The Internet juggernaut rolls on - VI

Some new websites that will be of great convenience to the public, covered at the new Marketer's Kaleidoscope blog on the Wordpress platform...

Growing the Internet Market : What's the Big Deal ??

“ The economies of the last century were driven by railway connections, the economies of today are largely driven by the Internet and other ICT (Information and Communication Technology) links.”

– President Mwai Kibaki of Kenya, speaking a few days ago at the laying of East Africa’s first broadband cable line, connecting this region to Europe and India.

Why the big fuss about maximizing Internet users and usage? After all, among developing nations like India or Kenya, there are other areas for development e.g. roads, electricity, schools, hospitals and telecom. Which is true. All I wish is that Internet should figure actively among these top development priorities.

The Net is not just email, search, shopping, dating, social networking, portals, advertising revenues, IPOs and the like, or a poor investment, which at times the media has made it out to be.

It is now society’s most powerful tool for 'advancement'.

Consider:

A. During my travels around the country (more a few years ago than now, I admit) trying to popularize the Internet, I have found the desire to use the Net the keenest among the disadvantaged sections of society e.g. I found teenaged girls in small town Uttar Pradesh to be avid visitors of cybercafés.

B. Politically suppressed Iran now has more avid tweeters than perhaps most countries; Twitter has kept the ferment for reform in Iran, alive.

C. In China, which at 338 million users and counting is the world’s biggest Internet market, there is widespread usage of news and blogging. 79% of all Net users use it for News: this is the second most used Net application, behind music which has 84% users.

And there are more bloggers by far in China than in any other country, with 54% of all Net users i.e. 162 million blogging!

And China is still witnessing an explosive growth in Net users. Here is the latest available report.

It would appear that in a country with acute news censorship and propaganda, the Internet plays a major role. Media such as China Central Television (and I would imagine radio and press) are State controlled monopolies. Individuals can best inform themselves and voice themselves via the Net? Do we dare predict that it is the Internet that will one day willy nilly catalyze political change in the world’s largest non-democracy.

D. In Kenya, the laying of the new broadband link (see pic above) will, it is said, open up the door for it - and for other neighbouring countries - to join the BPO boom , creating jobs in economies which sorely needed (and posing competition to India’s call centre industry).

E. The Government of India has announced, in this year’s Union Budget, the setting up of an online employment exchange. India has just 8 million organized sector jobs, most people are in the unorganized sector.

F. Another recent announcement - that did not get sufficient attention - is the government’s intention to provide Internet marketing support to the country’s micro, small & medium enterprises sector. There are estimated to be 13 million such units, they employ 42 million people and account for 45% of the country’s industrial output. Online marketing can help them significantly, some players have been at it already, but there is much that can be done.

G. ITC’s E-choupal has placed 6,500 Internet kiosks across 40,000 villages, benefiting a potential 4 million farmers. These give information on crop prices, access to markets, weather patterns and farming knowhow, leading to improvements among small and marginal farmers - that would have been otherwise impossible. This is the world’s largest ‘rural digital infrastructure’, says the company.

Then there are other companies that have installed rural Internet kiosks for other (non-agri) purposes, e.g. Comat for e-governance.

H. This year, for the first time, online application was mandatory to admissions to colleges in Mumbai city. Nearly 200,000 graduating high school students have just submitted their admission applications online.

Till last year, prospective students hopped from college to college to first pick up and then drop by (submit) the applications. At about 5 colleges per applicant and 2 trips per college, this year that’s 2 million trips saved!

That’s the power of the Internet. And that’s what just one (admissions) website can do.

There is a humungous diversity of uses to which the Internet can be put. Agriculture, e-governance, recruitment, outsourcing, small business, college admissions and political change are some of these, as the above random examples show.

An economist would say that the Internet has high ‘social utility’. A rupee of investment here has a high multiplier effect.

See also previous posts on 'Growing the Internet Market' :

An Agenda to Grow the Indian Internet Market

More on an agenda to grow the Indian Internet Market

More on the Agenda to grow the Indian Internet market

In the last post ( at blog http://marketerskaleidoscope.blogspot.com, this is fyi for those following the Facebook feed) on July 11th, five actions (not exhaustive, it’s my pick) were suggested to grow the Indian Internet market :

1. Internet association IAMAI should join hands with other organizations and individuals
2. Studies that put a socio-economic value to the Net will help immensely
3. Talent needs to be developed
4. Adoption of Indian languages is the key bottleneck
5. It’s possible to identify “compelling applications”

There was some interest in that post, motivating this update.

Let me dig deeper into actions 1,2 and 4 above. Once again, I largely ignore the possible upsides from the mobile Internet (an area of which I know as yet little). This post is thus about Internet via the PC.

1. On IAMAI joining hands with other bodies

Last week the PC manufacturer’s association MAIT has gone ahead and published it’s own numbers on Internet use, numbers which are in variance with those of Internet association IAMAI.

There are, says the MAIT report, 8.6 million Internet “entities” and 60 million Internet users. (No definition is available on what qualifies as a user, appears to be closer to what the Internet industry would call “ever used”, rather than “active user”).

These vary from the IAMAI & TRAI estimates, not to mention those of others. ISP & telecom regulator TRAI’s Internet subscriber numbers are 12.85 million for Mar ’09. And the IAMAI had estimated 42 million active urban Internet users for Sep ’08. (Given the 20% p.a. growth being experienced - I had given 50 million as the current number).

To be fair to MAIT, their study is primarily a PC & IT hardware numbers study and Internet user numbers are only an add-on.

What stops the IAMAI and MAIT from talking to each other and putting out one set of numbers? Multiplicities of numbers dilute the seriousness with which the Internet sector is taken.

MAIT’s press release that put out the above numbers also made the following astonishing claim, and I quote: “MAIT has set for itself an ambitious target, 'Goal 511', 500 million internet user, 100 million broadband connection and 100 million connected devices by 2012.” No specifics of how this miracle is likely to be achieved, though there is a brief allusion to 3G and WiMax network rollouts.

Ironically, both IAMAI and MAIT use the same market agency IMRB but have different numbers, both of which enter the public domain...

