Series Initation Note: This kicks off a series on my conversations with folks starting digital media companies with the objective of assisting the enterpreneurs.
The Startup: I met an owner close to rolling out a site for commuter rants. Simply put, the site is a forum for commuters to rant about their commute.
Our relatively brief conversation focused on helping him with the vision/ raison d’être for the site. Snippets of the conversation are listed below. These are really interconnected factors, however you need to be able to think through them linearly once, before you iterate through the options and interdependencies. As with a few startups, these answers may change with time, however, it helps to have concrete thoughts about these questions at the start of the journey.
I. Market Potential
The entrepreneur's first area of uncertainty was: how frequently would a commuter rant at his site? We broke that down into market sizing and frequency of usage.
i. Who is the target user of this site? What is the market size?
What kind of commuter? Someone who takes the NJ Transit or Metro North to and fro work? Or does it include someone stuck on the D.C. beltway on a Friday evening? The idea here is to understand an existing unmet need and customer behavior tied to this unmet need.
For sizing, there are several ways to generate the numbers- by geography, by demographics, etc.
ii. What would the growth and usage trends be like?
Would they be like that of Twitter (where 30% of the users tweet once never to return) or like that of Facebook?
II. Business Model and Market Strategy
We are really thinking about distribution channels, partners, customer relationships, core capabilities and revenue models here, all of which can be expressed pithily as:
Would you prefer a B2C model or would you modify the site for a B2B model?
Note: We explicitly kept aside market defensibility to assist in brainstorming.
A> B2C Model
i. How would you grow the B2C site?
Would you eventually develop features tied to hyperlocal search to enable customer stick? E.g. Regulars in a train compartment can connect with each other?
ii. How would you monetize the site?
Through Ads, and possibly, viral content (to help folks cool down, for starters)?
B> B2B Model
i. How would you grow the B2B site?
After an initial push to bring on site users, would you consider tying up with media companies who may leverage feed from this site? E.g. TV Weather and traffic update has a ticker running at the bottom which shows "selected"/ "near real time" commuter "rants"?
ii. How would you monetize the B2B site?
How many media companies would buy into this? What would such features be worth to the media companies?
III. Product Strategy
Would you roll this out as an independent site/ platform? Or,
Would you leverage existing platforms like the iPhone and/ or Facebook?
The questions for you:
1> How would you have looked at this differently?
2> Would you invest?
3> What changes, if any, would change your investment decision?
What do you think?
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Showing posts with label invest. Show all posts
Showing posts with label invest. Show all posts
Thursday, August 06, 2009
Monday, March 24, 2008
Conference Panel: Selling to the Indian Consumer
Amazing insights from consumer electronics and retail consulting. A consumer electronics company was focusing on the top 30 cities, despite indicates that the rural market had as much disposable income as the urban market. This raised a couple of questions from me during the panel.
What kind of innovations in distribution do we see in India in the next 5 years?
What do you think?
Can the Consumer Electronics companies contribute to more active usage of the cellphone screen? This query had an interesting response and an unexpected fact component- India uses only about a third of the spectrum that the US currently uses.
Does the Indian cellphone consumer need an industry association comprising of consumer electronics companies, software companies, infrastructure companies and investors to encourage more active usage of the cellphone screen?
What do you think?
What kind of innovations in distribution do we see in India in the next 5 years?
What do you think?
Can the Consumer Electronics companies contribute to more active usage of the cellphone screen? This query had an interesting response and an unexpected fact component- India uses only about a third of the spectrum that the US currently uses.
Does the Indian cellphone consumer need an industry association comprising of consumer electronics companies, software companies, infrastructure companies and investors to encourage more active usage of the cellphone screen?
What do you think?
The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
Keynote address: Vinod Dham, NEA- Indo-US Ventures
The amazing keynote by Vinod Dham has parallels with a keynote (different conference) by Alan Patricof, Managing Director, Greycroft, with respect to his experience in Venture Capital in Africa. Vinod was bullish about opportunities in India.
His talk raise a query. What is the difference in managing a $200 MM fund in Silicon Valley vs. a $200 MM fund in India?
On the dealmaking end:
1> Do you do more deals?
2> Do you invest in companies that are more late stage?
3> Do you invest in companies that can bring in and ramp up revenue pretty quickly?
From personal experience, Indian startups are able to keep costs pretty low.
On the investing end, what kind of support do you need to provide to startup leadership?
The Indian technology clusters- Mumbai, Delhi, Bangalore, Hyderabad, Chennai- are not as mature as the Silicon Valley cluster.
What do you think?
