Not long after Tim Berners-Lee invented the world wide web, the first popular web sites revolved around the themes of email and information repository (e.g. Yahoo Directory). The next wave quickly followed on the themes of e-commerce: business to business (most no longer exist in their original form), business to consumer (e.g. Amazon), and consumer to consumer (e.g. eBay and Craig's List). In the next wave came the themes of search (e.g. Google) and "mash up" (e.g. My Yahoo). In the current wave, several themes are popular: user-generated content (e.g. countless number of blogs such as a healthcare CIO's blog), social networking (e.g. Facebook, Twitter), and rich media (e.g. YouTube, Jango).
Green pasture
Scanning the current activities among various internet start up companies, no new trend has yet to dominate. Many of the popular start up companies are still working the same theme. Essentially they are just fighting for a slice of the same pie. Extremely few of the start up companies are working on enlarging the size of the pie or, even less, creating another pie.
As an analogy, observe the telecommunication industry. Mobile phone growth has outpaced the fixed-line phone growth and enabled communication to people who are otherwise left out of the telecommunication industry. Growth is not driven by the high net-worth individuals, but instead by the mid-to-lower economic strata, most especially in the developing countries. The demand for communication has always been there, but the fixed-line phone providers never reached the price point whereby the market in these developing countries must have it. The mobile phone providers, on the other hand, was able to provide their services at the price point that opened the floodgate for pent-up demand to materialise as real consumption.
Computer hardware prices has fallen and continue to fall. Computer software is getting easier to use, arguably, and becoming available in more and more languages. Even free software is almost as good as commercial software, and in many cases, as good or even better. Before long, computer price will reach the tipping point where demand for internet will start kicking in and opens the opportunities for various internet companies.
The time is ripe to look beyond the current user base and reach out to the currently not-yet users in developing countries. Altogether, this is a potentially large markets. In this case, the grass looks convincingly greener on the other side of the fence.
Different types of grass
Easier said than done. With differences in culture, technology infrastructure, and financial habits, among others, what made internet companies successful in developed countries may not get them as far in developing countries. The short web history is filled with stories about big-name internet companies playing second tier outside their regional markets.
However challenging though, the internet start up community is very resilient, hard working, and creative. The players are used to business environment that is very competitive and, at the same time, collaborative at the technical level. But this is outside of their typical comfort zone.
And at the end of the day, it is indeed about stepping out of the comfort zone, although in this case there are some differences as exemplified in the following non-exhaustive list.
- Instead of moving to a friend's garage, they can (or should?) move to another country and work with the locals to analyse and solve what will work to meet the demand.
- Instead of wondering if offshoring can help them reduce the rate of their cash outflow, they can be "offshore" themselves to focus on managing the resources hands-on.
- Instead of finding out post-launch that the product name has a bad meaning in the target market (e.g. misuse of "4", as in "model 4", in product name in China), they can plan a multi-culturally acceptable name with the help of the local staffs.
- Instead of planning for language translation as an additional cost, their local staffs can design in the local languages, in addition to English (or German, French, etc).
- Instead of eating Chineese instant noodle or microwaveable Indonesian bakmi goreng or frozen Indian dal or Mexican take-out to save money, they can actually eat the real thing at the same, or less, cost.
- Instead of wondering if they will ever fly to a distant land for holidays, they can actually drive, or ride the train, to these places. (The lucky few may actually live there while working on their start up.)
Spreading the seeds
The challenge is not lack of entrepreneurship nor creativity for what to build. With a few paradigm changes, the internet community can uncover the great unmet needs of the rest of the world. Here is a short wish list.
- For internet community in general to look beyond the current internet users by engaging non-technologists who are actively working with / for the currently non-users.
- For internet entrepreneurs to come up with truly new web categories, instead of me-too products and services.
- For venture capitalists (VCs) to be open minded to venture into new approaches for return on investments and to sail into uncharted waters.
This is not an advocacy for social entrepreneurship, although there is nothing wrong with that. This is about uncovering a new for-profit market for the world wide web beyond the current market base. And one size does not fit all. Strategies that worked in the past will require tweaking to break into new markets, and that is okay because internet entrepreneurs are very good at thinking outside-the-box.
Some VCs may argue that there is no start up hub nor even an internet entrepreneurship culture where these target markets are. Too risky. At the same time, they will be the first who would say that the failure rate for internet start up in their "typical" market base is high. High failure rate combined with high cost and a saturated market is no less risky than venturing into new markets with low operating cost and millions and millions of potential users.
"The grass is not, in fact, always greener on the other side of the fence. Fences have nothing to do with it. The grass is greenest where it is watered. When crossing over fences, carry water with you." Robert Fulghum
So who shall bring the "water"? The invitation is out. The land is fertile and ready for the seeds of a new internet wave.
- -February 2009