2. Studies that put a socio-economic value to the Internet

We have probably all heard of the multiplier effect telecom is supposed to have on a nation’s economy. There is a correlation between telecom density and GDP growth, it is said.

You would have also heard of the stories about the fisherwoman (or is it the vegetable farmers?) who became rich once she got her first cellphone.

As regards the Internet, stories that have appeared with higher frequency are stories of dotcom IPOs (just 2 in India’s 13 year old industry so far, one on the NASDAQ and one on the BSE), of entrepreneurs could got or nearly got funding, robust ad prospects of this sector, etc.

There is one study though. This is by TRAI dated November 2003 and another 2003 study by CII. These were the studies which first made the case for Internet and broadband expansion in India. The CII study said (and I paraphrase) :

“Ubiquitous broadband is expected to create - between 2010 and 2020 - 1.8 million direct & 59 million indirect jobs, as well as create an increase in National Output (GDP) of $90 billion, calculated at PV (Present Value) in 2003 prices. Benefits are seen in improvement in productivity of the existing labour force ($47 out of above $90 billion), e-education at vocational and higher secondary level (worth $27 billion) and e-literacy programs in secondary schools (the balance $14 billion).

10 million urban broadband connections should be targeted by 2010 as well as 100,000 villages connected by Internet kiosks.

All broadband connected villages can enable

(i) the benefit of virtual primary, secondary & adult literacy and distance education through the kiosks,

(ii) e-health viz. each village kiosk acts as a telemedicine centre
(iii) every urban and rural connection acts as a single window Government interface for e-governance.
(iv) Entertainment and e-commerce services and employment opportunities will become available as well through broadband connectivity to all cities, towns and villages in India.

The total investments for achieving these milestones is summarized in the exhibit 4 of the report as $5.35 billion of which $2 billion were to be for content alone, $500 million was earmarked for rural infrastructure with the balance for urban infrastructure.”

If these old studies are updated and others presented it will revitalize interest in investments by government and private sector, interest seems to have taken a beating because the Internet sector is seen as one that has failed.

For example, it was recently reported that the Government is planning to spend Rs. 40,000 crores (INR 400 billion) to deliver services like the Unique ID number, healthcare, municipal services and some services from Indian Post. If this is indeed true, we will need an ubiquitous and robust Internet infrastructure first. Someone – it could be one of the IT biggies or Nasscom - needs to put a number and make a ‘must have’ case for this.

We now also need a Nandan Nilekani-type appointment to champion the creation of this infrastructure.

4. Language adoption is the key bottleneck

Also in the last post, two interesting numbers were ‘thrown into the ring’: 20 and 205. 205 million is the number of urban literates. And 20 million is the number of people who can actually converse in English, out of 86 million odd who claim to ‘know English’.

If we look (IMRB, Mar ’08) at the number of ever used Internet users (50 million), these are fewer than PC users (72 million), which in turn are fewer than the number of English ‘literates’ (86 million). And English speakers are growing much slower than the number of PC literates and Internet users.

This could be the key bottleneck in the growth in PC and Internet usage.

Did a quick (am no expert) check and learnt:

a. What’s needed for language use are keyboards (hardware), fonts and scripts (software) and content.

b. No one is talking much of external keyboards anymore, they don’t seem to be readily available.

c. As regards fonts and scripts - after years of work thereof - Windows now support most Indian languages. However, a friend of mine, who has been an IT infrastructure manager for over a dozen years - admittedly in big metro Mumbai - has himself never seen a PC being sold with it’s OS pre-configured with any Indian language.

d. Microsoft could have shaped the language agenda. They seem to have been at it for a long, long time, without a breakthrough in the market. Their site on language computing does not seem to have been updated since 2006, leading one to believe this is not something actively engaging their attention.

e. Over and above the OS, there are several applications available that claim to ease the convenience of giving a language input on a PC, these are typically transliteration tools aimed to help (say) the English Internet user send an email to his granny in the village. They don’t address the language requirement per se.

f. There also seem to have been some sincere government initiatives. But these have been on for at least ten years ,in fact earlier ever since the 80’s, when PCs came into being.

g. Multiple softwares and the lack of a dominant player mean that there are no standards in existence. We are stuck at the PC bottleneck (software & hardware) end itself, not at the content end.

h. With none of the major PC manufacturers on to the language trail, the marketing thrust to popularize languages is missing.

i. It’s believed by many that we Indians prefer English per se for PC or work related use, and our own languages don’t stand a chance. Why turn the clock back, the world is going English, they say. Fair enough, but in a large country like India, this is going to take generations. It’s taken 2 years for the number of ‘English-knowing’ adults to grow from 77 million (2006) to 86 million (2008).

The company I work for is also into English education, so this is something I know a bit about. There is and will remain a big unfulfilled gap between demand and supply of English, both in schools and in teaching institutes. We can’t bypass language use if we want to progress.

j. The great Google doesn’t have an answer to this one yet, either. When Shailesh Rao, Google India’s head was asked a couple of months ago about the Indian language Internet, he seemed to duck the question and started talking about the mobile.

Shailesh believes there are 35 million people with a functional command of English (I have been touting 20 million, matters not, both are lower than the number of claimed English knowing people of 86 million and under 20% of India’s urban population).

The future does look bleak for the balance 1000 million + Indians, their not knowing English may deprive them of the joys of using a PC and the Internet the way you and I know! "Let's give the poor guys the Internet via a mobile phone" is the refrain.

I don’t quite understand the absence of success in developing languages for PCs and Internet. Other countries have all popularized their own. This is preventing the (bottom-up) generation of mass demand for Internet services. This is the choke point.

An Agenda to grow the Indian Internet market

This (somewhat lengthy !) post will be of interest to well-wishers of the Indian Internet industry. We will arrive at five things to do by and for the industry.

A. Growing the Internet user base has been a key thrust area for the Indian Internet industry.

Internet firms today derive their revenues primarily from advertising, and they believe online ad market revenues correlate with the overall number of (Internet) users. And these user numbers for the Indian market have, as I wrote in this blog in Oct 2007 as well, been growing at just about 20% a year.

