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There
is no foolproof formula for success. But as a startup that
has remained profitable and survived every kind of meltdown
and slowdown that has come its way, Geodesic Information Systems
definitely seems to have the right ingredients. Srikanth
R P & Rajneesh De hone in on the secret of Geodesic’s
success
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| Kumar
says
with IM emerging as a killer app, the company’s product,
Mundu, looks set to rake in the moolah |
What
is the recipe for being a successful technology startup? Those
firms that believed that bold ideas and solid financing were
the only two important ingredients required to make it big,
are no longer present on the global scene today. In an era
when smaller technology companies in India are increasingly
getting wiped out, it is interesting to note the success of
a few tech startups that have made it against all odds, pretty
much on their own steam at that. The ones that have survived
the meltdown are now being looked upon as heroes by both entrepreneurs
and venture capitalists alike. A key pointer to the success
of any startup has been the firm’s ability to manage
scarce resources effectively and create a market of its own
where there was hitherto none.
Mumbai-based Geodesic Information Systems can definitely be
considered to be one of the proud flag-bearers of this rare
genre. It has not only survived the meltdown but has been
making profits right from inception. Quite unlike the flashy
ostentation that characterised the startups of the dotcom
boom time, the Geodesic office in suburban Mumbai is nondescript
and utilitarian, a sign of a true startup that knows that
survival and not plush surroundings is key to success.
Geodesic kicked off operations ambitiously on “Fool’s
Day” in the year 1999, and like any other technology
startup, had the objective of developing innovative products.
The year 1999 was when just about everyone from corporates
to panwallahs was jumping onto the dotcom bandwagon. Everybody
wanted to launch an e-commerce site and cash in on the action.
Geodesic too was no different, and launched its e-commerce
site, hamarashop.com. The strategy at that point of time was
to reach out to people by getting all the best stores in town
to partner with the site and offer their products for sale.
The plan back then was to launch a thousand kiosks across
Mumbai and other cities to facilitate e-commerce transactions.
Realising that larger shops would go online themselves, Geodesic
started looking at existing company sites and picked up information
from those sites to offer its users a comparative view between
different products. Says Kiran Kulkarni, director, Geodesic,
“We had the advantage of cross promotions between different
products and unlike the others who were backed by bigger names,
we did a turnover of Rs 3.75 crore in the first year itself.”
Kulkarni estimates the profits to be in the range of 17 percent
of the turnover.
Alternative revenues
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| According
to Kulkarni, the company’s services have kept its
products alive |
Being
far from foolish, the company also realised early that a focus
on e-commerce alone, while it was still in a nascent stage,
could prove to be suicidal. As dotcom after dotcom went bust,
it was quite clear that e-commerce was not yet happening in
sufficient volumes to sustain all the players. So Geodesic
decided that it would try and earn revenue from its indigenously
developed e-commerce engine itself, by licensing it out. Kulkarni
says that Geodesic’s e-commerce engine was built from
the ground up, completely plug-and-play by design, allowing
users the flexibility of adding and removing components freely.
In fact, this engine ultimately proved to be a stable revenue
earner for the company it’s been licensed to two portals,
iVast and Concentric. Simultaneously, Geodesic continued to
offer software services, and does so even today. As Kulkarni
aptly puts it, “Our services have kept our products alive.”
After the heady euphoria of 1999-2000, came the great meltdown
that left most dotcoms struggling to keep afloat. Unlike most
of its peers, Geodesic had been cautious on spending. It scaled
down most of the grandiose plans that had been made and scrapped
the proposed kiosk project altogether. It owes its survival
to the focus on projects and the licensing of the e-commerce
engine.
Instant Messaging
Since there were a lot of players in the e-commerce space,
Geodesic knew it had to do something different. The Instant
Messaging (IM) space was one that had not attracted much notice
back them. And Geodesic hit the jackpot when it licensed ‘Mundu’,
its instant messaging product to the Indiatimes portal. Says
Pankaj Kumar, managing director, Geodesic, “People have
begun to realise the vast potential of instant messaging.
