Think of the biggest success story in the telecom space in India, and it's likely that Airtel and Sunil Mittal's names pop up in your head, almost instantaneously. In a classic case of the fruit not falling far from the tree, multi-billionaire Sunil Mittal's son Kavin Bharti Mittal also decided to go down the entrepreneurial route and started a venture called AppSpark in the UK, when he was only 20 years old. And now, he's back in India in a new avatar. Kavin currently heads Strategy & New Product Development at Bharti SoftBank (BSB), the mobile internet joint venture between Bharti Enterprises and Japanese telecom major Softbank Corp Mobile.
In this freewheeling chat with YourStory, Kavin speaks about what BSB does, its investments, India's 'mobile-first' market, paying for mobile apps and the need for co-founder support. Do read on to know more:
You founded your startup AppSpark in the UK, when you were 20 years old. Why did you decide to come back to India and set up BSB?I was still running AppSpark when I came back to India. If you look at the trends, India today is where the US was in 1995-96, and where China was in 2003. And that's the one big reason why I came back to India. It's exciting to be in a market as nascent as India's where no one is building stuff for a 'mobile-first' populace. There are simply not enough people doing stuff for the 'mobile-first' market. I wanted to harness the potential of that space and that is why I came back to set up BSB.
In your view, why is the 800 million-strong 'mobile-first' market staying under-served?
There are three main points that one needs to tackle when you launch something in India. Or anywhere in the world, for that matter. And that'd be the product, the distribution and the business model.
If you look at the US market, there are plenty of people building great products for the mobile and the distribution is there because people are using smartphones, app stores, etc. The business models are also pretty straightforward because things have evolved. In India, there are a few companies building some good products. But it is very hard to get your service noticed and discovered because distribution is very poor. Also, if you look at business models in India, we are a prepaid market, not a postpaid market. In the UK, during my last 7 years there, I had 3 GB of data coming to me every month. That was a given. But here in India, people buy voice minutes and SMSes in sachets. And they buy data in the same way. At this point in time, people are wondering whether it is worth spending 100 bucks on something they're used to against spending on something called the internet.
Though there is a massive population that understands the internet usage in a very large way, a majority of Indians are still questioning and experimenting right now. If you look at the US and Chinese markets, the revolution happened on the PC and the experience on the PC is much better, much faster and on a bigger screen. So, people coming onto the mobile from the PC can understand data much better, as they are already used to it.
In India, 600 million people are coming onto the mobile for the first time. For them, MBs and GBs are very hard concepts. People here understand SMS and talktime very well. They are tangible and more importantly, they are accounted the same way by everyone. But with data, they find themselves encountering the fact that 1 MB on Facebook is very different from 1 MB on Twitter.
I think the biggest problem in India right now is that business models are not simple enough for people to understand and I see that as a massive obstacle to scaling distribution in India. Also, if you look at the operator ecosystem, it is not very friendly to the VAS guys. There just isn't enough discoverability. However, through what we have been building at BSB, we see that the operators are changing now and things will be very different a year from now.
What drove BSB to invest in Hoppr?
BSB serves as an incubator. We build stuff in-house and launch applications and services. And we do that by partnering with startups like Hoppr. Our decision to invest in Hoppr was because the team is extremely credible and they have great execution capabilities. They also understand the Indian market really really well. When we look at building services and applications at BSB, we think about solving hard problems and simplifying lives.
We believe that, in the internet and/or services space, it is very important for us to remove all the obstacles for the consumer using the product. We are very focussed on user experience at BSB. We think that the consumers are going to benefit a lot more, the merchants are going to benefit a lot more, given that the idea is about providing them a platform to connect with each other. Also, given BSB’s stance in the market, we can get all sorts of operators onto one platform, be it Idea, Vodafone, Airtel or whoever else. At BSB, we have a 'hacking' culture where we encourage teams to come up with prototypes really quickly. So, that is what we looked at, while investing in Hoppr.
So, how is BSB structured?
The way BSB is structured is that it is actually four different companies - one for social, one for hyper-local commerce, one for gaming and one for the media. We fund these startups individually and we fund them year on year. We see how they are doing and decide whether to put in more money or move on. So, each of these four different companies have their own teams and all put together, BSB has over 100 people now.
What are the three things that you consider carefully before choosing to invest in a startup?
As investors, we are very involved at the product level, the strategy and all of that. So, the most important thing is the team because it is the team that can give you a massive advantage over the competition. The second most important thing is the culture. We look very closely at the kind of people we invest in. We prefer open-minded individuals, as it helps greatly when it comes to building companies. The third most important thing is speed of execution. Speed is vital. On any given day, we prefer speed over perfection.
Tell us about your thoughts on the much-touted opportunities in social graph, e-commerce, gaming and media.
