We have discussed some of these ideas on venturewoods before, but I thought I would get more specific thoughts. We are seeing more and more businesses around the theme to offer a $100 a year service to a million users. Few ideas that have got discussed here include:
1. Online DVD rentals
2. Online photo printing
3. Online tutoring (export oriented – ok more like 100k x $1000 here)
What are the views around feasibility and scale on some of these? Will these land up being more like 100k x $ 30 plans in the online context? Given that 5-10 startups are starting out at the same time, will the market fragmentation be too high?
Any other ideas that might fall in this conceptual framework?
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1. Online DVD rental
On the MGRoad pavement, at least 2 of the pirated-book sellers’ slots have been taken by pirated-DVD sellers. They charge Rs 70/dvd for purchase…. Probably even less after haggling…. so this looks doomed. However, I am hoping to see Netflix-like recommendation technology in the Indian players that can guide the consumer to the long tail of old movies and subtitled movies in unknown languages. I think the long tail is not worth pirating, so there may be opportunity.
2. Online photo printing
If I were running one of these, I would just focus on 25-35 year olds with a newborn _first_ child and whose parents live in a different city and are either computer unsavvy or dont have an internet connection. Of such parents, NRIs are best, since they have fast internet connections for convenient uploading. Basically, turn the brand from online-photo-printing into three-generation-network (haha, ain’t I a great punster). The site facilitates all parent-mediated grandchild-remote_grandparent/aunt/uncle/cousin interactions and self-expression (personalized “World’s best Grandpa” mugs etc.)
The numbers from http://en.wikipedia.org/wiki/NRI#Statistics_on_Indians_in_the_US roughly suggest that this niche has a million+ users.
I fit the middle gen above and I have spent $40 on photos… $100 seems a certainty. Although… I am told this will drop off a lot in year 2 and with child 2 😛
Why focus on parents for pic uploads: anecdotes
* I had a digital camera, which I only used on trips (~20days/yr) until my son was born. Now I use it everyday.
* I have a lot of external motivators. I keep getting harassed for his pics and videos by my parents, my sister, my uncles and aunts and all the corresponding relatives on my wife’s side, every time we talk.
* The only person in my immediate friend circle with a camcorder bought it just when his son was born.
Why focus on grandparents for pic delivery:
* To my sister and my friends of same age, I send the pics and videos by email/yahoophotos/filesharing sites
Hi Alok,
I was referring to “Service to Companies” as the main segment. However, services like “Remote control of AC” over wireless networks with temperature monitoring can be targetted at consumers also.
Madhur,
My comments were in the context of Startup ideas – the original post called for that…
1. If a business model implies a “strong offline presence” – it becomes capital / manpower intensive…both beyond the reach of startups. It suits Godrej, HLLs, ITCs of the world. The uniqueness of Web 2.0 is that it allows creation of businesses which are user elastic, does not require offline presence / huge manpower – it’s a startup founder’s dream. Isn’t it…?
2. So long as you conceive a business over web platform, barriers to entry are very brittle, ephemeral if not non-existent. Call it Web 1.0 or 2.0, it only lasts till the next guy comes along with another cool stuff. The only way to salvage your business is to enable it to successfully harness collective intelligence that results in continuous improvement. That – can put enormous pressure on competition, could make them think again if not keep them at bay altogether. Ok, now you may use the term `barriers to entry’ if you are still obsessed. I am all for free market, nimble startups and would like to thrive in the midst of challenges. That gives you the high besides being realistic.
3. “Retention of community” has nothing to do with the idea itself. It has to do with uniqueness derived thro continuous improvement at 2 above. If you can ceaselessly keep delivering on user experience, the community is yours to keep.
Aren’t we one…?
Krish,
A couple of points to follow up on your response:
1. First of all, the type of services being discusses here are NOT web2.0 services. Web2.0 is all about slick AJAXy UI and more importantly user generate content and user participation, which are of very little significance to these type of services.
2.You are missing an important aspect of web2.0 companies. They do have barrier to entry. Its the building up that “community” and retaining the users. It might seem intangible to begin with, but its very important. If any company is successful in doing that for one particular area, it becomes very difficult for another player to make an entry, however easy it might be to technical get the service up and running. Take example of YouTube: every other player tried to do what they are doing including Google, but none of them were able to replicate the same phenomenon, thats just because YouTube had built a strong community and there was no reason for users to switch. Similarly take MySpace and Facebook: so many others try to jump on the social networking bandwagon very few got any traction, even though it does not take much to build one of these services technically.
While it is true that barrier to entry to these type of markets is very small, I believe that if the challenges unique to operating in India are addressed in a way different from others, it can definitely be used to get that early mover advantage. For e.g. one of the biggest issues right now is the Internet penetration. Even within the rather small (10mn odd active Internet users) userbase, broadband access is still more limited. Taking this into consideration if a strong offline presence is established, this would create a barrier to entry for other players. For e.g. if you take online DVD rentals or photo printing services, imagine if a person can walk into any of the local cybercafes or retail stores (that have Internet access) and drop off and pick their DVDs or film rolls/memory cards, that would create a distribution channel that will be difficult for anyone else to replicate. This essentially increases the market because now people who do not have Internet access currently can also use your service including in small towns.
After all, technical aspects of these type of services is quite well known, its the logistics that will differentiate the winner from the other players. As you know, its our own famous Mumbai “dabaawaala” case study that is used in b-schools as examples of operations, logistics, distribution etc.