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| July 24, 2000 | ||
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| the-asian.com Death of a Dotcom
Like most portals, the-asian.com started on an exciting note and the funds flowed freely for the first few months. The staff of 18, headed by founder Yazad Darsha -- the man behind the idea -- worked round the clock to fulfil its dotcom dreams. But seven months into the venture, that dream began turning into a nightmare. The revenues from banner ads weren't even enough to foot the monthly wage bill of Rs 5.5 lakh. The portal scouted for an alternative source of revenue, which was to sell its content to other portals. According to Darsha, they did come close to signing a content purchase deal with Satyamonline and the US-based chaitime.com, but the portal had bled enough by then for the investors to pull the plug. Says Darsha, who is now a consultant with Indiainfo.com: "When you are hit, all your preparations to absorb the impact come to a naught. Good ideas don't necessarily make good business." That's a feeling gaining currency among an increasing number of netpreneurs in India. yatraindia.com My friends and family thought that I was insane to shift from a high-profit data processing business to a dotcom venture. I went to Europe and the US to explore avenues in the Net business and was inspired by the success of online travel business. Yatraindia.com was born in July 1998 to showcase India at a one-stop website. My company Hexadecimal pumped in about Rs 1.5 crore. Ernst & Young picked up a 10 per cent equity stake. A couple of acquaintances chipped in with additional equity participation. We planned to generate revenue through online booking of hotels and transport, including railways, airlines, buses and taxis. We created an online photobank as another source of revenue. We were hoping for advertisements from state tourism departments, hotels, tour operators, airlines, transporters and shops dealing in artefacts. The initial response was overwhelming. Ernst &Young signed an agreement with us in November 1999 according to which they were to officially liaise with venture capitalists on our behalf. Citibank, Chrysalis, E-Ventures and a few other investors showed interest in Yatraindia. Enquiries also poured in from some leading travel houses. But soon some of them started backing out. Now it is an uphill task to convince VCS to invest, which is crucial for our survival. If nothing works out within six months there could be problems. I can always go back to my old business, but I haven't lost hope yet. I know that I have taken an enormous risk and I am talking to prospective investors. Our online photobank is up for sale. I am convinced that tourism in India will grow by leaps and bounds, and Yatraindia should be able to tap a substantial chunk of that market. Trisoft Design When I left my high-paying and secure job with Microsoft in 1996, I was one of the first in India to succumb to the all-powerful lure of the Net. A geek by qualification and an entrepreneur by spirit, my plunge into the dotcom business was two-pronged. To design and host websites for others and to build some world-class business portals of my own. Being one of the first movers, the initial two years were heady. Trisoft Design developed and maintained websites for some of the leading Indian businesses -- The Park Hotels, Hughes Software System, CII and TGI Friday's, to name a few. The deals were worth Rs 3-4 lakh each. We also developed portals like spindia.com (the first site to have Indian e-greeting cards and desktop themes) and thecpmall.com. By 1998, the business of web designing and web hosting was becoming overcrowded. With the market not very quality conscious, the size of business deals for website designing came down to Rs 50,000. Clearly it wasn't a very profitable business to be in. Through my portals I introduced many firsts on Indian webspace. thecpmall.com was the first in the country to use virtual reality model (VRML) and 360 degree panoramic views, but couldn't find any banks to make the substantial back-end infrastructure investments. It was the only Asian website to be featured in the Intel Pentium III launch show in San Jose. Yet there weren't many investors in India to support my ventures. I began to realise that Indians are great producers but bad consumers of technology. Also, by the end of 1999 there were distinct signs of an impending crash. So, early on in the year, we consciously changed our business model and became a strategic consulting and technology development company. We now conceive and develop a company's Internet strategy and implement it through customised applications. The great thing is that you share the excitement of the dotcom space but do not share the risk. Most of my clients are foreign companies which expect global quality -- and pay for it. My deal size has gone up to half-a-million US dollars and we take an equity stake in most Internet projects. We have just moved into a new office in Delhi and are planning to open offices in Boston, London and Zurich. Our business is part of the $80 billion pie estimated globally in the next three years. |
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When
it first went live in September 1998, the-asian.com seemed to have all the
ingredients necessary for a dotcom success. A new idea -- a website with
news and entertainment from all across Asia, solid funding -- promoted by
Abhyuday Morarka, nephew of businessman and former Union minister Kamal
Morarka, and a promising start -- about 10 lakh page views daily in the
initial months. Yet the portal was shut down early this year, making it
one of the first known casualties of the tizzy that is currently on in the
Indian Internet space. Laments Abhyuday Morarka: "I knew it (running
the site) would be difficult, but had no idea that it would be so bad. I
don't even want to talk about it."