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Posts Tagged ‘india’

The microfinance model has proved to be a valuable way to raise funds for entrepreneurs all over the country, as exemplified by the success of Kiva. Seattle-based Vittana is taking a similar approach to helping fund education in developing countries by allowing you to lend directly to students in the developing world. The idea is to bring student loans to the developing world through the power of person-to-person microlending. Today, the site is existing its beta period.

Vittana partners with microfinance organizations located in developing countries to donate to students in need of funding. Loans for students range from $200 to $1,500, are then funded by individual lenders, via $25 donations or more, on the Vittana website. One hundred percent of the loans are given to the student. Launched in beta last May, the Vittana community has made over $110,000 in loans to nearly 200 students around the world, who are now getting their degrees. Thus far, Vittana has programs in Mongolia, Nicaragua, Paraguay Peru and Vietnam and plans to expand to India and countries in Africa soon. And Vittana students have had a 97 percent repayment rate.

The non-profit organization was founded by former Amazon employee Kushal Chakrabarti and was incubated in the fbFund REV program. Vittana has received funding from a number of notable investors and leaders in the technology space including Mike Murray, Mitch Kapor, Joel Spiegel, Dave McClure, and Dave Richards. Qifang is implementing a similar model for education in China.

In conjunction with NCAA March Madness, Vittana launching a Microfinance Madness initiative to help bring together bloggers, college students, startups and other groups in a competition to lend the most money to college students around the world. TechCrunch is participating in the initiative and will be facing The Huffington Post, Redfin and others to raise funds. Join our group and make your donation today!

Ning CEO Gina Bianchini is being replaced as the CEO of Ning by COO Jason Rosenthal. Bianchini founded the DIY network of social networks with Marc Andreessen. But after five and half years at the helm, she is ready to try something new. She will transition to an entrepreneur in residence role at Andreessen Horowitz, the venture capital firm started by Andreessen.

In a blog post, Andreessen (who remains chairman of Ning) notes:

Ning today is one of the world’s top social networking properties, with more than 2.3 million user-created Ning Networks and more than 45 million registered users, and is far and away the market leading social platform for interests and passions. Ning Networks span every area of human endeavor, from the arts to business, politics to social activism, and every other field you can think of. Over 5,000 new Ning Networks are created every day, and we’re adding a million new registered users every 12 days

Over the past year, Ning’s unique worldwide visitors have doubled to 20.7 million, according to comScore, which is still much smaller than other social networks such as Hi5 (46.5 million) or LinkedIn (42.8 million). But at least it’s bigger than Friendster’s 15 million. Andreessen notes that Ning will continue on the same course under Rosenthal.

A trio of entrepreneurs who led online advertising technology company Accipiter to an acquisition by aQuantive – which was in turn acquired by Microsoft for $6 billion in May 2007 – have returned to startup life after serving a variety of roles in advertising and sales at the Redmond software giant.

Jeff Wood, Guy Taylor and Ryan Treichler are today announced their new company, aiMatch, as well as the limited availability for “early adopters” of its online ad technology platform. In addition, the threesome said they have also convinced former Head of Publisher Solutions EMEA for Microsoft Advertising Steve Perks to join the club.

So what does aiMatch do? According to the press release, the company aims to put advertising intelligence (hence the “ai” in the name) in the hands of online publishers, helping them create new audiences and revenue opportunities, while at the same time maximizing the value of their advertising inventory.

The company will provide a solution for online publishers to create, forecast, deliver and analyze online ad products based on an open platform that it says is able to communicate with value-add systems for aggregating data into one actionable view.

In the words of Jeff Wood, former VP of Publisher Sales at Microsoft Advertising and now CEO at aiMatch:

“While so many solution providers have been focused on helping publishers monetize remnant inventory, we recognized that publishers invest heavily in their content and need new tools to increase the value of their direct sold products. That is why we are dedicated to offering solutions that leverage advertising intelligence to maximize their return on that investment.”

