The salubrious weekend weather in Bangalore was just a perfect setting to a day that was unveiled with the important message of the day – how to raise money for your mobile venture. An entrepreneur himself and later playing a game-changing role at Airtel, Mohit Bhatnagar, MD, Sequoia Capital, rolled in some visible trends before putting forth his sevenfold path to get your mobile venture funded. The Apple ecosystem that is driven by iPod, iPhone, and iPad growth and the Android ecosystem that followed it have set in a new trend for mobile applications. “In the next 18 to 24 months, companies will emerge from clutter to become global from India,” predicted Mr. Bhatnagar. The explosion in smart phones (150 million in the next three years) in India that would be driven by Android first is the reason for the prediction that India is set to emulate the explosive growth of Apple and Android.
Mobile has excited investors since 2001 but the returns on their investments have not been the one that they would feel happy about. But still mobile ventures continue to get funded. Taking examples from the few mobile ventures that have set in a new business model or have emerged from small beginnings, Mr. Bhatnagar dwelt upon seven factors that influence an investor’s decision to invest in mobile ventures. Becoming a category leader like admob or square attracts the investor. Admob started small in 2006-07 to emerge with 50 million subscribers now five years on. When mobile advertising meant only SMS, admob bought in the game-changing publisher-advertiser matchup to grow exponentially. Going viral or network effect helps a mobile venture to achieve enormous success. Mr. Bhatnagar quoted airbnb to showcase how bread and breakfast services and homestays in the United States underwent a tectonic shift with airbnb entering the scene and overawing the customer with excellent service.
Solving a big problem plays a crucial role in scaling up a venture. Mr. Bhatnagar quoted Steve Jobs’ opinion of Dropbox, which he thought was great but when he met the founder of Dropbox, Drew Houston, he was supposed to have said it is only a feature. [Apple made a nine-digit offer to Dropbox, which was famously rejected by Dropbox.] Today, Dropbox is worth $4 billion. Dropbox solved a real problem of file sharing across devices. Success is made up of “foresight, luck, and a lot of execution,” summed up Mr. Bhatnagar. A large, engaged user base also attracts investor, added Mr. Bhatnagar, quoting Whatsapp. It was that huge user base that helped Instagram get acquired.
Being usable is important for a mobile venture. And the customers should vouch for it. Mr. Bhatnagar quoted Instagram’s maniacal focus on iOS before they shifted to other platforms. This is very important for success (steadfast focus), in Mr. Bhatnagar’s opinion. The other form of usability is Ringback Tones, which was used across platforms, achieving a mass scale, which makes a venture fundable.
Mr. Bhatnagar touched upon monetization models in proposing a path to monetization. Subscription, in-app, advertising, paper download and freemium are revenue streams for an app. Stating that no one-size-fits-all mode exists, he took the examples of Evernote and Dropbox to say that freemium is the most attractive payment model. Taking the case of JustDial, he explained how creating a barrier to entry and grit are important in creating a venture that literally keeps out competition. V.S.S. Mani, founder of JustDial, has created a local search business that works both offline and online, supplemented by a field sales force. This model is difficult to replicate for a new entrant as the sheer number of suppliers and customers built in JustDial would discourage any small business owner from listing in any other competitive business. Further, Mani failed once in the same business, didn’t give up, and later started the business some years later. His grit and passion enabled him to succeed. Mani was quoted by Mr. Bhatnagar as saying entrepreneurship is an inner calling. “You don’t build a business to get lucky,” warned Mr. Bhatnagar.
In conclusion, Mr. Bhatnagar suggested that enterprise mobility, payments, healthcare and education, and discovery are the future trends of mobile development.