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‘Time has come for small startups to kick butt’

Abinash Tripathy, currently founder and CEO at Infinitely Beta, and former managing director, Zimbra APAC at Yahoo, has written a blog post titled, ‘Why the great Indian media companies will fail on the internet’. Tripathy believes that the online media industry in India is in big trouble. However, he still hopes that “we can create quality companies in India that apply technology and innovation to cool services that consumers love.” An excerpt:

Abinash Tripathy, currently founder and CEO at Infinitely Beta, and former managing director, Zimbra APAC at Yahoo, has written a blog post titled, ‘Why the great Indian media companies will fail on the internet’. Tripathy believes that the online media industry in India is in big trouble. However, he still hopes that “we can create quality companies in India that apply technology and innovation to cool services that consumers love.” An excerpt:

“For a company (Rediff.com, considered to be the grand daddy of the Indian internet industry) founded in 1996, to achieve enterprise value of $42 million in 2009 is a joke. (Even Zimbra, which was founded in 2003, was sold to Yahoo for $350 million in September 2007.) Their (Rediff’s) profit margin is off by 61 per cent year-over-year and operating margin is down 44 per cent year-over-year. Their quarterly revenue growth declined by 40 per cent year-over-year and they are running at a loss. Hmmm… if this is the state of the best in the industry we need to wonder how the rest of the digital media companies are doing.

“Indian media companies don’t have the slightest clue about the internet. They believe that they can fast copy what great startups in the US do and try and launch it in India and start getting traffic. They do not believe that having great technology and technologists is an asset. They continue to hire people that are under qualified and operate like the services industry (fill the ranks with 100s or 1000s of below average people) and then wonder why they can never produce anything cool that consumers love even after fast copying and why it costs them so much to build something.

“The digital media industry in India is filled with people who started their careers in print and TV and then moved to the internet and then grew along with the industry. They do not have a background in technology and the internet. They take technology and innovation for granted. They think brand and content is king. I just did some analysis on one of the most trafficked financial sites in India and found that only 1 per cent came there to read news. So, there goes your content investment down the drain. Content has become commodity. I would argue that two years from now most Indians will get their news update from Twitter and not from any of the news sites.

“My message to the young, innovative type graduating from colleges is to seek out small startups that are doing quality work instead of working for the big name media houses just to be resume worthy. Resumes really don’t matter. what you learn and achieve matters a lot.

“My message to startup founders is that if you have a great idea please don’t short sell yourselves to any of the larger media houses. Most of the business/corporate development teams in these media houses don’t have the people or the ability to identify big opportunities, teams or technology and end up signing really crappy deals with a bunch of small startups mostly opportunistically.”

Read the full article here [Though, it’s a long article (2,977 words), still it’s worth reading.]

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70 thoughts on “‘Time has come for small startups to kick butt’”

  1. Very nicely put.
    They

    Very nicely put.

    They continue to hire people that are under qualified and operate like the services industry

    On the dot. out of experience, people in the top mgmt do not value people, for them its like the tshirt one wears. Remove one and get another one.

    Very nice read 🙂

  2. very very aptly written
    very very aptly written post! Even I wondered why Rediff lacks innovation, been in industry for more than 10 years. On the contrary I love web 18 websites. in.com is something we should be proud of! I hope other media houses would also understand the real need of quality technologists.

  3. I couldn’t agree more. I
    I couldn’t agree more. I myself have been in the Internet Industry for over 12 years now & have also worked with not only start ups, but also with known, well established brand/media/digital-production houses. My experience taught me the difference between them & it is very much in line with what Abinash has expressed. Start ups do focus on talent & innovation – but quite often they end up messing on the financial/marketing aspects (as the excitement to create & innovate often surpasses the urge to focus on selling). On the contrary the established houses – though have strong financial & marketing know how – somehow don’t seem to bother much about innovation. And quite unfortunately, they don’t bother much about talents as well. I will love to consider these as exceptions – but I doubt.
    It is high time for Indian start-ups to pull up their socks & make their presence felt. It is never too late, if you try hard enough.

