The Ledger
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Hariharan: Point-to-point ride sharing relies on scale economies, not network effects
“So I would say the general ride sharing, we think it's more supply side economies of scale. And what that means is the more drivers you have on the platform, you know, you can make sure that you get a good quality driver within five minutes, but that's where i…”
Anu Hariharan: Brands scale under Sarnoff's law, not Metcalfe's law
“So for brands, we actually think it's more like Sarnav's law. You know, some people argue, yes, it has Some network effect, but not directly incredibly value to the user, which is why the value is not as steep as Metcalfe's law, for example.”
Hariharan: Local execution gives Indian and Chinese startups an edge
“I do think there's a lot of elements in execution that's quite different and local to those markets. That's very different from The U.S. So it's not necessary that a U.S. Player going into those markets has all the advantages. I think there are local advantage…”
Hariharan: Foreign investors provide 90 percent of Indian startup funding
“One interesting thing that I learned in my recent India trip is that 90% of the funding is actually from foreign money and it's not from domestic.”
Hariharan: Indian Series A startups commonly employ 650 to 900 people
“For example, to give you an example, when you look at a series A, U.S. Startup, or a series B, if, you know, you sort of get surprised if they say I have 150 people or 200 people. Like, that's a lot of people. In India, it's quite common to say I have 650 or 9…”
Hariharan: Building Network Effects Is Easier on Mobile Than Web
“It was easier for platforms to build a network, I would argue, on mobile more than web.”
Hariharan: Marketplaces Do Not Inherently Possess Network Effects
“So I don't think that all marketplaces have network effects by definition. They have the potential, but different marketplaces are different at different stages of development in their evolution.”
Airbnb Saw Sluggish Growth for Three Years Before Achieving Liquidity
“The first three years of Airbnb was a real slog, because it's a global marketplace and they were trying to build supply. At the same time, they were also trying to build demand, and they needed to sign up the homes. They needed to make sure that people were, p…”
Hariharan: Platforms Do Not Require Viral Growth for Network Effects
“Platforms or marketplaces don't need to have network, viral growth to have network effects.”
Hariharan: Pokémon Go is the first massive light-AR mobile game
“I think this was the first, I would say, like a massive game that showed light AR meaning You could get some experience of rudimentary augmented reality without an additional hardware.”
Hariharan: Pokémon Go lacks true network effects
“My personal view is, it's too early to say whether they have a network effect. Given the gaming elements today, I don't think they have a network effect.”
Hariharan: Facebook's DAU/MAU ratio rose to 57% in its first 18 months
“The one metric that he really focused on in the first two years was Retention, and the way he measured retention was daily actives by monthly actives, and if you see their chart in the first 18 months, it kept going from 52% to 55% to 57%.”
Hariharan: Connecting 10 friends in 14 days drove early Facebook retention
“If someone was connected to 10 friends in 14 days, they were much likely to return to Facebook.”
Hariharan: Lyft Line and UberPool create true network effects
“However, if you look at lift line and Uber pool, I think those could have network effects because think of this, you're a rider, you want more riders using those because then you can share a ride to San Francisco from Palo Alto and therefore have a cheaper rid…”
Hariharan: Airbnb paid to acquire supply from its early days
“I think for Airbnb, supply was really hard. So they were, they spent dollars right from the early days to acquire the host.”
Hariharan: Amazon US delivery costs relative to transaction size are lower than India's
“Amazon itself says that their delivery costs, for example, as a percentage of transaction in the U S is a lot lower than in India.”
Hariharan: Indian e-commerce delivery costs reach 30 percent of net sales
“30% of net sales in India is delivery, versus Amazon in the U.S. Says it's about 10 or 11%.”
Hariharan: Two-factor authentication mandates hurt Indian online payment conversion rates
“The Indian central government has a two factor authentication protocol as a result of which what happens is it's the conversion rate obviously gets impacted because you have more steps to close the transaction when it's online.”
Hariharan: Chinese ride-hailing giant Didi invested in Indian competitor Ola
“And to add to that, Didi also invested in Ola recently in their latest round, and so this just goes to show how a player in China also has, you know, global ambitions, and it's no longer just the U.S. Companies trying to enter the various markets.”
Hariharan: U.S. tech giants dominate India without local equivalents like Alibaba
“You don't have an Alibaba yet in India. You don't have the buy, the Google of India is Google. The Facebook of India is Facebook.”
Hariharan: Tech startup attrition in India matches Silicon Valley levels
“In India, I actually see the attrition problems to be as significant as in Silicon Valley. You do see that a lot of engineers move across startups. They switch every two years or every three years, and there's heavy competition in terms of compensation and pay…”
Hariharan: Overlapping supply and demand gives marketplaces a distinct advantage
“The other advantage Airbnb had, has, is the supply and the demand actually overlap, right? So, for example, I was first a customer of Airbnb, but then I was open to listing the place as well. So, only some marketplaces have that overlap effect, where you could…”
Network Effects Originated in Hardware Before Evolving to Software
“Network effects began with hardware. It was first the telephone, then the Ethernet, and in today's world, we talk about it in the context of software companies like Facebook, right?”
Hariharan: Niantic uses micro-location and climate data for Pokémon spawns
“Because, so they like, they know the Andreessen Horowitz fountain, they know the fountain behind the Rosewood Hotel. They also know, they take information on climate and weather conditions, you know, for the gaming aspect of it, they decide, you know, if you'r…”
Hariharan: Mobile game in-app purchases historically relied on under 0.5% of users
“Historically, the in-app purchases, it really came from what they call the whale users, which are less than, like.5% of what the app users are”
Hariharan: Facebook spent zero dollars on user acquisition in its early years
“For the longest time, even to this day, they hardly spend money on acquiring users, right? And especially in the initial years, they spent zero dollars.”
Hariharan: Facebook penetrated 80% of US colleges in 18 months
“They did penetrate almost 80% of the colleges in 18 months.”
Anu Hariharan: Airbnb took almost 36 months to build critical mass
“It almost took 36 months for them to build critical mass and see network effect.”
Hariharan: Medium is the primary traffic source for non-viral tail posts
“For the non-viral posts, medium is actually the biggest source for the traffic, which was, you know, early indicators that they are able to match.”
Hariharan: Credit card penetration in India is only 4 percent
“Credit card penetration in India is only about four percent.”
Hariharan: Average internet data speed in India is two megabits per second
“The average data speed is like two megabits per second, and mobile is even worse than web.”
Hariharan: Cash on delivery accounts for up to 70% of Indian e-commerce
“Cash on delivery is still predominant, and depending on who you ask at any point in time, people would say it's as high as 50% or 70%.”
Hariharan: U.S. ranks third globally in internet users behind China and India
“I think if you look at internet usage globally, like the number one country is China. As Connie mentioned, it's like six hundred and fifty million users. The number two is India. So United States is actually number three.”