properly defined and developed,
b. the audience has or knows no need for it, despite all your efforts to persuade them otherwise,
c. the audience cannot pay for it which means you are talking to the wrong people,
d. You get the attention of the right people, who can afford to pay, but you fail to deliver.

Fred Wilson’s examples are all about how to use the web to market your offering. The internet is but one channel to promote one’s product/ service; it is seductive because it is perceived as “free”. In the end, nothing is free, including the time one spends on the web. So it is smart to have a budget or notional cost allocated to the time you cannot spend writing code or checking the air-tightness of the fruit juice bottle you plan to sell. Especially crucial for a start-up that is promising something but nobody has seen it yet.

Fred Wilson points out that he is only referring to consumer internet companies and not those that may sell to enterprises. I add another rider to it. There is a vast world out there where people do not spend their time online 24X7 as some of us do. These people are buying real things whether influenced by friends and family, or by a coupon in print media, or a promotion in their local bazaar. Such influence does not come for free. Smart companies and their investors plan for those costs.

So why bother with that marketing budget, if what John Wanamaker says is indeed true: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half”? Replace advertising with sales, or with marketing, or with hiring and you will know that this is no more than a thumb rule. A rule that says we cannot predict how some of our spend will yield or not yield expected results. Some adverts just won’t work; some networking contacts one develops will never yield a tuppence of business; some promotions or give-aways in a mall will be just people seeking freebies and nothing more. But each of these activities need real or notional money to be spent. If there is no headline item in the business plan, it may come from cannibalising some other headline spend. That is hardly clever.

We can however increase the probability of a desirable outcome if we prioritise our activities and focus, just as Brad Feld says, on the customer and the product.

And on making good on delivering what we promise.

Four For Friday (11)

This occasional series of good readings from around the web covers the themes of strategy, technology, investment and regulation. This week’s picks include: the broader business environment, enterprise collaboration and social media, how to pick a co-founder and some humour.

Jeff Jarvis argues that the future of business is in ecosystems (link via @Syamant) Rupert Murdoch does not think so, of course. But I don’t think Google is worried much. Although I really think this element of selective curation to comply with people’s wish to be excluded from Google’s indexing could be a slippery slope for Google whose line always has been “It’s the algorithm, stupid”. What do you think?

Enterprise usage of Twitter is apparently up 250% in 6 months, reports Mashable. My recent conversations suggest the trend is on the up in the most conservative of sectors and companies. What about your firm and your sector? Of course, another perspective is about growing security concerns. The full report can be found here.

VentureHacks’s Naval’s spot-on note on How To Pick A Co-founder. Some basic but essential advice.

And for a chuckle, via @MarcusduSautoy, on Newton, Leibniz, Calculus and derivatives:

Newton and Leibniz (Copyright: XKCD)

Newton and Leibniz (Copyright: XKCD)

The social media opportunity in India (1)

My investor and business clients are increasingly interested in investing in India. While many of the conversations are about the less glamorous sectors, the chatter about social media is unavoidable.

A quick Google search on the ‘social media opportunity in India’ brings up over 0.5 million articles, in English alone. This suggests a considerable degree of interest in the topic. This interest is evident in conversations with some investors in London too. Understanding the opportunity however needs more than interest. It needs clear analysis.

Although things are changing for the better and the more efficient, setting up a business in India remains quite challenging for most. Two sets of problems come up instantly – corruption and infrastructure.

The former’s many facets need no explanation. In Transparency International’s 2008 Corruption Perceptions Index report, India has an unflattering 85th position. The legendary ‘Mr Fix-It’, admitted by many executives as being essential to success in India, has recently had his own cover story in a recent issue of Wired magazine, titled The Godfather of Bangalore.

Infrastructure in India is a multi-headed Ladon ‘guarding’ the golden apples of the Indian market. Investors admit to their first-time-in-India shock rather candidly but truly getting over bumpy roads, snarly traffic, unreliable telephony infrastructure and rolling power cuts (although I find it hard to imagine The Taj ever has one) takes a thicker skin and a very deep commitment to cracking the Indian market.

(c) Encyclopedia Mythica at www.pantheon.org

(c) Encyclopedia Mythica at www.pantheon.org

Social media businesses bypass both these bottlenecks with relative ease. An internet-based social media business can be set up with minimal permissions. If the business can find a reliable bandwidth and storage provider, of which there is no paucity in India now, we are in business. Prima facie, the social media scene in India does seem to offer an attractive investment proposition.

In the next post, I shall write about some of the most popular social media businesses in India and what investment opportunities may be around.