Decoding some of the major questions in Consumer Internet

Ft. Huddle Founder's

Starting this week, we will be decoding with Founders from the Huddle portfolio, as well as investors and mentors, who will be tackling the major questions that arise in each of the sectors that we’ve covered. 

These are popular questions that have been asked by our subscribers and have emerged across each of the themes covered. (Keep your questions coming our way and we’ll continue our best to decode for you!)

For our very first ‘rapid fire’ of questions, we’ll be speaking with Sagar Nair, founder of Qlan (AI-based interactive social networking app dedicated to gamers), and Manu Jain, founder of Vama (Astrology and spiritual wellness platform built for the digitally native consumer) to address questions focusing on Consumer Internet from their experience.

1. What defines short and long-term success in consumer internet companies?

Sagar Nair (Qlan): Some of the key short-term goals include user acquisition, active userbase, and user retention. What defines long-term goals are factors that are specific to what the product/platform has to offer at its core. This includes; having your users experience an ideal product journey, proving the planned use cases, driving value to your users, organic retention, and effective solutions to the problems your users face otherwise.

Manu Jain (Vama): Short Term Success for Consumer Internet companies for Vama is to get PMF along with controlled spending on performance marketing. Long Term Success for us is profitable per unit transaction metric being met. 

2. What are the main challenges of this Industry? Especially in the Indian Market?

Sagar Nair (Qlan): Creating a unique identity, communicating the need for your product, and creating an early bond with your target users are some of the early challenges. In a market like India which is heavily cluttered, it becomes critical for a brand to establish its differentiation from what may already exist in the market. The consumers today are well informed, have lesser attention spans, and are far more evolved. They have to be communicated with in a way where they recognize the value that your product/service brings to the table from the get-go.

Manu Jain (Vama): One of the biggest challenges continues to be distribution and optimizing for lower CAC using innovative marketing; this is more relevant for the Indian market as the Indian customer is being wooed by multiple brands even though non competing with each other but the same customer pushing the cost of acquisition higher.

3. What do you think is the most efficient strategy to acquire users?

Sagar Nair (Qlan): While advertising and influencer marketing can do wonders when it comes to user acquisition. The most efficient way to acquire more users is your existing users, period. There is no greater marketing than peer-to-peer marketing, when your existing users recommend and want their peers to experience your platform, it’s priceless.   

Manu Jain (Vama): Word of Mouth/Virality & also one lever I feel is under-utilized is partnerships with complimentary brands or large distribution platforms is a great growth hack; we need to focus on all channels and find the best suited for our product. Performance marketing is not the only channel to focus on. 

4. Can you mention a few growth metrics for companies to keep a track of?

Sagar Nair (Qlan): Besides performance indicators like the daily and monthly active users, what defines a product in the long term is User retention and Time spent. Building a compelling experience on the platform that keeps your users coming back is the most critical growth metric. With regular use comes data-driven insights and feedback, which then becomes important in defining the future of your platform.

Manu Jain (Vama): One of the things Vama tracks is the Monetisation percentage of MAU, but the M2/M3/M6 retention charts are super critical as well to build stickiness; Also the funnel from Sign in → App open →  to Transaction has a lot of drop off points, so simple innovations have helped in reducing each step of drop off in the funnel (like bureau.id instead of sending SMS OTP) 

5. A key trend in this market you’re particularly excited about?

Sagar Nair (Qlan): Solution-centric and purpose-driven vertical communities are something I’m really excited about. After an era of centralized communities that are seemingly reaching a saturation point, it is now time for genre-specific, decentralized communities with tangible value and real connections. The evolved consumers of today know what they exactly want and do not wish to deal with the clutter anymore. Will be interesting to see how this space plays out. 

Manu Jain (Vama): Currently excited about Live Social Commerce & the power of influencers/content creators to become stars in our country as well & people buying virtual & physical products from the creators; the best part being in our country even renowed astrologers & priests are active on platforms & have huge following. 

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Now that we’ve heard from our portfolio founders, We’ll wrap it up with thoughts from the Huddle team on Consumer Internet as a segment and our conviction as backers of some stellar companies in this space.

Rishi (AVP, Huddle): Consumer internet is as much an art as science. While it is important to give users products or features that they don't know they need, it is equally important to double down on the user behavior of highly used products/features. In Pre-Seed stages, it is virtually impossible for founders to double down on usage behavior due to lack of completeness of the product. However, it is key to define the demographics of the user and build towards it. Being true to the user group and not being agnostic can reap wonders in usage statistics as demand for users from varied demographic areas vary significantly within a country like India.

Social status driven business  models and acquisition techniques has seen a lot of success within the Indian diaspora. Be it CRED, which launched as a platform primarily for the top credit holders in the country, or any social media platform, the need to get entry into the application or to get widely socially accepted from followers has been the subconscious need within the consumer. Meanwhile, Service based consumer applications fall under the trap of price war when serving Bharat. In such cases, content via social tools (such as community, gamification, highly personalized information) can significantly drive such users from being a WAU or MAU to a DAU. While content is abundant in today's era, short form consolidation across audio and video is primary for Bharat.

High CAC's associated with Tier 1 focused applications have been a deterrent factor for investors, however, a higher than standard D30 retention of 30-35% can showcase quality of content/service delivery and improve chances of the apps to survive longer.

Sanil (Founding Partner, Huddle) - This segment is one of the most ripe for collaborating through integrations and cross distribution strategies. Due to this factor it’s key for founders to focus on their core positioning from the early days in order to be able to identify collaborators whom they can utilise for increased reach, visibility and leveraging a chain of trust to build a larger user base by integrating with credible platforms that are complimentary to your user base. We’ve seen this take place across fintech platforms where a user is served the core product as well as newer products that align with their persona and by being able to predict these wants for your user, platforms are more likely to reap higher retention rates. Lastly, it’s key for founders to focus on the path of positive unit economics and be able to prove this through small clusters at their own end in order to be able to leverage the funding they might raise with accurate acceleration.

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We’d like to appreciate our portfolio founder’s, Sagar and Manu for taking out time from their extremely busy schedules to add valuable insights to our subscribers. 

Sagar Nair (Founder & Ceo, Qlan)

Manu Jain (Founder & Ceo, Vama)

That's all for today! This space is for founders in the sectors and solutions we are bullish about, therefore, a call out if you are a founder working in the consumer Internet space thinking along the lines of our approach, you can reach us at connect@huddle.work and we look forward to brainstorming with you. If you are an enabler and investor and would like a further look into our ecosystem, then we are happy to dive deep into these sectors alongside you.