Hyper-local marketing for startups

Since last week, one can’t miss the advertisement of Eon tutorials in Malleshwaram area (in Bangalore city). It’s on every gate of houses/offices along with No Parking sign. In spite of several such signages which use No Parking boards to advertise, one cannot help taking note of Eon. Not for its colorful board design, but for the sheer number of boards they have managed to display. They are on EVERY gate. As you happen to walk or jog or drive by any road, you will take note of it. all this despite several other signage boards on the gates. Sub conscious registers it well. Ask anybody about Eon tutorials in Malleshwaram area. They might not remember where they saw it, but surely will tell you they heard about it before. From Eon tutorials business point of view, this is a tremendous marketing achievement. Their claim is simple – tutorials for any class all over Bangalore! I would imagine these sign boards are put up in other areas of Bangalore as well (unless they don’t have cash to spend on it). Now the decision for parents is made easy. Eon has produced top of mind recall. Either curious parents will call to inquire from them or hear about them from other parents. In any case, number of students inquiring for admission or even getting themselves admission should increase. (I am not invested in them J and do not know actual conversion rate).

This got the marketer inside me thinking. For a moment, assume they were a pan-India company and they set aside budget for their marketing team. What would marketing team do? Open a website, with parents and students as target market, get bloggers to write about them, get Google to show them in search results for related keywords, advertise near schools, on facebook etc. This is perhaps what they will do considering most consumer startups in India are already doing similar stuff. The bigger idea would have been to spray in all cities and hope to get required buzz. If a marketer were to think of what Eon has done, maybe it has an important lesson. What if all marketing effort is focused in one region or city? Spend (the always constrained) marketing budget in hyper-focused manner. Ensure it gets buzz within that region. This is possible and well demonstrated by Eon. Note: signage board as a medium of advertisement is not important, setting up the hyper-local buzz is important. Ensure your target audience (parents/students/…) as case maybe don’t miss it. This is sure shot way to create a buzz with a section of target audience (and can be executed with less budget). If the product/service doesn't get inquiries/sales from that region in a reasonable period of time, it validates viability of that offering. If it does convert into sales, it’s a good indicator of offering’s acceptance in a wider market as well. In any case, the result of product-market fit will be known. If product/service does convert into sales, the marketing team will have a happy problem to solve – to satisfy those initial customers and create the all-important word-of-mouth social buzz. Hey, Isn't this the lean-marketing way anyway? J

Not surprised to hear stories about how Yelp first proved their product in San-Francisco first or how FourSquare got their numbers initially with hyper-focus on one city. Perhaps these companies planned that way or executed it that way for lack of initial marketing/operation budget. Reason could be anything; hyper-local marketing is a great way to start marketing in a consumer startup.

I don’t see many Indian startups adopting this thinking. Any thoughts why?

Telcos - how about adding intelligence to pipes?

Having worked in telcom domain for 12 years, I cant help noticing stark difference between the telco world and the internet world. Now that I am trying my hands on internet “stuff” for nearly 1 year, the difference is more apparent than before.

Much like the telcos, internet companies have gathered users, built a brand and store user data (think of Google, Facebook, Pinterest and likes as internet companies). Data is the core treasure and then in priority comes their brand; which can be obtained by e.g. through advertisements. Intuition should be telling them “hold on to data and don’t expose it anybody else”. On contrary… over time, they realized that opening up data to the world makes them an attractive proposition for a community of developers and their users. People will figure out innovative ways to profitably build applications in diverse domains. Think of Zynga and host of others who have built a business using social data exposed by Facebook (which Facebook by itself could not have done without defocusing from their main business). As a platform provider of data, Facebook only needs to create a business model to monetize exposed data. Data privacy regulations have to be respected and they have found ways to take permission from user. E.g. my private data is not compromised when Farmville uses my friends list since I authenticated Zynga using my Facebook credentials. Facebook and Zynga are examples of zillion others to illustrate power of open data architecture.

