Paramendra Bhagat's Blog
Thursday, March 31, 2005
To: Vanita Soni And Team
Subject: Business Proposal
Sorry, meant to get back much earlier, but this blog has taken a lot of my time this past two months, it has been kind of urgent. This message builds upon my earlier message to you and your team. TwoRoots seems to be coming along wonderfully. I just visited again a few minutes back. Great job. What I am proposing builds upon what you already have. I hope it makes sense. If not, discard.
The traditional dot com business model was, hopefully you have a great idea, and a good enough team to start with, and you go seek some angel investing, and roll out, and then go seek some bigger investors, expand your team, rent office space, very much like a traditional corporation, move from the mythical "garage" to the cubicle. Late term investors buy chunks of the company. Say you value the company at $10 million, and, at that point, an investor who pumps in $1 million ends up being a 10% owner of the company. And you work some more, burn more money, expand. And you reevaluate, and if the new figure for the company is $100 million, and an investor pumps in $5 million, they end up owning 5% of the company. Down the line, you hope to go public. Say the market puts a $500 million figure on the company. The investor who put in $1 million for a 10% stake is now worth $50 million, the one who put in $5 million for a 5% stake is now worth $25 million.
But this is when it works out. A great company, with a great product, one that beats out the competition. It might not pan out that way for most start-ups. It did not even during the late 1990s. And this tends to work more for those companies with some cutting edge technology to offer.
What I am proposing is a totally different approach. Your idea is to create "an online community for South Asian teens." So far you have been doing the Chaitime thing. You are pouring all you have into creating content from scratch for this one website.
Instead, how about realizing that the term "community" is more to do with Face Time than it is with Screen Time? How about admitting that those teens very much have their families as part of their community, that their parents are a large part of their lives, and for good? How about building a business that does not involve any investors!
I am proposing a twin tack approach. Track 1, you work your degree, you get your degree, and you get a job. Track 2, you work the business on the side. When your business income matches your job income, which might happen in five years, maybe three, you quit your job and focus on the business full time. And of course, there could be a Track 3, all else you want to do, maybe TV shows.
To get more specific.
- Continue doing what you are doing with TwoRoots, just do more of it.
- Add a section, to be called Blogs. And another called Links. Add one called K-12.
- Spend some considerable time googling around to see what content there is out there already for your target audience. I just did a search "for south asian teenagers" and the results were disappointing. So you all might be upto something. But anyways, see if you can find content. No point duplicating. So, if I am a South Asian teenager, I trust the TwoRootswallahs to constantly be surfing around to see if there is stuff out there for me on the wild wild web. Your page will have links, but also a 1-2 sentence description of the link. Kind of like the Yahoo Directory, only much smaller. Might be able to learn a few things from Yahooligans. I also did a search on "web content for teenagers" and there too the results were disappointing. There is this ALA stuff, not much else. There is this one magazine, but it is for the parents of teenagers. A few others that came up for "teenagers online": About Teens, TeenPeople, TeenHelp. I am surprised, maybe I should not be. But the overwhelming content online for teens is to fit the stereotype of this "lost" teen who needs lots of help. When you are a teen, you don't really feel that, you feel as human as any other age group, perhaps more so. I guess there is this wide, open space for what you are attempting to do.
- The K-12 concept is my play of Jyoti, something I have not been able to give any time to yet, but the basic premise has been laid out. Teens should be able to come to TwoRoots also for help with homework. Again, it will primarily be about searching for content already out there.
- Introduce teens to blogging. Have a partner program. A teen with a blog who links to TwoRoots gets linked to from a page on TwoRoots. The more sites that link to yours, higher up it shows on search results worldwide. And encourage everyone to do the Google Ad thing, so they all feel like small time business owners, generating their own revenue, even if it might not be much starting out. For safety reasons, make a rule that participating bloggers may not reveal their real identity, real names, contact information etc. at their blog, something like that. If you could convince about a dozen teens to keep an ongoing journal, that would be some great content for a starter. I would recommend Blogger, primarily because of the search engine in the top left corner. Say if your blog ends up real huge with 1,000 entries, and 500,000 words, how do I find stuff? The old way is to go to the contents page. The web way is to simply search!
- So you are creating content, making available content already out there, and you are helping teens create their own content.
- Now, for parental involvement. This is where some online marketing comes in. You sign up under me, and everyone on your team signs up under you. And you all go seek families. But first take the 3-month course. If you find yourself unwilling to take the course, this business is not for you, so skip. If you take the course and fail it, this business is not for you, so skip. Go to the site, and click on "Book," and follow on to the course link, 101. Take the course before you approach anyone. You rope in the parents, and get "access" to their teenagers. So there is this large Face Time component to this community theme you are cultivating. The idea is not to take over their lives. Not. I would think you would get kicked out fast if you tried. The idea is to enrichen their existing sense of community, online as well as offline. I bet they do more bonding over their instant messengers than any other online tool! Let not that be a threat to your business model, and it will not be if you embrace it in your vision.
