Web 3.0 = (4C + P + VS)

I have already written a few pieces addressing the disjointed nature of the Web whereby you go one place for content, another for community, and a third for commerce; the most notable of these pieces is the popular 4C: Yahoo’s Turnaround Formula.

Let’s quickly recap the terminology:

3C = Content, Commerce, Community |
4th C = Context |
P = Personalization |
VS = Vertical Search

This, I submit, is the formula for the future: Web 3.0 = (4C + P + VS).
>>>

Small Car Boom Spells Urban Doom

by Satish Dey, Guest Author

India is basking in the sunshine of its robust economic growth and the inevitable consumerism it has spurred by way of higher spending and improved lifestyles for its citizens. A car — the ubiquitous status symbol delineating the rich from the poor — is expectedly much in demand. The nation’s image as one afflicted with widespread poverty has taken a backseat after 1.3 million automobiles were manufactured in 2006. In my previous posts ‘Small Is Beautiful‘ followed by ‘Small Cars Make Big News‘, I hinted at small cars becoming the cynosure of automobile manufacturers. But is it really good news? >>>

iPhone and the Future

by Frank Levinson, Guest Author

When I was sitting with some friends recently, we began talking about Apple’s introduction of the iPhone. We all felt that this product was one with much more promise than many we had seen in the last few years.

Why?

From the most straightforward view, the features in the iPhone have been available on the Dopod 838Pro has nearly all of the same hardware features, perhaps even more in that it has a second camera for video phone calls. (Where is that iSight camera on the iPhone anyway?)

What makes this device different? >>>

The Yahoo! Turnaround Formula

Red Herring included the possibility of a buy-out of Yahoo! this year among its top predictions. ‘Business Week’ rated Terry Semel recently as one of the highest paid chief executives with one of the worst returns to shareholders.

And yet, I have said it for a long time, that Yahoo! is a superbly underleveraged asset that if played properly, could return gold.

Today, TechCrunch reports on one of Yahoo’s big (and rare) wins versus Google: Yahoo! Answers. It is indicative of an area in which Yahoo! remains strong: Content and Community, versus Google’s stronghold: Search.

So, the first order of business for Yahoo! is to understand that brand advertising – CPM-based banner ads – is also big business, and concede the broad CPC-based Search business to Google.

Then, focus on the 3Cs : Content, Community, and Commerce. >>>

Neocase: A SME-SaaS Case Study (Part 2)

SM: Under what circumstances did the company get started?
HP: Neocase Software was established 15 years ago in what can be considered one of the more challenging environment for providing quality customer service: a technical call center. Jean-Michael Cambot, a software guru who later went on to become the CTO with Business Objects, “cracked the case” of true collaboration applied to customer service. Cambot’s work set the technical foundation for the Neocase application, which quickly became a standard of excellence for technical call centers and help desks in Western Europe by integrating all the elements of the service chain.

SM: Who financed the company at the very beginning?
HP: France-based Supporter S.A. provided the initial financial support during the company’s inception. Since 1990, Supporter has remained a major actor in the field service and customer service markets.

SM: Did you raise Angel money?
HP: No.

SM: Did you raise Venture money?
HP: Neocase’s first round of venture funding came from Caisse des Dépôts. Caisse des Dépôts is a state-owned financial institution that performs public-interest missions on behalf of France’s central, regional and local governments. It also manages substantial portfolios of shares in listed companies, private equity investments and real estate assets.

The company’s second round of institutional venture funding was supported by Iris Capital. Iris Capital is a pan-European venture and development capital company specializing in media, communications and information technology. We recently announced this round.

SM: What stage are you at now?
HP: We recently closed our series B round of funding.

SM: What is the revenue & profitability status of the company?
HP: Neocase realized $2M in 2005. Our French headquarters has been profitable since 2003, and the American subsidiary is expected to reach profitability in 2007.

SM:What % of your business targets SME customers? Please describe your
experience marketing / selling to SME customers.
HP: Neocase has 3.8 million worldwide users, with over 120 corporate customer, 11 consecutive quarters of growth, and our overall annual growth rate has doubled every year. Our client base is divided between SME and larger enterprises. As our software can be marketed as an integrated solution with Microsoft Dynamics CRM, we have an active channel and work with many Microsoft resellers that are very experienced in selling to the SME market.

SM: What were/are your top challenges in building the business?
HP: Our top challenges have come with the internationalization of the company, particularly as we expand our presence to the U.S. Neocase, which was established in Europe, launched in the U.S. in early 2006. In establishing out U.S. based presence, it has been critical to build out a top U.S. executive team for Neocase, and the individual expertise which we have brought on board thus far will be instrumental in moving the company forward in the U.S. marketplace.

SM: Your advice to entrepreneurs building SaaS businesses?
HP: On a high level, I’d advise that there are three main points to keep in mind:
– Focus on the value proposition: Providing a SaaS business model is not enough, as customers will come to expect a solution that fits and is customizable to their specific needs.
– Build a robust platform: The software delivery should be state of the art. Therefore, you should invest in a word class hosting solution, provisioning process and data security.
– Be patient: The SaaS model is very interesting for software vendors but it is a volume business which needs to be built out over time. The resource capacities therefore need to be recognized to support such constraints.

SM: Are you looking to raise another round of funding?
HP: Yes, we are looking to raise our next round of funding in early 2007 to support the company’s continued development in both the U.S. and European markets.