As mentioned earlier, aiMatch’s online advertising platform is currently only open to some early adopters, with full availability scheduled for June 2010.

Earlier this morning, social networking giant Facebook announced on its blog that, one week after it said it would be opening an office in Austin, Texas, it will set up an additional support center in the southern Indian city of Hyderabad, the capital of the state of Andhra Pradesh.

In the statement, the company says both offices will allow them to better serve its users, advertisers and developers. Facebook added that it is currently recruiting people to staff the online sales and operations teams for both office locations.

The India-based support center will not be Facebook’s first international office – it already established a presence in Dublin, Ireland, just over a year ago (PDF). Don Faul, director of global online operations at Facebook, in the blog post said that having multiple support centers in a variety of time zones helps Facebook provide better round-the-clock, multi-lingual support.

According to the company, seventy percent of the people using Facebook are now located outside the U.S. and are accessing the service from more than 70 languages. In India alone, Facebook says it has more than 8 million people actively connecting on Facebook

A quick glance on Wikipedia teaches us that Hyderabad houses many computer software companies and consulting firms, so much so that the city is sometimes referred to as “Cyberabad”. Microsoft apparently has established its largest R&D campus outside the US in the ‘City of Pearls’, and other names on the list of companies with one or multiple offices in Hyderabad include Google, Alcatel Lucent, Amazon, HP, Dell, IBM, Motorola, Oracle and Deloitte.

I mentioned in my last post that mobile is bridging the digital—not to mention analog— divide in India, with almost half as many new mobile accounts being opened just last January as there are Internet users in the entire country.  And there are a host of interesting companies seeking to leverage that network as some kind of rudimentary, literally “dial-up,” Internet that extends far beyond the country’s 50 million or so Web users.

One of the most ambitious companies I met with during my last trip to India in November was Eko, a mobile banking company. There are a few SMS-based bank applications in India, but Eko differs because the phone isn’t just another channel for the account—it is the account. You make payments and transfer money simply by dialing numbers. It’s so simple, you don’t even need to understand SMS to use it.

It’s an ingenious offering that doesn’t try to be everything to everyone. It aims squarely at the unbanked—some 60% of India’s huge population. For now, Eko is focusing on the 1,000 kilometer corridor between Delhi and Bihar.

It’s a textbook case of the how hard it is to build something incredibly simple within a sandbox of tight constraints—yet that simplicity is the same thing many would argue caused Twitter’s 140-character missives to become so universal. There are no extra bells and whistles with Eko’s service because there’s no room for them, and at the end of the day, probably little need for them.

The accounts are actually held by the State Bank of India, which insures up to 100,000 rupees per account, but Eko’s customers don’t ever go into banks. The “tellers” are the tiny corner groceries that dot every neighborhood and street corner in India’s crammed urban areas and expansive rural areas. They are the center of commerce for those living on intermittent jobs, tips and handouts. These stores sell medications by the pill, shampoo in tiny sachets, cell phone minutes by the Paisa, and frequently extend credit when needed. Eko just seeks to give this already trusted, daily-visited vendor one more thing to sell.

The interface is simple enough for anyone to use, regardless of language or literacy. Just like filling out a check requires you to enter the payee, how much you are paying and sign it and Eko transaction has the same three elements. Eko customers type the bank’s short code, then an asterisk, then the mobile number of the person you are paying, then an asterisk, then the amount, then another asterisk. Then comes the signature. That’s the tricky part, but also the most important, because the account is solely on phones, which can be stolen.

Eko’s founder Abhishek Sinha (pictured above amid his signage) wanted to come up with a cost-affective equivalent of an RSA token, so he created a paper version of it. Account holders get little booklets with pages of 11-digit codes. Seven digits of it are random numbers, with four randomly placed black marks, where the person enters his or her PIN. So even if the booklet is stolen, no one knows the PIN number and they still can’t access the account. There’s a VeriSign logo on the back of each booklet. Sinha reached out to VeriSign to see if they could come up with a better solution– instead they endorsed his.

