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I asked a question last week that generated a lot of discussion. In that post, I had concluded that market is hot and there is definitely a need for some of the Web 2.0 services like online social networking joint, India specific news/media sharing etc. Now how to take these needs and turn them to viable business models with the constraints of operating in Indian market (less Internet penetration, small online ad market) is the interesting aspect of it. There are a lot of players and they are applying different strategies to work through these constraints and make their model more appealing than others. I am talking to some of the players in the market and getting their views on the strategy that they are using and why do they think their model will succeed. In this series, I present one strategy in each post as quoted by these players to me. I do not know how well these strategies are going to work, just bringing them to fore to have discussion around them and see where they go.

Strategy: Experiment with slew of services, build organic and loyal traffic over time
Case in point: Better Labs, India
I talked with Vaibhav, the founder and CEO of Better Labs, India. Their strategy for India angle is to launch a slew of useful services targeted towards a particular demographic and build organic traffic. The set of services they offer (termed as india 2.0 by them) are news aggregation from newspapers/blogs, social bookmarking of news/events/links. The problems that they are trying to solve are the following:
1. The user experience of a lot of news sites in India is not very pleasant because of overload of ads, pop-ups etc. With indiagoes, they want to come up with a service that provides a much richer news reading experience on the web.
2. It is very difficult to find good India specific user generated content on the web. With indiamarks, indiaevents and indiahappening, they want to device ways to incentivise people to participate and create great new content or label already existing great content.

None of these are ground breaking ideas and they realize these will not become the next youtube, but they think these are useful services which at least the IT people (the demographic that they are targeting) who have Internet access for a large part of the day care about. What I found interesting is the “experimentation” strategy that they are adopting to try out these services. They do not plan to raise VC money until they hit a critical mass and the reason he quotes for that is once you have VC funding you are under pressure to deliver and get your google analytics numbers ticking up all the time. He further says that once they build a steady organic traffic by rolling out new features and relying mostly on word of mouth marketing, they will be able to create a set of loyal users that will keep coming back to use their other services. Once they reach that level, they may plan to raise money to expand their operations. Of course this strategy can only be applied if you have access to personal funds to sustain during this “build up” time.

One notable company that has adopted this strategy in the past is mouthshut. They probably have the best user generated India specific content (other than Wikipedia maybe) and this has resulted with a sustained effort of over 5 years. They had a bad patch from 2001-04, but now with the market picking up I think they are are in a very good situation for monetizing the content they have and expand their operations. Another company that has adopted this model in the past is Sulekha that has over the last few years (since last dot com bust) built a good user base and has now raised a bunch of money.

If you are an entrepreneur and have adopted a new model for playing in the Indian market, ping me and we can talk about it and I will put it up here for discussion.