NRIs! Connected How an NRI portal is launching an attack on the Indian classifieds market

The Geronimo days of the Internet boom spawned plenty that started out big and ultimately got washed away. But occasionally, the Unpretentious grew to be something more. Sulekha, a website started by a husband-wife team of non-resident Indians (NRI), Sathya Prabhakar and Sangeeta, in 1988 is one such example. It started out with a few pages of text from closet writers. Everyone's got some words on the skin of their thoughts - and Sulekha (su in Hindi meaning 'good' and lekha meaning 'writing or an essay') was the vehicle for thoughts.

It is now one of the few contact companies that managed to make a successful transition to revenue models. It is the world largest online community for NRIs, has sales of Rs 16 crore, is profitable (no numbers), and wished away on offer from Rediff a year ago. Sulekha gets its money from a variety of services like advertising and matrimonals but its biggest money spinner is the online ticketing market for Indian Events in the US. Want a ticket for a Hari Prasad Chourasia concert or a Shah Rukh Khan gyration-bonanza? Sulekha is the place to get it. It is now the largest ticketer for online events in the US.

Recently, it launched a concerted attack on the Rs 1,000-crore Indian classified market. It opened up offices in three Indian cities, Chennai, Hyderabad and Bangalore. Over the past year, they have expanded their online classified across 10 Indian cities, set up their online Ids to get SMS updates. In India, the business is still nascent and dominated almost entirely by print. But globally, certain companies have been driving the market. Ebay recently acquired Craigslist, an American Classifieds company and, most recently, a Dutch company that focuses solely on classifieds. That launched plenty of online moaning by Craigslist die-hards that the spunky site would lose its attitude. In India, Sulekha will run into companies like Sify Online and Indiatimes that have been building the Indian Classifieds market for a while now.

What is interesting and a bit surprising is that through all of this original writing focus has managed to stay alive. Just last month, Penguin announced a humour writing contest on Sulekha, a $2,500 award and publishing contract. Two years ago, Penguin had also picked up the best of Sulekha's writing and Publish a compendium called Blac, White and Various Shades of Brown. It published authors like Abbas Tyrewalla (scriptwriter of films like Munna Bhai MBBS) and Nagesh Kukonoor (of Hyderabad Blues Fame).

The site was originally called Dakghar (Hindi for 'post office') and connected IIM Calcutta alumni. Prabhakar himself was a wannabe writer, and so Sulekha was born. Within six months, it became clear that something wonderful was happening and the site was picking up momentum fast. The two supported the site for two years before raising about $4 million from a private equity investor group in 2000.

"Through Sulekha has sice transformed from a literary webzine to a multi-faceted community with scores of new services, the name remains to signify its community-driven ethos," says Prabhakar."The evolution of Sulekha happened very fast from the moment we realized that we are not just a webzine, but an interactive global platform for Indians to connect, network and transact. The just opened up a whole world of possibilities.

Prabhakar is your quintessential bright engineer heading west to make a living, but who somewhere along the way change his plans. He got into all for IIMs but chose to do his Masters in computer science from the University of Florida (Gainesville) and then an MBA in international finance from the University of Florida in 1989. After a corporate stint, both his wife and he left their jobs to set up Sulekha.

The success of Sulekha proves, yet again, the wise spending has been key to the successes of early Internet start-ups. There very few exceptions that have flouted this rule and got away. Baazee (now E-bay India) would be one of them. But it had the advantage of having raised millions of dollars, largely from News Corp before Noah's Ark closed the gate on funds after the Internet bust. But there are very few such examples. Two, relying only on advertising as a potential revenue source for eyeballs was always a mistake. Sulekha made none of these mistakes.

The first three years of Sulekha after it got funded were the worst years in Internet's history where online ad-spend was next to nothing. The initial investment that was meant for one year stretched to three. Initially, the business model was purely content-driven advertising but then was de-risked to include classifieds, matrimonials, and event ticketing. Two, the founder made a strategic decision to shift the entire Sulekha development, support, content and sales to India to reduce the fixed cost structure. "Without this we would be dead by now," says Prabhakar.