Freedom from always having to carry cash has obvious safety and empowerment implications. But this is a hard company to build out broadly in a country like India. The very strength of the model to truly reach the unbanked—turning those trusted, neighborhood grocers into tellers—inherently makes it costly and time-consuming to build because there are so many of them serving relatively small neighborhoods and villages. Eko has 30,000 account-holders right now. “I thought it’d be a million by now,” Sinha says. “We’ve had a lot of false starts.”

There’s a cost-time trade off. Since the service launched in late 2007, Eko was outsourcing the management of the grocers to a third party who sells multiple things through the channel already. But evangelizing the product takes more hand-holding, so the number of accounts wasn’t growing. Since November, Eko has taken over the management of these grocer accounts assigning employees to each neighborhood and investing in street promotions, blaring its Bollywood-eque jingle extolling the virtues of banking and bedecking stores with in-store signage. Now new accounts are soaring. Eko had just 6,000 accounts before the switch in strategy. It added 10,000 in January and is now adding 10,000 every 15 days.

But costs are going up too. Sinha, who made some money founding a previous company Six DEE Telecom Solutions, has self-funded the venture until now, and in Eko got a $1.78 million grant from the World Bank and The Gates Foundation. But that money will run out this year. He’s working on raising a venture round now—and hoping to get a whopping $10 million. In his previous startup he says he was turned down by literally hundreds of VCs and says that this time it’s going a lot better. Indeed, he jokes, it’d be hard for it to go worse. For one thing, he’s learned a 60 page PowerPoint is overkill.

Like VNL, the solar-powered, mobile equipment company that was 100% bootstrapped by the founder, this is one of those companies that is tricky to build in India. There’s a huge social need and business opportunity if it hits scale, but there’s also a lack of capital to support deals like this. A venture firm is more comfortable in the $3 million-to-$5 million range and a private equity firm would demand a lot more maturity of the business before it would invest. Had Sinha not invested his savings in the project, it likely wouldn’t have gotten this far.

I asked several times if Sinha was worried. What if he couldn’t raise the money? He laughed every time I asked with a look in his eyes of “Do you know how hard it actually is to be an Indian tech entrepreneur?” He says he’s been through enough to know there’s always a way. (Regular readers know there’s a word for that.)

Mobile social networks have tremendous potential to flourish in developing countries where mobile phone usage trumps internet connectivity. SMS based social networks like SMSGupshup have gained considerable traction in Asia because of this. For example, in India, there is currently a 10 to 1 mobile-to-PC ratio. Mig33, a mobile social network that involves VoIP calls, instant messaging, e-mail, text messaging, and picture sharing, has accumulated 35 million registered users of its service and is growing fast in South Asian markets such as Indonesia and India. Assuming 3 to 10 percent are active on a monthly basis, that would be 1 million to 3.5 million active users.

Mig33’s users are now sending over 1 million virtual gifts a month, and posting approximately 100 million messages a day on its network, or 1,000 messages every second. Twitter, in comparison, just passed 50 million a day. Mig33 is eying the virtual gift economy as a revenue maker because of the model’s success for China’s similar application, Tencent QQ. According to Mig33, the Chinese mobile social application has nearly 8% of its over 500 million users in China paying about $2 per month in virtual gifts and goods. Mig33 is hoping to emulate that model in markets like Indonesia, India, South Africa, Bangladesh, Kenya, and Bosnia.

Mig33 is available worldwide and optimized for more than 2,000 different mobile devices. The startup has steadily added to its app by integrating social games, user-owned groups, virtual gifting and, most recently, avatars. Avatars are actually a source of revenue for mig33, by charging users to customize and enhance their avatars. Mig33 is looking to expand the virtual economy. In fact, the startup says that its revenue stream has grown to over $1 per user per month in countries such as Indonesia and India.

