google cornering local search?

is google cornering the local search market? perhaps it’s a bit too alarmist to suggest such a thing when local search as a market is still in such infancy globally. now while the world may be getting better at building and indexing structured local content, even in highly unstructured information markets (like what askme and burrp have done/are doing for india), meaningful, scalable monetization still eludes us all – another blog post altogether. let’s get back on track here. google recently launched an extension of sorts to their local search product called google places. tc describes google places best, as “a local search page for restaurants and other local businesses that brings together the address, phone number, website, maps, description, directions, photos and reviews all on one page.” sounds very much like a local business details page you might be used to finding on burrp!, or yelp, or citysearch. in fact, as you can see, it looks like one too. to be fair to google, once on a places page, almost all of the information is aggregated external links: reviews and pictures from yelp, menus from menupages, etc. even so, there are three major issues, or general shifts that i notice when i see something like this. indulge me:

1. organic search results – google set out to be an information gateway to the world wide web, quickly redirecting people to the source of information as quickly as it could. this new product calls that philosophy into question. as googlers will soon start to notice for local search queries performed on the google search engine, google places pages will begin to show up, undoubtedly in the treasured ‘first ten.’ this means that google itself will possibly claim more real estate on the search results page than other players, i.e. one box results + google places pages. it’s funny – google usually penalizes seo tricksters for trying to play the search saturation game. they seem to be dabbling in a bit of it themselves now.

2. owning the traffic – google has long had a monopoly over where and how to direct the world of internet traffic. now, it wants to hold onto it a little longer before it lets go. i generally do not have a problem with this; google is an independent company, and it is free to figure out how to monetize local search like the rest of us; but it’s interesting to see this slight shift in google’s behaviour. take a look at any google places page – wouldn’t you say that just glancing at that page is giving you about 90% of the information you need to help you make some kind of a decision on any local business? while google may be fairly linking to all the right sources, by creating this page, they have almost eliminated the need to click through at all! yikes!
more interestingly, a page like this threatens to undermine  experimental local search revenue models that exist today, all of which are primarily lead-based models (yext and yelp have the proprietary phone numbers; angieslist and redbeacon basically connect service seekers with service providers). if all pertinent information is available on a google places page, a user may be disinclined to use other local search platforms (unless of course it can help them save considerable money).

3. ads, ads, ads – not much to say here, but notice those google ads on the lower right hand corner? that’s right – yet another google-owned page that it will effectively monetize by serving relevant ads, arguably on the back of multiple content providers. fair? you decide…

it’s the ugc, stupid…

or is it?

one of the things that continues to baffle others about burrp.com is how we’ve been able to maintain such a high level of integrity and quality when it comes to our user generated reviews and comments. take a long, careful look at the indian ’social’ web if you will – it ain’t pretty. mouthshut, rediff, in.com, yahoo! india are just some of the platforms that showcase a general trend towards ugc that is polluted with sms language, all caps typing, imperfect english, subtly perverted undertones, and at times, completely illogical trains of thought. there is not much you can do about the sex-starved pervs and the unruly; but there is tremendous value hidden in people that are trying their best to say something, but just don’t have the capability to do so. this entire class of ugc should never be dismissed, ignored, or worse, cast off. understand, these are people that mustered the courage to express an opinion or a thought about a particular thing, perhaps while even knowing that they lacked a handle on the english language.

this is where a qualified, dedicated middle-tier of editors becomes a boon to your platform. the ugc purists may throttle me for believing this, but when an editorial layer can elevate a review which would have been otherwise functionally useless into something legible, readable, and moreover enjoyable, that can be nothing but a good thing. our editorial team does an amazing job of sanitizing and polishing what we call  raw ugc, while doing their best to maintain the tonality, voice and essence of what the user is trying to say. this is a win-win. the user is heard in the community, and we continue to amass high-quality professionalized user generated content. it goes without saying that this crowd-sourcing model can work brilliantly to derive meaningful conclusions about things when the underlying framework of content is of a high quality and integrity. of course, our community must have an incredibly high degree of trust in us to believe that we are not manipulating reviews for some beneficial outcome, and we’re happy that we have earned that degree of trust across our community.