- The good about this model is (1) You are putting Face Time at the center of your universe in your business model that is about community, (2) You are respecting the existing community of the teens, not trying to snatch them away from it, instead you are adding the online component as just an add-on, (3) You are closely involved with parents, and (4) You are constantly doing "market research" because you are personally befriending members of your target audience on an ongoing basis.
- It is almost like you are only doing it all for the families you are immediately involved with.
- But then there are concentric circles of influence. Innermost circle: families and teens you personally know, or get to know, who are participating. Then: those who are participating only online, like bloggers you will never meet. And then there are those that will find your site because it shows up on search results worldwide. If you do good by your inner circle, you will end up creating great content, and you will end up doing good by your outer circle.
Saturday, March 19, 2005
Needed: an "iPod" for movies. Just like music, movies will have to go digital in a legitimate way.
Thursday, March 03, 2005
Interview questions by Vanita Soni.
......a few students here at UCLA Anderson are building a web space for South Asian teenagers. We are doing some content development and will soon test to see what these kids will be interested in. Obviously, Chaitime.com was very successful in raising a lot of capital and maintaining strong interest in the site for a time.
As to webspace for South Asian teenagers, my brother-in-law Bisundev Mahato (who recently co-authored a paper on health care in New York City that got a thousand New Yorkers marching to City Hall) might be in a better position to talk. I refer you to him. The idea of an online community for teenagers is something he has thought about a lot. Maybe you all can even team up in some capacity. I send you his email address.
If you will just be offering content, that is one thing. But if the idea will be to actually create a virtual community, I would think safety would emerge a prominent issue. How do you ensure people are who they say they are, that they are all teenagers? Can you involve parents? How do you make sure undesirable people do not get in?
Before I go into Chaitime - and yes, it did shine for a while - let me make it very clear, I was one of several founding members. The key person all along was Bhana (Grover). I wish I had her contact info to share with you.
Late 1990s were a heady time: everything felt possible. It was much easier to raise money then than it is now. But a good idea and team can raise money today as well. It is just that a lot of all-clicks-and-no-profits dot coms got flushed down.
I myself hope to work hard on my online marketing idea where the webworld stays in the background, the real challenge is at the level of Face Time, and the money made is "real" and not based on stock speculation. And also my writing and online presentations. Basically it is like claiming real estate online and inserting ads all over that estate. That is me today! I might also give a second look to my Internet Computer (IC) idea. I don't know right now for sure.
What do you think made Chaitime so attractive to investors?
The number one reason was the idea. Indian Americans make more money per family than any other ethnic group in America. If you can get them to come hang out this one online place, maybe they will do some shopping. That was the idea. The number two reason was the leader: Bhana. I once said she has a Steve Jobs like intensity. The number three reason was our lead investor. I forget his name, but he is the name behind Zany Brainy, the toystore chain. Number four, the rest of us on the team. It was quite a colorful crowd.
Who were your best advertisers?
We had some. But I was primarily focused on content development. I can not tell you much on the business side. There were quite a few advertisers. I just can't remember.
For someone starting today, you have things like Google AdWords, that I do use in my personal capacity today. You don't even have to do what we did. You don't have to go seek out advertisers and manage the money, one customer at a time. Heck, you don't even have to interact with Google employees. It takes less than 15 minutes to get started. If you can create content that will get a lot of page hits, you stand to make some money.
There's another - TargetPoint - that I have not had the chance to look into closely and make use of. It is similar and you "get 50% of the total on–click revenue."
The model we followed was advertisers paid for the number of times their ads got seen. But I believe AdWords and TagetPoint are more sustainable because money only moves when viewers click on ads. We had colorful banners, whereas the Google program, as you must know, is text based, and in several ways more effective, because they are targeted.
What was your biggest draw for advertisers?
That we get page hits from the most successful ethnic group in North America.
What was your best content? What was your main draw for viewers?
Bhana was really big on the community theme; she often mentioned iVillage. That made us stand out. And the presentation of our webpages were really artistic. At the time I remember remarking something to the effect to Bhana that I had not seen such beautiful pages anywhere else on the web. The ethnic elements added to what I call the exotica element.
