The 99-0.9-0.1 rule for Indian Startups

Jakob Nielsen is given credit for the 90-9-1 rule of Internet participation.

The “90–9–1″ version of this rule states that 1% of people create content, 9% edit or modify that content, and 90% view the content without contributing.

In the last 6 months, I have gotten 21 Indian web and mobile consumer applications data on visitors, engagement and contribution.

In India the numbers are closer to the 99%, 0.9% and 0.1% in terms of lurkers, participants and contributors of any consumer application.

This explains a lot of things, including the 2-speed nature of Indian market adoption.

Its not that we don’t have early adopters, its that most people (99%) are really laggard adopters.

The difference between 1% and 0.1% is dramatic for startups who need the early contributors to get the community going.

To give you an example. Lets take a mobile application which has 3 competitors in India. Each of the 3 products has been in the market for about 6 months and still they total about 140K total downloads.

In the 1% scenario they would total 1.4 Million downloads. This assumes 140M total Internet users for both mobile and web. In reality there are only about 50-80 Million real broadband users.

Is it cultural? I have heard many folks blame (yet again) our Indian culture & education system which values listening to others than voicing our opinions. I don’t quite agree with that though.

I don’t know why exactly we have only 0.1% of people contributing.

This however has dramatic implications for “traction” among startups.

If you are going to show traction and have between 20K to 50K users or downloads, then you should realize that the 99, 0.9 and 0.1 % rule applies again to your users.

Only 0.1% of those who download will actually be contributors (such as check-in to locations if you are Location based service).

So the engagement metrics will be consistent but woefully low compared to what our US counterparts are seeing.

Traction among Indian consumer startups is not really “traction” in other markets.

P.S. I am still trying to see if this is the same for ecommerce startups. I am hesitant to think it will be the same, but among new and smaller (lesser known) ecommerce companies, these numbers are in the range. However, among established companies, the US engagement (or purchase) numbers are probably more valid.

About these ads

13 thoughts on “The 99-0.9-0.1 rule for Indian Startups

  1. Badri

    Mukund,

    You have hit the nail on its head!

    The really low number of early adopters in India is also partly due to the lack of perseverance amongst start-ups who give up on seeing low adoption! Kind of chicken and egg!!

    We must also take responsibility, as entrepreneurs, for defining insanely humongous market sizes, perhaps to get the investors (and ourselves) excited! And when the response is measured against that imaginary magical number, it is bound to be depressing and the cyclical effect continues. If we leave spreadsheet aside for a while and have actual dialogues with our target audience, there will be more ground reality.

    Reply
  2. akismet-4270adabd05e55e30702eb82e3a8df09

    Hi Mukund
    Interesting article. Almost all startup owners I know is facing this problem in India & I believe your numbers more or less reflect the exact nature of the problem. If we go by the five main segments of consumers: innovators, early adopters, early majority, late majority and laggards, I wouldn’t hesitate to conclude that majority of the Indian market consist of laggards and late majority. Why is it so is a question you left unanswered.
    Some related questions:
    Herd mentality: Why do every child has to choose between either medical or engineering if she shows some positive signs in her early education? There is a shift in this mentality, but wait.
    MBA after engineering: I saw a pattern that most of my peers followed and people are still following it.
    MS abroad: This is the new thing to do. Since getting into a good MBA institute is getting harder, getting a set into a MS school abroad is much easier (even though it’s costlier)
    Try anything new/experiment: Oh, wait…I can’t think of many people who do that.
    I can clearly see that it has something to do with our mentality, maybe it’s inculcated in our upbringing that taking risks, trying out new things is not okay. If you say, parents send their kids to extra curricular activities like karate, sports, art school, music school etc., but at the end of the day, they make their kids do her homework and say, “Beta, do well in your studies and get a good job and get settled. You can still continue your hobbies of sports, art etc.”
    Our whole education system teaches us to look for solutions when provided with the questions. Can you name a single test/exam where stress is laid on looking out for the right problem? Everywhere we are expected to solve a problem & the catch is that the problem will always be provided. That goes against the natural inquisitiveness of a kid & gradually all we become are good problem solvers, but once given the problem.
    It’s a mix of all these things that brings down an average Indian’s ability to cope up/ try out new things, stick with a beta Android app, try out a new opportunity from a startup, get involved early in a new platform. Fear breeds fear.

    I rest my case.

    Regards,
    Tonmoy Goswami
    Co-founder, Qonversa (currently in Alpha and is used by 0.1% of the population)

    Reply
  3. Pramod GS

    Do you think the problem is with the way Indian Start-ups try gaining traction rather than the market adoption? I ask this question because I see Indians are the largest group on Quora.

    Maybe the problem lies with the start-ups’ approach and not the market…just a thought!

    Reply
  4. NSiva

    Mukund,

    Interesting data!

    I remember several years back about Indian “middle class” (with certain parameters) being estimated to be 100s of millions and the Washing machine, Refrigerator manufacturers going ga-ga over the #s and found that the actual “middle class” market was actually smaller. But again the middle class #s bubbled up and I believe it did reach the #s (quoted 10 years earlier) 10 years later. So I am not sure whether we can take the # from a “matured” market like the USA and apply it to India. Do you believe these #s would improve over years in India and get closer to the USA #s?

    I suppose these #s are for Internet B2C type of apps/content, isn’t it? Do the #s differ between Internet apps/content delivered on mobile/iPad type appliance vs regular desktops/laptops?
    Do you have these numbers for “emerging” markets – say for BRICS to compare against?

    Regards,
    Siva

    Reply
  5. Varun Khona (@varunkhona)

    Mukund, the kind of post that triggers a lot of introspection for start-ups in the ‘under construction’ mode before the year end.

    In your experience over the last 12 months, how have the US focused Indian start-ups fared for similar metrics w.r.t US-based start-ups?

    Reply
  6. Sidhartha Roy (@sidhartharoy)

    That’s very interesting. I can share our data, we have engagement from almost exactly 1% of our member base. By engagement I mean people who have at least posted once. But it has taken us 7 years to reach this critical mass.

    I think one of the main reasons for low engagement from users is founders being shy of engaging with the users. I have tried to engage with the founders of many of the rising brand names from India – most of them don’t even reply, even to positive sharing of ideas. I find that very odd. On the contrary if you write to a founder from the US they will engage deeply in conversation and even arguments.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s