as i look around the world of social media and user generated content, i think one of the things that unfortunately became instantly taboo was this idea of sanitizing the content in order to make it more useful. personally, i am a big believer of the simple idea, and think that it should be applied more widely across other platforms, especially when you can leverage a skilled labor arbitrage (i.e. india!). while it may not be the perfect analogy, i am reminded of comparisons drawn between hulu and youtube. while one has now surpassed television inventory rates in its advertising pricing, the other is still sucking wind trying to figure out how to earn a dime. no prizes for guessing which one is which…

smsgupshup

my eternal caveat with most of my thoughts/posts, lest i repeat it over and over, is that most of the time they take birth in this innate gut feeling i get about things. my gut feelings are usually based on two things: (1) common sense – something surprisingly underrated and sadly, underutilized; and (2) being in the trenches for three years now. so today, a few gut checks on smsgupshup, funded partly by good friend and highly respected mentor ashish gupta at helion ventures (a la rakesh mathur/webaroo/junglee/ashish gupta connection? just calling a spade a spade, buddy).

smsgupshup is a group sms messaging service that allows users to basically create reply-to-all interest-based sms groups. so yeah, it’s along the lines of twitter, but less of a micro-blogging platform, more of a group messaging platform. the platform has boasted amazing growth, and claims to capture a significant chunk (4% – 5%) of the total sms traffic in india. the business model is basically ad-supported smses. recently, the company claimed to be doing about $150,000 (or about 75 lacs) per month in topline revenues. great. now what could be wrong with a business like this? well, in india, many things.

first of all, my sense is that smsgupshup probably suffers from the ‘garbage in, garbage out’ syndrome: basically, while we may question the numbers, it’s the content that i am wary of. most of the messaging must be promotional spam, semi-porn, bollywood, or cricket related crap; basically, a dirtier, sms-based ‘ebay india’ (excuse the analogy; only meant that today ebay india is not a true p2p exchange forum; more of a b2b, or b2c at best).

secondly, let’s analyze the revenue figure. today, a bulk sms purchaser, by promising volumes, can purchase smses at about 5-6 paisa per sms. from my discussions with other platforms trying to monetize sms traffic, they claim it is in fact smsgupshup’s pricing that has killed the market; so i’m assuming they’re charging the dirt lowest rates in the market. if we assume 25 paisa to be the charge per sms impression to an advertiser, at a revenue number of 75 lacs per month, this assumes that the company is monetizing 30 million smses per month. not impossible, but i scratch my head a bit…

lastly, twitter. need i say more? it works everywhere across the world, is the flavor of the year, and doesn’t seem to have any intentions of slowing down or being gobbled up (yet). getting stiff competition in a market where very few differentiators can actually be built is a tough game to play.

i could be dead wrong about most of this stuff, but again, i’m just listening to the gut.

grammar a victim of ibibo’s growth

apparently, grammar wasn’t a part of ibibo’s growth plans. india’s safest social network is also india’s least grammatically correct….

iburrp! for iphone??

iphone users don’t like to wait. i know this now. prabhu over at desistartups.in hacked our local search widget to create an app for the iphone, and it rocks! take a look at his process flow here. hats off to you, prabhu. if my last blog post lit a fire under the right kind of asses, i’ll just have to blog a bit more often!

p.s. we are trying to make burrp! completely iphone friendly, so just stay tuned for an announcement on that!

congrats to desimartini.com

the mint, a daily business periodical in india, carried a story today that reported indian social networking site desimartini.com has been acquired by hindustan times media (ht media) for “under $10MM” as was quoted by an ht executive. i was honestly left a bit speechless, but i tip my hat to vivek pahwa and the team for pulling this off. after reading the paper, though, i tried to see if anything had changed at desimartini since the last time i visited the site, and i found this:

wow…hmmm…*cough*….$10MM….yeahhhhh………..

f*cked business (for now)

i sat down on saturday with a very respectable, senior leader in the media space. this guy really “gets it” and i respect him for that, so it was a treat to pick his brain. one thing he asked me that caught me off guard: “do you know you’re in a fucked business?” i thought to myself, man, bad first impression, this guy really doesn’t like what we’re doing. but he wasn’t talking about a particular business. he mas making a comment on the space. “you’re in a fucked business, and as long as you know that and you can stomach that for the next few years, you’ll do fine.” he also made a funny comment about vcs, one that i thought was worth passing on to ya’ll: “there are two scenarios under which a vc won’t trouble you – if you’re company is going gangbusters; & and if you’re company is totally up shit creek. in the former, well, it goes without saying. in the case of the latter, they’ll run for the hills, i.e. prepare for the write-off.  it’s when you’re performing at about the expected or average level when they really come and fuck you in the head with their own ideas.” i couldn’t keep myself from laughing after he recited this to me. we shared a good laugh about it.

