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Concept Arbitrage: Web 3.0 & Enterprise 3.0

Posted on Wednesday, Feb 28th 2007

Last summer, I wrote a Concept Arbitrage series focusing on the Indian market.

The market has moved, and Consumer Internet and Mobile Value Added Services, which were turning hot then, are much too hot now. Valuations are very high. Much too high. At this rate, I dread to think how long it would take to actually back-fill those valuations, and get any return for the investors or the entrepreneurs.

On top of that, there is a serious overflow of capital, with 120 venture / private equity firms walking up and down the Bangalore-Mumbai-Chennai corridoor.

All the low hanging fruits – online travel, movie rental, jobs, matrimonial – have several players, which is to be expected in hot segments. Niches, however, are more open. For example, as I pointed out before, Events & Reviews – the CitySearch concept – has not been arbitraged well at all.

As is customary in the venture business, now, we need to turn our heads to the next trends. Remember, foresight is what makes one successful in this business, not Me Too!

With Consumer Internet, the Indian market lagged the US market by almost a decade. Why? Because, no venture capital industry existed in India through much of the nineties. Even until 2005, there was a rather nascent one. This phenomenon has changed. With it, has changed the tremendous opportunity that lies ahead of the Indian market to actually play in the same timezone as the US market.

With that context, let me propose that Indian entrepreneurs start looking at the trends that would shape the US market in the next 5 years. Let’s look forward, not behind.

I propose, we look at Web 3.0 and Enterprise 3.0. Especially with Enterprise 3.0, India has a huge mass of skilled developers who have experience in developing enterprise infrastructure and applications for multinationals and outsourcers. It’s time to call upon that experience, and understand where the opportunities might lie.

This way, entrepreneurs in India and US would be working on the same generation of problems, and I suspect, India can leapfrog a generation of technology that has already become outdated.

This segment is a part in the series : Concept Arbitrage

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the concept of arbitrage is great. However, I think India is now more connected with the rest of the world than it was ever before. It took some time after Netflix, for a to video rental service to launch in India. I think the arbitrage time are on the decline.

Rahul Dighe Thursday, March 1, 2007 at 2:39 AM PT

Precisely my point. The arbitrage needs to begin while an idea is still at a concept stage, not already a proven business.

Successful ventures anticipate the trends. Not follow them.

Sramana Mitra Friday, March 2, 2007 at 3:00 PM PT

Mobile worker like sales, field personnel are definetely a form of extended enterprise. Mobility today is what Internet was back in 1996-98. There were lot of winners in the infrastructure play like F5, Juniper to Alteon etc, irrespective of what happened in the dotcom burst.

In the same vein, from enterprise to carriers there will be several mobile infrastructure products. AppVoyage provides mobile application gateway to simplify and personalize complex web applications for mobile use.

Delivering required information in right format is important for mobile consumption, as well as security (preventing AJAX worms, phishing attacks), identity management like single-signon, usability through personalization all belong in the mobilie application gateway like what AppVoyage does. For more information please visit, http://www.appvoyage.com

Krishnan Saturday, March 3, 2007 at 9:14 PM PT

[...] Imagine, a Manoj Saxena guiding a group of entrepreneurs focused on Enterprise 3.0! [...]

Sramana Mitra on Strategy » Blog Archive » Indian Incubator Fund : Specs (Part 2) Monday, March 5, 2007 at 8:53 AM PT

[...] Finally, I suggested some areas for technology entrepreneurs in India to explore as segments where new companies can be formed: SaaS, Enterprise 3.0 and web 3.0. [...]

The Indian Economy Blog » Entrepreneurship In India Friday, March 23, 2007 at 8:14 PM PT

Not to be a contrarian but I tend to side with Delhi-born tech trend writer Om Malik, who pointed out a few weeks ago following his visit to India,

http://daily.gigaom.com/2007/03/11/personal-perspectives-on-an-emerging-india/

that the old economy seems to be the sector best able to utilize venture and PE money today.

New technology plays may be more exciting, and more relevant to the high-end or international markets, but there are still billion dollar opportunities in domestic Indian organized retail, real estate and financial services. Some might suggest that these industries have such high barriers to entry that only large scale private equity shops can afford to play in them but my experience working as a VC with very small financial services startups in the micro-finance and micro-housing industry suggests otherwise.

Many of these markets seem ripe for experienced, local entrepreneur-VC partnerships to tackle them and displace sluggish incumbents.

Mark Straub Wednesday, March 28, 2007 at 12:27 PM PT

If you read my writings (in fact Om quotes me in the piece you quote), I am also of the same opinion. However, that doesn’t mean that the technology industry is going to rush into real estate and retail. There are opportunities for technology entrepreneurship as well, and entrepreneurs will continue to pursue them.

Sramana Mitra Wednesday, March 28, 2007 at 12:51 PM PT

[...] Finally, I suggested some areas for technology entrepreneurs in India to explore as segments where new companies can be formed: SaaS, Enterprise 3.0 and web 3.0. [...]

Entrepreneurship in India « Startup Dunia - Indian startups and Entrepreneurship Thursday, April 5, 2007 at 9:32 AM PT
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