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BT DOTCOM: COVER STORY The Second Coming It's no longer about vague ideas, VC cash, and splashy billboards. The new dot coms dig into their savings, think revenue and quietly road test their businesses before launch. Still, it's a deep trough out there. By Vinod Mahanta
A narrow staircase leads you to the first floor of S-472, Greater Kailash II. The only way you can distinguish the private residence from the office is a small signboard, shaadionline.com. Once in the office you expect to hear the yapping from flashy 20-something execs. Instead, you're struck by the silence. There are only four employees busy tapping keyboards in the spartan four rooms. That includes CEO Jai Raj Gupta, 37. It's comedian Ash Chandler and model Nethra Raghuraman's marriage and they are taking care of all the arrangements. The soft-spoken IIM-C grad doesn't talk of page views, p2p, and other dotcom jargon, but of his services, revenues and setting up office. ''I am not a traffic site,'' Gupta emphasises. ''My core business is offering wedding-related products and services and generating revenues.'' This, a dotcommer? Actually, yes. Gupta is one of the breed of new dotcommers: mature, level-headed, and tuned to the realities of the day. Their business plans are no longer being made to suit the VCs and what they would like to hear. Most of them think of the net as a channel to provide services. Like Gupta, a certain Agarwal, Suresh, and Patel have launched dotcoms in the last three months and are ready for the tough times ahead in an industry that went from boom to doom in less than a year. ''A person who starts a dotcom nowadays is either stupid or serious,'' says Rajan Patel, CEO, musicabsolute.com, launched in July. Stealthy, sure-footed, and slow, this breed of net entrepreneurs is determined to play it hard and win, something even the VCs bear out. ''Now we receive proposals from seasoned entrepreneurs, with prior operating experience,'' says Rishi Sahai, Senior Fund Manager, Infinity Ventures. ''They target a vertical industry with a clear value proposition of a service over the internet.''
The Niche Is King It's a model that has worked in the US: Identify a niche, offer services that are new and suitably tuned to local environments. Take shaadionline, which offers a concept little known in India, wedding management. The portal-it has invested a chunk of the Rs 1.5 crore it has burnt so far in its back-end-offers a mix of offline and online services to make marriages more convenient and unique. The staff will take care of the entire wedding arrangements-the panditji, lodging, florist-within your budget.'' This has been an unorganised market in India; we are trying to make a brand and define the levels of service'' says Jairaj Gupta, a former net business strategy consultant. Others are identifying similar new opportunities and trying to build them into a viable businesses from the start. Key2crorepati.com, launched in July, is a gaming portal, a Kaun Banega Crorepati spinoff. CEO Suresh spotted an opportunity in all the people who were eager to participate in the programme but could not make it. He promptly launched the site after spending five months in developing a site and already 60,000 have taken a shot at the Rs 1 crore prize. ''There was a vacuum for people who wanted to get into quizzes and gameshows, show talent and win rewards,'' says Suresh. The old modus operandi-set up the site, then sell the idea-is done with. Not only are the new entrepreneurs very clear in what they offer, they also put in their best effort to check offerings and their processes before inviting customers in. The B2B site gate2biz.com launched its services in May after spending six months testing its three processes with three real companies: Procurement with DCM Sriram, auctions with Hindalco, and selling with Tata International. When the site was launched, it was ready for transactions from day one and offered one of the broadest range of services in the Indian B2B arena. ''We wanted to go to the customer and show him the proof of the concept, not just promise him returns,'' says Vivek Agarwal, 34, coo, CommerceOne Distributor Operations, which manages gate2biz. Shaadionline took eight months to go live and even engaged marketing consultancy Quadra to estimate the organised wedding-planning market in India. Show Them The Money
There are no longer free trials or, token payments for services. It doesn't work in the long run. Revenues are particularly important because there's no VC money to splurge. Except for shaadionline and gate2biz, all the other have invested their own money. Gate2biz started earning money before it went operational. ''The revenue has to be there from day one,'' asserts Agarwal. Key2crorepati.com will let you take a shot at the Rs 1 crore kitty only when you buy a Rs 20 key number, which serves as a password. In the last two months, as we said, 60,000 people have taken a shot. Grihrachna.com, a real estate portal focussed on Hyderabad and Secunderabad talks of break even in six months flat. A sharp focus helps. Grihrachna.com was launched two months ago by net entrepreneur Jayesh Kamdar, and focuses on providing 22 real-estate related services to NRIs, but only in Hyderabad, Secunderabad, and nearby areas. ''We can deliver quality in this area and still run a profitable business,'' says Kamdar. Similarly, shaadionline's operations are focussed on Delhi, Ahmedabad, Mumbai, and Bangalore because these metros account for 70 per cent of high-spend weddings. Pure play is a strict no no. Crutches in the form of offline arms are a feature built into today's business models. Most of the dotcoms need a hybrid model as the service delivery is mostly offline. For example shaadionline.com offers a service that is totally offline. It has offices in Delhi, Mumbai, Ahmedabad, and Bangalore, and the net is used as a medium for reaching out to global customers. Key2crorepati.com has set up a dealer network of 45 dealers in two states to sell its key numbers. It plans to cover the country in the next few months. Grihrachna.com also has the entire servicing model offline, with the net used to reach out to NRIs and showcase products. The new dotcommers are stingy, the operations costs are low, the teams very lean. Key2crorepati has a staff of 16 people and a cash burn of just rupees one lakh per month. It's spent only Rs 6 lakh on advertising. Shaadionline.com has a staff of just 20 and they believe in word-of-mouth advertising. This, despite the fact that the site is the only one of the five listed here that has attracted VC funding (GTV). Musicabsolute.com recently did a promotion with Magnasound, Mumbai's The Afternoon Despatch and Courier newspaper, and two other partners. They bargained free ads from the newspaper in a barter deal. Have you heard of dotcoms sharing staff? Andhravision.com and griharachna.com actually share an office and a staff of 15. The new dotcoms are run by people who have industry-backgrounds and are networked in their domains. Rajan Patel, 31, was Head (Audio & Repertoire), International Music at BMG Crescendo music before launching musicabsolute .com. Patel has Alok Kejriwal (CEO contest2win), Anshuman Ruia (Director, Essar), Suresh Thomas (MD, BMG Crescendo) on his board. Shaadionline's Gupta has spent 15 years in the it Industry and has biotech leader Kiran Mazumdar Shaw on his board. Grihrachna's Jayesh Kamdar is a builder in Hyderabad and has spent 12 years in the real-estate business. He's also been running another portal, andhravision.com, successfully for the past one and a half years. None of this is a guarantee of success. Most of the entrepreneurs who are a part of the second coming realise that the new economy still rides a base of economic quicksand. But their chances of survival are just a whole lot better than the pioneers before them. |
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