Founded in 2005, mig33 is backed by Accel Partners, Redpoint Ventures and DCM and has raised a total of $23.5 million.

I’ll say this about Brazilian startups—they’re certainly not dominated by Web copycats. Perhaps it’s because there aren’t a huge number of Brazilians who’ve made it big in the Valley transmuting the local way of doing things back home or because there’s not a lot of US venture capital flooding into the country. Perhaps it’s the country’s noted isolationist streak, or perhaps it was just the startups I lucked into meeting.

But whatever the reason I saw fewer “We’re-the-fill-in-the-blank-Web-company-of-Brazil” ventures than I have in any other market to which I’ve traveled in the last few years. Many Brazilians I spoke with said it’s just part of their nature, that they’re not competitive (tell that to fans of opposing soccer teams), and that they’d rather chase “green field” – or, as they say, “blue ocean” – opportunities. See, they don’t even use the same color to describe opportunities.

No matter the reason, after nearly 30 weeks of emerging market travel it was refreshing to go to a country and see things that are unequivocally new, even if risky and a bit, well, wacky. To make the point, here are three of my favorites: Companies that make bugs, houses and diamonds.

The World’s Ickiest Factory: Bug is one of most aptly-named companies in the world. This company makes bugs. No really, I saw the factory: Millions of eggs, and jars and jars of larvae and cocoons. There’s a “cook” on staff who makes up the peanut-buttery solution these bugs feed on and each room is kept at an optimal temperature for that stage of bug development. Like something out of a sci-fi movie, the company is growing natural predators for common agricultural pests, so that farmers can move away from pesticides in accordance with a growing wave of worldwide safety regulations and the organic food movement. It’s combating a caterpillar with a wasp—like nature intended– but rather than selling live wasps, it sells wasp-infected caterpillar eggs and cocoons. Think of them like thousands of little Trojan horses being dropped into Brazil’s sugar cane, tomato, and soybean fields.

Brazil is the second largest agricultural country in terms of exports and the largest pesticide user in the world, recently overtaking the United States. The company is only doing a few million in revenues but is hugely profitable. That’s the good thing about growing something found in nature—it’s pretty cheap once you figure out the optimal way to do it.

But even without all that, I would love this story because Heraldo Negri, one of the co-founders, is just obsessed with bugs. Since he was 19-years-old he’s photographed pictures of bugs in every stage of life. He has albums and albums of them and even started a niche publishing house to produce his bug books for the masses. He doesn’t seem to think this is weird at all. When he handed me a stack of his books on bugs he exclaimed, “Your husband will love these!” (Note: My husband has a horrible fear of spiders.) That’s Negri above, standing on the left. What you can’t see from the picture is that he’s holding two fistfuls of larvae. Here’s a close-up….

Negri—a former college professor who lives several hours outside of Sao Paulo— always wanted to be an entrepreneur but says he never quite had the guts to take the plunge. But the sheer obsession with the idea and technology drove him to take a sabbatical (which he intends to be permanent) from his university teaching job to run this company full-time.

Bug is funded by Fundo Criatec, a government-sponsored venture fund. It’s one of its hottest companies and Francisco Jardim (standing to the right in the main photo), who’s in charge of the fund’s deals throughout the state of Sao Paulo, drives out to Piracicaba meet with them several times a month.

Bug was a risky investment deal in a country that doesn’t take a ton of venture risk. The technology was there, but several VCs walked from negotiations because the company didn’t yet have local certification to sell to farmers. Now, it is one of the only ones that does, and its biggest problem is meeting demand, so it’s investing in better, larger bug-growing facilities. (Right now they’re largely using a series of houses and an old supermarket.) Certification is a process that takes several years, and tellingly, some big multinationals and other upstarts recently applied for certification, Jardim says.