I think the opportunities are endless, actually. If I had 100 hours a day, I could still do more. There are huge opportunities in building seamless and cool applications and services across gaming, e-commerce, hyperlocal commerce and social. I believe that it is very important to be extremely passionate about what you are doing because, at the end of the day, you are going to spend most of your time doing this and if you don’t fall in love with what you do, there is no way the company is going to take off.
Also, it helps if the total addressable market (TAM) is really big when you jump into a venture. In early stage ventures especially, that helps because there are 20-30 companies building the same thing, leading to a good deal of healthy competition. In addition, building a very good product team helps a lot in being ready to harness the opportunities. One thing India lacks is designers - UI/UX designers. Fortunately, I learnt that skill really well during my days at AppSpark. So, I strongly believe that entrepreneurs in India have to be lot more design and product-oriented.
It is crucial for entrepreneurs to understand all the features and use-cases in the UX department because that will help evolve their business models as well. Typically, most people decide to launch an application for free. They keep adding features and make it a freemium model. That is the typical business model here. And that leads to a horrible user experience. And to make matters worse, the mobile advertising ecosystem in India hasn't evolved much.
To get around this, we build things that we would love to use. We always try and figure out what is the best for the user. I believe that a design-led entrepreneur will do a very good job in any market all over the world. It's true especially in India and more so in mobile because, in mobile, design flaws are exposed easily. Design-led entrepreneurs are very few in number. But design is very important for mobile users.
Do you see that trend changing? Do you see design sense becoming more prominent in Indian products soon?
I hope so. I really do. And I think it is something that one learns over time. And as an extension, the guys who understand design really well will have a massive advantage over the rest. It took 4-5 years in China for the UX to evolve. People see opportunities in a sector, they build stuff and end up learning in the process. So, it is a matter of time as well. Meanwhile, one can always see what applications have been built in the US, UK, Japan, China, etc and enhance them for the Indian market.
The standard plaint is that India still doesn't have too many people willing to pay for the mobile apps. What are your thoughts?
The reason for people not downloading or not paying for mobile apps is not because they are not good. The larger problem is that the ecosystem has not evolved. For example, out of the 180 million active phones in India last year, only 11 million were smartphones including your Nokias and your Blackberrys. Now, all these standard feature phones have a few apps. But the demographic using them has no idea about them. Of course, data was and still is expensive. But the basic understanding about how data can work for you is just not there. The lack of 3G and 4G infrastructure, speed and lack of local content only worsens things. I still think that there is not enough local content in the market, which is why I believe a lot of people do not download or pay for apps. I always struggle to find apps with good local content.
Can you tell us a bit more about the kind of support that incubatee companies can expect from BSB?
At BSB, we are very operationally involved with our companies. We don’t just hand over the cheque. We work closely with the companies, whether it is about how to build the products or how to take care of distribution models and so on and so forth. So, we provide all of that support. We also build teams for various companies. We have 4 operational leaders at BSB to work with the companies. We also support startups by hooking them up with the entire partner system that we have, be it Airtel or other operators, OEMs etc. So, we really open doors for our companies at BSB.
What is the duration of the incubatee program?
It's not a traditional incubation model. We build these companies. So, we actually run them.
In retrospect, what are the biggest lessons that you drew from your entrepreneurial experience at AppSpark?
One of the biggest lessons that I had at AppSpark was to start small. When you launch big, you have already burnt a lot of money without actually testing the market. The second big learning is that design/UX is very important. And the third one is that if you don’t have the right team, it is going to be a massive problem. A right team can do just about anything. The fourth important learning is that you also always keep an eye on the budget and ensure you are taking care of cost cutting, etc.
Where do you see BSB, let's say, five years from now?
With BSB we don’t have a 5-year vision. We have a 20-year vision. We hope that we can contribute towards building the ecosystem, not just the companies. We would like to work closely with OEMs, operators etc. Three to five years from now, BSB could either go bust, considering that we are a startup ourselves, or could have created a large scale impact in this market.
What advice would you give to entrepreneurs, venturing into the mobile space?
Well, the journey is going to be really tough. You have to think about not only building the product, but also about how to distribute the product. You will have to think big and start small. You will have start with a massive market, because there is lots to do in large markets. Even if you fail there, there is lots to learn. And you will have to stay hungry and stay foolish. This is something that we keep telling ourselves at BSB as well. At the same time, you should never start a company alone. Entrepreneurship is not easy. There are many ups and downs and usually, more downs than ups. It is very important to have co-founders who come in with different skill sets than yours. That is the one thing that I learnt at AppSpark. Having co-founder support can make or break your venture.
We at YourStory thank Kavin for his time and wish him and BSB much success. We shall bring to you regular updates from BSB, so stay tuned. Also, we'd love to know what you thought of this story. Do leave a comment with your feedback.