BackShareChat finds its niche with local languages
ShareChat has the potential to do well given the Indic language content gap on social media
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Bengaluru: At 9pm, on 31 December 2016, as their systems were flailing and their users were having a hard time, the founders of social app ShareChat were feeling strangely validated. More than 700,000 Hindi, Telugu, Marathi, Gujarati, Punjabi and Malayalam speakers had turned to the platform to wish each other and look for greetings and GIFs to wish friends and family happy new year. The traffic was so heavy the system crashed.
“We were sitting on half a million (daily) active users the day before. We usually account for some spike during festivals but this was just crazy," said Farid Ahsan, co-founder and chief executive officer of ShareChat, run by Mohalla Tech Pvt. Ltd. “We faced a loss but it was a good learning that the product had found some market fit and we will see some kind of traffic going forward."
ShareChat was founded in January 2015 by Ahsan, Ankush Sachdeva and Bhanu Singh, who studied at the Indian Institute of Technology (IIT) Kanpur, where they were part of a larger group of students prototyping and building software products.
After building products around real estate, crime analysis and debates among others, the three had stumbled onto the fact that Indians wanted content in their own languages and that it was not easily discoverable.
While they were working on the debating product, the trio created 600 WhatsApp groups and found themselves being added to various other groups without their consent, based on what they were sharing.
“My full name is actually Mohammed Farid Ahsan, and one day I found that I was added to the Mumbai Shiv Sena group. Why would that happen? We realized that the people in these groups only cared about whether they get pictures and videos that they liked, and they would encourage those that posted them," said Ahsan.
They then decided to become a one-stop shop for vernacular content and “think their way through that" as they “already knew that debates sucked".
And so ShareChat, the app that has been downloaded more than eight million times so far and where one piece of content is generated every second, was launched in October 2015.
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While the number of users and the amount of content that is created is very small compared to platforms like Facebook and Instagram, which attract hundreds of millions of active users a day, ShareChat—which has removed the option of posting in English on its app—is one of the few local language social apps to have gained this much momentum.
Mooshak, a social networking app in Hindi, for instance, has registered only between 50,000 and 100,000 instals, according to data on the Google Play store. To be sure, downloads from the play store are only partially indicative of the number of times an app has been downloaded, given that it is available on other sources as well.
Local content
ShareChat’s potential has attracted investors. The company has so far raised $5.35 million in venture capital funding from Lightspeed India Partners Advisors, SAIF Partners, India Quotient and Venture Highway. It raised $4 million in a Series A round in November that was led by Lightspeed.
“The next several hundred million people coming onto the internet in India are not English speakers. The problem right now in the market is that when those users come onto the internet in India, they don’t have much to consume. The prospect for this company is to be the leading destination for people who want to consume and share content in all the different Indic languages," said Dev Khare, partner at Lightspeed India. “If it succeeds, it’s a company that will have several hundred million users using it every month. To put that in context, today, Facebook has about 160 million users in India and it’s the largest internet service in India. And ShareChat is a company made in India for Indian users."
Ahsan attributes whatever success ShareChat has had to a sharp understanding of its target market.
“A lot of people tried before us as well, but they couldn’t catch the trends. Entrepreneurs don’t really care about this audience. You have to think like the user. You have to be in bed with the user, if that is the right word. I hope the readers don’t take it the wrong way," he said with a laugh.
“The combination of Jio, Micromax and all these things helped," he added, referring to Reliance Jio Infocomm Ltd and Micromax Informatics Ltd, which have made data browsing and smartphone handsets, respectively, more affordable for the masses.. “Maybe we’re the right guys to do this, but we’re definitely (doing this) at the right time," said Ahsan, who hails from Lucknow.
His co-founders also come from other similar small towns—Gorakhpur and Ghaziabad. Their understanding of their users also stems from having a “frugal mindset" as a company, a word which Ahsan stresses multiple times.
The beginnings
The three co-founders moved to Mumbai in 2014 after Ahsan graduated, and stayed there for six months with their combined pool of savings of Rs2-3 lakh from various internships (Sachdeva, who was still in his final year, and Singh, who was involved in a bunch of projects at IIT, would frequent back to Kanpur during this period).
“We had a friend called Prateek Shukla who ran (home rental start-up) Grabhouse in Mumbai. We used to sleep in his office and work from India Quotient’s office. There was a point in December 2014 when we shut down Opinio (debate app) and we started ShareChat as an experiment, when we had some Rs3,000 remaining and we still had two weeks to go in the year. So I told these guys, you have to go to college. You go, I’ll try surviving on those. So, we cut down on our food, I think I didn’t take a bath for 45 days because we would have had to buy soap and shampoo," said Ahsan.
“At that point, you know there’s no place to go back. When reality hits you it’s tough, but that also trains you really well to not go berserk when you get funds. You look at our office; we have not spent anything," he added.
The conference room of ShareChat’s sparsely furnished office overlooks one of the entrances to Forum Mall in Kormangala, the neighbourhood in Bengaluru most famous for its numerous start-ups.
The office, which houses 40 employees, has an open floor plan with developers, designers and the community team clustered around long wooden tables, a small pantry to one side and a closed room on another, where mattresses are laid out at night for those who want to sleep at the workplace.
“Normally, people are supposed to put walls. We just put the conference room here so that we have two separate areas. This frugality is inbuilt because when you survive on Rs3,000 and you have just one vada pav a day and you can’t take a bath, then the value of money increases fourfold, even fivefold," said Ahsan.
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Avoiding mistakes
Having worked on 17 products before ShareChat has also helped the company stay stable.