His talk raise a query. What is the difference in managing a $200 MM fund in Silicon Valley vs. a $200 MM fund in India?
On the dealmaking end:
1> Do you do more deals?
2> Do you invest in companies that are more late stage?
3> Do you invest in companies that can bring in and ramp up revenue pretty quickly?
From personal experience, Indian startups are able to keep costs pretty low.
On the investing end, what kind of support do you need to provide to startup leadership?
The Indian technology clusters- Mumbai, Delhi, Bangalore, Hyderabad, Chennai- are not as mature as the Silicon Valley cluster.
What do you think?
The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
Conference Panel and Keynote: Managing Local vs Global
Ravi Venkatesan, Chairman, Microsoft India, talked about how the Indian market and how its challenges were different from those in the US.
How does the local leadership deal with a global company's priorities while "tending" to the local market? Does the company's DNA allow for a global/ local market trade-off based on the type of market (socio-politico-economic environment)?
What do you think?
How does the local leadership deal with a global company's priorities while "tending" to the local market? Does the company's DNA allow for a global/ local market trade-off based on the type of market (socio-politico-economic environment)?
What do you think?
The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
Conference Panel: Trends in Private Equity and Venture Capital Sectors in India
Given a trio of PE, VC and IB players in India, the panel met high expectations. Some facets talked about:
1. Debt market in India
2. Constraints in structuring transactions
3. Regulatory environment and red tape
4. Nature of targets (family driven enterprises), time horizons and deal flow networks
Given these factors, I wondered how the firms managed risks- not just financial risks. I queried the panel about their experience with a deal that did not meet experience.
What do you think?
The VC investor, who had significant experience in investing in India provided an interesting insight, that emphasized the efficiencies that the PE/ VC firms can find across funds and investments/ deals.
The response also threw light on the "transaction costs" that mutual fund like SPAC aggregators would face that would make them replicas of publicly traded PE firms.
The panel echoed some of the points made by Alan Patricof, Managing Director, Greycroft, at a conference keynote, with respect to his experience in Venture Capital in Africa.
The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
1. Debt market in India
2. Constraints in structuring transactions
3. Regulatory environment and red tape
4. Nature of targets (family driven enterprises), time horizons and deal flow networks
Given these factors, I wondered how the firms managed risks- not just financial risks. I queried the panel about their experience with a deal that did not meet experience.
What do you think?
The VC investor, who had significant experience in investing in India provided an interesting insight, that emphasized the efficiencies that the PE/ VC firms can find across funds and investments/ deals.
The response also threw light on the "transaction costs" that mutual fund like SPAC aggregators would face that would make them replicas of publicly traded PE firms.
The panel echoed some of the points made by Alan Patricof, Managing Director, Greycroft, at a conference keynote, with respect to his experience in Venture Capital in Africa.
The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
Conference Panel: Fundraising Darwinism- Evolution of PE fundraising
Bruce Rosenblum, Managing Director, The Carlyle Group, tore into the re-emergence of SPACs (Special Purpose Acquisition Companies) in the context of Private and Public PE companies. He pointed to two advantages PE firms would have over SPACs: diversification and GP incentives.
Given that there are many similarities between VC and PE fundraising, I was inclined to think that there was more to the comparison that what met the eye.
1> Was the PE firm structure an advantage?
2> Were the PE networks an advantage?
3> Were the PE firms able to gain efficiencies across investments that would not be possible in a different setting?
I queried Bruce for a comparison between Public PE firms and hypothetical mutual fund like SPAC aggregators (something I came up with to gain a better insight into his perspective). He had an interesting response.
What do you think?
Also, Francesco Guerrera, Financial Times, highlighted the paradox of PE firms going public. Bruce talked about KKR rasing $5 BN in public equity through Euronext at Amsterdam.
How do you think PE firms would deal with the q-on-q public market pressures?
Given that there are many similarities between VC and PE fundraising, I was inclined to think that there was more to the comparison that what met the eye.
1> Was the PE firm structure an advantage?
2> Were the PE networks an advantage?
3> Were the PE firms able to gain efficiencies across investments that would not be possible in a different setting?
I queried Bruce for a comparison between Public PE firms and hypothetical mutual fund like SPAC aggregators (something I came up with to gain a better insight into his perspective). He had an interesting response.
What do you think?
Also, Francesco Guerrera, Financial Times, highlighted the paradox of PE firms going public. Bruce talked about KKR rasing $5 BN in public equity through Euronext at Amsterdam.
How do you think PE firms would deal with the q-on-q public market pressures?
The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
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