I found this on Knowprose.com written by Taran Rampersad, a Caribbean blogger who also has the most comprehensive list of Caribbean blogs online right now. He’s responding to the post I wrote on ‘Look Who’s Betting on a Caribbean Dotcom Boom. Have a read of his response. He makes some quite valid points. Let the debate begin
In keeping track of references to KnowProSE.com, I came across ‘Look Who’s Betting on a Caribbean Dotcom Boom‘ despite the fact that they didn’t actually link the site (or even link to the Caribbean Blog List). I read it with some amusement because there is a trend in Caribbean web entrepreneur circles to do exactly what the article was talking about. My thought on that is that the Caribbean web entrepreneur circles are too small… but I get ahead of myself.
The premise of ‘DotCom boom’ is, in and of itself, flawed. When the global DotCom boom hit, for every single success there were 300 failures. This ran into the DotCom bust - basically the boom was not lowered, it was dropped. Millions of dollars were spent on creating Internet presences - I know some companies paid that much simply for a web page with some snazzy flash because the Internet was popular. The Kool Aid being passed around was something that Georgetown, Guyana, became infamous for.
Subsidizing Growth
The article goes into internet penetration figures - something I reference quite a bit but maintain a pound of salt with which to swallow them. But the figures themselves do not reveal the actual issues in the context of the Caribbean. I raised one of the issues, again, when I posted about how the Caribbean Internet Forum 2008 requires a bank draft for registration. How can there be any sort of ‘boom’ when you can’t have practical microtransactions? I see an email from the coordinator of that event; I’ll check it after I write this.
Where the Internet truly boomed was with microtransactions. A simple thing such as Google Ads - which, in truth, must be a configuration nightmare at times - brings income to perhaps millions of users around the world - but a person in the Caribbean will likely have to have money sent to them to deposit in banks that will take… two weeks or longer to clear. That’s not how one does business globally. That, on the information superhighway, is a fatality.
Microtransactions subsidize growth. eBay, in all of it’s selling of obscure artifacts from virginity to Pez dispensers, allowed everyday people to make money while allowing them to not only subsidize their own bandwidth but to profit from it. The Caribbean, aside from the Bahamas, has not figured out that this is a necessary step. Other developing nations, such as China, do. Any gear-head knows that a small engine performs better if you recycle the exhaust to produce more horsepower - commonly known as turbocharging. Turbocharging development works in much the same way. As it is, the Internet remains a liability because banks within the region do not seem to think that accepting payments on the Internet is something that they could profit from. Instead, they profit from the interest on float from cheques/checks pulled from foreign banks.
You want to accelerate the Caribbean’s use of the Internet? Hold a bank up at gunpoint and, instead of robbing them, demand that they give you the ability to receive funds. Seriously - don’t do that, but the tone seems necessary.
Caribbean Social Networking
Caribbean specific Social Networking is the biggest mistake any serious web entrepreneur can make. Let me say that again: Caribbean specific Social Networking is the biggest mistake any serious web entrepreneur can make.
Now I will explain why.
Large social network sites make money off of people who use them. If you’re going to create a social networking site, allowing access to people with disposable income makes sense. In case you haven’t been looking around, my friendly entrepreneurs, the Caribbean doesn’t have a very large middle class - or population, for that matter. Thinking inside the ‘Caribbean Box’, while all nice and warm and fuzzy, is - pardon me - foolish. If your goal, as an entrepreneur, is to make money (aside from the warm fuzzy ‘adding value’ stuff), guess who your market should be?
Anyone and everyone with an Internet connection. And maybe a lot of people who don’t.
This isolationist sort of thinking is counterproductive on the Internet. I’m not sure where it comes from, but in the Caribbean it is not limited to the Internet. Outside of the Internet, there are practicalities that might need to be addressed, such as postage or taxes1. On the Internet, dealing with social networking, these issues are not a big deal at this time. The Caribbean’s entrepreneurs are only isolated because they want to be. As a bit of an entrepreneur myself, I can honestly say that almost 100% of my Internet related income comes from the global economy - not the accident of geography of my Internet connection.
If there is to be any sort of growth, one has to look at the bigger picture - and the bigger picture is much more lucrative.
And here’s another thing: Social networking sites rise and fall. Never be impressed with a peaking business. Be impressed with the consistent business.
- 1For example, no one can import cost-effective hybrid cars into Trinidad and Tobago right now because they say that the effective engine size is what they tax - thus a motor in combination with a small engine gets taxed very heavily as it is seen as the equivalent of a 6 cylinder. So much for the environment.
I actually like some of the sentiments explored here by Mr. Rampersad, and as a Caribbean web entrepreneur I disagree with a couple.
