There has been a lot of activity in the Social Networking space in India this year. With the kind of money being poured into this space, I have been trying to figure out how things may unfold in the coming year and beyond.
The landscape is already crowded with a number of players like Jhoom, MingleBox, Yaari, Humsubka, Yo4Ya and others. Orkut is a clear leader and will continue to be so. Where do we go from here? I see four broad categories of social networks emerging as we go forward. There could be a mish-mash of these options as well.
- Mobile Communities – With the rapid penetration of mobile devices both incumbent players and startups need to address all levels in the Indian Digital Pyramid [As outlined by Rajesh Jain in a Knowledge @ Wharton Interview – Requires registration] – PC First, Mobile First and Mobile Only. Social Networking players need to go beyond SMS notifications. We need the likes of ProtoMobl, Twitter, DodgeBall. I also believe that there is a huge opportunity for players who address the long tail of “mobile only” and “mobile first” users ( 100 million in all!!) by building out a primarily mobile centric social network that “also” has a web interface instead of focusing first on the web interface. And watch Google closely. It will use its first mover advantage in the social networking space to reach out to the large mobile communities in Brazil and India. My take is that if it gets the DodgeBall/Orkut integration right in India, it would trigger network effects that would bring more and more of the users at the bottom of the pyramid into the Orkut fold. This will be very much in line with what Tim O’Reilly had to say in his recent “Web 2.0 Compact Definition-Trying Again” entry : “Being first or best, you will attract the most users, and if your application truly harnesses network effects to get better the more people use it, you will eventually build barriers to entry based purely on the difficulty of building another such database from the ground up when there’s already so much value somewhere else. (This is why no one has yet succeeded in displacing eBay. Once someone is at critical mass, it’s really hard to get people to try something else, even if the software is better.)”. Expect to see Google entering into partnerships with mobile carriers in India, late 2007 or early 2008.
- Vertical Communities – These networks would allow individuals to leverage the connections they establish within the social network to achieve a broader objective like job search, making a real estate desicion,planning a trip etc., . This I believe, is going to be a real killer. We need the likes of Doostang, TripConnect and Boompa. My take is that there is a huge opportunity for social nets that can disintermediate the likes of Monster and Naukri – the word of mouth job referral space in India is pretty huge. Tourism and real estate are other areas where social nets can lead to richer user experiences. There are potentially hundreds of other niches that may work in the Indian context.
- Regional Social Networks – I’m increasingly getting the feeling that to get a critical mass of users in these social networks, we need to dramatically bring down barriers to content creation in local languages. Putting the cart in front of the horse is not going to help. I believe some of the following key technology trends will converge and become key enablers of content creation and catalyze social networks in India:
a. Transliteration tools like QuillPad
b. Regional language mobile text input software like the one from Tegic
c. Mobile keypad layouts in regional languages
d. All local language computing initiatives like this one
- Meta Social Networks – PeopleAggregator kind of ecosystems. We are not yet there.
Given the diversity in India in terms of language, culture and life style, it is inevitable that we would end up with a long tail of niche, vertical and mobile social networks. Many of these may be purely mobile or semi mobile – with web as a secondary interface. Startups need to keep these in mind:
- Understand changing user needs as this generation grows up. Can you create compelling value propositions for an existing Orkut user (passing out of college)? Can your vertical social network help him/her find a job, plan his/her finances etc.,? As social networks mature in India would user expectations in terms of privacy and real tangible value from the community change? Would users want to migrate to other spaces as their social needs change? ( Vox kind of a system as opposed to public scrap books on Orkut).Social networking for the sake of social networking is not sustainable. The key is to create the value layer on top of the connections you enable in the network.
- Monetizing nodes in a social network remains a challenge. On top of that monetizing a purely mobile, semi-mobile and vertical social networks would a bigger challenge. There is a need for some innovative business models in this space.
- Remember that this game is not about better software and more features – It is about creating a platform where there is a happy marriage between network effects and rich user experiences for the Indian consumer.
- Don’t take Google and Orkut for granted. DodgeBall integration could be the tipping point for Google and the last nail on the coffin for the rest unless they differentiate,verticalize and reach out to the long tail of users. Let me repeat – the game is not about more features, it is about network effects and Google understands that really well.