Estimates of the current Internet user base vary. The most reliable numbers are those from IMRB, India’s well-known research agency, see summary graph here. By this measure we seem to be at about 50 million active users (active = used Internet at last once a month, the globally accepted definition).

The same graph also shows growth in Internet subscribers, as given by TRAI. The IMRB and TRAI numbers serve as a proxy validation for each other.

The industry believes this user base is rather small in absolute (Internet penetration versus other countries) and in relative terms (mobile users have grown over 8 times faster). Notwithstanding this, by one estimate, India is today the world’s 4^th largest Internet market (after China, U.S. and Japan).

The Internet ad revenues themselves have been growing at a fair pace - by one estimate they today constitute 5.4% (Rs. 5 billion) of the total ad market, and will grow at 44% in the current year. But this is clearly not enough to satisfy every Internet player’s aspirations, the lion’s share goes to 2-3 (Google with Yahoo a distant second) of the hundreds of players. Hence the industry’s clamour to grow the user base.

B. Recommendations to grow the user base were recently tabled at a Keynote at the 5^th Digital Marketing Conference of industry association IAMAI.

IAMAI is the Internet and Mobile Association of India.

Recommendations that were given at this keynote address, being taken here as a proxy for what the industry believes, are not new. Some look correct in principle, but will be tough to implement.

These recommendations include:

1. Government needs to play a catalytic role by
- boosting the broadband subscriber base (TRAI recommendations of year 2004)
- provide support to ISPs

- Encouraging the cybercafés business
- encouraging debit cards for e-commerce
- enable easy funding for start-ups
- and (this is new and important) reserve part of upcoming 3G spectrum allocation for data (not voice alone)
2 Indian languages need to get a boost on the Net
3 Mobile operators need to play ball with content providers by giving higher share of the VAS revenues to them and by not moving into content themselves,
etc.

Various questions arise related to the above. In this post, we concern ourselves with just two :

1. Is the government likely to do something at all? Who will bell the cat? Is the IAMAI well suited for this?

2. The above wish list is rather long, if one were to prioritize, what would these priorities be?

C. Roadmap to grow the Indian Internet Market (5 suggestions)

1. Join hands

The tasks before the industry is huge. The IAMAI does not have a history of lobbying the government, nor do it’s members itself have much experience in government affairs.

Other associations like MAIT, the PC manufacturers association and the ISP Association ISPAI as also software association NASSCOM itself, have been at government lobbying longer. Internet growth will benefit them too. An organization like TIE has clout. Then there are start-up associations like Proto.in.

IAMAI would do well to ally with one or more such experienced bodies to move the government faster.

At times, some of the causes IAMAI champions seem rather small, fiscal measures, not on any big visionary thrust.

IAMAI’s seven founder members are in fact the country’s leading portals, who derive their revenue from advertising. IAMAI remains essentially rooted to it’s desire to grow industry revenue, rather than grow the Internet market. It’s power structure as well as it’s membership is still skewed in favour of media (read ad-revenue) firms.

An Internet association should have thousands of members, individuals included, not just a few dozen firms as is the case currently. The Internet is a public good (no different from water or roads) and too big and important to be represented by just one Association, no matter how well-meaning. E-governance, for example.

2. Understand the full value of the Net
We need organizations and professionals who can educate, nay form public opinion about the benefits of Internet use; preferably with empirical data from research studies.

The Internet can make a mammoth socio-economic contribution, giving a high return on investments made in it’s infrastructure. The above studies can establish the viability of government and financial institution funding for the Internet sector in the Indian context.

The government recently announced in the Union Budget that it would set up an online employment exchange for the country. The tragedy is that Internet access itself is restricted.

3. Develop talent for the industry.

There is a crying shortage of good web designers, trained product managers and Internet marketers. I work at a company which is a big player in informal education and we do provide certificate courses in web design, but neither we nor our competitors have kept pace with the fast changing knowledge. No university or college degrees or diplomas exist in the Internet field. These occupations are outside the province of IT companies and ad agencies as well. And all this in a field that advances by the day.

There are but few Seminars or events regarding Internet which provide great learning value. (The Bar Camps and the like are infrequent and of uneven quality). The ones which exist are often pure media events designed to cash in on the Internet hype (“Web 2.0”) and/or are “plugs” for a select group of industry captains. Silicon Valley is 10,000 miles away, where does a professional renew oneself?

A few digital firms as well as IAMAI have begun with Internet Marketing courses, but on the design and product side there is still a vacuum. Without good people, compelling applications and great user-experiences cannot be provided, and the Internet market will not take off.

The space is ripe for entrepreneurs to move in?

4. Language, language, language

Online content in Indian languages has been created over the years, but these sites failed to get traction. This is because today’s PCs do not support language OS and language keyboards are not in common use, so current PC users, ;eave alone Net users, are only those comfortable with English.

There is evidence that the No.1 factor stalling the growth of the Internet is language. If one looks at two numbers, viz. the number of computer-literates (as presented in the annual Internet market surveys of the IMRB) and “English knowing individuals over the age of 12”, there has over the years been a good correlation. These numbers are currently 72 million computer-literate (IMRB 2008) and 86 million

English-knowing individuals count is obtained from the National Readership Survey (NRS). I remember reading elsewhere that only 20 million Indians can really speak English. This comes as no surprise to me. When a few years ago I ran Rediffmail, Rediff.com’s email service which then had 35 million registered service, much of the customer mail I received was in abysmal English.

In effect, of 205 million literates in urban India, only 20 million have reasonable English-skills. The Indian PC & Internet industry has not yet marketed the right product for 90% of the urban population! It’s no use complaining about the lack of vernacular web content, let’s get the average user started first in Word & Excel in Hindi or Tamil.

A further discussion of what’s gone wrong regarding popularization of local PC hardware, software and web content requires a separate post.

However, it’s worth noting that India is perhaps the only country in the world where a local language (say Hindi) is not the lingua franca at the workplace. There is an inadequate push for the adoption of non-English PCs and mobile devices. This is a situation unique to India, which we need to break out of.

Separately, apparently, Hindi is the world’s third largest spoken language, after Mandarin and English, with about half a billion speakers !

