Since this time, I have connected with many people, from some of the best in the Internet domain to some real sharp entrepreneurs, who have given their comments on the various business models which startups and the established Internet/ Online companies are following.

Scale up or Shut Shop

Out of my interaction a couple of days back with a highly placed and successful Internet entrepreneur, a revelation jumped out, which in a way took me by surprise, as I was always present to it, but not really in the real sense of the action.

Over a cup of coffee, we discussed the following:

1. Is working with SME’s in India really that easy into Social Media?
   • Are they good paying customers?
   • Are they easy to grab?
   • Do they really have the time and resources?
2. How, many huge clients (some of the top companies in India and Abroad) are looking for all kinds of services into Social Media and are ready to pay for innovative and rewarding work

Now, I had this idea about how social media campaigns are made for these big fat clients, but never had someone who is doing it in real time, telling me, how much of it is true!

Thus came the BIG realization!

There are these big companies who are asking for partners in the online world, who could do some really innovative stuff. When I talk of innovation and results, I am in a way referring to the likes of Sunsilk Gang of Girls and TATA TEA Jaago Re.

But what I was not aware of was, trivial and almost commoditized offerings in Social Media as creation and seeding of content on the various Social Media channels, these BIG companies are asking for such services as well as an integral part of the offering and are paying good sums for the same.

Many small online marketing companies are offering the same set of services to their clients which represent the SME/ Startup space.

But would the business model sustain?

I am not saying NO, but surely I think its going to be very very difficult. Even if as an online marketing company your differentiation is the market that you are serving, you still have to consider that your market should be sustainable enough and you should have enough resources to crack the market. Some questions that you should answer:

1. How long is your sales cycle?
2. Do you have enough resources to hang onto your tables?
3. Is a low paying and yet more demanding market, the best way for you as a startup?

Moral of the story?

Am I saying that small online marketing companies would not sustain? Well, not really! But surely such companies would find it really hard to sustain. The model over a longer run is surely not sustainable. Moving up the chain and crossing over to the clientle, which is sustainable for your business, is an absolute essential.

Price war?

Not really, in my personal opinion, price is surely not a differentiating factor which smaller companies can establish and fight over. Otherwise the shark will surely eat away the smaller fish.

Finally

There is enough business around, all you need to do is create the right set of expectations with the client and deliver innovations which would help the client get a high over, through short term wins, and will also help you establish long term relationships with your high net worth client!