How to Build a House in One Day: It doesn’t take much travel to see that millions of people in the emerging world need better housing—hell, you could just watch “City of God,” “Slumdog Millionaire,” or earthquake footage from Haiti. Or just visit 16th and Mission in San Francisco. Much of the emerging world is living in makeshift structures that are missing walls, doors or decent ceilings. That’s what makes BS Construtora so potentially exciting not only for Brazil but the entire emerging world.

BS Construtora was started 14 years ago and for many years was just a small business known in agriculture sectors for its ability to build structures such as silos faster than the competition. 2006 was a bad year for agriculture in Brazil, and the company had to look around for other customers. The founder Sidnei Borges dos Santos, a former brick layer, was looking at a shoebox when he had the idea for how to build a prefab house quicker than the competition. Rather than pre-make parts and assemble them wall-by-wall and beam-by-bean, what if he made a mold that could lay the concrete for the whole room in one big piece, add the shutters, paint it and throw it on a truck? The molds leave room for plumbing and lighting and plop the houses on the ground just like the inspiration–an upside-down shoebox.

Today the company can build a house in 24 hours. It’s currently building a whole city complete with 1,600 houses, electricity, phone lines, Internet access, schools, a hospital, a police station, a fire station and a shopping mall in the Amazon for a crew building a hydroelectric dam. The photo of the village I saw looked eerily like where “The Others” live in Lost, but a house built on the cheap in 24 hours isn’t for show—it’s for necessity and speed. And there’s a ton of need in the world for this product. The company is meeting with governments of South Africa, Ghana, other parts of Latin America and Asia to talk about expansion.

The problem is thin margins. So far BS Construtora has been financing itself mostly through working capital while trying to dramatically increase capacity. It can build 20,000 houses in a year and CEO Marcelo Miranda wants that up to 30,000. In another year, the company will start looking at raising some funding to help grow faster, he says. For now, he wants to give the valuation some time to build, given all the growth the company is seeing. The houses go for between $15,000 and $140,000, for nicer-non-Lost-like models. The company is also developing some new four-story models to get farther into the commercial market.

BS Construtora gets a few big corporate or government funded projects like the village described above—a $120 million-plus project—but the bulk are developed and sold on the real estate market. The former is likely lower margin but less volatile, and the latter is the opposite. Between the two, though, the company generated an impressive $100 million in revenues last year – made all the more impressive by the fact that this is a startup that hasn’t received any external funding, operating in an emerging market.

In a decline-of-America-side-note, Miranda is a recent Stanford MBA grad who got 13 other job offers upon graduation, including some impressive ones to head up multi-national divisions in Brazil. (He asked me not to disclose specifics.) He gutsily chose to take this rather uncertain post at BS Construtora last year—at nearly half the pay he was offered elsewhere– despite the fact it was mostly an idea with little execution.

Why’d Miranda go back to Brazil? Part of it was a desire to build something in his homeland. Part of it was when he interviewed at companies in the US they intimated that there was pressure to hire only Americans. “It was the wrong time to be there,” he says. “The feelings were not good for a foreigner like me.” Looks like that brain drain isn’t limited to India and China.

Drilling Your Teeth the P-Diddy Way: Another Fundo Criatec investment is CVD. (I know, it’s not nearly as well named as Bug.) This company makes man-made, multi-crystal diamonds, with technology spun-off from the Brazilian equivalent of NASA, INPE. Aeronautics was big during the dictator days and there was a need for super-hard materials that were durable and wouldn’t corrode, so it started experimenting with growing diamonds and using them in space. Much like the early days of NASA gave American things like the EKG and Tang, Vladimir Airoldi (left) is working to make this diamond technology applicable to everyday life.

The key to CVD’s edge isn’t so much the diamond itself, it’s the way it preps the diamond to be adhered to another surface. The first product is tips of dentist drills. Diamond powder is already used on drills, but it doesn’t stay on well. Because CVD’s adhesives are so much stronger it can drill with an ultra-sonic, not rotational motion, which means no pain, no bleeding and no anesthetic, the company says. Early adoption has been a challenge. Dentists are trained a certain way and don’t like to deviate. So far just 5,000 dentists in Brazil have tried it and 3,000 are still using it. Another early use is drilling into the earth. CVD did a pilot-sale of some diamond-adhered drill tips to Petrobras a few months ago.

