The Sandhill

Wattapad is to be acquired by South Korean group Naver. Naver owns both Line and Webtoons. This sends out a few signals. South Korea is pressing on with it’s efforts to become a global creativity hub. The extent of Korean soft power realized through content beamed into homes worldwide is not often appreciated. There is more to tech than tech itself. Welcome to The Sandhill.

Wattapad has around 90 Million viewers. It is a platform where audiences and stories come together through a mobile app. Many of it’s users are young people with a significant skew towards women(80%). This is extraordinarily clear in terms of served segments. Many of it’s writers are not known in the world of publishing. Yet it is proving a sleeper hit in countries like Philippines and India. Now, Wattapad authors are getting book deals from storied houses like Simon and Schuster. It has now formed it’s own book publishing arm, creating a bridge between the digital and physical world One might recall the Amazon vs Barnes and Noble saga. We all used to shake our heads in wonder. Amazon got it right. B&N got it wrong. Maybe so. But Wattapad has shown that the last line has yet to be written in that particular play. What will the big guy do? Will it even want to do anything? We shall see. A quick disclaimer-I used to own Line shares. I no longer do.

There are two interesting points that are being made here. Women, especially young ladies, are a force to be reckoned with. Many of them are using Wattapad to create their own communities of creative consumption. This is significant, given that some of the leading markets have been usually seen as deeply patriarchial. The question is, what are marketers and start-ups missing? In our quest for “solving problems”, are we missing out on leading indicators? This is not new. The industry did not understand mobile. It did not get SMS. It totally misunderstood the popularity of GCash and Mpesa. Then there is Bitcoin. So we have a long list of what we got wrong, the first time around. That is fine. We just need to be a bit more humble when we make those predictions for the year. I would like to see more products oriented towards younger people, older people, women, challenged people. Let’s have less of what we see in the mirror. In the long run, that will lead to diminishing returns and the mirror will crack. Diversity is powerful. Believe in it.

The second point is that South Korea is becoming a player of consequence in the global creative arts game. That must not be under-estimated. The power of visual and performing arts in economic and political exchanges is palpable. America is a living testament to that.  It is important to understand the enduring popularity of Korean content. No, it is not the whitening cream. Yes, it was K-pop- for a while. Korean film, drama and increasingly live shows address common sentiments and issues for people anywhere. There is little by way of a great nation or manifest destiny narrative. A lot of it has to do with people like us. Korean heroes are sometimes quite flawed and compromised. That they do excellent production quality helps. But their tales are universal. They are the real inheritors of the New Wave mantle. There is a lesson here again for us. Over time, there will be rivals to Korea. For now they are in the driver’s seat.

One must wonder what this means for Substack, Medium and Wordpress. But it should be a matter of interest, at least, that Wattapad has such a powerful female skew. There is a need to re-assess how we consider audiences. That can come only from a re-evaluation of how we study societies.

Have a great day.

Many thanks to Laura Chouette for a great pic on Unsplash. 

There are some unusual things happening right now in the field of tech ventures. We need to look beyond the headlines to see the trends. The world is very noisy after all. It’s like those elevators outside my apartment. Welcome to The Sandhill.

Desktop Metal is one of the few high-profile firms in the field of 3D printing. And it was listed on NYSE via SPAC. It has bought Envision Tec, which is a specialist in polymer 3D printing. The battle for turf in Industry 4.0 is being fought on many fronts. We are only seeing the early thrusts, not yet the skirmishes. On one hand, we have the market for materials. The more materials you use to print products, the more of a market share you have. What is not yet clear is at what stage do printed metal and polymer products get used en masse in the value chain. More to the point, will the printers remain a competitive advantage or become commodified? You might crank out products by the million. But if your machine is just a tool, you are not adding value to your enterprise. I think we will see a few changes as the industry tries to go really commercial.

Let us take note, too, of the investments by Sequioa India into Indonesian start-ups. This indicates cross-border interest in ventures. It is putting an end to a long-standing orthodoxy in the VC world. That venture capital will become borderless is inevitable. What is remarkable is that it taken so long. Do investors usually not want to invest across borders? I believe they do. They invest in US stocks all the time and a few others. Some folks invest in all kinds of investment funds and mututla funds. Perhaps the reasoning is that the venture needs investors, mentors and managers in one place. COVID has put paid to that notion. Investments and deal-flows have to necessarily factor in disruption, isolation and lack of movement. Money and deal flows will move just as folks are moving. You know, to Savannah and Austin.