    Aaron Sarbagna
    http://www.innindia.com

  4. Very well said…
    I am a

    Very well said…
    I am a startup founder and have interacted with few large media companies. Their new initiative/business development guys are MBAs who think they already know everything. And have no idea what the hell are they doing. Companies like HT Media (who made that famous under 10 million acquistion), NDTV (who launched “comments” on their sites last year and celebrated it like a technology breakthrough) are great examples.

  5. Very good post . One example
    Very good post . One example which i feel is apt for this post is of Times Business Solution Ltd (TBSL)with websites like TimesJobs, SimplyMarry, MagicBricks,PeerPower.

  6. Totally agree with the
    Totally agree with the “Rediff is not going anywhere because of Ajit Balakrishnan” syndrome.

    The only constant is change and it’s just a matter of time before the entrepreneurial young idea-generators of today turn the tables on companies like Rediff and Indiatimes.

    Abinash – totally agree with what you wrote and totally support the thoughts of ppl like you.

    The days of “old school” media/internet companies are over soon !

    Alok

  7. It is true that Indian
    It is true that Indian Online Industry is not in a Good stage. If we look at Top 100 sites in India in Alexa (http://www.alexa.com/topsites/countries/IN), we will find Rediff at No. 8 (Top 7 are Google, Yahoo and FaceBook), IndiaTimes at No. 10, and In.com at No.18.

    All other top positions are taken by Google, Yahoo, FaceBook sites. It shows that we still lack in innovation and failed to produce “Me Only” concepts as majority of innovative Indian startups are “Me Too” versions of successful concepts of western countries.

    It is true that India produces world’s most intelligent techno people but still we are not able to make any significance in the International segment. Indian e-corporate have to think that where we stand?

    Look at Google, Yahoo, MSN, YouTube, FaceBook, MySpace and thousands more small or big ideas of the western countries, we are even not able to produce a successful Indian version of these top sites.

    The most popular search engine of India is not an Indian, the most popular news site is not an Indian, the most popular Cricket site is not an Indian, the most popular shopping site in India is not an Indian, the most popular Video sharing site is not an India, the most popular social networking site in India is not an Indian. So what the eIndians are doing since long? It is true that for successful ventures it requires money as well as talents but do the VCs really find an innovative idea and support them? They are supporting only them from where they can mint money and not in innovation.

    Don’t you think we all need to think from scratch and something of our own?

    Yogendra Oza
    http://www.affiliatemanager.in

  8. Even though I agree with the
    Even though I agree with the author about the dissimal performance of the Indian online industry and might agree to the quality of so called stalwarts of our industry ( I can’t comment on any of the guys mentioned above although I do agree with the companies referred above as not being up there in terms of online leadership), I do not totally agree to the technology being the be all and end all of everything and driving innovation all the time. There is a general gap in our digitisation. What I mean by that is that more than the product / innovation – there are lots of challenges and like our country itself it just cannot be changed overnight . And its frustrating to know that no amount of intelligence and technology is able to do that.

    I mean look around us ( and BTw this is not true for everyone one of us but country in general ) and its not a social message but its true – we do not conduct our general routines without MC’s and BC’s , we throw trash out of our cars thinking the roads are a public bin, we go and write on our monuments hoping to achieve immortality , we are yet to learn how to drive and conduct ourselves on the roads, we definitely do not want to follow rules of the government but will subject ourselves to any amount of slavery for few rupees in a job, we would any day criticize the likes of MNS but not do anything about it and given this perspective and things around us ,what we are doing with the business- which is so new for everyone – we are nothing but a mere reflection of our inefficient, unethical and unlearning self.

    The author should not have been surprised by people here had he known India well. All I hope is that we drive some sense of objectivity, openness, fairness and boldness.
    Someone helps !! whosoever is there even if there is God!!

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