The hope is to turn CVD into a platform company that can spin out lots of these ideas, and partner with others to take them to market. Obviously, the challenge here will be the latter. The technology is there, and Airoldi, a CalPoly grad who got his ideas about tech transfer from his experience in California, can come up with dozens of use cases of the top of his head. Focus is going to be a key for this company.

But, like Bug and BS Construtora, CVD is trying to introduce new technology into industries that many other entrepreneurs have forgotten about. If that’s going to be the new green field – or blue ocean—opportunity, Brazil is a good place to bet.

Live video streaming on the web is becoming more and more popular, and for news organizations and brands who don’t want to shell out thousands of dollars a day for a satellite truck there is another option. At SXSW, Kyte is going to release a new product called Kyte LivePro Unwired with Spin magazine.

LivePro is a computer in a backpack connected to six data cards all uploading live video at the same time, balancing the load across three different carriers (Sprint, AT&T, and Verizon). It is made by LiveU and Kyte will be reselling it to its larger customers. (LiveStream uses the same technology in its Livepack).

Kyte CEO Daniel Graf came by my office the other day to show me the technology (see video below). It is incredible that a backpack can now replace a satellite truck. You won’t get HD quality, but you can get broadcast-TV quality, and it is certainly better than uploading video from your mobile phone, which Kyte also allows. He says that typical livestreaming rates with the backpack are 700 kilobits to 1 megabit per second.

Some customers using Kyte’s online video platform include Fox News, MTV, and Calvin Klein. Graf says Kyte is now streaming 100 million videos a month across its network, up from 50 million last summer.

Editor’s note: Richard Wong is a venture capitalist with Accel Partners, an investor in AdMob, GetJar, and SunRun, and a former mobile industry executive. In this guest post he argues that the fragmentation of mobile devices and platforms is here to stay, and offers some advice to entrepreneurs on how to deal with it.

Mobile data is on fire. Despite a few false starts, we are now in the midst of a transformative “Open Mobile 3rd Wave” (remember WAP, and J2ME?). We are just in the early swell of the wave; the iPhone itself is not even three years old, and thanks to continued improvements we’re now seeing in smart phones, mobile OS platforms and 3G/4G networks, the raw ingredients are just getting better every month.

Per the views of many mobile denizens and thought-leaders such as well-known internet analyst Mary Meeker of Morgan Stanley, I certainly believe there will emerge new industry-transforming Facebooks, Googles, and Yahoos in this mobile wave.

FRAGMENTATION & COMPLEXITY

However, a key topic discussed by us mobile geeks and startups is the challenge of mobile platform fragmentation. There is an alphabet soup of protocols, standards, and regional differences by country which can be daunting for any entrepreneur. Just look at the range of technologies on handset platforms alone, from iPhone to Android to Blackberry, and even new platforms announced in last 30 days, from WinMo7, to MeeGo, to Samsung Bada, as if we need more platforms to deal with . . .

THE MAGIC BULLET—IT DOESN’T EXIST

One of the worst myths floating around the blogosphere is the wait by some for a “unifying technology” that will make things “simpler and easier” to develop services and apps for the global mobile market.  At times, some have claimed that Java (J2ME) was the answer, then Flash Lite, then Webkit browsers, and most recently HTML5. While each solution has its merits, there will not be any unification anytime soon. Even as HTML5 richness has improved substantially, browser support will still vary and many, many phones will not support HTML5 for 7+ years.

Anyone who is waiting for a single silver bullet to solve fragmentation issues in mobile will be waiting a very long time, especially if they want to go after the global mobile opportunity. As such, it is important for mobile entrepreneurs to wade in and sort it out for themselves.  No one is going to flatten the industry such as Microsoft did in the PC-era to make it simple.