coming back to the original point, a valuable takeaway for me was in learning how to not only understand and accept reality, but also realizing how this understanding and acceptance in itself is a big competitive advantage. you’d be amazed at how many people, when realizing that reality will break the constructs of their safe little engineered concept of how the world works, will still fail to take the necessary steps to prepare themselves for ground level realities. i’ll borrow a great analogy from mr. nassim taleb – the turkey who is fed like a king for 364 days of the year can either believe that there is no reason for him to think the 365th will be any different; or he can learn about the important role the turkey plays in the great tradition of thanksgiving. wake up and smell the f*cking coffee, people.

oh, they’re SO not the same…

brijj.com is sanjeev “naukri.com” bikhchandani’s new linkedin wannabe. check out the logo comparison below. i’m not saying anything – just merely thought it would be a productive use of my time to put these two very different logos side by side….righhhhttttt…..

vs.

the fallacy of the me-too mashup

india today is like wild west of the internet startup days of yore, but with a lot less innovation, creativity and substance. sorry for the sudden shocking dose of reality, but the truth of the matter (at least in my eyes), is that nobody is really making cool shit. what very few smart teams are doing is brilliantly executing a strategy of concept arbitrage, localizing with a high degree of sensitivity, and being nimble enough to adapt to market and user needs (i see the first phase of burrp! fit into this category, although i daresay we’re certainly innovating for the future – more to come on that). even this is very risky, since a). nobody copies shitty products, hence, a high bar has already been set and b). an upfront assumption is made that the concept being “borrowed” cures a pain point that exists in this market as well.

internet companies in india are now starting to borrow concepts not from abroad – oh no, that’s so last year – but rather other indian consumer-facing internet companies. not only that, they are starting to pick and choose what products to mash up, as if they were in some peach orchard, and then serving up what they think is a delicious peach cobbler. unfortunately, it tastes more like shit cobbler. see, the fallacy of the me-too mashup is that it becomes exponentially harder to “succeed”, whatever the definition for success might be (page views, ad revenue, registered users, etc.) since theoretically, the product now copies two or more existing respectable products (respectable enough for you to copy, anyways).

let’s take an arbitrary example of an indian consumer-facing internet company that was recently funded $10MM by a reputable VC firm. they have a blogging platform, a yellow-pages section, a social network, a classifieds section, a local section, and a travel section. what this means to me is that for this application to be compelling enough for me to use, the blogging platform should be better than or equal to wordpress; yellow-pages section should be better than or equal to justdial; the social network should be better than or equal to facebook; local section should be better than or equal to burrp!; and the travel section should be better than or equal to tripadvisor. now, i’d even go as far as to say that i’d be willing to consider this application if these products were even slightly less qualified than their models, given some benefit i’d theoretically receive from having these products under one domain – but with services like pageflakes, netvibes, igoogle, etc., even this is questionable.

so a word of caution – the goal for an entrepreneur playing this game should either be to aim for a strong # 2 position, but with the ultimate goal of making a product better than the one you copy. if this isn’t manageable, start innovating.

my visit to iim calcutta

yesterday, the entrepreneurship cell at iim calcutta invited me to be a part of a panel and give a lecture on how to create buzz about your startup in the early stages, as well as to discuss various potholes (and mitigation strategies) for startups in india today. the euphoria in the market is such that a lot of smart people from prestigious institutions are seriously considering giving up seven figure salaries to dive into the unknown. across the panel, whether other entrepreneurs were focused on b2b enterprise products and services or true consumer-facing internet products such as ours, a common thread could definitely be inferred:

• your product must speak for itself – no amount of marketing can save a shitty product. eventually, it will die.
• set a high bar with technology – build the best technology possible within your domain. for us, it just means that all of our features work, and work brilliantly and better than anyone else. setting up a front-end marketing and sales function while outsourcing all of your technology in the early stages is most likely doomed to fail.
• invest in the best team – build the best team you can, don’t lower your expectations bar, and create a collaborative, fun environment that will foster loyalty to the organization.

many thanks to ankur gattani and the entire entrepreneurship cell at iim calcutta – truly a very kind, generous and hospitable group of people that are well on their way to achieve big things. remember, it’s harvard mbas that tick me off, not iim calcutta mbas!