Things I agree with:
1) The inability to accept micro-transactions and work with Caribbean banks on transactions is indeed a crippling crutch for many of the business models that have succeeded elsewhere online.
2) A fairly obvious point, but true nonetheless, that for every success there were, are and will be failures. Should that prevent people from taking a swing? As one entrepreneur to others out there, of course not!
Don’t be naive about the odds of success, but don’t be a little scaredy-cat either. Be smart, plan well, execute, and give the best account of yourself possible.
Things I DISAGREE with.
1) Caribbean affiliation being quasi irrelevant for money making. I don’t love the idea of building a me-too social network site that much myself, but there is absolutely value in building “affiliation destinations”. There are examples all over the web that have succeed. blackplanet.com, jewish or indian specific dating sites, and many more.
The caribbean is not the biggest market, but so what. Anyone who successfully aggregates that small market will still make money with a sound smart business model. It’s the latter thing that is the critical factor in my opinion, not that affiliation for the Caribbean is not a good thing to go after.
Have thoughts? share here or via email. cfarrell@caribbeanideas.com
September 24th, 2008 at 3:56 pm
“Caribbean specific Social Networking is the biggest mistake any serious web entrepreneur can make.”
He is only half-right.
Focusing only on Caribbean people INSIDE the Caribbean is not wise in my opinion.
When you look at what Indian sites have done in going after the Desi group, their Gen Y, that live all around the World, you see what a Caribbean entrepreneur SHOULD be doing.
Jamaica alone has one of the largest diasporas in the World, with essentially the same number of Jamaicans living INSIDE Jamaica as living OUTSIDE.
If you add up all Caribbean people living around the World, the market is much larger and the desires to be connected increase tremendously.
Of course, a sizable potential user base alone does not make a good venture.
If no one wants to advertise to them, you still won’t make money and selling to them directly from the Caribbean is so hard as Taran rightly points out (hence why my venture is incorporated in the US).
Opportunities abound and VIbesconnect, through its name, and its push for non-Caribbean members, has proven that solid ventures throwing off lots of cash can be born in the Caribbean (it seems to be more based in the US now though).
My mantra is to “think globally and act locally” - I see too much local thinking, especially in the naming of sites and target markets.
Lastly, calling it a “boom” now is a little premature, but the boom really is coming - just wait for the capital to show up after one person does well.
September 24th, 2008 at 7:19 pm
WRONG, WRONG!! with niche social networking site, the mistake is with choosing a Caribbean specific domain name. You can have a successful (make money) Caribbean social networking site. The strategies below:
> Choose a domain name that is more Global
> Develop a solid Caribbean Branding with such domain name, so when visitors from the Caribbean hear that name they “THINK” of it as a Caribbean website( vibesconnect.com good example)
> Optimize your website to attract a Global reach through search engines
> Other strategies are undisclose lol….
Note: With Caribbean social networking site(THINK), you are better able to attract local businesses who wants to advertise on your site…..
Good there are differences between Online Dating and Social Networking….. cause my site gotta to be Niche lol, Caribbean Online Dating. What they say Niche Online Dating is the future, Hmm!!
September 25th, 2008 at 12:22 am
I am liking this discussion!
The question of ecommerce which includes microtransactions have been an issue for years in the Caribbean, it’s as if we’re waiting for Godot and I hope not.
Regarding whether focusing on the Caribbean or Caribbean Diaspora or taking the Caribbean to a global market will result in success, only time will tell.
I called it a boom as I recognise where we are in the process and that a boom is pending and the elements to make it so are coming together - in some respects very fast and in others too slow. Regardless, I remain optimistic about the rise and boom of the Caribbean Web.
September 25th, 2008 at 3:05 pm
I am liking the discussion too and I agree that being the first facebook-like, ebay-like, etc. venture in the Caribbean could have potential - it seems to have worked for job sites.
However first-movers don’t always have an advantage, especially if they move too early and don’t have enough capital to stay alive while advertising dollars in the Caribbean take years to migrate online in significant amounts.
I ask these questions:
(1) How is the entrepreneur defining “Success? - revenue, profit, pageviews, registered users, impact are all measures that can be used
(2) What are the opportunity costs of trying to aggregate the Caribbean? - The same time, energy and capital could be deployed on some other venture that is not nearly as complicated.
Do you have something better to deploy your capital, like aggregating Caribbean people in North America and charging them directly since they can already pay?
September 25th, 2008 at 8:21 pm
Caribbean Dotcom Boom? I think the Caribbean internet will be significant. However, I don’t think there will be a boom. So entrepreneurs should plan for a long haul.
Social networking? Who knows, it has proven to be a marginal business model at best, so manage your expectations when it comes to the Caribbean.
October 3rd, 2008 at 4:39 pm