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In search of a revenue model

india Updated: Jun 01, 2007 21:42 IST
Highlight Story

A beautiful mind, a little fire and an enterprising heart and you have the perfect recipe for success. Why is it then 80% of the startups fail within the first two years? Why is it that 60% of entrepreneurs fail and get back to where they came from? At a time when there are organizations studying the impact of technology and culture and delving further into various aspects of enterprise, technology, culture and society I think it is rather pertinent to know why does an enterprise fail or succeed (depending on whether you are an optimist or pessimist) especially when the average age of an entrepreneur is shrinking like no other time in history. The psychological impact of this is too huge to be ignored.

Simple questions sometimes don't have simple answers. Even if they do the answers sometimes don't come as simply. I have spent hours thinking about this simple question. Why is Google Google today? Why is Microsoft a giant today? What did Netscape do wrong? Did ICQ fall in love with a wrong partner to get almost wiped out overnight?

Revenue Model - the secret of success

Recently I had the opportunity to meet the founders of two very interesting startups Webaroo and Techtribe. Both very interesting enterprises. Webaroo started by one of the Indian dotcom heroes Rakesh Mathur (remember Junglee Amazon connection) and Techtribe founded by Rohit Agarwal. Both very interesting enterprises. One common thread I found in them was the focus on the revenue model. A business without a revenue model? Well you may find it crazy but trust me when I say more than half the startups started in the early years of the dotcom era didn't know what a revenue model meant. That trend carried on and though many claim to have revenue models but besides some mumbo jumbo numbers they haven't concentrated on revenue models at all.

Webaroo - Revenue through Gupshup

Webaroo Gupshup offers a free group messaging service in India. SMS GupShup offers a simple way to create groups of any size and communicate with them. Messages sent by the group creator are forwarded by Webaroo, at no charge, to all members of the group. Using a single SMS message, users can join any group they choose. They will then automatically receive messages posted to the group as an SMS on their phone. Similarly, users can use SMS messages to create their own groups, invite friends, and post messages to the group. Additionally, users can also run a poll, rating and quiz within their group. Groups and messages are archived online at smsgupshup.com, except for private groups.

Users can join groups to stay connected with friends, to receive alerts and notifications, to stay updated with news and current events, to receive weather updates or sports scores from their favorite sources, etc. According to Webaroo using SMS GupShup stockbrokers are communicating with their clients, movie fans publishing quotes and reviews, music lovers sharing trivia, colleges notifying alumni of upcoming events, bands announcing upcoming performances, activists rallying supporters, tutors teaching students and so on.

Mobile Advertising - the future of advertising

The revenue model is simple and yet very powerful. Mobile advertising. Remember the mobile phone is a device that stays with us more than anything else in the world including our parents, spouse, friends. The cell phone is also the most visible screen in the world now. Life in this century is lived 24/7 and life is on your mobile phone screen in your hand. Mobile advertising could just be an El Dorado for Webaroo and Rakesh Mathur and gang could just be the next pin up boys at a wallpaper on your cellphone.

Techtribe - referring gains for yourself

I met the founder of techtribe.com Rohit around eight months ago. To be honest I didn't really think anything great about the startup. He did have a Baan background and but that doesn't matter in enterprise. The opportunity in the tech startup field is more or less a level playing field. I thought the company to be a fatly funded enterprise and nothing more. That impression changed recently. Without exaggeration Techtribe I now see as a startup with immense potential and something that could turn Rohit into a poster boy.

We all have heard about job sites. This company has brought the power of personal referrals in recruitment. They have a program called 'frontfoot' which they claim is the world's first referral recruiting service of its kind. A simple successful referral could earn Rs.10,000 plus more for other referrals. Plus they have a quality control mechanism to keep the weed out.

High personnel organizations like BPO's have been using this model for sometime with great success. To turn the job plus social networking model into a revenue stream is very interesting innovation. In an era of high demand of personnel and a booming economy this could just change the way recruitment industry works. Rs.10,000 may or may not be the right figure but that's a small issue. With time as they move they will perhaps get it right. But the power of this small innovation could turn this enterprise into a recruitment superhero.

The Last Word

Success is simple and is mostly based on simplicity. It's interesting to see how small innovations can do magic for a business. It's a welcome change to see startups focusing on revenue modeling and I think it is here that the simple answer to success may lie.

Puneet Mehrotra is a web strategist at www.cyberzest.com and edits www.thebusinessedition.com you can email him on puneet@cyberzest.com