It’s almost six long years since Apple launched the world’s app store for its first variant of iPhone. There have been many precursors to the concept of having a marketplace of applications that can be bought and downloaded onto a device, but none had the effect of what Apple had managed to do. Soon enough, others followed suite and the most notable of the lot has been the Google Play Store. So popular was this concept, especially for the Smartphone, that even telecom players and e-commerce players have their own app stores today.
One of the main reason for this meteoric rise in popularity for app store was what it gave companies. Because of the popularity of the devices, the app store became this singular platform to reach scores of users. At the touch of the button, an app made in the bedroom of a coder could be made available to the billion odd mobile devices across the world. If numbers are anything to go by, the US alone generates $15billion from app downloads from various app stores.
Cut to India, where mobile internet users are roughly about 10% of our mammoth one billion-plus population. You would think that the app store would work here, right? Well, India is a strange country in that way. India has, and still is to a large extent, not used to buying software of any kind, let alone in the digital form. Minus few skirmishes of successes here and there, India has largely been starved of app successes, when compared to the size of the market.
A lot of businesses in the app space realized this problem when they were neck deep in their business, but not Arun Menon. After having founded Ambrosia Technologies and enjoying a good few years in the services space, he quickly realized the problem that the app business would have and began to work on a distribution systems that would work in India. And he would do it offline.
The AppsDaily (formerly Onward Mobility) story is that of a shrewd entrepreneur who understood India really well. And going by how things are going for it, AppsDaily might really be onto something in the app distribution space in emerging markets like India.
But how did this unique venture come to be? Read on, this is one interesting story -
Origins from Services; what problem are you going to solve?
Soon after his graduation from IIT B, Arun knew that he wanted to startup. He says, “Back then, it was the time of the dot com and everyone was talking about the internet. We also saw a lot of startups emerge because of this and I think it was back then that the entrepreneurship bug bit me; I knew I wanted to start up.” So after short corporate stints, Arun started a software service company, which at one point had a 150 employees. He says, “I learnt a lot of things during this time. One of my biggest realizations was the scale really only happens in B2C space; we were doing B2B. You could say that the seeds of AppsDaily was sown during the time of this realization. We came with a lot of domain knowledge in the app development space and we believed that we would enter the market as pioneers, who could completely transform the scenario.”
AppsDaily is trying to set up alternate channels for app marketing. Arun says, “There are so many hurdles that an app developer faces while trying to distribute their apps. At least in a market like US we know that there is a 125 to 130 million Smartphone user base. We roughly know that India has about 60 million Smartphone user base. App revenue in the US alone is about $15 billion, and there is no way to say what that number is in India.
Arun believes that the main reason for this is the mindset of the Indian customer. He says, “Indians are not used to paying for things digitally. Look at payments in e-commerce for example. It is still not resolved and a large amount of e-commerce payments is still done via COD. India is a do-it-for-me market; there is a requirement for a physical point of sale for anything to work at scale in India.”
Arun hoped to solve this problem using the retail infrastructure of India. He says, “What if customers could pay physical money for apps at places where they buy their phones from?” But like any good entrepreneur, he went ahead with the thought and executed it to perfection. “We’re now spread across 70 cities including cities like Madurai and Trichy in Tamil Nadu and we will be growing to about 100 cities by the end of this year.How India works - The importance of trust
Along with working on the retail based offline distribution model, Arun shared that AppsDaily also has an online model. He says, “There is still a lot of tech involved in what we do. We have an online app store as well, which has a list of apps that are curated by us.” He does however admit that setting up the offline channel has taught him a lot about the way India works -
“I think the masses of Indian customers take physical perception very seriously. I find that very interesting. There are many who say that Indian customers don’t buy online. From our experience, I can safely say that there are lot of people online and they don’t have a problem buying from you, as long as you’re providing value to them. This value increases trust. And trust is the most viral form of marketing in India. Your customers will market your brand if they trust you,” says Arun.
“An app like iFart, which is a really silly iOS app got about a million downloads. All the more, it is a paid app. Such things will never work in India, however cheap the selling price is. If it is a product that provides value, people in India won’t even finch and pay up. You will be surprised to know that the average sale price of apps in the AppsDaily store is Rs 1200, which is much higher than any other app store today. This is because we provide apps of value; like education apps, health care, anti virus apps etc. Now combine that with the last mile POS we do, and it offers the customers with a great value proposition,” He further added.
The apps offered by AppsDaily are either built in house or through trusted partners. He says, “Think of it as a premium, curated app store. I want my customers to get the best product. I don’t think it’s important to have 10 different calendar apps, as long as you have one which is the best. Before launch we test it crazily and make sure that there is nothing wrong with the app. Even after a customer has purchased an app, we support them with live customer support through the call centers that we’ve built in the past year.
“In India, value and trust are absolutely critical for success of a business. It doesn’t come soon, but once you have your customer’s trust, it will not go away easily either,” Arun reiterates.
The Kalaari experience
Prior to meeting Kalaari capital, Arun admits that he hadn’t heard of them. However, he shared that they made an instant connect from the very first meeting. He says, “I found them to be really straightforward, which I always appreciate. Furthermore, they liked our team and the idea that we were trying to execute, especially the Indianness of it.”
Vani Kola from Kalaari Capital is on AppsDaily’s board and Arun believes that her role, despite not being operational and day to day, is one of the most important roles in the company. He says, “Vani has an innate ability to think out of the box. She can quickly identify patterns and always challenges us in places where we can do better. I think it comes from the fact that she has been an entrepreneur herself.”
“Having said that, it is very important from someone with the company to have an overview of what is happening and Vani does that for us. And because she’s gone through this journey that we’re going through now, she really brings value in helping us avoid mistakes; it’s not fun to learn from mistakes. Furthermore, the contacts that she have has made many things easy for us.”
On team, Bhai-Bandi, facing and overcoming fears
Apps daily has a large team of about a 1000 people working all across India and Arun takes building this team very seriously. He says, “An organization is defined by it’s team and so the most important thing that we look for in a person while we hire them is whether he or she is a culture fit or not. Everything else comes after that. It will be difficult to do this as we recruit more and more people, but it is important.”
An ideal team culture according to Arun is one that is like a family. He quips in Hindi, “Bhai-Bandhi honi chahiye yaar. We really strive to make the company as flat as possible. And by that, I mean when a driver in the company does not feel inhibited to join other’s in an office party to dance with them.”
His advice to Indian entrepreneurs is singular - “Get your trust factor going. The early days for any business in India will throw up all kinds of problems at you; people won’t buy your products, user adoption will be slow. Trust is very difficult to get. But once that kicks in, your business will go crazy.”
And lastly, he picked out a line from a popular beverage’s advertisement - “Dar ke aage jeet hai. You know, I really like that ad, because if you have the courage to believe in your passion and overcome the fear of the uncertain, you’ve already won.”
Going by Arun’s principals, AppsDaily sure is winning.
Republished from the Kalaari Capital Blog