“All the newbie mistakes that a founder makes, we had made all of that while we were still in college. So that probably put us in a position where we could avoid them altogether. The simplest is the co-founder conflict. But since we had struggled so much making different products together in college, we are able to better decide unanimously what’s best for the company," said Ahsan.
The co-founders hope to steer clear of a key mistake that other start-ups make— over-hiring—and say they have not planned for how they’ll scale the company when the number of users increases.
“The 40 people we have cover around 79% of India’s population (ShareChat supports eight languages spoken by 79% of India’s population). If our systems are scalable enough, if we are able to build tools inside the company to help these people to reach out to all of them, a 60-people company would probably be enough to serve 85-90% of India. I just have to continue the same culture and just keep on optimizing processes," said Ahsan.
To optimize processes, ShareChat has also focused on DevOps, a function that makes sure systems are scalable from the start. The first person it hired in a technology role was for DevOps, despite having only 7,000 users at the time. The company now uses more than 120 tools built in-house for various levels of automation.
Reaching scale
The founders also claim they aren’t worried about how they’ll monetize ShareChat. The start-up does not plan to launch a full-scale monetization effort over the next 12 months, but “probably after that", said Ahsan.
So far, they have experimented with 10-15 major monetization models with various tweaks, like native advertising, micropayments, games and talent hunts on sets of 200-300 users. “We measure very closely what our break-even points are going to be with different models and at different scale, and we’re quite comfortable with that. So revenue is not that big an issue today," he said.
ShareChat is betting on reaching a scale that promises large revenue, even if the advertising revenue per user is low compared to a company that targets urban millennials.
If it succeeds in getting to where it wants to be, ShareChat will have the responsibility of shaping how many of its target users, people from the towns and villages of India who are using the internet for the first time, think about and understand the dynamics of the Net. These are the people who will get exposed to the possibilities that a vast network brings through interactions on the app.
This is also one of the most rewarding aspects in building the company—changing the internet landscape of India, said chief technology officer Singh and chief product officer Sachdeva, both of whom are co-founders at ShareChat.
For now, the company curates content around pre-defined hashtags. The category “wishes", for instance has the subcategories “good night", “good morning", “birthday", “congratulations" and “anniversary."
On the Telugu version of the app, the “good morning" wishes feed is filled with numerous graphics like a fuchsia rose with an ornate “morning" written across and a rooster in front of a full-moon getting ready to announce the morning.
The comments on these pictures— written in a mix of the Telugu script, Telugu transliterated in English and a smattering of English—are along the lines of people wishing each other a good morning, asking each other if they ate, if yes, what did they eat, where they are from, sharing their phone numbers to chat further on WhatsApp, a bot account that posts job openings for “10th pass", and in multiple instances, “brother, send me some girls’ WhatsApp numbers".
Early days yet
It is evident that ShareChat has a long way to go to create the kind of social experience that is expected on most social networks. The early versions of most social networks were raw as well. One of the first few tweets on Twitter, which is now used by heads of state across the world to communicate with their people, was “wishing I had another sammich".
Snapchat, a popular social media app which went public in March this year, less than six years since it was founded, has redefined what the social experience is, to a certain extent. Significantly, it was first known as a company used by teens to “sext" each other.
ShareChat says it also ensures that “when someone’s coming to the app, on a passive level, we have to avoid them interacting with those people who they’ll have a clash with".
But Ahsan dismisses concerns that this would lead to an echo chamber like that of Facebook. “We don’t customize posts, or change tags. We customize the experience to the level that if a girl has posted something, it should not go to 100 men who try talking to the girl," he said, adding that most of the new users on the platform do not have the same sense of privacy or understanding that what they do online can reflect on real life as well.
“This is not where we’re trying to change the psyche of a user," he said. “When you try posting something, you can stop comments. We are giving very, very small powers and automatically we are giving a lot more powers to some people who we want to save from nuisance, specifically women."
Ahsan also dismisses the possibility that by doing this, ShareChat may end up pandering to certain stereotypes.
“There is a recipes section on our app. In Hindi, the person who has the best recipes account is a guy. (Perpetuating stereotypes) is a possibility, but that only happens when you put your gut in front of your data. What your data tells you is, there’s a man who posts a lot of cutlet recipes and there are uncles who want to read all those recipes and share them with their groups, and then probably cook for their wives. None of the decisions we make are via gut. Everything is dictated by data," said Ahsan.
Indeed, its very popularity could be a challenge for ShareChat.
“Many people use phones that are on the lower end and they don’t have enough memory. WhatsApp clogs memory and these people remove everything except WhatsApp. People are very, very sensitive to data consumption. We actually dread that a user is going to go away because they spent a lot of time and opened ShareChat five times in a day. This is basically saying that a user loved you a lot, and then he uninstals you," said Anand Lunia, general partner at India Quotient, the first investor in ShareChat.
“Given the fact these people have not worked in such a start-up, any social media start-up, it’s amazing how they have developed. In the board meetings, for example, where we raised a round recently, first thing they said was that they were stopping their ad spends, which is completely contrary to what any other company does. They actually said we’ll stop that and see how far we can push. Last quarter, we hardly spent any money on advertising. And we doubled the numbers," said Lunia.
ShareChat has the potential to do well given the Indic language content gap on social media, which has become synonymous with Facebook, said Neha Dharia, a senior analyst at research firm Ovum Ltd.
“However, companies like Facebook also know that they need to tap into local languages if they want to get to the next billion, so they’ll have to watch out for them too," she added.
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