Mr. Ubhi and B2C business in the world of Web 2.0

I met a smart guy today, Mr Ubhi. I picked him up at the airport today when he flew in from Mumbai to present a talk on "creating a buzz around a start-up" at our B-school as part of an Entrepreneurship workshop that happened this weekend. The candid hour-and-a-half long conversation in the cab from the airport to the institute was most insightful. Btw, he runs b-u-r-r-p-dot-com.

Mr. Ubhi is my age, born and raised in northern CA with prior work experience in LBO and private equity. Last year, the entrepreneurship bug bit him and he along with a colleague, a veteran in software and IT, landed in Mumbai to join the leagues of Balakrishnan(rediff), Bikhchandani(naukri), Bajaj(founded ebay-india), and Mittal(shaadi). It might be a while to go, but if he plays his cards right, you never know.

Tidbits I picked up: Gurgaon is cheaper than Mumbai (40-50% of the cost). Web hosting isn't a commodity in India yet, so host in US/Singapore. It's best to have close control on your product, outsourcing isn't always the best option. Your first team members have to be rock-stars, not those with padded resumes, but those hungry and passionate to be part of your greater vision. Hiring the right talent is difficult, but don't lower your bar. Web 2.0 is more about democratizing the web, rather than the tools/technologies in use like ajax. The actual internet user population in India is about 20 million, out of which only half are frequent users. Banner ads in India are charged on impression count and not on click count. There are many ways to market a product, try guerilla marketing, secretly hiring people, members of target communities, to subtly promote your brand in the specific locale. Deterrents to start-up in India are red-tape and having to grease hands to achieve basic infrastructure. Angel investment comes handsomely in the SFO bay area. VC in India is actually being used as private equity, i.e. even in businesses like restaurants. Strategic tie-ups with partners like Google is possible, to provide niche content and in return receive their traffic. Social networking in India has a skewed male-female ratio and members are mostly out to honk their horns at profiles with good photos. Mr. Ubhi's website will use SMS in a big way, with the ubiquity of cell-phones and messaging becoming a universal skill, it's an excellent mechanism to target a larger base. With the lack of structure in information in India (like postal addresses using "opposite Amitabh Bachchan's bungalow"), it's important to use natural language to communicate with the customer base. Lots of players in India are trying to copy successful models from the US and implement them in India, without realizing that the business climate is very different.

Core dumpped.