THE REALPOLITIK: COMMON STANDARDS  = COMMODITY STANDARDS FOR MANY

The realpolitik is that Mobile is truly global, and serves an extremely wide range of countries and users. There will naturally be a wide breadth of technologies, from CDMA vs GSM protocols, J2ME vs BREW, Mobile Apps vs Mobile Web, xHTML vs HDML, SMS vs MMS and others to serve this market.
Ask former execs of PSINet (bankrupt operator), AST (bankrupt PC maker) & Packard Bell (bankrupt PC maker) about the impact of the WINTEL “standard” on other PC industry players, and you’ll get a sense why Nokia, Motorola,Verizon, & Sprint aren’t rushing to follow their PC-era predecessors. Common standards = commodity standards for many players in this industry. Sadly, whether or not there is an elegant technical answer, it will be hard to drive any single set of worldwide standards given the different economic incentives of the many players, however good it would be for developers.

OK, SO AS A MOBILE ENTREPRENEUR WHAT DO YOU DO?

What do you do as a mobile entrepreneur in the face of this complexity?  If you’re going to be successful, the winning entrepreneurs in mobile will have to learn to navigate these waters.  There’s no simple shortcut. Several thoughts:

1. Don’t wait for the Magic Bullet.  The first step towards progress is acceptance of reality. I actually do believe that Webkit browsers, HTML5, continued progression of J2ME, Android and iPhone are all positive trends that will help make things easier for many developers, but none of them will be a single-threaded answer. There are too many markets where these solutions are insufficient. For example, India, one of the world’s fastest growing mobile markets is stilldominated by Nokia, which has 70%+ market share. I don’t think developing only for iPhones will be enough to dominate the India market given their < 5% share.
2. Bound The Problem & Get Down the User Learning Curve.  So, the critical next step is to limit the boundaries of the problem so you can actually solve it. Are you pursuing an enterprise app or a consumer app? Does your success require broad scale viral use, or is it perfectly good to have 2000 profitable users? Many developers focused on the consumer market are going to find that a blend of mobile web, and prototyping on iPhone-only or Android-only is the right first step and only then expand to broader platforms. Blackberry and WindowsMobile are similarly important in business applications. Rather than the costly efforts of chasing 4-5 platforms at once, focus in on the first one or two, prove your model, then expanding will help to bound the complexity.
3. Geography matters. That said, it turns out that there are major differences by country in the mobile ecosystem. Just as important as the use case, is which country/geography one is targeting first. In Europe, 3rd party retailers such as Carphone Warehouse play a major role, reducing the influence of operator controlled stores. In emerging markets, Nokia is still a major force to be reckoned with. In North America, iPhone is capturing a disproportionate profit share of the industry.  Look at the data sources I link to below and understand which handsets dominate which geography—it is very different by region.
4. Get a guide. It is difficult to explain the subtleties of the mobile ecosystem without a longer dialogue, but the good news is that there are quite a few battle-scarred mobile veterans around that can help you with the Cliff Notes on the industry. Find one to help you.
5. Resources To Tap Into.  Whether or not you agree with my opinions in this article, here are some great data sources to learn more.

• Admob Mobile Metrics—a good summary of trends in the mobile data ecosystem from the lens of Admob’s network. A good view of by-country handset types from their view.
• Chetan Sharma Consulting—Chetan, as an independent analyst publishes some great research on the trends in the mobile data space.
• Getjar Mobile Statistics—Getjar is the leading independent mobile app store, and publishes stats on download volumes, handset types, etc.
• Mobile Monday—great entrepreneur organized events getting the mobile community together in over 120+ cities around the world.  If you really are looking for a guide, this is a good place to start
• WURFL— wireless universal resource file—an open source project; a “config file that contains all info on every wireless device on earth”

DON’T WAIT

There’s an incredible startup and wealth-creating opportunity in this new arena of Open Mobile. The smartest entrepreneurs will not wait for these fragmentation issues to be solved but are figuring out now how to pick a use case, a core platform, and geography to bound their problem and get going. Once you have initial momentum, you can pick through these fragmentation landmines, and make a 2nd and 3rd step. Don’t wait for the unifying technology to solve these issues before diving in. Its going to be an exciting time to build great mobile companies this next 5-7 years. See you out there.