5 . Compelling web applications
The Indian Internet companies and entrepreneurs themselves have a role to play by introducing compelling applications. What exactly is a compelling application ? How can an entrepreneur be sure he has one? This is a subject fit for a follow-on post.

(A declaration : I was, as Chief Marketing Officer for Rediff.com, involved in tracking and pondering on the growth of the Indian Internet market during 1999-2005 . I helped IMRB kickstart their annual Internet market surveys in '99. Was also briefly on the Government Sub-Committee of the IAMAI in 2004-05 ).

The Internet juggernaut rolls on - V

Nowithstanding one belief that a vast majority of Internet applications are yet to be "invented," the fact of the matter is Internet has been mainstream for over a decade old. We thus run the danger that new developments here won't make news. For example, usage of the Net for politics (cf. my last post on Obama), is a done thing now, we have reams being written about this even in the Indian media and I am afraid that it will all soon draw a yawn from the readers.

In recent days, however, I have been surprised by two news stories on the Net. 

1. The first was a story last week in the daily Mint that Malappuram in North Kerala State  is now the first district in India where at least one person in each household is Net savvy. Many households have at least one family member in the Gulf, with whom emails and chat is used to keep in touch. Note that India's Internet penetration as a whole is barely 5% (~ 50 mio users in a 1000 mio+ population).

The catalyst was the government's Akshaya Project launched in Aug '02 to make the populace e-literate. There are 289 Akshaya kiosks too and electricity, phone and other bill payments are being done online. The users include a fair number of purdah-clad women, this being a Muslim-dominated district.

2. The other is a story in Newsweek on a couple - Rhonda, 39, who lives in California and Paul,43, who lives in Wales - who have "met" and fallen in love on Second Life. No, this by itself is not what's unusual, there are other people who have found romance on Second Life : 43,000 is the number of such couples who have so far got "married." And there are by itself interesting aspects to Rhonda and Paul's story. 

What's unusual is the conclusion : that online is actually making possible genuine relationships. The conventional wisdom was that online relationships are risky and that love cannot flourish unless two people have met first in the flesh. Fake profiles and protection of kids and teenagers from perverts, for example, were in the news.

Unlike in the real world where a mutual attraction is likely at first sight, in online it usually grows only over time. The distance apparently makes candor possible, couples share much more information about themselves than they would in real life. This may lead to an emotional bonding !

Worldwide, 1.6 billion of 2 billion Internet users in 2011 are expected to have used some virtual world or the other.Separately, there are 800 dating sites in the U.S. and 10% of Internet users currently look for love online. The Internet is also having an incredible ability in allowing people to self-sort i.e find and engage like-minded others, it's said. And given that people have very different personalities and tastes, this can indeed be useful.     

 

The Internet juggernaut rolls on - IV

1. The power of the Internet, good or evil, never ceases to amaze. Some news from the previous fortnight - and earlier :

• The Taliban is using Skype to dodge the British intelligence service MI6 in Afghanistan. 
  
• Tigers are being sold illegally over the web, said a news report. Very surprisingly, the site still seems up and running, despite activists having lodged complaints with the authorities.
  
• And then there was news of HRH Queen Elizabeth II’s scheduled visit to Google’s London office on October 16^th.  This follows the successful debut of the official Royal Channel on You Tube (currently with 22,000 visitors and 1.5 million+ page views). Reportedly, Her Majesty also uses email to be in touch with her grandchildren Princes William & Harry.
  

2. India’s Parliamentary standing committee on Personnel is considering sweeping changes in the UPSC (Union Public Service Commission) exams for entering the civil service. Among other things, they are considering that the phase I or preliminary exams be held online, followed by the immediate release (online) of the candidate’s results (as is the case with the GRE & GMAT), thus saving time in the overall selection process. Civil service is one of the country’s three or four largest entrance exams (the others being engineering, MBA and medicine) with approximately 200,000 aspirants appearing each year. The MBA Common Admission Test (CAT) exams, with an anticipated 400,000 aspirants in 2008, are to also go online, though only next year i.e. in 2009. 

3. The Times of India, Mumbai reported on July 8th, '08 that an online mutual fund platform has been launched by Tech Process Solutions (the people best known for running the bill payment site billjunction.com) that enables mutual funds to be traded online. Tech Process said it had so far brought together six mutual fund houses (including Reliance & ICICI Prudential), four large MF distributors and 9 banks. Currently, investors can use the platform only via the above distributors, who have to give them a login.

This is an important initiative. Unlike stocks,which today are traded online by individual investors, mutual funds in India can at best be bought and sold at the fund house's website itself. Tech Process seems to be setting up an exchange for trading mutual funds, which should help Plans include allowing adding more players to the platform and enabling investors login directly.However, one was unable locate any site in use.

Meanwhile, industry association AMFI is itself exploring setting up of such an electronic platform for which it has invited and received 15 Expressions of Interest from potential vendors. It is believed such an exchange will take two years to implement. Several countries viz. Canada, the U.S. and Australia alredy have such a platform. And there are other moves in place to standardize - acros fund houses - the mutual fund application forms and offer documents. All this would benefit existing 46 million mutual fund owners as well as help grow the market.  

 

The Internet juggernaut rolls on - III

After a 75 day (or so) hiatus, am back again (no blogger likes to be off-blog for so long, and I have the same standard excuse for being away : "Was busy").

Here are two interesting Net applications recently reported in the press:

1. BMC (Brihanmumbai Municipal Council), the municipal council of Mumbai, the world's second most populated city, is testing a website which will have on it the approved plans of all buildings in the city - as well as permissions given by the civic authorities to the builders for these constructions. Currently, citizens have to go from pillar to post to get hold of these plans & information.

Thus, hapless apartment buyers today after moving into their homes often discover that several floors in their building are unauthorized. Or, they discover that the building does not have an "Occupation Certificate" and thus pay the penal rate (double) for electricity and water charges. My building in Lokhandwala area in Mumbai too hasn't got a copy of the approved plans, for example, though the building was built nearly seven years ago.

No details available yet about the site or the url.