We work to get start-ups on their way. So for us, this is a very positive development. It may be that a lot of the norms around VC funding will change. I expect global approach, local value creation, regional market operation to be the path going forward. But I hope to see more possibilities opening up in the months ahead.

So two broad themes-one the growing momentum towards decentralised manufacturing around Industry 4.0; two, the globalisation of very early stage venture investment.

More to come. Have a great week ahead.

Bakkt is going for a NYSE listing via a SPAC. The implications for consumer retail payments are profound. Good morning and welcome to The Sandhill. A note of caution-you will hear some background noise. That is life in the age of social distancing and WFH. I deliberately do not edit that because we are not living in a sanitized world. Noise matters as much as voice. 

Startups should not be a vehicle for just employment. They are agencies of change. If you want to join a start-up, keep this mind. Also remember- this is an entity that is starting up. The team has no one else to look to but itself. The company will live and die by it’s own sword. Welcome to The Sandhill.

Research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. While the term start-up carries glamour, it is really not very different from “normal” shops and businesses at their inception. When we were kids, there was an air of mystery about “doing business”. It wasn’t something one  usually did. Apparently it was inherited through a family tradition of sorts. In any case, we were supposed to become engineers, doctors and managers and receive a salary.

But in our late teens and youth, the government and public sectors began to crumble. We were suddenly told that “doing business” was the new thing. But of course that conversation stopped when one got a job. I see the same thing even today. There are long talks about consulting and doing your own thing when people are out of a job. Pressed for action, defensiveness kicks in. There are conditions and qualifiers. Then the conversation peters out. Of course, that is perfectly ok. Not everyone can run a start-up and often personal circumstances prevent one from doing so. Remember, the centre-spread heroes of the tech world take key bets on their futures. Sometimes  they veer close to outright personal failure. It may sound pleasantly correct today, the word failure. But there are emptied out purses, broken homes and families behind that word. Believe me, no one wants to fail and do not wish it on your worst enemy.

Start-ups simply do not have the luxury of meandering through what-ifs and good to hear stuff . That is fine at our local coffee shop. There is a need for it. It is called social lubrication. But if you are a start-up person, you are on the meter. If someone wants to do stuff and then is not sure, be polite and cordial and get on with your life. If it is a friend, find time to counsel him or her and see if there are common goals and interests.  Shoot the breeze by all means. 

But the other person should be clear very quickly about what all this  start-up stuff  entails. Yes, you can support each other. That is important. But commitment is absolutely needed. This is also the reason why teams need to be small and frugal. If you want to cash in on the growth dividend, you should not be collecting it upfront on day one. Sustain by all means but do not indulge. This is a hard path. 

Have a great week ahead.

Note-thanks to Matthew Osborne for a great pic on Unsplash. 

Tech is often used to maintain status quo. But it lands up unleashing change, much of which we adapt to and then innovate on. Payments is often the area where this is most visible. 

We pursue context within Knowledge Graphs. Context matters not only to the UI designer and the backend engineers who are building out a full product. It has a direct impact on an ongoing basis in the training of artificial intelligence interfaces. When the banks extract insights from the interactions between their apps and customers, they should be able to extract context as well. So there is an encoding and decoding of context at all levels which is necessary. Also read the blog https://kaustuv.substack.com/ and I look forward to your comments. 

Thanks to Aditya Chinchure on Unsplash for the great photo. 

Enterprise sales for startups is always a challenge and a necessity. 

A new product from a new company is likely to have an extended time to contract, as someone told me over coffee. A start-up has limited resources for trade marketing. Even with reliable distributors and partners, it pales in front of the formidable track record of more established products. Enterprises prefer to stay with existing brands-after all, no one gets fired for buying….well, you know.

All of the above are true. These truths are compounded further by the fact that the start-up has to worry about raising cash while it is selling. Sales is expensive and who is to say that the best salespeople will bet their careers on new concepts from impoverished newbies? And yet start-ups in the B2B space refuse to fail. Datadog, Docusign, MongoDB, Servicenow. Atlassian. Just a few names.

(Episode cover art-Helena Lopes on Unsplash, many thanks!!)

There is pent-up demand for wealth creation and people with some cash are ready to take some risks. It is no longer possible to keep it in the salary account and do anything. What does that mean for banks? Well, Goldman Sachs wants you and me to put our weekly latte expenses into buying things we could not buy before. In our part of the world, there might be a knock-on effect. Marcus might be a more pervasive cultural brand in the months ahead.