Deepak's Den

Today, as I was reading through the article about InMobi, an Indian startup that has been consistently getting rave reviews in the market. I have been always been a huge fan of Young Turks and that is one thing which has always inspired and motivated me through thick and thin lines of my career and I am sure it will continue to do so. I take this opportunity to thank CNBC TV18 for such an amazing program. But this article is not about CNBC TV18, it is about InMobi.

Till early this year, I don’t know why but I never heard about this startup at all. But with this article, I was refreshed about my memory of InMobi when I first heard about it in January. As I browsed through their website today, it was a great feeling. Time is changing and so does the tides have started to flow from the reverse direction. Gone were those days when the market was driven from developed countries like USA. I was not fortunate to be in the Silicon Valley because I still pity on those people who go for monotonous jobs in the Silicon Valley but I can definitely fortunate to be at a place where markets are being driven today and I see that happening more often from hereon. This whole thing is exciting and being an aspiring Entrepreneur, I do look forward to jumping into this sea sometime soon. InMobi is a classic example of what I am talking about, Naveen Tiwari – an IIT graduate going for his MBA at Harvard Business School and then returning back after a brief stint to drive a business from India.

Let us take a look at the Mobile Advertising industry and InMobi today in this post.

InMobi:

• InMobi started as Mkhoj. I remember using it occasionally earlier but I rarely used Internet on mobile phones those days. What amazed me with InMobi was not only they were smart to tap into an opportunity but also re-built their whole business from scratch even after Mkhoj. I have always believed that Entrepreneurs should always be smart to tap opportunities in the market and should not resist change and that is what defines leadership. Leaders don’t talk about existing systems and processes but they talk about how the system can be challenged for the good. Resisting change is not the sign of growth and prosperity. In my view, InMobi led this aspect by a perfect example.
• The 60:40 revenue model is very exciting. Basically, InMobi connects the advertisers and publisher. Naveen mentioned in his interview that if $100 comes from the advertiser, InMobi gives $60 to the publisher, keeping $40 within itself. According to me, before hearing to this numbers, I never believed that a high share as much as 40% could be made this way. There are lot of players who are into advertising domains and the most common of them are the ones who divert traffic to certain blogs. But honestly speaking, I never heard of anyone mentioning as high percentage of share as 40% earlier. Kudos to the InMobi team for pulling this through.
• The Management team of InMobi comes from varied backgrounds like MBAs, BTechs from top class schools like IITs, ISB, XLRI, HBS and XLRI to name a few. This makes the team very strong. I am not surprised why such a team should not get funded and especialy when they are doing so good.
• InMobi has given companies like Google run for its money. InMobi is in over 140 countries in the world today serving ads to over 200 million users uniquely every month across the globe. In Japan and Europe, it is number 2. In United States where we have entered about 7-8 months ago, it is number 3 or number 4 in the market.  Isn’t it really interesting? Yes it is.
• Naveen already talked about acquisitions and according to him, InMobi will be acquiring its first company in 3-4 months. Amazing work and my prediction is that they might either buy someone in the US or China/Korea. Why US? Because by buying in US, InMobi can give the open war with Google and Apple in the market. With Google buying AdMob and Apple buying Quattro Wireless, it will be a very good competition to watch for when an Indian company declaring big on the US shores. Why China/Korea? Because InMobi has expansion plans in these areas because of obvious big user space. Acquiring a company in China/Korea can give InMobi quick access to its vast market.
• For people interested in this space, I would strongly recommend to go through some of the case studies of InMobi. Some of the case studies are quite appealing. I have a personal experience of their presence with Reebok T-Shirt ad during IPL and I quite enjoyed it. Going through the other case studies could give very nice perspectives.

Lets now come to the Mobile Advertising space, in general. I know that there is a lot of buzz in the air for mobile startups. With official launch of 3G in India, the whole VC industry and Entrepreneurs are going ga-ga over it. Even one of my own initiatives, might go that way in future but as of now, I am closely watching this space. One more addition to this space, would be tablets. Android and Apple are going to have an awesome time of their life. The curiosity to explore this space has made me to buy a 3G phone and have also, recently ordered iPad 2 for my own person experiments. More on the personal front, sometime later but lets try to put some interesting facts that I collected while reading through the consumer and market trend reports of InMobi. Kindly remember these facts are directly taken from the reports of InMobi website and I hold no guarantee of correctness of data.

• Informa Telecoms & Media estimates that the global mobile data services market , including mobile advertising, was worth
  U.S. $224 billion in 2010. Over the next four years the market will increase to U.S. $340 billion in 2014.
• 15 emerging countries – China, India, Indonesia, South Africa, Nigeria, Egypt, Turkey, Israel, Saudi Arabia, Brazil, Mexico, Argentina, Russia, Poland and Ukraine – offer substantial investment opportunities for the telecom and advertising industries due to the sheer volume of mobile subscriptions in these markets, and continuing mobile penetration. It is not surprising to note that 30% of mobile data services revenues were generated by these 15 countries in 2010. So, what do you feel is driving these revenues in these countries? Obviously, the low cost feature-rich mobile phones. Visit India and watch any person, to day there might be more mobile phones in India than the toilets.
• According to Informa, the mobile phone subscriber market of India and China alone will be around 734 million in 2014 from 334 million in 2010.
• Informa also quotes that the global mobile advertising revenues will rise from $3.5 Bn in 2010 to $24 Bn by 2015, with Asia Pacific contributing to 31% of the share, led by India and China.
• InMobi research gives very impressive signals on usage of mobile advertisements by consumers when they get free apps or 10% discount on their phone bill. A significant number of consumers might also be attracted to personalized ads. At the same time, consumers have been found to have less attention to free and useful ads.
• Comfort level of consumers with the mobile advertisements is one of the biggest strong findings in the InMobi research. People seem to be very comfortable rather being apprehensive.
• InMobi grew by 21% from December, 2010 to March, 2011 giving strong signals of global rise in mobile advertising industry.
• The Key driver of markets now is the smartphones, which in itself grew by 34%.
• Android took over as the most used OS over iPone OS. Nokia OS still continues to lead the market share but Android and iPhone are closing on it. The recent Nokia-Microsoft Partnership is a clear example of worries of Nokia losing its mobile platform share rapidly.
• Android and Apple are clear favorites in the OS platform in both Europe and US while Apple is the largest manufacturer of mobile phones in both US and Europe. The market of US is primarily driven by smartphones where the growth is as high as 50% in the 90 days with Apple growing the most due to its tie-up with Verizon.

Personally, overall, I feel mobile advertising space is going to be a very interesting space to look forward to. I feel more and more Indian companies are going to give US companies a run for its money in future. Its the time for India and we are stepping into a golden era. More companies like InMobi are going to start from emerging markets to penetrate later into developed markets of US, Japan and Europe. I see a brand new Silicon Valley being built but this time, we will be in the driver seat. I would love to see the next “Black Swan” of this world happening from India and I hope to be part of this amazing event.

References:

1. CNBC TV18 Naveen’s Interview on Young Turks – http://www.moneycontrol.com/news/business/check-out-who-is-giving-googlerun-for-its-money_537155.html
2. InMobi Company – http://www.inmobi.com/
3. InMobi Research – http://www.inmobi.com/research/
4. InMobi Company – http://www.inmobi.com/company/
5. InMobi Blog – http://www.inmobi.com/inmobiblog/