There were many channels. I was with the News Channel. Arif Ullah was my team leader. I am tempted to say our channel had the best content, but that would not be true. Actually it is my personal opinion that it was our News Channel's failure to really expand our news feeds that lead to the early demise of the company. We did not even attempt to compete with Rediff, our chief competitor, on their premier turf, which was/is news. We had India Abroad as our sole news feed. I was the minority voice that wanted something like the Times Of India for our newsfeed, and I even e-corresponded with them, but the leadership did not want to go down that route. My idea was that the vision should be that if you are a South Asian anywhere on the planet, and if you want news, you should first think of Chaitime. That would mean we would get a lot of local news feeds from outfits in South Asia. Either I did not express my opinion well, or in the right away, or I was not senior enough on the team, or the leadership saw something I did not, I don't know.
I just went to the India Abroad site, and I just now learned they have been bought up by Rediff!
Anyways, I digress. I think some of the best content we had was in the culture section. There was one section that helped you plan a wedding. I thought that was pretty cool.
Another digression: the site had a policy of not allowing links through the content we offered with the erroneous thinking that people will stick around longer. I always maintained that was a mistake. The links are what differentiate the web medium from other media.
What were your strongest partnerships?
Again, a business question that I am not in the best position to answer. But from some of my informal conversations with some of those on the business team, I remember we were on talks with companies like MetLife. And many, many others.
What was your revenue model? Were you collecting from users or advertisers more?
We were not collecting any money from users, not at all. The model, get a ton of page hits, and make money from advertisers, but primarily get a cut when people do some shopping at the site.
What do you think about the future of teen media in the States? What should we not overlook?
Before I delve into this specific question, let me make it clear, I am a total Internet freak. I talk about the Internet like some Christians talk about the coming of Christ. Just so you know where I am coming from. And I do not think things ended with the dot com bust. We have barely seen the beginning.
The media world is converging. It is not like newspapers and radio and television are going to go away. More like they are all going to migrate to the online world. Earlier in the day I was thinking I might add an entry to my Tech N Biz blog, that would be called Five Is A Finity. I guess instead I will just put that here.
Look at it this way. (1) Mathematical symbols, (2) Text of every possible language, dead and alive, and every possible script, (3) Audio, (4) Graphics/Photos/Video, and (5) Money. That pretty much sums up all of human communication, would you say? The vision is this: every Homo Sapien needs to have internet access, if only because we can not afford to waste a single brain, each person is unique and hence without substitute; I mean, what with broadband over powerlines and all. And any person should be able to communicate with any other person, or with as many other people, in real time - like in chat format - or over time, like when you visit an archived page, like a blog entry.
The rudiments of all these are already available. There is MathML, but some work needs to be done to make it more user-friendly. Text, audio and video blogging are already options. There is PayPal, although the deficiency there is we as human beings are at a rather stupid level of group dynamics and have not yet achieved a single global currency, and PayPal, or its look-alikes, should be as easy to use globally as it is today within the US. And I must stress, I do not approve of the ways of journals today. I would rather they made all their content freely available online, and instead made money through ads.
The point being, in such a future, every person is a media powerhouse. Does that mean old media will go away, that names like CNN and New York Times will disappear? Not necessarily, if they change and embrace the technology and let the new stuff work on all aspects of what they do.
I just drew the big picture. But I thought that necessary before coming to teens. Teens are a small part of that big picture itself. The new world that the internet and broadband make possible has enormous implications also for teens. It will at once liberate them from the constraints of geography in terms of what they can learn, the kind of people they can interact with. The whole penpal thing takes a whole new meaning, don't you think? I mean, I had a penpal from Argentina when I was at middle school, and for the longest time she thought I was a girl because my name ends with an a. I guess we did not have video chat back then! On the other hand, I believe teens will also rediscover the importance of the immediate, offline world, of face time, of family at home, and friends at school and in the immediate neighborhood. I do not see it happening that just because there is this new media, all teens do is stare at the stupid screen. Not at all.
Education transforms. More people can get educated faster. That is quantity. But also quality. If there is a 14-year-old genius somewhere, there is no reason why that Teen Queen should have to wait to finish high school and go to college or even grad school before she can collaborate with the leading people in her chosen field. Barriers get broken.
Teens get to stay in touch with distant cousins. That is a treat, I would think. And teens get to explore their cultural backgrounds more, regardless of if they are only a few family in some isolated small town.
Teens can start their own e-zines. We call them blogs these days!
In short, it is a brave new world, also for teens.
What should you not overlook? I don't know. I mean, is this an academic project for a class? Or is this a business idea you all are nurturing? Will you offer content only? Or is the idea to create a virtual teen community? If I had to take a guess, I would say you should look into the social and psychological and cultural aspects as much (if not more) as you might the tech aspect. That is one thing. Second, if this is a business idea, and you are offering content, it might be a little while before you have enough page hits to make a ton of money off of ads. And always have alternate plans. What if whatever you all have in mind does not work out? What is plan B?
I am sorry I do not know more to get more specific here. And I wish you all all the best.
Audio.
