Ninemotion, Online SMB Exchange Marketplace shuts down – Founders share insights/experience.
Ninemotion (read our review)
, Bangalore based online marketplace/exchange for SMBs has decided to shut down it’s service.
Deepak Vinchhi, co-founder of ninemotion shares his insights/experiences:
“The only real failure in life is the failure to try.”
nineMotion Story, The End, Learnings
We started nineMotion more than two years back. The idea was to capitalize on a fast growing SMB outsourcing market of USA & Europe. Over the first 6 to 9 months, we developed a pretty good online product with key differentiators in connecting buyers and providers of services, helping them manage their offshore engagements, minimize risks, provide collaboration, visibility and many other features. After that, we have been trying to market and sell our offerings mainly in the US over the last 15 to 18 months.
From our experiences, we realize that we almost need to take a consumer marketing approach to reach our market. This is because our target segment consists of very small businesses, and in order to build a brand recall, we have to spend marketing dollars.
Secondly, an online marketplace is a winner-take-all game. More number of sellers will attract more buyers, and that in turn will attract more sellers – this can become a self propelling growth story but only if we reach a critical mass. There is room for only one player to succeed in the end. For example, there is only one eBay in the product marketplace space although many others have spent billions of dollars over the years trying to emulate eBay.
Thirdly, the competitive landscape has changed considerably in the last 2 years. Elance has raised a total of $65 Million, Odesk has now raised $35 Million and Microsoft has entered the space. We think that Google will also enter this space very soon. This is now a business of very deep pockets.
Under the circumstances, we decided that it is better to close the business rather than continue to throw good money after bad money. This decision has nothing to do with the current economic downturn.
What we could have done differently?
The approach we took was a more or less a big bang approach of addressing the entire market breadth which is pretty big, and the approach was too ambitious. If we had executed better and succeeded, it could have set us on an interesting growth path, but obviously it hasn’t worked.
If I were to do this again, I would choose a series of micro markets and try to penetrate them one at a time with deeper domain centric user experience. Even today, there are opportunities of working on such markets, but both I and my co-founder (Bala) have no appetite and energy to work on such opportunities any more.
Key lessons that can apply to other startups
If I were to distill some of the key lessons that can apply to most startup, they would be as follows:
- Even if the market is huge, it is better to cover it in a step by step manner - a small segment at a time. There are numerous examples of this from the past, but we ended up making the same mistake
- Make constant incremental progress in penetrating your market over a long period of time – one customer at a time – rather than banking on big bang marketing or PR
- Try out many different things that are broadly in your defined space in terms of product features, target audience, marketing and sales, etc. You never know what works or what may provide you with a significant leverage
- Build business for cash flow. There is no substitute for cash generated from the business
- If you are able to raise capital, raise it as early as possible and as much as possible – doesn’t matter at what cost. This gives you time to try out more approaches and a longer runway before take off
–
Wishing Deepak and Bala best of luck for their next venture.
About the author - Ashish Sinha is a Startup Mentor/Product Strategy Coach, and the founder/chief editor of pluGGd.in.
He has launched/managed couple of products (consumer as well as enterprise) in US and India, and now consults with startups/small businesses on their product/media strategy. He can be reached at: ashish (at) pluGGd.in [+91 98452 06443]
Microsoft is in this business??? whats their website for this? Please provide link
Thanks for sharing it.All the best for their next venture.
Thanks for sharing the experience.
Pluggdin team has done a great job and articles like this will bring more value to this site.
Thank you for sharing,Very helpful.
There will not be any clear winner in this space as Microsoft,Google interests lies only in marketing their own products in the end.
Every product companies should start such services with their own tools for marketing their products rather than a eBay like effect.
[...] oDesk/RAC and several other online exchanges and as ninemotion’s Deepak mentions it’s a deep pocket business: “..the competitive landscape has changed considerably in the last 2 years. Elance has raised [...]
Hi Ashish/pluggdin team,
Can you tell me about a startup story from India, which has managed to turn profitable? Every startup seems to be meeting the same fate. Though I am hopeful that we would get a winner soon.
Thanks.
Hi,
Ashish there are many startups that have been profitable and are doing pretty well. I think burrp and mapmyindia are good examples. Both of them operate on very different budgets. The Indian market has place for many more startups provided we concentrate on the technology and the business model concurrently.
Also, as far as Deepak knows what went wrong it is cool…he will know what not to do in his next endeavour.
Interesting and very honest analysis. Agree with all of it apart from the bit about raising money – there has to be something left for the original founders or else what’s the point of all the hard work. Anyway, good luck with the future guys. I think you’ll do alright.
[...] Ninemotion’s founder on shutting down an insights/experience gained. [**] [...]
Thanks for sharing this Deepak.
“Success is a good motivator and Failure is good teacher”
-Mahesh
Celebrating Life…
Hi,
I am also trying to launch a venture. I can say try and try. You can only try and you should only try.
Thanks,
Rajeev
http://www.brandsindiaonline.com
This is brilliant point
a) Concentrate on customers go step by step.
b) Raise as soon as and as much as possible..
Brilliant..
V