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Sulekha is known for its unique business model and for being what the
promoters and stakeholders call a Web 2.0 version in the web 1.0 age. Launched
in 1998 from an email list, named Dakghar (post office in Hindi) that connected
the alumni of IIM-Calcutta, it carried articles written by them. One alumnus,
Satya Prabhkar, was inspired by the idea and created a website, Sulekha, to
publish articles written by Indians from around the world. Today, the site gets
20 mn page views every month. Param Parameshwaran, chairman of
Sulekha.com and Indigo Monsoon Group speaks to Bhaswati Chakravorty of
Dataquest about the unique business model
What is the uniqueness of the Sulekha business model that
helped it survive the dotcom bust?
Sulekha, as you know, is the largest and most popular member-generated community
for social/professional networking hub integrating social media and local
commerce services. Put simply, most of the content that you find on our site is
member generated which is the single-largest strength of sulekha.com. In 2001,
Sulekha received an investment of $5 mn from Indigo Monsoon Group, our first
investment in India, which incidentally brought on Sulekha's board as the
chairman.
In my opinion, most web companies in the dotcom wave had to
fight multiple battles. Content being member generated took care of the
unpredictable challenge. I think what we did right, unlike dotcom companies
concentrated on strengthening systems and processes instead of only investing on
promoting the brand.
How has the business model changed in the last five years?
Our initial business model where people are encouraged to write remains
unchanged. The site earns revenue through the sale and syndication of content.
Also, earns money through transaction services, such as online ticketing for
organizations and companies, and classifieds. We have also gone into
vertical-based content like movies and travel search. We also offer business
leads to smaller businesses post member permission. Initially, we were
completely focused on the NRI population. However, we have an India focus today.
There are 26 city portals worldwide. We generate some revenue from online
advertising as well.
Sulekha has recently received investment from Norwest Venture
Partners. How large is the investment and how does the partnership work for both
Sulekha and NVP?
Promod Haque's NVP has invested $10 mn in Sulekha. NVP is one of the most
reputed venture capital firms in the world with more than 45 years of experience
in building successful companies. This, coupled with NVP's strong interest,
many investments and relationships across various industries in India, made NVP
a great choice for Sulekha as we pursue aggressive growth plans in the coming
year. Sulekha.com plans to use the new capital to extend business development
and marketing, primarily through alliances, and expand its service offerings
into new vertical markets.
What kind of growth strategy have you put in place?
Sulekha's target market is the 50 mn online and 80 mn mobile users today which
are expected to grow to 100 mn and 200 mn users, respectively, in the next few
years. We have invested heavily in our sales force. We would also like to
develop our business through new alliances with mobile operators and the media.
For example, Sulekha Yellow Pages is available on WAP-enabled mobile phones. We
are also looking to reach out to smaller Tier II cities like Gwalior, Coimbatore,
Pune, among others. We are also investing on brand building activities. We have
been achieving 100% growth y-o-y over the last couple of years and hope to keep
it up. Page(s) 1
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