The whole Social Networking thing has pretty much exploded in the Indian scene. In this post let us try to figure out – what it takes to run a successful Social Networking site and what it takes to get funded.
I even had the privilege of speaking to Kavita Iyer (CEO, MingleBox.com) earlier today and convinced her to share some figures and facts with us.
Minglebox.com announced that Sequoia Capital India has committed an investment of $7 million in the company.
“Minglebox possesses a compelling business model that has the potential to transform the Indian internet space. They are well on their way to creating the most exciting internet company for Indian users” says Sumir Chadha, Managing Director of Sequoia Capital India.
So what is so compelling about the business model?
It must be something outstanding that it can transform the Indian internet space. Not to forget that there around 20 other Social Networking websites in India who are aiming at doing the same thing.
How does it make sense for Sequoia?
Let us look at similar investments made by Sequoia in the international scene.
‘Sequoia Capital is helping pump nearly $110 million into online dating site eHarmony says this article from the Silicon Beat.
Sequoia, has also backed social-networking company LinkedIn, which is going after the jobs space.
I wouldn’t really be surprised if Kleiner Perkins Caufield & Byers funds an Indian Social Networking site. They’ve backed Friendster and VisiblePath, a related company focusing on the sales/relationships business.
Sequoia chose Shaadi while Kleiner preferred JeevanSathi (Via InfoEdge). Sequoia chose TravelGuru while Kleiner funded ClearTrip.
Recognizing the scope of Local search site Sequoia backed Guruji.com and the scope they see in local Social Networking has gotten MingleBox funded.
Now let us try to figure out – Why MingleBox? and what are the possible reasons of this funding?
The Team at MingleBox:
Looks very impressive on paper.
Kavita Iyer (IIM-A + IIT-D) + (ICICI + Wipro + Tata)
Sanjay Agarwal (IIT-D) + (Yahoo + Appian Communications + Infosys)
Sushma Abburi (Georgia Tech + IIT-D) + (i2 + HLL)
In fact while inviting users to join MingleBox (Via Scrapping on Orkut), they introduced themselves as – IIT-D Alumni who got bored of the Corporate Work culture and decided to start something of their own!
Currently there are around 20 employees at MingleBox – as confirmed by Kavita today morning.
Their We’re Hiring page has some real high demands when it comes to technology. Is technology the king when it comes to Social Networking?
What are the benefits of having an impressive team?
Unbelievable amount of free PR.
MingleBox made an appearance in almost all the newspapers and quite a few magazines too.
The Press/Media loves to write about people who’ve been to IIT’s and IIM’s and have chosen the risky path of entrepreneurship and people love to read such stories too. There’s always an awe associated with these institutes.
What’s new about some normal B.Com/B.Sc chaps starting up something?
Hiring becomes a little easier.
Hiring talented people is one of the most torturous experiences that start-ups have to go through and with a strong team it does get a little easier to convince prospects.
Current position in the market?
This market is crowded and if you’ve been reading WATblog, I’m sure you would be able to name a dozen of them yourself!
We’ll stick to an Alexa comparison…
MingleBox has been leading Yaari consistently except for the last month or so, in which they’ve witnessed quite a dip (In fact our blog gets similar traffic to them!). DesiMartini has shot up recently because of TV ads – just stressing the importance of the role of TV ads in India.
But keeping all the sites in mind – MingleBox is the one which seems to be commanding the most visitors.
I asked Kavita what are their plans for the money? Are they looking at some heavy marketing especially with Reliance Entertainment backed BigAdda hitting the markets soon too?
‘We are currently looking at concentrating on User Experience and Product Development. Marketing would be through online communities and we have no immediate plans for Press, Radio or TV ads,’ she replied.
This might be a smart move.
I personally liked their Ambush Marketing on Sirf Dosti (Non-intentional according to Kavita):
Kavita adds, ‘We welcome competition in this space. Social Networking is very new in India and this would just make the whole thing grow.’
It’ll be interesting to see how they respond to BigAdda, Naukri’s Social Networking venture, Indiatimes etc. Even Microsoft is looking at ramping up Live Spaces in India.
So what does MingleBox have to offer? What’s so unique about them?
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Alumnus networking is an un-served niche in India and their Campus element is what I find most promising at MingleBox. It automatically markets their site to more than just the youth.
Tie-ups with Colleges for their festivals is an excellent method of low cost pull marketing.
It has almost 10 months since MingleBox launched and they are yet to hit the 1 million mark. Tried to get exact growth figures unsuccessfully from them.
I would guess the number of registered users to be 4-5 Lakhs, with a current average of around 600-800 new registrations per day.
Another very important factor in running a successful Social Networking site is the girls. Especially in India. Get the girls and the guys shall follow.
