@Ray Thanks for the compliments on the writing. Regarding “Why don’t you popularize it more”.. I don’t know how to do that , Will check out rambhai.com and contact you offline.

@Kalpesh I guess the trick with mobiles is that once there is a financial relationship (the customer gets a bill every month), it is easy to get them to use more services such as caller-tunes, etc. which would’ve been difficult to sell otherwise.

Regarding the google conversation, it is a good-to-hear story, but there is a difference between trying to create great technology, and trying to create a business. The latter does require a business model.

@Venkat Good points. “Show them the value” is my takeaway and something to keep in mind. And yes, I agree that ad revenue is not something to depend on, unless the website/webapp is inherently suited for it.

Very interesting topic indeed.

The question is will people pay for service? My answer is – yes. I feel there are 2 main reasons how you can convince your users to pay.

1. If you can cut costs of your users and you can prove to them the ROI – how by buying your service it saves them a bunch of money.

2. If you can reduce the pain points of your users. It can be saving time, saving other frustrations ( like avoiding queues,physical travel for instance ).

Ad revenue in my opinion is a bonus. You cannot sustain off it. From what I have learnt from some entrepreneurs Indian consumers do not click on ads – I may be wrong but my experience so far concurs with this view.

Regards Venkat

Although I haven’t ventured into anything (so I am nothing in this journey), but to worry about business model makes it limited.

I don’t know whether youtube had a model right from beginning & am not sure, if they are making money yet.

(conversation between investors in google before it became household name) IIRC, it was like following.

A VC director speaks to one of his partner about how they can make money with this idea. To which, he said – these guys have created something of value. they are good in technology. if we can’t find how to make money out of it, we should get out of the VC business.

So, guys who created google didn’t know how to make money out of it

People in tech field don’t think of business outside of tech, which is true in some sense. Also, we think about who will buy it rather than how many?

Look at mobile. Personally, I don’t spend money on ringtones, caller-tunes, poll SMS. But, you can see that there are people who pay for it (just for fun). So, paying small amount once is fine.

Another trick cellphone companies use is unlimited SMS for x amount. People really dont need this. People buy it & them SPAM it by sending crappy jokes around.

I was reading ur blog posts and found some of them to be very good.. u write well.. Why don’t you popularize it more.. ur posts on ur blog ‘swaroop ch’ took my particular attention as some of them are interesting topics of mine too;

BTW I help out some ex-IIMA guys who with another batch mate run http://www.rambhai.com where you can post links to your most loved blog-posts. Rambhai was the chaiwala at IIMA and it is a site where users can themselves share links to blog posts etc and other can find and vote on them. The best make it to the homepage!

This way you can reach out to rambhai readers some of whom could become your ardent fans.. who knows..

Cheers,

As far as I know – Smsgupshup makes money off their enterprise solutions. Selling sms based services to businesses and enterprises.

Again – they are making money only from the audience who is able to pay money.

Your wiki is quite handy. Real estate is a market I had completely missed thinking of.

@Yash, Yes, the idea definitely has to provide value and benefit. But the point I’m making is that it’s become hard to do that and make money off of it. Let’s take the case of airline ticket booking services, it’s become such a dog-eat-dog competition that people are finding it hard to charge for anything. And when you want to charge, there are multiple adoption problems.

But I guess, it’s a moot-point if the line of thought should be that if you give enough value, people will pay for it. Is my understanding correct?

@Ankesh, Thanks for the insight. I agree with you that most of the audience online is techies and that’s definitely something we have to assume as mostly the target segment, but especially for the IT crowd, it’s hard to encourage people to pay for anything, there is this whole culture of getting everything for free which is both good and bad. And also why can’t we get the others online and provide them value as well? I have been making a list of such websites on my wiki – the kind of websites that “are useful enough to compel a person without internet access to go to a cybercafe just to access this website.” Almost all of them have a physical aspect (movies, travel, etc.) or are classifieds supported by ads (which is not sustainable unless you reach a critical mass and that might be too late in the cycle for a startup).

Why can’t we have more apps and utilities that are generally useful for people in India? For example, smsgupshup.com is the SMS/India-equivalent of Twitter, but I have no clue how they actually make money off the thing and if they are indeed actually making money or not.

@Gowri Sivaprasad, I agree with you on that, maybe it’s those ideas in that cross-section that need to be sought out. I like what ngpay is doing for buying stuff on GPRS-enabled mobile phones.

There are probably some uniquely country/region specific things that can generate money online. For eg, personal finance and related aggregation is one of my favorites that is screaming for some webapp. A business model that works with multiple financial institutions and aggregates data/value for a user would find a wide audience.

Also, a webapp doesn’t have to be on a regular browser. I think valuable mobile webapps have a good chance of finding customers willing to pay. For eg, mobile webapp for Railway or bus booking with a service fee component per ticket would be a good business model.

Freemium model is not the only way to make money.

India is comparable to Finland when it comes to online activities. Does anyone ask – how do you make a web app profitable in Finland?

Yes India has a billion people. But how many of them are online? And how many of them are able to buy things online (not willing to buy – able to buy)?

To make your website profitable – you have to focus on the audience that is ABLE to pay online. In India – there are only 2 broad markets that I can see: i. Tech consumers ii. Businesses

(There may be others too – I haven’t come across them.)

Focus on those 2 and your website can become profitable without the freemium model in India too. A website like alibaba.com but focused only on Indian related goods would do very well. I think any B2B based website would do well.

Job sites do very well too – because businesses are able to pay for such services.

In summary: Think WHO before you think WHAT or HOW. Think who your target audience should be. Not how you are going to create a website based on the freemium model.

Scribd – wufoo – youtube – all of them worked on the what and the how before the who. And thats why they are struggling to become profitable.