India has more then 60 million active Internet users out of which 25 million are on the net everyday. 70 percent of this audience has visited social media sites once and India ranks 9th according to Comscore in Social Media usage in Asia Pacific Region. With all this statistics adding to the Social Media Growth Story, India has still to acknowledge its Social Media Product Startups. In the last two years we have witnessed some promising Startups come up who have strong products and global clientele. With Radian 6 acquisition, we hope that the time for Indian Social Media startups to get their due has come.YourStory spoke to some of the leading VCs and entrepreneurs to gauge their reactions and find out what we can Social Media entrepreneurs expect in the coming days?
Soumitra Sharma from IDG Ventures says, “The acquisition of Radian 6 by Salesforce signals that monitoring and analytics of social media interactions will form a key part of business strategies for organizations globally. For Indian Social Media Product Startups, this means a global validation of their offerings and with India rapidly skipping steps in evolution of smart devices and communication technologies, Indian market will only reach the inflection point faster. With most social media platforms being global, Indian startups have an interesting choice to make – do they develop offerings that go after large global markets that are definitely more mature and ready for uptake, but where they will have to compete with the likes of Radian 6, Hubspot and Jive Software? Or are there any peculiarities of the Indian social media user that these Indian startups understand and which helps them develop strong customized propositions that forces say a Pepsico India to opt for them, even though Pepsico might be using Radian 6 at a global level?”
Soumitra further adds, “Radian 6 going on to serve more than half of Fortune 100 companies in a span of 5 years, suggests that this space will continue to be of strategic interest mainly for large companies, domestic or multinational. From a high quality traction and scalability perspective, Indian startups would do well to target large established players with extensive customer bases, instead of only going after SMEs, which sometimes are a low hanging fruit. From a VC perspective, this transaction provides validation for the exit potential in this nascent space.”
Ankur Gulati from DFJ (Draper Fisher Jurvetson) says “More than anything else, this is a timely validation for the fast-growing enterprise social media space, globally. And while emerging economies, and especially India usually lag adoption in some such fields, this is one area where I feel history will not mirror the future and adoption could rise dramatically.
I always say that given limited brand-history in India, every experience is a make-or-break-experience for these companies in their quest for consumer mind-share. And given the fact that propensity to complain is much higher on social media than to complement, generating actionable insights from social media will have to be right up there in the priority list of the CXOs.”
Entrepreneur Rohit Gupta from InRev Systems Pvt Ltd, who has built the Social Media product Simplify 360, is already witnessing positive affirmations for his product in the market. Rohit says “Social Media Intelligence has seen a fast pace growth in the last few months. Since our official launch late last year, we have been receiving a lot of requests. In just five months of launch, we have close to 100 corporate clients.
Though Rohit is bullish about his product he maintains that the learning curve is a bit higher in the Indian market and the conversion period much longer. But lately he believes this trend is also changing,he says, “Even though most of our customers so far have been from outside India, the rate of customer acquisition in India is growing too.”
Another Bangalore based Social Media Monitoring and Engagement venture, Beevolve Technology is confident of building a strong global footprint. Incidentally Beevolve got seed investment from Upstart.in (managed by Freeman Murray) as part of the iAccelerator programme at IIM-A. Goldee Udani, the young entrepreneur behind Beevolve says, “So far, we have seen a good response for our monitoring platform in the market. We are one of the few players who provides a superior product with excellent customer service at an affordable price. That results in a lot of word-of-mouth promotion for us. Currently, we have customers ranging from Fortune 1000 firms and publicly limited companies to startups.
However, Anirudh Singh from Cannan Partners has a different standpoint, he says, "Aggressive social media valuations coupled with recent Radian6 acquisition at $300m shows the trend that -top end companies in the world think that social media is future from a consumer’s standpoint. This is also validated by $29M revenue earned by Google last year majorly on the basis of ad spend. Social media analytics is going to emerge as an interesting and high growth space.”
But Anirudh cautions and raises some pertinent questions which the Startups will have to consider/answer as they scale up.
Anirudh says,” What does this means for Indian SM startups –
a) Disadvantages of remaining/competing only in Indian market;
i) Indian SM analytics market is too small – take 18M FB users * $5 per user = $90-100M market, that can grow to max $500M in 5 years time frame. It is not interesting enough and too big a bet from a VC standpoint.
ii) Let us consider Twitter: Out of 175M registered users, only 10M users follow more than 64 people and only 10-20M users are active. What this means is that the ‘analyse-able’ users are too less and majority of these users are in all probability not in India but in US/Europe etc. It could be a similar case for FB in India as well(though globally they have solid trends). However, this will surely grow, but, from a 3 year perspective, I would not bet on India.
Which brings me to my next point-
b) Indian startups will need to compete with US/foreign startups in order to compete in a global market. And Indian startups, due to the location disadvantage(of not being in Silicon Valley) may not be as clued in into the latest technologies, trends etc.
c) Indian startups will need to differentiate on the following factors among others -
ii) Distribution/user base – Radian6 had more than half of Fortune 100 companies. Can Indian startups match/compete with that?
iii) Data acquisition – How do they acquire twitter, FB users?
iv) Business model – with "Mobile" and "Local" expected to be the buzzwords in 2011 in the US – can social media analytics startups integrate these two into their business model? May be a back-end infra which gives client companies a chance to take and execute instant actions/decisions (e.g. instant Groupon type deals based on user requests) based on social media trends/analytics. I think out of the box thinking will be critical.
To sum it up all, I think, Indian startups will need to think of ways to create a dent in the global market, like Radian6 with 150M users plus more than half of Fortune 100 companies, to be taken seriously enough by VC’s. For companies/clients to use them on a global/scalable basis, they need to have serious differentiation and scalability on the above mentioned factors."
Ankur Gulati further adds, “All this is good news but this won’t necessarily make Startups job any easier in the short-term. They will have to continue to demonstrate value and keep on innovating and moving beyond the traditional “monitoring” applications.”
How Indian Social Media Startups embrace this dynamic space and compete glocally we will have to wait and watch . but we at YourStory would like to sum it up in the words of Ankur, “In short, exciting days lie ahead!”
Shradha Sharma | YourStory