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Facebook for India is a Waste of Time by 500Startups’ Pankaj Jain

Facebook for India is a Waste of Time by 500Startups’ Pankaj Jain
Pankaj Jain
Pankaj Jain
500 Startups provides early-stage companies with up to $250K in funding, access to the startup accelerator program, and unique events like SmashSummit, UnSexy, and GeeksOnaPlane. With hundreds of experienced startup mentors around the world, a creative work space in the heart of Silicon Valley, and a vibrant community of startup founders, 500Startups help companies succeed in ways other venture firms do not. Pankaj Jain of 500Startups “regularly kicks ass” & takes names of Desi founders to help build a vibrant startup ecosystem in India. When he isn’t busting the chops of noob startups or predatory angel investors, or firing up Startup Weekend in Bangalore or Mumbai, you will find him devouring unsuspecting vegetables at Delhi’s best vegetarian sushi joint.
Pankaj Jain

Latest posts by Pankaj Jain (see all)

In a country of almost 1.3 billion people, mid-20th century infrastructure, rampant corruption, over 400 million people below the international poverty line, roughly another 400 million people that are considered middle class and one of the youngest populations on the planet – building the next Facebook is not exciting.

What is exciting? Solving problems for over 800 million people who don’t have access to smartphones, tablets or computers. The real opportunities in India for smart, savvy entrepreneurs is to solve the problems plaguing them on a daily basis. And, there really is no shortage of problems, big or small.

 

For example, A SMS based service that brings “mandi” (market) prices directly to a farmer and allows the farmer to know exactly how much his produce will get him at a market in Mumbai, Delhi, Indore, Kolkata, etc. In 2009, Thomson Reuters made over a million dollars a year by providing this service to farmers in only three states in India. In many cases, information about current market prices has helped farmers better negotiate fair prices with middlemen, sometimes tripling the amount of money the farmer receives.

 

Ever hear of “star dialing”? Chances are that if you live in the US, you haven’t. In India, on my mobile phone, I can dial *123# and my current balance will pop up on an iPhone just as easily as a Nokia 1100 feature phone. The best part is that “star dialing” doesn’t cost the caller anything – andno call ever gets terminated. Well, can you imagine building a banking solution on top of this for people who don’t have access to a bank? Eko Financial, based in New Delhi, has done exactly that. For the millions of people who don’t have access to a bank or the millions who need to send money back home to their family in a small village, can now do so quickly and easily by going to a local bodega (we call them “kirana” stores in India) and by giving cash to the store owner. The store owner simply enters a sequence of numbers to authenticate the service and transmits the cash to the destination account. All of this is done in minutes and payments can be tiny or relatively large.

 

Imagine you live in a rural area with no terrestrial Internet connection, no 3G, no 2G, nothing. You have a mobile phone to communicate with the world via voice and SMS. Now, imagine you could search the web simply by sending an SMS to 55444. Now,you can find the Rotten Tomatoes ratings for a movie playing over the air or you can join IRC style chat rooms simply by using SMS. Innozlet’s you do all of these things and a whole lot more. It’s bringing the power of the Web and applications to people who would never have had access to them. The reality is people living in remote, rural parts of India can now connect with people in cities over IRC style chat rooms, find out the seven day forecast, and even get the best price for a TV from eBay simply by sending a text message.

 

These are just a few examples of mobile applications that people have built in India over SMS. Add in smartphone apps that alert civic authorities to sewage problems, garbage piled up on the side of the road, illegal construction, unsafe working conditions, etc. and you have a tech savvy urban population that can use technology to improve their quality of life. The opportunity in India isn’t in building another social network or e-commerce site that sells printed kurtis online. The poor across India are hard-pressed to get access to basic resources. The middle class is very aspirational and though price sensitive, the household savings rate, as a percentage of GDP, fell to 7.8% – the lowest in 20 years, according to a report in Times of India. This means middle class Indians are spending and it’s been increasing.

 

Today, it’s possible to get a basic smartphone in India for INR 4,500 or less than USD 85. The Aakash tablet was an ambitious project to produce a basic Internet device that can be used anywhere a mobile phone can at a USD 50 (subsidized to USD 35). A good deal of controversy surrounded the Aakash tablet. However, the push from the Indian government as well as manufacturers towards more affordable smartphones and tablets will help to create massive opportunities for entrepreneurs. These saavy entrpreneurs will be able to provide solutions to every day problems including education, entertainment, sports, content, and other utilities all while serving hundreds of millions of people who are accessing technology for the first time.

500 Startups provides early-stage companies with up to $250K in funding, access to the startup accelerator program, and unique events like SmashSummitUnSexy, and GeeksOnaPlane. With hundreds of experienced startup mentors around the world, a creative work space in the heart of Silicon Valley, and a vibrant community of startup founders, 500Startups help companies succeed in ways other venture firms do not.

Pankaj Jain of 500Startups “regularly kicks ass” & takes names of Desi founders to help build a vibrant startup ecosystem in India. When he isn’t busting the chops of noob startups or predatory angel investors, or firing up Startup Weekend in Bangalore or Mumbai, you will find him devouring unsuspecting vegetables at Delhi’s best vegetarian sushi joint.

Comments

  1. Totally agree to what you say. There is a HUGE opportunity in USSD based services.
    Tried explaining this to many, this article will help me drive my point home.
    There is so much that can be achieved. And its so easy too.

    Thank you.

    Murali.

  2. Good one Pankaj. Though, I like you bio the most :-)

    • Hey Ravi, I don’t know if that’s a good thing or not ;-)

  3. Proud of Innoz, of SMSGYAN fame which powers the offline search and proud to be associated in a small way to spot the team early on in the college and encourage them to come to Delhi.

    Personally, I have contributed to solve one problem – create 2 Lakh pages of value added information for Indian SMEs (winning a couple of awards on the way), the same has enabled millions of SMEs, who now have the information free of cost which was earlier deprived to them from over 300+ sources.

  4. Amit Gupta

    Few facts :
    http://en.wikipedia.org/wiki/List_of_countries_by_number_of_Internet_users
    http://en.wikipedia.org/wiki/List_of_countries_by_population

    http://en.wikipedia.org/wiki/Facebook_statistics#Top_50_Countries_on_Facebook

    India is placed 3rd for number of internet users, which by the way is more than total population of most countries.

    Waste of time ? Seriously ?

    • Hi Amit,
      Thanks for the comment. All true and there are still opportunities for pure online plays in India and as more people come online, those opportunities will also grow. However, the post was meant to highlight that these ideas only focus on 10% of India’s population, maybe 12% today. What about the other 88%-90% that have yet to get online (and may not for a while)? That demographic is a massive opportunity today. Those business solving real, everyday, problems in India are exciting and I want to meet the entrepreneurs going after them.
      Best,
      Pankaj

  5. As you mentioned, plenty of people will have access to smartphones and with the prices dropping increasingly and the network coverage of 2G and 3G increasing in India, don’t you think it will ultimately make sense to create smartphone apps specifically for the rural market? Or will the smartphone always (next 5 years) be a bit too complicated for the average rural user? Do share your thoughts.

  6. Pankaj: Thank you for sharing your insight. I think your opinion is valid not only for India but many developing countries also. I am not against social media, but the real value of any new technology or hype must be evaluated carefully. If majority of the population is challenged for survival, there is not much time left for social exchange. I have been living in Shanghai for last seven years. China’s economy has grown very high – #2 in GDP. However, if we visit the rural China, the issues faced by population is quite primitive.
    BTW, I would like to raise a questions about facebook. What is the carbon foot print of each page view of facebook? How much electrical energy is spent to show a page?

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