Sunday, April 26, 2009

Freemium: What would consumers pay for

Freemium business model seems an appropriate way to attract people to a service, while trying to make the business sustainable/profitable. However, what aspect of the service would somebody pay for?

From a service provider perspective, getting your audience to become subscriber is preferred. Event-based premium content (akin to pay-per-view) is a good bridge to get from the free world to the subscription world.

What kind of events would somebody pay for? One of my friends has been working on trying these models for a couple of years now. He said live data is the key. As a consumer I can relate to it. Live data can be multi-faceted:
  • Get access to information/event before others. Data services for businesses have been doing this for a while now.
  • Experience an event while on the run/road. Popularity of smart phones is driving this category. A significant portion of the billion Appstore downloads are of this segment.
There might be related information for which folks would pay for:
  • Inform when a friend/contact is in the vicinity
  • Event of interest taking place in the vicinity
The above is a pull-push model. Based on personal filter settings (static data) and location details (dynamic data), the consumer 'pulls' events of interest (primarily in the personal/social space).

Prima facie, a service that can take advantage of the above triggers would require:
  • Support for mobile devices, as the above use cases involve user mobility
  • Sophisticated push engine: The success of BlackBerry service was based on their push model. If the guy pulls something, chances are that he wouldn't pay for it!
  • Micro-payments: Each of these events are atomic, and paid for prior to consumption
  • 1-click / Integrated payments: Make it easy for the consumer to get to what they want
The Apple Appstore is turning out to be a platform where interesting experiments are being tried as folks figure out a way for consumers to pay for services (more about this in another blog).

While on the topic of what consumers would pay for, would they pay for:
  • Identity: Would a parent pay to ensure that adults don't participate in kids conversations (for e.g., at a chat room)?
  • Security: The site must be secure, and that the information you share with the service is secure. To most people, this sounds like hygiene and should be covered by the service provider
What are your thoughts? Love to hear from you.

PS: Advertising revenues from businesses targeting the audience of the service is assumed to be a source of revenue.

Friday, April 17, 2009

Universal Financial Access by 2013

[Manju Murthy] In my earlier post, I wrote about the opportunities for disruptive innovations as emerging markets address financial inclusion, I had also written about Sanjay Bhargava, who is championing Universal Financial Access in India. He has graciously agreed to be a guest blogger at Commerce Insights (follows). Additionally Universal Financial Access India, a LinkedIn group, has been created to enable interested professionals continue such discussions and to network with each other. Please sign up to this group as well.

[Sanjay Bhargava] Manju, thank you for inviting me to be a guest writer on your blog and sharing in the dream that real and not cosmetic UFAI (Universal Financial Access in India) can be achieved by 2013.

I would like to start this first post with two extracts from the Nobel acceptance speech given by Prof. Muhammad Yunus. For the full speech see

“We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it. We create what we want.”

“I firmly believe that we can create a poverty-free world if we collectively believe in it. In a poverty-free world, the only place you would be able to see poverty is in the poverty museums. When school children take a tour of the poverty museums, they would be horrified to see the misery and indignity that some human beings had to go through. They would blame their forefathers for tolerating this inhuman condition, which existed for so long, for so many people.”

I think it is important that we set ourselves measurable BHAG (Big Hairy Ambitious Goals) and my first attempt at articulating five goals for 2013 is there for everyone to look at and comment on. See this five slide presentation

Do you think UFA should be a national priority for India and that the five goals for 2013 can be achieved with high innovation and low subsidies?

The presentation also refers to a set of whitepapers which can be downloaded from

Most of you will not have the time or the inclination to read the whitepapers and may find them complex without explanation and context. I plan to do a series of bite sized posts highlighting the main points over the next few weeks. We are all learning and seeking solutions so critical comments are very welcome. Together we will find a way. I look forward to collective action and an interesting debate.

Saturday, April 11, 2009

Disruptive innovations in payments - BoP style

In emerging markets, often the growth opportunity in the payments industry lies in addressing the un-banked. While addressing opportunities at the bottom-of-the-pyramid is challenging, financial inclusion empowers the un-banked to be both producers and consumers, thereby unlocking a viable business opportunity.

While looking at payments opportunities in India, addressing the unbanked / under-served forces its way into any brainstorming session. This could be because of innovations around branchless banking, novel methods of handling KYC mandates, reducing documentation/paperwork associated with opening a new bank account, zero-cost bank accounts, leveraging technology without being encumbered by legacy… When you are trying to create a profitable business from millions of customers who earn less than $100/month, you think thru’ the problem in a very different way. Resulting in a raft of innovations can be truly disruptive. CGAP has been successfully promoting this cause for a while now. I've enjoyed participating in the CGAP group on LinkedIn as well.

It is in this context that I ran into Sanjay Bhargava, who has been championing Universal Financial Access. He brings a lot of energy and enthusiasm into a daunting initiative, and makes it seem achievable. His attitude is so infectious, that I figured a lot more space needs to be devoted to the Universal Financial Access project (subject of another blog).

Is BoP a lost cause? Is Universal Financial Access an oxymoron? What are your thoughts?