2. Patients in the U.S. are seeking a second opinion online through sites such as the Cleveland Clinic, John Hopkins Remote Medical Second Opinion service and Partners Online Specialty Consultations (POSC). Each of these three report getting a thousand patients a year, with POSC saying they have had a cumulative 10,000 patients since starting out in 2006. These services offer consultations from specialists based on the medical records that they fax, mail or post via the Net. The cost of the service payable upfront through credit card is $500 to $1500, depending on the radiology or pathology interpretations required. So far these services were not covered by insurance but on April 24, Cigna announced it's intention to cover this service.

Thus for example if a patient has a tumour and finds travel to a distant specialty hospital for a second opinion tiring or cost-prohibitive, the online second opinion service comes in very useful.

Such a service should do well in India, considering that we have one of the lowest doctor to patient ratio (a reported 6 doctors for every 100,000 population) in the world. There should also be scope in doing outsourcing services of this type for overseas patients.

The Internet's positive impact

Here are five more ways the Internet is going to positively impact our lifestyles.

1. A Website for senior citizens is planned by insurance regulator IRDA for senior citizens that will enable them to easily lodge their grievances with their health insurance providers. The background to this development : health insurance companies seem to be taking the short way out when it comes to meeting seniors' insurance needs.

Not only have they of late doubled the insurance premia but - reportedly - often do not accept new proposals or accept proposals for a low sum insured. Over and above, these insurance providers pussyfoot when it comes to clearing insurance claims.On the ground that many claims are for diseases with a "pre-existing" condition.

I should know. My late dad didn't get his claim passed on the ground that the claim he lodged was for a "pre-existing" heart condition : hence not admisible. So he put some of his hard-earned, public sector career savings to engage a lawyer. And fought - against a very Big Insurance company - for over 10 long years. And their attitude all along was : fight us if you can.

2. Domain names in Devanagari (the Hindi language script) will be available by year end. Currently, even Hindi domain names like Nai Duniya are spelt in English. An important psychological move forward in taking the Internet into local languages, I would say.

So far we have had language fonts for the HTML content, language keyboards as also limited availability of OS in local languages. The slow availability of Indian language OS is a mystery. Especially since it is local language OS that helped IT & Internet penetration grow in China, Korea and Japan.

3. The government proposes to set up a National Knowledge Network costing Rs. 1oo crore (Rs. 1 billion) that will connect major education & research institutes at 100 Mbps to enable them to share knowledge. This will also include portals on education, health, water, natural resources as well as online lectures on various issues. Public sector telecom behemoth BSNL is being roped in to set this up.

Expect an announcement in tommorrow's Union Budget.

4. Mumbai city has been looking at various upgrades to it's infrastructure, notably its transport system. The city is currently examining Seoul's Bus Rapid Transit System (BRIS).

Seoul has 10 million population vis-a-vis 14 million of Mumbai. It has 627 sq.km area while Mumbai has 468 sq. km. And it has 2.8 million vehicles as against 0.7 million of Mumbai.

In the late 90s, when Seoul had about 2.3 million vehicles it was able to decongest the city by, among other things, introducing dedicated bus lanes with buses leaving every 2 minutes. Currently, Seoul has 10,000 buses (Mumbai currently has 3,400) operated by 170 private bus operators.

5 million of its 10 million population use this bus network.And only 25% of the population take cars to work, down from 40% who used cars in the late 90s.

The important thing for a Neophile (that's my own term, by the way) like me is that the bus schedules for these 10,000 are available on the Net.

That's something that should be done here in Mumbai as well - leaving aside the bigger need for a dedicated bus corridor et al.

5. While on urban transport woes, the local car pooling site http://www.carpoolin.com/ has been getting some positive press. There are other sites too.

One issue preventing popularity of these sites is safety i.e. security concerns in travelling with strangers. For which one answer is the creation a social networking car pool site. This can work either standalone or be a widget that works with existing social networking sites.

For more on this idea, see my previous post on "Social Networking : Learnings & Opportunities".

Wishing all readers of Marketers Kaleidoscope a Happy Leap Year Day and a favourable Union Budget !

Teachers’ shortage & Internet's magic wand - II

In post I, we covered teachers’ shortage and technology solutions in use to date.

In this post (II of 3 parts), there are a couple of reflections on how technology can transform learning (higher education) ,over and above it's use in combating the teachers shortage.

4. The Gary Hamel solution

Gary Hamel, (probably still best known as co-author – with C.K. Prahalad - of Competing for the Future) and one of the more radical management gurus of our time, had, in his 2000 book Leading a Revolution, presented a disruptive business model for a B-school. Technology of web and video (satellite TV) was to be used to make this disruption possible.

This is Hamel’s model: create a world-class B-school, as follows.

Take top 2-3 star professors from each of 10 MBA schools in the U.S. Give them a $1 million salary and equity in the B-school.

Aim to reach 100,000 students through live satellite broadcasts and Webcasts.

Have a network of second level tutors to engage with students locally. Do not have an entrance exam but have a demanding exit exam. The entrance should be based on 3 letters of recommendation viz. (1) “against the odds” type of accomplishment, (2) applicant in leadership role (even if humble) and (3) contribution the applicant has made to community.

Courses should be based on issues e.g. globalization & it's impact, not traditional disciplines e.g. international trade.

Unlike faculty of regular universities, these star faculty will not need to do research themselves but can instead hire research staff whom they will supervise. (In the U.S., research is a key requirement of faculty). They will thus have free time to devote to create quality videos and online course material.

Course fees will be kept lower than at the top MBA schools. The GLA can afford high salaries as well as keep course fees lower, since it will have high margins.

Importantly, as opposed to about 6000 students in the 10 MBA schools who receive quality education, a 100,000 plus will now be covered.

Business education will then begin to resemble investment banking or basketball (or cricket, if I may add my own two bit) where the best get paid star salaries (In cricket, the salaries are not outstanding, but the endorsements are. Thus, Sachin Tendulkar current wealth is ~ Rs. 400 crores or $100 million, by one report).

So that was Hamel's global virtual B-school.

