The Quest for cheap bandwidth
Infinitely Beta moved into its office in Pune and we were delayed by a month due to the last mile issues with ISPs in Pune. The state of broadband distribution in India continues to be a nightmare (thanks to all the Telcos, the builder cartel and local authorities). When you pick your office make sure that you have talked to a few ISPs and that your premises are connected by them to avoid unnecessary delays in last mile wiring by the ISPs.
Like all Internet startups we are extremely bandwidth hungry and were looking at various options for good bandwidth. We ruled out leased lines as they are exorbitantly priced in India thanks to the greedy telcos. The best quotes we got for leased lines were pretty much around Rs. 2 Lakhs for 1 mbps (one) and Rs. 4 lakhs per year for 2 mbps. At the same time we were seeing Ads from TATA that they were offering 4 mbps DSL conections at Rs. 9000 per month and Airtel was offering similar DSL connections. The only issue with DSL is that the SLA’s are not as good as leased lines and the bandwidth may be shared on the last mile which means that effective bandwidth may drop to a 4th of the bandwidth during peak hours. To solve this issue I started to wonder how it was possible to use technology to bond multiple cheap DSL connections and create one big fat pipe for the office. A little bit of tinkering with routing tables convinced me that this was easily possible and I started to search the Internet for solutions that can do this so that we did not have to mess with IP tables etc and manage a PC. BG and I looked at this problem closely and came up with many solutions:
Entrepreneurs: Stop Innovating, Start Minnovating
This past weekend I read a very interesting article titled “Entrepreneurs: Stop Innovating, Start Minnovating” published at Harvard’s Business Blog that I felt needs to be shared widely. When I setup Infinitely Beta this is exactly what we set out to do. We are working on a core idea which we will reveal shortly. I must confess that the core idea we are delivering is not novel in itself but the way we are delivering the idea with the use of technology and mini innovations will set it apart from the competition (we hope!). Another important company DNA we setup at Infinitely Beta is “1 innovation every weekend”. The team works on the core idea the whole week and then we work on a small bite sized project every weekend that is based on some trends we see in the market. One such weekend project is a site we developed over a weekend that allows a user to link their Google Calendar with their Twitter Account called http://www.imnotspacy.com . Once subscribed to the service, all your Google Gcal reminders are sent to Twitter as a DM 15 minutes before the event. We wanted to experiment with OAUTH api’s and this project just seemed to fit in perfectly and yes we did learn about all the quirks of Google’s poor OAUTH implementation. The story of this cool little project is as follows:
“On the 6th of November, very late in the evening as we were working on our main product, @abinashtripathy our founder saw a tweet from his mentor @satishd that said
“I hate it when I space out on breakfast meetings and have to call to apologize. I want calendar reminders on my twitter client
“
Abinash jumped up out of his seat and said “I know what we are going to work on this weekend” and quickly explained what the product should do. 2 days later we had an initial prototype of I’m not spacy.”
Keep on Minnovating!
Apple iPhone Profitability Surpasses Nokia
It seems that my hunch on Nokia losing in the Mobile Handsets business is now validated based on the article published in www.telecomtv.com titled ” Nokia “not prepared” for smartphone onslaught; could sell its handset business“.
Highlights from the Article:
1. Apple’s iPhone division’s operating profits for Q3 2009 is estimated at $1.6B (based on quarterly earnings release data)
2. Nokia’s handset division’s operating profits for Q3 2009 is $1.1B based on the quarterly earnings release
Quoted from the article:
” Nokia’s director of strategy, Anssi Vanjoki, admits that the Finnish company was ill-prepared for the sustained and undeniably successful attack on its commanding position by the likes of Apple, Google and RIM and “does not rule out” the sale of its handset business at some time in the future. Martyn Warwick reports.
In an interview published this morning in the German magazine Wirtschaftwoche, Mr. Vanjoki, who is also Nokia’s head of marketing, admits too that his company needs to work harder to improve its mobile Internet products if it is to to stay in contention with the likes of Apple, Google and Research in Motion – the manufacturer of the increasingly popular Blackberry PDAs.”
Takeaways from the article:
1. Nokia’s march to the deadpool just seems to be accelerating over time as it remains uncompetitive with the onslaught of Apple and Google who are using their Silicon valley style Product Innovation capability to cut the oxygen supply to Nokia.
2. Apple’s profitability is based on the sale of only 5.2M handsets while Nokia sold 113.5M handsets out of the total market of 308.9M handsets sold in Q3 2009. The argument that I always made that selling large volumes of low end mass market feature phones and losing sight of the highly profitable high end market may be the sole reason why Nokia will fail as a company. Moore’s law applies to the mobile devices market as well and what is high end today will become low end in 1-2 years and when that happens the already uncompetitive Nokia will not have a market to play in.
3. Product companies need to focus on innovation and providing product delight to customers so that they don’t face the same fate of Nokia. If a large Goliath like Nokia can fail simply because they took their eye off the ball and started dabbling in fashion, gaming and areas that were not important to customers and started delivering poor user experience (btw, user experience is what made Nokia a great company a decade ago) then small companies with poor product offerings have a much shorter lifespan.
Indian product companies do not focus on delighting customers and keep offering sub-standard products to the market (Internet and Media companies included). The only reason they continue to do business is because our market is very large and due to the socio-economic background customers are not exposed to great products YET. Our markets have opened up nicely and we can now get the same products available internationally. It is only a matter of time until our people will start getting spoiled by great products and start demanding great products and services.