Online meetings, enhanced wireless services and new forms
of collaboration are just the start. Online auctions, e-commerce,
knowledge management, CRM, inventory control and clearance,
stock market activities are all potential applications which
can be done with the help of instant messaging.” Today,
due to its tie-up with Indiatimes, Mundu is the third largest
messenger in the country with ten percent of the market share
after Yahoo Messenger and MSN Messenger.
A killer product is all a startup needs and Geodesic has found
just that with Mundu. The potential of the product is undoubtedly
huge, as can be seen from these statistics: Use of instant
messaging in corporates is up 110 percent over the last year.
A research study by Forrester Research predicts that by the
year 2005, two-thirds of all corporate users of e-mail would
be using instant messaging as well. As more and more business
gets conducted over IM, corporations are looking actively
on the value of integrating IM with their business applications.
Industry reports estimate that one billion messages are sent
each day and that this figure will soon surpass the 1.9 billion
phone calls placed each day. The Instant messaging (IM) market
is estimated to grow from 250 million users worldwide to around
500 million in 2004, a growth rate of over 100 percent.
The one thing that holds back IM from being adopted as a standard
is the lack of interoperability between different instant
messenger software products. It is exactly this vacuum that
Geodesic hopes to fill in with its product. Currently, Mundu
has a unique advantage over other competing brands as it is
a messenger that is compatible with all the industry leaders
like AOL, MSN, ICQ and Yahoo. With the core technology in
place, Geodesic hopes to provide in Mundu a kind of brand
that would fit the needs of businesses of all sizes. The potential
target segments that Geodesic is looking at include call centres,
finance and IT organisations, providing an instant messaging
network for business-to-employee and business-to-customer.
With its ability to manage communications over multiple channels,
i.e. web text chat, integration with messaging networks and
wireless devices such as PDAs and mobile phones, Geodesic
could very well turn this product into a goldmine.
Instant e-commerce
The biggest stumbling block for e-commerce in India today
is the lack of personalisation which users demand. Here also,
an IM solution could provide the answer. Adds Geodesic’s
director Prashant Mulekar, “If you go to a site and like
a product, you would obviously want to know more about it.
And what better way to explain to a customer his queries than
an instant messenger. The missing link in e-commerce sites
can thus be addressed with the help of instant messaging tools.”
The Mundu IM environment ensures queuing, transferring, escalation
and auditing of partner, agent, employee, and customer interactions
for time-sensitive communication for key industries. Kulkarni
predicts that the product would be a great hit when deployed
in banking applications. A bank could have an instant messenger
operational and have queries answered instantly, cutting down
on the time spent by customers over phone calls and at the
bank itself. For banks and financial institutions worried
about security issues, the Mundu IM offers SSL-based 128-bit
encryption for authentication and messaging.
Geodesic is also waiting cautiously for the expected Internet
telephony and Voice-over-IP boom in April 2002. As the product
supports voice communications using LTP (lightweight telephony
protocol) over the network for users, there can be significant
cost saving for corporates. Going forward, as Ritu Soni, project
manager, says: “Users will evolve from using multiple
applications on various devices to one unified application
across all devices.”
Thus far, the only missing link in the strategy of Geodesic
has been on the branding front. The technology is great and
there is no doubt that the company has with it a killer app
yet there are not too many who know that Geodesic is the “brain”
behind the Indiatimes instant messaging success. The company
has now realised this and plans to get more aggressive on
the brand-building front. The company is already talking to
a few top-notch corporations, both globally as well as in
India, for tie-ups. Geodesic has also set up a marketing office
in US to market its products. Like with most hot startups,
the technology is not in doubt but whether Geodesic will be
able to capitalise on that technology à la Mirabilis
(the developers of ICQ) only time will tell.
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