I believe :

• The above B-school model can be applied to courses other than business management.
• There is value in having a few global "star" teachers, any which way. In today's globalizing world, such teachers will help provide an unparalleled perspective for practicing professionals.
• The creation of some "star" faculty will raise the stature of teaching as a profession and make aspirational teaching as a career.
• Creation of "star faculty" will also hopefully give rise to a second rung league of many more top-notch professors who too will be paid very well.
  
  Not unlike the increase in match fees for players who play in Ranji Trophy, India's domestic cricket circuit. This increase came consequent to an increase in emolument of the Indian national cricket team.
  
  Incidentally much of Gary Hamel's model has been tried already. The current online universities viz. University of Phoenix and Universitas Global practice some of these ideas. But, they don’t dream big enough. They don’t have star faculty AND top notch quality,relevant content AND affordable fees.
  
  MIT’s OCW is one model that has made rapid strides. But for reasons, I can't put my fingers exactly on, it leaves me dissatisfied.
  
  It's typically got lecture presentations in pdf or word format put online. But these presentations have not been edited to cater to a non-MIT audience. Some lecture notes are often only in an outline form. Video or even audio content is available only for a minority of the 1800 odd courses. There are no tools available for interactivity with M.I.T. or among the learners. Just static, vanilla content. Did M.I.T. really want to encourage open education or did they just want to put content online ? Am going to take another look (it's vast content ,cutting across 1800 courses) but..I was expecting more.
  
  And the content is of course not suitable as is to local e.g. Indian market needs or Indian university curricula. The textbooks and journals from which readings are prescribed may not be available in India / outside the U.S.
  
  6.1% of the visitors to the OCW site, as per the latest report available were from South Asia (no data on India). This seems low. None of the top 100 educational domains or 100 non-educational (corporate) domains from which visitors land on the OCW site are from India.
  
  Coming up in part III of this blog post, a model for education which promises to do it all :-)

5. Advantages of an online education:

A couple of comments here :

5.1 Here are some excerpts from a piece Peter Drucker wrote on online education in a May 15, 2000 issue of Forbes magazine. A synopsis of that article :

"Today demand for lifetime education is high, especially from people who are already educated. These people sense they are not keeping up with what they need to know on the job. Greater speed of change in the world means more demand for learning:

Firstly, professionals can barely keep up with the rapid progress in their fields. Secondly, earlier, one could expect lifetime employment with organizations, not so today. Organizations themselves do well only for short periods of time. People have no chance of working for their company even a decade later. So from a job mobility point of view, it’s important that people keep themselves up-to-date.

Continuing education could already be another 6% of U.S. GNP and growing. 40% of total US work force are knowledge workers.

These working people however are busy & cannot commute. They need flexible and accessible ways of learning.In addition to it’s convenience, the interactivity of online education with its facility for blending graphics and pictures with the spoken word, gives it an advantage over the typical classroom. It is like a 1-1 student – teacher ratio. Online Chat rooms are also useful.

This new online education channel would be complementary and additional to existing channels".

5.2 Some advantages of online learning, from a working professional’s point of view :

• Doesn’t uproot your family
• Doesn’t put your career on hold
• Doesn’t require you to pay exhorbitant fees
• You can live far away from the faculty
• Not so tough to get in, there is no limit to the number of students
• Flexible timings and number of classes per week
  etc.
  
  More in post III.

marketing

Teachers’ shortage & Internet's magic wand - I

This is the first of 3 posts on the above. The issues covered , with special reference to higher education, in these posts are :

1. The teachers' crunch


2. How to run a successful education business


3. The technology solution


4. The Gary Hamel solution


5. Benefits of an online (distance) education


6. IITs' NPTEL project


7. Why the NPTEL project is really a “big deal”

This first post covers 1,2 & 3

1. The teachers’ crunch

The demand for education is on the rise. Knowledge is,in today’s world, king. There are very many knowledge-based vocations, and in each of these the accumulated pool of knowledge is growing rapidly. This creates a need for continuing education.

In contrast, the majority of our forefathers were in manual occupations (e.g. plumbing or farming), where one's learning was essentially once and for all complete by the time one reached adulthood. And this learning was essentially passed on from one’s parents - because the techniques in use had not changed for centuries.

Continuing, knowledge-intensive education, however, needs qualified and motivated teachers. And these are not to be had.

My guess is that the teaching profession probably never ever attracted very many talented people. However, societies earlier could "get away with it" since not every one was educated or even supposed to be educated. A few Dronacharyas (Drona was Guru to the Pandavas’, as was Aristotle to Alexander) were enough to take care of the education of the elite.

In today’s democratic world, though, a (quality) education is one’s birthright. There is no reason, for example, why every aspiring executive should not get high quality management education. At the risk of stating the obvious, MBA or engineering or medicine curricula are themselves not so demanding as the respective entrance exams. So availability of higher education is actually constrained by supply issues (teachers, infrastructure), not by the number of quality applicants.

In India, as per the recently released India Development Report, 2008, just 9 out of 1000 Indians are currently enrolled in higher education, a number lower than most other countries. So the teachers’ crunch can only increase.

2. How to run a successful education business

Good education requires quality in many areas – an updated curriculum, an effective pedagogy, good content, well-designed and conducted examinations, a recognized i.e. brand name certificate or degree and qualified,motivated teachers. And education businesses try to provide these on an "what we can afford" basis.

Among these, good content is no. 1; one must have quality, credible content in order to succeed in the education business.

The above aspects including content can however usually be attended to. The chief issue is ability to invest a minimum amount in infrastructure and content. With teachers, however, one encounters what in business is called a scalability issue. There simply aren’t enough of them around.

3. The technology solution

Technology for education has been in use for a long time. There have been radio, satellite TV and online chat services for education and now there are 3D animations, Rich Internet Applications (Flash) , VOIP and webconferencing. These have been put to use for different applications. For instance, conducting exams online. Or, practice question papers. Training teachers.

In India we have had several such services. We have had egurukool, Zee Interactive, onlinevarsity and netvarsity at the height of the dotcom boom.

There is Tutorvista which leads in the online tutoring business. This is a $150 million outsourcing-led market: the students reside in U.S. or elsewhere overseas and the tutors are in India. And Elluminate is a "synchronous collaboration" software that forms the core of online tutoring services like Tutorvista, creating a virtual classroom online.