MingleBox currently has around 30-40% of their total users as girls. 30% is the average Indian figure of Females online. The extra 10% is the key.
Future Plans:
It’s necessary to have future plans ready and flexible to impress a VC. No one is going to be investing a huge amount with seeing some really sound growth plans. Sequoia would definitely be looking at an exit at some stage.
What is MingleBox looking at?
Advertising is going to be their primary revenue generator.
Mobile strategy is being worked on and is in the pipeline.
Music is an important channel which they are concentrating on with MingleMusic (Create your own Jukebox) – audio ads soon perhaps?
What does Kavita have to say about ‘Blogging, Gaming and Videos’?
Blogging – ‘Exciting! A lot of amateur bloggers are currently on MingleBox. Excellent engagement tool.’
Gaming – ‘In the context of community – yes, gaming is pretty important but we have nothing concrete planned yet’
Videos – ‘Important part of a community again’
Well Kavita refused to share details of the investment but added that they would greatly welcome Sequoia’s involvement.
But can MingleBox really be valued so high at this stage?
There’s nothing extremely striking on their site which might want me to make me change from my current network. The scope of Social Networking in India is immense but it is not the common which is going to make the difference. A social networking site which makes the offline user go online just for using its service is the one which is going to win.
Minglebox are still in Alpha! Perhaps now is the time to move on to Beta with the Sequoia push.
I am surprised you forgot to mention that Kavita is Sequoia MD India's wife ? this is an INSIDER business. Minglebox has between 100-200K users and their traffic peaked in Sept' 2006.
I assume Vivek is Vivek Pahwa from DesiMartini. Are you plain jealous that MingleBox got funded? They are way better than your pathetic site.
And Sequoia are a very professional co. They've backed google for godsake. They'll never do any INSIDER business. I've seen you spread your jealous rumours in ContentSutra too
Please guys.. lets keep it clean.. NO PERSONAL REMARKS AND MUD SLINGING ON WATBLOG! Id suggest please focus on your business and let that do that talking.
I apologize sincerely if I ticked anyone off.
I was simply stating the facts, not rumours. As we know facts dont lie and can be verified…
Vijay, just so you know, Sequoia has also funded fropper.com which is a fully fledged social networking site. a VC normally does not invest in 2 competitor products.
@ Vivek: Sequoia's investment was not directly into Fropper, but to the group it belongs to 'People Interactive' and we all know it was mainly for Shaadi.com
Cheers,
Ekalavya
Guys,
Seriously, I am not interested in writing negative remarks about anyone! that was some other Vivek – you gotta have a little hole somewhere if you think that! and i did not write anything on CS either..
-Vivek
Miglebox is defnitely on a hiring spree. Some friends from IIT D are also working towards it. The problem however lies that in India, orkut rules and now in social networking yaari, minglebox and many others are stepping in. Not enough market and too many players. Will it work? I seriously don't know.
Nice post. You guys at watblog should be the ones advicing vc's on takeovers
is watblog being biased because of the watbloggers works at minglebox?
I cannot sense even a hint of bias in this post. Perhaps I would recommend you reading the whole thing.
Cheers,
Ekalavya
@WAT Nonsense – Well you outta read this –> http://www.watblog.com/?content=detail&id=484 We were the only ones to write about minglebox scrapping and spamming on orkut. Infact i had pointed this out to Nikhil (the WATblogger) who works in Minglebox and Kavita. But thats what WATBlog is we show you the entire picture.. That was their marketing tactic that we didnt like but their product has always been appreciated by us and was noted even in the India 2.0 series way back in Oct 2006 –> http://www.watblog.com/?content=detail&id=253 .. So this should clarify (if there was ever any need) about us being biased to anyone.
Good to see professionals with a great background and lots of options start new companies. Being an entrepreneur myself, I know how hard it is. So guys, keep it up and remember it is a long journey…
i heard of them on orkut first and got interested. They're still changing and adding a lot – college is a good idea.
Why trash someone for speaking the truth? it is an undisputed fact that the founder is married to one of the guys leading India investments for sequoia. That just stinks of something very fishy.
Its a case of sour grapes for all other indian social networks. but its encouraging to see squoia believe in indian social networking, unlike mr avnish bajaj. sequoia would never put money just because MD's wife is heading a business. they'd be bankrupt if they did that everywhere
The pathetic AlooTechie has finally noticed the so-called gossip!
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@ Sanjeev – We do not appreciate unhealthy comments directed at other blogs / bloggers. Please avoid that in the future.
I personally am not very impressed with the growth stat data and all that. Just key in http://www.bharatstudent.com and http://www.minglebox.com and check out the difference for yourself.
Or checkout this blog post:
http://digidrool.blogspot.com/2007/07/minglebox-is-funded-whopping-7-million.html