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A big buyout doesn't happen too often in India - the threshold to sell is so low for entrepreneurs that $50 million seems enough for them, Vikas Saxena tells Abhilasha Ojha
What are the key things to keep in mind while starting up? Can you give us some insights on tackling changes from the early experiences of Nimbuzz?
Every start-up begins with a key idea in mind. For many companies, the key is part luck, part experience. What is important, according to me, is the timing. This can make or break a business. While the right time is important, changing with time (adapting to newer technologies and upgrading) is also important. When Nimbuzz started - roughly seven-eight years ago - we were beginning to see relevant changes in the industry. We saw a lot of people being glued to their PCs, talking loudly into them, communicating with their friends and families on the computer. At the same time, however, we were beginning to see the manner in which people used their mobile phones was changing. Simply put, a phone stopped being just a phone and was getting used as a computer.
We had to quickly adapt to the changes, understanding that the way forward was to allow conversations and interactions on the phones. Even our motto, 'Be Mobile', which we had adopted earlier when we began our business, stopped being relevant because obviously everyone is on the mobile now, communicating 24x7. Now, with Microsoft taking over Nokia, it is a watershed moment for the industry. This will fast-forward a lot of things in the business of messaging.
Given the changes in the industry, companies needed to evolve. At Nimbuzz, for instance, we quickly aggregated people on social media sites like Orkut and Facebook, among others. We saw how smartphones were gaining popularity; the boom had just started and so we understood that for people to converse, we had to build new features that were specifically suited for it. Nimbuzz introduced chatrooms and adopted a lot of its offerings in the Arabic language for the West Asia market. At that point, the market boomed. So smart companies have to constantly identify what they need to change. After all, the landscape of technology is undergoing changes rapidly.
Given the rapid pace of adoption in mobile, is R&D proving to be a challenge?
At Nimbuzz, we get a lot of information from our database, which is huge and growing. I think companies need to offer products to their consumers that can also fulfil their internal data and trends demands. For example, our Pulse of India, a new initiative launched a couple of weeks ago saw 100,000 downloads within 48 hours of its launch. This programme is aimed at the younger consumer profile, which looks at their opinions, their likes and dislikes.
Here, Nimbuzz has managed to fulfil a dual purpose; on the one hand, we offer a 'conversation-based product' that gets our consumer profile interested; on the other, the same conversation is giving the company an insight into relevant trends on which our future offerings will be based. Through this, we are aggregating results, understanding what people are talking about, we get what I call a 'measurable pulse'.
What are some of the challenges faced by the sector?
Not just our sector but overall, the problem is that there aren't too many Indian companies for the global markets. Barring a few, not too many big companies have emerged from India. Another problem is that companies in India sell out too quickly. A $50 million opportunity comes their way and companies are sold out. What if companies were to wait and grow and not sell in a hurry? I think the business texture, then would change for the better. Yes, there are financial investors in Nimbuzz. But what I mean is that the threshold to sell is so low for an entrepreneur that $50 million seems enough for them. India will be a major power only if we sold well.
Another challenge in this business is ad revenues. Though a lot of brands and companies are willingly showing interest to having their messages communicated through us, our challenge is in how we can innovate and push brands on such small screens. Companies have to innovate and in the case of Nimbuzz and Minto-s, we came up with the 'brand buddies' concept, which was an extension of people chatting with the Minto-s branding. Companies have to integrate brand advertising without alienating users.
There's so much conversation online, so many similar offerings. Above all, entry barriers are low. How can companies differentiate?
Someone might look at traditional media, someone else might look at some other means, but a true brand is one where its partner begins the conversation. Reliance phones, for example, have a Nimbuzz button as a feature in some of their handsets. Now, that is a perfect example of the partner talking about the brand. It allows us to grow our consumer base - quite literally - at the touch of a button. Several other handset manufacturers have similar Nimbuzz buttons through which conversations can begin. Our facility of chatting is growing with newer tech products and brands. However, we still haven't abandoned the PC chat facilities. Once there are cheaper handsets in Android, a lot of value will be disrupted, the telco eco system will change and companies like ours will get a bigger playing field.
Collaborate or compete? What relationship should companies like yours have with operators?
It is always collaboration. Technological advancement has happened, user adoption, cited as one of the major challenges, has also happened. We are already headed towards growth and what we will see are newer business models emerging, both for operators and companies like ours. Companies will have to identify their key strengths and play up on those that no one else has. Many telcos will bring in their core competencies and I won't be surprised if they also launch apps like Nimbuzz internally. However, that will not be a deterrent because companies like ours will be the specialists and telcos, even if they do offer anything similar will only have a marginal value. So, I think, collaboration is a win-win situation for both. Can operators ask us for exclusivity contracts (getting a company like Nimbuzz to create apps only for one of them)? It's possible, but only later, not now. We all have to grow in this business. We have to give better video calls, better improvisations on products, make the core better, make innovations and bring those innovations into the core.
The mobility man
* In his role as Nimbuzz’s CEO, Saxena is responsible for the overall business strategy and operations of the company across the globe in more than 200 countries
* As the founding general managers for 3G operations at Aircel in India, Saxena helped roll out operations of one of the India’s first private sector build-up of 3G networks nationwide
* Before he joined Nimbuzz, he set up the mobile business of Ibibo.com
* Saxena holds a B.Tech degree in Electrical Engineering from IIT Delhi