Then, there is Smartclass from Educomp. This is 3D animated content for schools that is delivered from a central server in the school to a whiteboard-type display inside each classroom and which acts as a aid to the teacher. 500 schools of the estimated private 50,000 pvt. schools in the country are currently covered. Analysts believe that the addressable number is 12,500. They just launched an ad campaign in Mumbai to extend their reach beyond the dozen odd schools they have signed up in Maharashtra.The company’s prospects are much fancied by investors.

There is HughesNet, the satellite (VSAT) -based management education service targeting working professionals. However, these guys have not been able to scale. They say they have reached (just) 4750 students across 34 cities in two years.

Earlier,radio and later,satellites were used. "The potential of space technology for mass education, especially in terms of immediacy, omnipotence, visual power and outreach was recognized in the early 70's. Keeping in view the larger aspects of education, especially rural education, India undertook in 1975-76, the Satellite Instructional Television Experiment (SITE) to telecast a series of educational TV programmes on health, family planning, agriculture, adult education etc., to cover 2,500 Indian villages via the US satellite, ATS-6. It was the largest sociological experiment ever carried out in the world".

There is Blackboard LMS which has been deployed at thousands of universities. There is MIT’s OCW (Open courseware) project that boasts nearly the entire MIT courseware (1800 courses) and has been around for seven years now. They claim 1.5 million visitors a month to their website. Here is a report. Then there is the Open Course Ware Consortium that is based on the MIT model and has over 100 participating institutions from the world over.

And the University of Phoenix is a pioneer in and one of the largest online universities.

So, use of technology to supplement or even substitute for teachers has been around for long. Some of these like MIT's OCW and Educomp in India have been quite successful too.

So what's new ??

I believe that none of the above initiatives have been or will be carried through to their logical conclusion i.e. potential. On the ground, the number of students benefitting from each of the above services is far lower than should been the case,considering the demand that exists.

But now here in India there's been launched a service that looks like it's going to be very large in terms of it's impact - both in quality delivered and in the number of students taught.

More on this in my two subsequent posts on "Teachers' shortage and Internet's magic wand".

The Internet juggernaut rolls on

Here is a selection of a half dozen "Internet news" items over the last three days, each of which is about the increasing usage and adoption of the Net. It's "happening" ( both in India and elsewhere) :

In India :

1. IPOs to go "online only"

SEBI (the Securities & Exchange Board of India) is considering a move to make applications for IPOs exclusively online. This seems prompted by the recent deluge in applications to IPOs like Reliance Energy, with many more such IPOs to follow.

This is now feasible since demat accounts are online and all major banks also have a provision for online banking. An online IPO application will cut the allotment period to 5 days from the current 21 days,says SEBI.

This will result in savings in funds tied up for those extra days. Importantly, it will also save applicants the bother of cumbersome paperwork. The move is likely to benefit banks too since many people now will open online banking accounts. This will save costs for banks. A win win situation for all.

And this will certainly give a fillip to Internet growth in India. So far only secondary stock trading is posssible online - and that too is optional. In contrast, IPOs applications will be online only.

2. Lawyers to go online

The Hindustan Times reports (couldn't locate the online version) that the Bar Council of India has managed to successfully persuade the Supreme Court that lawyers should have their own website. So far, as part of their professional ethics code, lawyers were barred from all sorts of advertising & soliciting. However, lawyers pressed hard for this and the Supreme Court seems inclined to let this go through.

Should be interesting - I've had trouble getting to find a lawyer when I needed one - for my odd personal matters.

Also, with an estimated 1 million lawyers in India, this spells big, big business for domain name & website hosting companies around the corner. Also, there's a good possibility to create Web 2.0 type of sites for lawyers, read my other posts or contact me if you want to know more :-)

3. CRY (Child Rights & You), possibly India's best known NGO, has opened an "office" on Second Life (under the Bollywood section I'm told, not sure why Bollywood though :-)

4. Online job hunting is #1

Kelly Services, the manpower company, has published the results of a survey among 3000 Indians which shows that online job hunting accounts for 40% of all jobs placed, ahead of other methods. The survey has other interesting nuggets for would-be job hunters and recruiters.

And, worldwide :

5. Ecommerce on a roll

Nielsen Online has come out with a survey which shows that as many as 875 million people around the world have ever shopped online. In Korea, 99% of all online users have ever shopped online.

6. Online music going the legit , ad-supported way ?

Ad-funded legit P2P music services are in. The latest one to launch is QTRAX, New York. They will have 25 million music titles available, a number 5 times as large as the iTunes store. Being legit, the company claims, they will be avoid viruses (unlike semi-legit sites like Limewire). And listening to all these 25 million titles will be free ! The company spent three years doing deals with the music labels.

So, if you are an online buff, happy stock hunting, lawyer selecting, giving to charity, shopping, job hunting and music listening.

Calling Product Managers

Product Managers are the lifeblood of the Internet industry. But here in India they are in short supply. Yahoo India , AOL India, Indiatimes, you name it, are all looking for some.

There are almost no schools (companies) where one gets trained in product management. There is no real big consumer technology industry (local manufacturing by the likes of Apple or Sony) either.

In contrast, "out there", they have outfits like these. This organization ought to be good, their white papers are a resource recommended by Vinod Khosla, no less.

Here's a great, great JD for a consumer Internet product manager. This one is by Ibibo, the South African/Gurgaon/"Chinese QQ" company.

Well, prize bulls per this one JD simply don't exist. But :

• If you are indeed considering a career in the Internet industry or if you are an HR guy or recruiter here, the above JD is one which can give you a good idea of the product manager's role and what it takes.
• If you already are a PM in the industry, these are the sort of skills you want to have.

Likewise, here are some good job descriptions for two other key positions in a consumer Internet company, the CTO & the HR Head.