A nice example of this phenomenon can be observed in the Home Appliance business. LG and Samsung now dominate the home appliance business in India. Almost all the Indian companies in this space have been systemically eliminated and the few left standing like Videocon are struggling to remain competitive in this business and are diversifying into other businesses (DTH etc) where they can compete more effectively.
All Indian technology startups should focus on building great products that delight customers and can be benchmarked against the best in the world. If not, it is a matter of time until some silicon valley company will look at India as a part of their global expansion strategy and obliterate Indian companies that deliver poor quality.
Nokia – The story of an Awesomely Innovative Company getting Out-innovated
Motorola is a classic American company founded in 1928 with a history of working with Radio technology. It started manufacturing car radios and slowly started manufacturing walkie-talkies (2-way radios), cellular communications infrastructure and Wireless Phones. As a pioneer of radio technologies in the US, the largest customer of Motorola was the US government who procured radio communications equipment for the military. Even NASA used Motorola’s technology in all the human space travel and the first words spoken from the moon by Neil Armstrong was through a Motorola Radio. Motorola is also credited with many industry firsts including the launch of the first Commercial Cellular phone the DynaTAC, microprocessors that powered the early Apple, Atari and Commodore computers, the invention of the Six Sigma Process, creation of the first digital cellular system and phones in 1991 and enjoyed the title of the leading manufacturer of Cellular technology in the world until 1998. When I arrived in the US in 1994, the rich lawyers, salesmen and doctors had Motorola car phones. The form factor of the cellular phone was not compact enough to be carried around in a purse or your pocket. By 1995/96 Motorola had introduced a series of cellular phones which were not quite compact but were portable enough (Pictured here). They were very sought after in those days and the very wealthy people in the US owned them (very similar to the early days of the mobile phones in the Indian market when the phones and the service were expensive).
Rediff Losses Widen Even As It Invests In ‘Improving Customer Experience’
Rediff just announced their earnings for this quarter as reported by ContentSutra. Seems like they are tailspinning towards the deadpool.
Quoted – ” Nasdaq-listed Rediff.com (NSDQ: REDF) India Ltd today said net loss for the quarter ended 30 September widened by 84% to $2.61 million, from $0.41 million during the corresponding quarter last fiscal.Total revenues dropped 43% year-on-year to $4.19 million. Revenues from India Online dropped 45% y-o-y to $3.08 million.”
October 2009 browser stats – Firefox overtakes IE6
Quoted – “Between October and September, Internet Explorer dropped a significant 1.07 percentage points (from 65.71 percent to 64.64 percent) and Firefox moved up a sizeable 0.32 percentage points (from 23.75 percent to 24.07 percent). Safari increased 0.18 percentage points (from 4.24 percent to 4.42 percent) while Chrome once again moved further away from Opera: it gained a worthy 0.41 percentage points (from 3.17 percent to 3.58 percent). Opera slid 0.02 percentage points (from 2.19 percent to 2.17 percent). Although IE’s decline seems to be unceasing, the real shame is that the old versions have more share than the newer ones (we can only hope that as Windows 7 gains popularity, this trend will reverse). Still, given that IE6 had 23.30 percent of the market in October, this means that Firefox has now surpassed it:”
Both Sides of the Table – A Blog maintained by an Entrepreneur turned VC – Awesome!
How profound? – “I think the sign of a good entrepreneur is the ability to spot your mistakes, correct quickly and not repeat the mistakes. I made plenty of mistakes.”
Add this Blog to your reading List
Live Ted India Coverage from Indiatimes.com
Very impressed with Indiatimes Coverage of Ted India. Check it out at http://ted.indiatimes.com/ Really seems like Indiatimes is being reborn. Now I hope they can fix their Integra/SSO issues. Would love to start using my Indiatimes mailbox hosted on Zimbra
Indian Internet Industry Watch – Updated 5/11/2009
Demographics
Total Population -> 1,166,079,217 (2009 est) [1]
Age Structure -> 0-14 = 31.1% ; 15-64 = 63.6%; >65 = 5.3% [1]
Urban Population -> 28% of Population [2]
Adult Literacy Rate -> 66% (2007 est) [3]
Youth Literacy Rate -> 82% (2007 est) [3]
English Speakers as per 2001 Census -> 10.66% of population (100M) [4]
English Users (Latest Estimates) -> 33% of Population (350M) [5] [6]
* Users are defined as people that can read but cannot understand spoken English or Converse in English
Economic Indicators
GDP (PPP) -> $3.3 Trillion (4th in the world) [7]
GDP (PPP) per Capita -> $2,780 (130th in the World) [8] * the distribution of wealth is so skewed in India that this number looks really bad. If someone has data on what the middle class (~300 million folks) makes, it would be am interesting number I bet.
Technology Indicators
Internet Penetration as of Nov/08 per ITU-> 81M (7%) [10]
Broadband Penetration as of Jun/09 per TRAI ->5.3M (<1%) [10]
Venture Capital Indicators
Investment by VCs July to Sept Qtr -> US$77M [11]
Number of deals by VCs July to Sept Qtr -> 17 [11]
PS: I usually watch these numbers once a quarter and wanted to make sure I share it with the startup folks.
RIP Nokia N-Gage
I had blogged in one of my earlier articles about how wrong Nokia had got the mobile gaming market. The news today as reported on TechCrunch is that Nokia is killing its Ngage platform and the Service that distributed games for the crappiest gaming device ever built. I am hoping to make a similar post on Ovi in a year or so. Seems like Nokia’s problems are never ending.
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