Reference Glossary

SMS – short message system otherwise known as text messaging

MMS – multimedia messaging system (originated as photo messaging from J-phone in Japan)

CDMA – code division multiplexing – pioneered and still very controlled by Qualcomm – Sprint, Verizon & MetroPCS use this protocol

GSM – Global System for Mobile, the standard in Europe and most of the world – AT&T & T-Mobile use this protocol

J2ME – Java Mobile Edition (often paired with class library profile called MIDP2)

BREW – Binary Runtime Environment for Wireless – a Qualcomm owned initiative as alternative to J2ME

XHTML – multi modality markup language

WML – the original markup language of the WAP Forum which allowed more efficient use of bandwith constrained mobile networks (i.e.. less chatty)

WURFL – wireless universal resource file – open source config file of wireless devices

MOMO – Mobile Monday community of mobile entrepreneurs supporting other mobile entrepreneurs

(@Rich_Wong is a Partner @Accel_Partners and works with mobile investements Admob and Getjar ( among others) and was previously an operating exec at mobile technology provider Openwave Systems. See www.accel.com/rpw_presos for additional data around the mobile ecosystem. Disclosure: Accel Partners is an investor in Admob, Amobee, Getjar, Mig33, Medio, MetroPCS, as referenced above)

Fresh off a $12 million investment, SMS GupShup, a Twitter-like service in India that is primarily accessed via SMS, is launching an App Store. The store aims to expand SMS GupShup’s ecosystem by allowing developers to create SMS-based mobile applications based off of the microblogging service.

Launched in April 2007, SMS GupShup (spawned from Webaroo) serves 26 million users across India. The startup has seen rapid growth in users primarily due to the immense popularity of mobile devices in India. According to the startup, there are 550 million mobile phone users in the country and only 50 million web users. With a 10 to 1 mobile-to-PC ratio and SMS serving as the most popular communications platform, the market is ripe for SMS GupShup to take off. SMS GupShup currently processes over 480 million messages a month and accounts for 5 percent of all texts sent within India.

Called AppShup, the app store allows developers to use the platform’s API to create and connect their apps to the GupShup stream, allowing developers make small SMS applications and widgets. App Shup pre-enables carrier approval processes, hoping to make the process of submitting apps easier for developers. Currently, AppShup is integrated with the Indian carriers – allowing SMS services for Indian mobile subscribers. The startup says they are conducting discussions with carriers in other countries to expand the program. Close to 100 SMS apps are already available including Tic Tac Toe, Cricket Quiz, and Word Jumble. For now, most of the apps appear to be free.

Releasing an API and launching an App Store makes sense for SMS GupShup. The mobile social network has been growing fast and developing an ecosystem around its platform is the next step for development. The startup has even attracted the attention of leaders in the space, like Facebook. Last year, Facebook partnered with SMS GupShup to power and deliver its users’ status updates via text messages. Additionally, SMS GupShup has an advertising strategy. Over 100 advertisers currently run on the network including local insurance provider ICICI Lombard and international brands like Puma, Microsoft and Cadbury.

India is a huge market for social networks, with Facebook, Orkut and even Twitter vying for a share of the growing number of web users who are increasingly flocking to social networks in their day-to-day routines. But clearly, SMS GupShup has tapped into the mobile side of social networks and is seeing success from this in India. It should be interesting to see if the service can develop the vibrant ecosystem Twitter has produced with its third party apps and API.