Avnish Bajaj Says Social Networking Is “A Waste Of Time” In India
Avnish Bajaj, founding managing director of venture capital fund Matrix Partners India, has always been critical of Web 2.0, especially the social networking business models, in India. In an interview to The Hindu Business Line, Bajaj has again raked up the issue of relevance of the social networking websites in the country. “I think people are wasting their time on Web 2.0 in India.” That’s a harsh statement on a lot of folks who are trying to develop businesses out of sites like Yaari.com, MingleBox and Desimartini, a new kid on the block.
Bajaj added: “People talk about the Internet being convenient, but it is not so in India. You need to go to a cyber café or you have to dial up a telephone line or use a slow broadband connection. Whereas in the US, 150 million households have broadband access all around the clock, sitting at home. When you have such a situation you can do social networking, but where is that happening in India? Do you think a person will go to a cyber café or any public environment to discuss everything about their life?”
Bajaj’s point is that Indians may not need a platform for social networking yet. Indians culturally are not loners. He said: “Yes, there is a cultural barrier, as not many individuals will express themselves as in Myspace.com.” Besides, there are infrastructural barriers. So what is Bajaj’s point? “Fundamentally it is not about social networking but about community building. In India one needs to first create a product according to people’s needs and subsequently a community will form around it. An example would be Seventymm, which solves a need. We are building a community product around it,” Bajaj concluded.
Bajaj’s firm has, in fact, been investing in “low hanging fruits” like a Chinese food chain (Yo! China), digital signage company (vJive), and also the online DVD rental company Seventymm.com.
I sort of agree with him. The basic problem is the Internet penetration. Also I think it is the responsibility of the Govt/ISP's to bring broadband to the common man quickly and efficiently. The ridiculous charging for downloads etc.. should stop.
However, I don't agree with the cultural barrier part. They have not communicated openly because there was no mode for such communication. Actually it may have the opposite effect- people who don't want to come out in the open can now easily communicate behind a PC with Internet….No?
Infact, when the market becomes sizable enough, India may skip the Web 1.0 and jump directly to 2.0
its not new for VC's to market their companies so openly.Dosent Avinash think logically about what he is saying.he says there is a problem with number of net connections and the speed of intrenet in India .Is 70 mm not an online service.is the net which people use for accessing 70 mm different from what will be used for other sites.isnt the number of users who will sign up for a paid service much less than what it will be for free services- people dont you see avinash is ajust one more entreprenuer who is pitching for his company.
I'm sure he will miss the boat in India's internet hype which will start from 2009/2010 , a.l.a a China mimic.
Avnish
I think either you are ignorant or you think all the readers of this interview are ignorant. Let us get some facts right . To quote PWC "the indian film industry in 1.75 Billion dollars and the is expected to be 3.4 Billion in 2010. the indian home video market would grow 5 times from 90 million dollars to 467 million dollars in 2010" Given this fact, your projections of 2 Billion US dollar market in India for DVD/VCD rentals just dont seem to add up. Knowing indian market DVDs/VCDs can be bought for Rs 50 from any street corner.
FYI Netflix posted a revenue of about 1 Billion US Dollar after 7 years in a mature market like US.
If you really mean what you talked about internet and mobile, please be honourable and dont invest in any company in this area.
Seventymm is a waste of time. And so are most of the online companies in India today. Social networking is one such example.
Avnish
I completely agree with your point. In US culture self expression / sharing oneself with others needs to be done online as it is a culture of "loners". In India on the other hand, people have strong social / family relations and do not need a virtual venting place.
Hence in US, "social networking" became the platform for people to come together and now the sites are trying to convert this into busines opportunities. In India, potentially, the case could be reversed you discovera business opportunity – bring a set of people together and proviode a value added "platform" for social networking.
And technology barriers could be surpassed by making these platforms / businesses mobile enabled (voice / sms / gprs).
I completely agree with Avnish on this. Infact it is a very data driven point which is largely undisputable.
But another way to look at it is:
How many people from India have time on their hands and a broadband connection at home? While this number is miniscule compared to India's population, is this number in itself larger than any of the smaller countries where internet community building has successfully worked? Does this Indian sub-segment share sufficient traits in common to be able to form communities online?
If answer to all of the above is yes, (which I think it is), there is some scope for online communities in India. What say?
I think SN in India should be more according to our needs rather than just a mimic. Look at http://www.linkedzone.com which is a professional networking with unique features rather than a mimic of features on other websites.
Orkut became hit only because of its join by invitation marketing technique., which created curiosity among people and this made people hunt for invites.,
Now i see all the new social networking sites, spamming orkut, yahoo groups and other sites.,
And I would be interested to know what is India specific about seventymm.com. It looks like an exact copy of Netflix which is soon going to face competition from new Blockbuster's model and direct movie downloads in the slightly distant future.
Since internet penetration is so low in India, a feature that allowed selecting movies using mobile phone would have been truly india specific.
It's not about fit-for-India thing. Computing services have to end its dependence on a "computer" (as we know of) and find better platforms for the next wave of computing, or perhaps portability to better platforms.
And on the loner part. You can easily experience that during rail journey indians share a suprising lot about themselves to "strangers". And on orkut they share phone numbers!
So the loner argument is, if I may say so, flawed.