SM: I like the fact that Neocase is able to leverage the Microsoft SME channel. I would say, leveraging some bigger player’s channel is critical for building SME focused SaaS businesses. Salesforce.com has App Exchange. SAP has a SDN program. Google is accumulating Office 2.0 SaaS applications, and I won’t be surprised if one of these days they too announce an App Exchange kind of model.

It also appears that NeoCase is now ready for a funding round from mainstream US VCs, and for that, congratulations!

ps. If you have an interesting SME-SaaS play, and want to discuss your strategy, please email me. Especially if your case study is interesting enough to publish.

Neocase: A SME-SaaS Case Study (Part 1)

Here’s an interview with Hervé Pluche, President and CEO of
Neocase Software. In this dicussion, we focus on the challenges of building a SaaS business, especially one that has a major SME focus. We go into a lot of details of precise segmentation, solution selling methodology, and other strategic marketing issues, which I hope, you will benefit from listening to. Note also, that this is an European company, coming into the US market later in the game. I hope this will be encouraging for my readers in Europe, India, Asia and Russia.

Hervé has spent over fifteen years in the US and Europe working with companies as diverse as Autodesk, ADAC, Great West and SBC Communications to fundamentally change their strategy and customer results. With management experience under his belt from Avanti Partners, a leading pan-European venture capital firm, and Telecom Italia and Bain & Company, Hervé is driving Neocase’s continued growth. Hervé is a graduate of the Stanford Graduate School of Business.

SM: Please describe your SaaS business value proposition.
HP: Neocase, a provider of customer service software solutions, maximizes the productivity and quality of service through collaboration, self-service, knowledge management, partner centers and advanced workflow management. Designed for quick implementation, easy use, and optimized for Microsoft Dynamics CRM 3.0, Neocase is deployed either on-demand as a service or on-premise, as needed.

SM: What is your target customer? (Please provide a good segmentation
perspective, including Size, Industry, etc.)

Neocase’s target customer-base can be broken down into many segments, including:

• Business Departments: Contact Centers, Help Desks, Service Organizations, Support centers

• Industries: High tech, Financial Services, Retail & Healthcare

• Company Size:
o Annual Revenue: Under $100m
o # of Employees: Under 500

• Economic Buyer
o Title: CFO, COO
o Responsibilities: Big picture, Profitability, Financial goals.
o Concerns: Investment, ROI & Payback period

• Decision Maker
o Title: SVP/VP/Director/Operations/Contact Centers/Customer Services/Support
o Responsibilities: Managing call center employee productivity, customer satisfaction, cost savings goals – reduce dependency on agent interactions.
o Concerns: Customer wait times, efficient case management and quick case resolutions, case resolution quality

• Users
o Title: Support Managers, Customer Service Account Managers
o Responsibilities: Day to day customer interaction, resolve uses as quickly as possible
o Concerns: ease of use, how will improve their day to day work life, resolve customer issues quickly

SM: Let me stop here for a moment, and refer you to a book:
Solution Selling: Creating Buyers in Difficult Selling Markets. We will continue to discuss financing related issues next.

300 Million Strong Indian Middle Class

In the previous two-part post showcasing Battery Venture’s perspective on investments in India, the 300 million strong Indian middle class and its problems were highlighted as a key target market, and hence, opportunity.

So, what are the problems that the Indian middle class faces?

To answer this question, one should ask another question : How did the Indian middle class come to be?

India has had a tremendous poverty problem, from which a certain class lifted itself out, primarily through education. They then climbed the steps to the lower middle class, then the middle class, the upper middle class, and many are now rising to affluence.

Throughout, the determining factor has been education.

NIIT understood this phenomenon really well, and built a superb technical education franchise by tuning into the middle class’s aspirations.

Today, however, the opportunity for fueling more growth via education still remains, at all levels – from K-12, as well as in colege and graduate education.

In pursuing this, one should squarely keep in mind the NIIT model, and refrain from trying to sell technology to schools. [I recently had lengthy discussions with Atanu Dey, who is researching this topic and harbors desires to do something entrepreneurial.] The Sylvan/Kumon learning center model, for one, would be very successful in India, and tutorial centers are very popular places, helping clear exams such as JEE.

Other obvious areas are the ones the Indian middle class opens its wallet for: Bollywood, cell phones, and consumer staples. Job search and matrimonial classifieds are also popular categories, and are being thoroughly addressed by the Internet investments of recent times.

It would also pay to dissect the behaviors of specific ethnic segments, and their quirks. For example, Bengalis tend to be voracious readers and consumers of culture. An online Bengali literary magazine (like Desh) that is supported by a branded TV channel with cross-marketing of culture and literature could be an interesting opportunity. [Read this article on the Top 10 World Languages; Bengali is spoken by 211 million people.]

Similarly, Telegus, Tamils, Gujaratis, and other groups have their own quirks. Tuning into these quirks will open up other such opportunities. Both Tamil and Telegu have over 60 million speakers each, while Gujarati has about 45 million. [I confess, I don’t know these quirks as well as I know the quirks of Bengalis.]

We should continue exploring other ideas from the readers, and in doing so, please feel free to use the forum.

Stumbleupon

Some stuff I found on Stumbleupon:

(a) Playing with a ball
(b) Strange Places
(c) Mental health

As Om said at the party on Saturday night: “The Web’s most addictive time wasting tool !”

And, it is a compliment, since, as you can see, I have wasted some time on it too.

Try it, and post some cool stuff you find. I can promise that you will find something to post 🙂