Imagine if telcos in India opened up their data. Privacy of data comes to the fore first… assume telcos have smartly handled it by taking permission from users E.g. via SMS for opt-in kind of services. India has nearly 600 million mobile subscribers and nearly 60 million facebook users. Who is more likely to have more data about your social graph? your telco or facebook. Remember telco knows who you call (close ones), who your friends call, how frequently, at what time of day, from which location, who do you SMS, how many times, with what text content and other way data about who called you etc. This is accurate way to understand who is important to you. In addition, by analysing data traffic moving in and out of network nodes, telcos already know which web pages you visited, what did you click, which e-commerce site you browsed, which product you intended to buy etc. If you think carefully, this is nearly as much data what facebook and Google put together have about you. Imagine if your telco were to start a mobile ad network. Since they knows which pages you browsed, which products you expressed interest to buy online and content of your SMS messages, what pages your friends browsed (wow), it could provide far more contextual advertisement than Google can provide. Although some of it appears to violating user privacy, a deeper thought can create value by staying within regulatory boundaries of user privacy. You could argue this is not core business of the telco. Well this is exactly where the telco will benefit by opening data to others who can create a business around it and make money. By unlocking the power of hidden data, telcos can create additional revenue streams. Apps will provide telcos a value differentiator from their competitors. E.g. you might stick to Vodafone and not switch to Airtel since you already use an app which inturn uses network data+your data. Telcos are currently collecting user’s government approved verification documents as proof of identity. Imagine if they exposed this data to third parties with a view to verify individuals, online hiring and online small credit agencies would use it as preliminary verification method. What’s currently done to satisfy regulation can be used to perhaps create new revenue stream. These are only examples to think in one direction. If telcos were to flex thinking muscles, they can uncover lot more useful cases. All this by providing secure APIs to developers and inviting them to hackathons to innovate. Instead telcos are happy protecting data assets (just like spectrum asset) in an oligarchy ending up providing a conduit pipe which provides commodity voice minutes and data bytes. Clearly, telcos have missed the bus. CIOs from internet domain can make this difference. Biggies have tried their hand but efforts are not enough. Airtel’s app store is not yet a runaway success. Vodafone had an initiative towards open data architecture but effort has weaned away without visible results.

2012 was helluva year. Excited about possibilities future can bring.

Looking back into one year could be daunting, more so if it threatens to expose own vulnerability. During my long walk with close friends, I have shared with them about my progress report… which has often triggered constructive discussions and ideas. Sharing with you could just stimulate further ideas...

When we started Shoutout, there were many assumptions. that people would complain… that India has enormous number of people who complain on regular basis… that we will evolve a business model after gathering a critical mass of consumer complaints… that we will magically weave an SEO band to attract consumers in hoards… that somebody will invest in us once consumers start pouring in… that we can draw living expenses to sustain and grow. When we launched, consumers came in good numbers to vent out complaints. Bloggers wrote about the exciting new story and companies started resolving complaints based on complaints. So far so good… till we started to define all foundational assumptions in numbers. We found from Flipkart’s yearly report that they received 1M active users during the year. This number was startling! much lower than any of own estimates. It does give a ballpark on number of active internet users in India. My folks at home use Gmail, Facebook and Youtube to consume information. However are they so active on the internet to transact (Flipkart, ICICI bank etc…) and contribute content (shoutout and the likes)? Probably not right away. They will, like millions of other internet users in India… take few more years to become really active. However we didn’t have financial muscle to sustain that long. A respected investor in town showed interest but perhaps found us wanting on techie skills. We had to move on… ShoutOut was exciting and will still be exciting. Opportunity still exists for somebody to grab this market, perhaps for those who can sustain for a longer timeframe.

Pushed to the corner drawing board, we had to find another opportunity to build a business. 2 of my well meaning advisors pointed to my past experience in B2B markets… they wondered why I wasn’t playing to our strengths. And that tipped us over to mold ShoutOut into an enterprise business. And then started a fresh set of assumptions… that businesses would like to hear feedback from their customers… that there are lot of such businesses in India (to start with) whom we can sell… that decision makers in service organizations would like to analyze consumer voice to make decisions on a ongoing basis. But now we were wiser than before. We realized it’s better to start small, make note of all assumptions and validate before drawing grand plans (these are established startup virtues made popular as lean startup principles). We also had learnt few other facts… that we had to learn coding to remain lean… that we had to build a product and prove market acceptance before seeking out for funding. After few weeks, we had learnt CSS, Javascript, SQL and RubyOnRails. Keen to follow lean principles, we had to now build a product with minimal features… which could still solve somebody’s pain point resulting in revenue. Our product is now ready… absolutely proud to have built it ourselves. Spencers retail and Café Coffee Day have agreed to pilot the product and we are on way to validate its viability in market. I like to believe we have setup ourselves to fail fast. If it has to succeed, it will by validating our assumptions. Else we will move on again… Market will finally have final say in validating my startup’s den of gambling assumptions. Although we know by facts that most startups fail… fight we will, hope we will.

My closest of friends have often challenged my wisdom of not having an easier life with a cushy corporate job. The journey to hang on and discover new inroad to what we believe makes it exciting lends a sense of purpose to every new day. The satisfaction of trying than wishing makes the effort worthwhile. As they say, startups are not for weak hearted… certainly not for those who are not prepared to fail. What do you think?