As per an interview with Medianama, Rediff CEO Ajit Balakrishnan mentions that “Vakow is struggling”. Rediff had earlier invested in Vakow and opted not to invest this time.
In case you dont know what Vakow is, its a social site where you can share your SMS forwards. Inspite of the fact they use a SMS long code, it isnt cheap to send out SMS’es – and without any clear revenue model, all those SMS’es cost adds up.
Besides, SMSGupshup and Google SMS channel, closest competitors for Vakow are well funded and so can continue to scale up without any issues.
Do you think all these SMS based services can continue to sustain themselves without any solid revenue model?
Wow, that was really a very quick break
I am glad that I am a pessimist. When I used to come across such services, I always to wonder how they are able to manage the costs. I knew that they received funding, but still I never got the answer. Then I thought that “advertising” was their source of revenue, but still I was not sure if advertising could really makeup the costs. AFAIK, advertising revenue from such online services is a meager unless you have tens of millions of good users.
As a result, I always wondered how this business exactly operated and used to think that these guyz are some genius kinda entrepreneurs!
You see, most of these web 2.0 startups are like rich kids living off their parent’s(investors’) money!
Recession is a great thing! It will help to differentiate between good companies with sales-profits and hyped companies living off investors money!
rohan,
sometimes the idea / app might have potential to become wildly popular. for example – look at twitter. twitter has no source of revenue at this moment. However, it has emerged as a serious platform for real time, short content sharing..
having a real revenue model is always great..But often times, a service without one could also strike gold.
you never know — you need to give it a shot if you believe in it.
nice post
Hi Pranav,
Thanks for pointing out to me what I has overlooked!