Internet market surveys - more on social media & video

The online video & social media juggernauts keep moving on in the U.S. As I said in a previous post, these are the new online killer apps :

1. On Video :

Harris Interactive surveyed 2455 U.S. adults and found that over the last one year :

• 65% had watched a video on You Tube - as compared to 42% in previous year.
• Further, 42% said they visit You Tube frequently, as against 33% who said so in the previous year.
• You Tube was also the most favoured video site , with the stated reason being that users found it to contain almost all videos.
• However, as against 65% who used You Tube, as many as 43% had also watched videos on TV network website, 35% on news sites and 30% on search engines.
  
  And online viewers say they are more interested in full-length TV shows & movies and less in the amateur videos or video news that currently dominates video. Good omen here for the first movers .
  
  Her Royal Highness The Queen is now officially on You Tube. A watershed event of sorts. I still remember the interest the online coverage of Princess Diana's demise & funeral had aroused; it was a landmark in Net usage at that time (ten years ago), people the world over found it convenient to convey their condolences online.

2. On social media :
Pew Internet has come out with a report on teens & social media. Three salient findings :

• There is an increase in content creation (64% of all teens between 12-17 as against 57% in 2004).
• Girls continue to dominate most aspects such as blog creation and posting a photo or video online.
• 28% of all teens are "super-communicators" and these are more likely to be older girls.

Not much buzz about video and social media in India yet. Yes, social networking much talked about but even this has yet to get the widespread usage. Orkut was only 5 million (and Facebook will be much less) when I last checked the site's stats.This in a market of 32 million active users a month.

There is indeed an opportunity to create an online video and an online social media market in India. More on this later.

Internet draws youth away from TV

That's the title of an article that appeared in The Hindustan Times dated Nov 17.They have quoted MediaScope, an annual media survey that is done in 11 West European countries for the European Interactive Advertising Association by market research agency Synovate.

Key trends from the survey :

1. Almost 6 out of 10 (169 million ) West Europeans now regularly access the Internet.
2. 8 out of 10 Internet users now use a broadband connection.
3. A user spends on an average about 12 hours a week online.
4. Among young people (16-24 year olds):
- For the first time, they are more likely to go online for most days of the week than turn on the television. 82% use Internet at least 5 days a week while only 77% use TV for the same period.
- Average use of Internet per week is 14.7 hours, or 10% than the average use of TV of 13.4 hours per week.
5. Internet consumption is fast increasing among all demographics, the +55 age group and women in particular.
6. 42% of all Internet users now use social networking, making it the third most important application after search (87%) and email (81%). Very interesting.
7. The number of people watching TV, film or video clips is only 30% of all users but has grown 150% since 2006. Another killer application here.
TV Advertising will move to video & rich media ads online big time, considering the 80% + broadband penetration.
8. Over a quarter (27%) of Internet users post on rating & review sites, a growth of 42% over previous year 2006. A similar number viz. 26% post on forums. Social media is big.
9. The most commonly visited sites (% of all Internet users who visit at least once a month) were:
News 65%, Local information (52%), Travel (51%) and Banking & Finance (50%).

The contrast with India is of course stark, one source for India data is the annual I-Cube study by IMRB. Here is the executive summary of their 2006 report.

More on trends of Internet usage in India and other countries in subsequent posts.

Indian Internet market : Hindu rate of growth Part I

I have just returned invigorated from the Bangalore summit Web Innovation 2007. Will soon update with notes of some sessions that I attended. Will also provide the presentation I made there on social networking.

Meanwhile, herein are my much delayed views on why India's Internet market has been growing slow and what can be done about the same.

The answer is in three parts :

I. Why is the Internet important
II. Why is the Internet user base not growing fast enough in India
III. What can be done to make the Internet base grow (this is the flip side of the question in II above)

This post is about item no. 1.

Why is the Internet important ?
(Don't laugh, there are several shades to this answer. The answer also has some bearing on questions II & III above).

1. Large numbers online (globally currently 1.25 billion are online via PCs alone).

2. Network effects : a potentially viral medium. You can make your idea or product travel through above large number of people faster than is possible through any other medium. Yes, you have to be smart about it.

3. Low cost of going online. And any one can be a publisher. Thus all in all a democratic medium. Gives every one of us access to information, various tools as well as a Voice.

4. Global Encyclopaedia, with well-regarded Big Brother (you know who, first two letters of name start with Go :-) manning the gates to this.

5. Easy Internet access across devices (beginning with mobile phones ) and in remote locations (probably via wireless technology) will boost usage,leading to a virtuous cycle of benefits.

6. Technologies getting popular currently e.g. VOIP, video, RIA etc. will provide many-fold benefits and growth in usage.
The best is yet to come e.g. Vincent Cerf believes that only 99% of the Internet applications have yet to be invented. A universal language translator, online, any one ?

7. New paradigms e.g. Web 2.0, 3.0, Semantic Web and the like makes the Internet grow through its own self-renewal.

8. Hypothesis : The more underpriveleged the Internet user, the greater benefit does the Internet possibly provide to him / her. This does needs an explanation :-)

When I worked at Rediff.com, we did much to understand Indian Internet users, including focus groups with consumers. And the sense I got then was that there is an even greater hunger among, say, young SEC B girls in small towns of U.P. to log on to the Internet than there is among upmarket metro users.

Education,jobs,travel,marriage, the Internet provides it all. The Internet is thus seen by underpriveleged as their passport to break out of immediate constraints of locality, gender and the like and partake of mainstream opportunities.

So the Internet is a tool to address social inequality concerns. And today income inequality in India is a more worrying issue than it is in any other large country. I was at a TIE Summit last week wherein C.K. Prahalad touched on this. He presented data on changes to India's Gini cooefficient ( a tool to measure disparity in incomes) over the years vias-a-vis comparable data for China and U.S. Income disparity is increasing faster here while at the same time our absolute i.e. average income levels are also much lower.

From the above, I would argue that in the long-term in India we have even "more" to gain from the use of the Internet than do China or the U.S.

9. Great impact possible in societal issues. The Net's impact will be even greater in non-business / non-profit concerns affecting us all. The new social media has a role here.More on this big statement in a subsequent post.

I was looking at a reason # 10 to create my own Ten Commandments, couldn't find one, and now will leave you, the esteemed reader of Marketer's Kaleidoscope to take a go :-)

Coming up : Parts II & III regarding "India's Internet market : Hindu rate of growth".