Platforms and marketplaces, which facilitate either communication between two groups or trade between sellers and buyers, go through the typical chicken-and-egg problem – to aggregate a decent number of users at the two ends — to take off. Facebook went through it, Twitter too, and likewise YouTube and Instagram as well. However, rarely or perhaps never in social media history, a networking platform has been fortunate enough to almost bypass it, within 10 months of launch, on the back of a government’s conflict with a corporate. Social networking startup Koo’s rise in the number of downloads to over 4 million in the past week showed what real network effect could mean in the digital space. But how long it could last?
Driving Critical Mass
What drove the windfall for Koo in the current context arguably wasn’t the Atmanirbhar narrative, it was the government’s indirect assertion of its my-way-or-the-highway stance to Twitter over non-compliance of law with respect to the alleged spread of misinformation on farmer’s protest by multiple accounts on the microblogging site. Consequently, the app was flooded with right-wing support along with endorsements from A-listers and who’s who of the entertainment, politics, and corporate worlds including Anupam Kher, Kangana Ranaut, Piyush Goyal, Prakash Javadekar, Ravi Shankar Prasad, Smriti Irani, and more. Several ministries and government organisations also jumped to koo their thoughts. However, according to experts, it would take more than just backing from public figures momentarily driven by self-reliance fervour for the yellow chick (Koo’s logo) to spread its wings wider and fly high.
“Putting celebs in any brand helps but it is based on user experience, the service’s overall functionality, data security, and accessibility. Endorsements may work for a shorter duration but if the app is not stable and sustainable in the long run, it won’t work irrespective of the audience you cater to. Google had also tried Google+ but it didn’t find adoption even as there were multiple top profiles on the app,” Anoop Mishra, one of India’s leading social media experts told Financial Express Online.
The migration to Koo, launched by Aprameya Radhakrishna who co-founded the cab-hailing app TaxiForSure in 2011 and sold it to Ola in 2015, was akin to how people switched from Twitter to another social network Mastodon developed in 2016 by a German developer Eugen Rochko. The trend came to light following Twitter suspending Supreme Court lawyer Sanjay Hegde’s account last year over his usage of German national August Landmesser’s 1936 image of allegedly refusing to salute Adolf Hitler as his account picture. The image, according to Twitter, amounted to ‘hateful imagery’. While Hegde’s account was restored but it was again suspended because he retweeted a 2017 tweet by CPI-ML member Kavita Krishnan carrying a poem written by poet Gorakh Pandey against the death penalty, titled “Unko phaansi de do.”
“While there was a similar migration to Mastodon last year, many people continued posting on both Twitter and Mastodon to engage audiences. We might see a similar development in the case of Twitter and Koo as well. Sustainable growth usually only takes place when a critical mass of users decides to stay on your platform, which we have to wait and see,” Udbhav Tiwari, a public policy advisor with Mozilla Foundation told Financial Express Online.
Koo didn’t reply to a detailed questionnaire seeking responses for this story.
However, this isn’t the first time that an Indian startup is operating in a market dominated by foreign rivals. Ola vs Uber, Flipkart vs Amazon, Quikr vs OLX, Zomato and Swiggy vs Uber Eats and more have fought it out in the Indian market. Many had perished while a handful had either succeeded or managed to remain an aggressive competitor such as Flipkart, Swiggy, Zomato, Ola, and more. Nonetheless, rivals here had already acquired decent might before they took on competition. For Koo, which has positioned itself as a microblogging platform for the non-English or vernacular audience, Twitter may prove to be quite overwhelming even in regional markets.
“Critical mass is needed for long-term growth. Once Koo gets that mass and if they manage it well, they have a good shot into the future. Without critical mass, it is difficult to do well long term. Without this user pull, it is very difficult for them to succeed as thought leaders and opinion leaders drive audience,” a leading investor in India’s social network space told Financial Express Online requesting anonymity.
To ensure Koo becomes the de facto channel of communication, at least for the government and economy-related developments, the Modi government might completely move away from Twitter or perhaps keep it as a distant second option. So, what this could essentially do is drive all media handles, corporates, associations, and possibly everyone to the Koo app for relevant information. This would certainly provide the heft Koo would aspire for to gain decent size and a true leg up to the Atmanirbhar vision.
“Indians now have a choice between Twitter and Koo. Tomorrow twitter cannot shut us out. Indians should never be at mercy of a business registered outside India. We don’t lack technology, human capital, and ability. We had bad government policies which have been removed. However, we must not shut foreign companies. The infrastructure is good in India and will further improve. Hackers can go after every large technology company. We shouldn’t throw cold water on our own startups,” T.V Mohandas Pai, Chairman, Manipal Global Education Services told Financial Express Online.
India’s social network users are likely to grow from 326 million to 447 million in 2023, according to the data from Statista. The country is already the second-largest social media market worldwide after China that will have more than 1.1 billion internet users accessing social networks in 2025, up from 926.8 million social network users in 2020. Currently, India is the third biggest market for Twitter with 17.5 million users as of January 2021 while as of Q3 2020, Twitter had 187 million monetizable daily active users globally. In comparison, Facebook had an eye-popping 320 million users in India – its largest market as of January 2021 while its daily active users as of Q3 2020 stood at 1.75 billion globally. Further, Twitter’s revenue in 2019 was $3.46 billion and Facebook’s 2020 revenue stood at a staggering $85.9 billion, as per data from Statista. While Twitter was launched in 2006, Facebook started in the year 2004. The market, as implied, isn’t too big for microblogging globally.
Moreover, the microblogging market irrespective of the focus on English or non-English speaking users in India has a problem. The Majority user base is one-sided – it only wants to consume content and doesn’t want to interact. “If you take a normal distribution of let’s say 100 people doing microblogging and ask them to write few lines of original content, they won’t be able to do. It will not work. I will be surprised if that happens. Unlike in the case of entertainment, where you can sing one original song in multiple different ways and create content, in microblogging each post has to be unique as there is no entertainment quotient,” another investor in social network space told Financial Express Online.
To put this in a relatable context, only 10 per cent of most-prolific US Twitter users created 92 per cent of total tweets posted by US adults, based on the Tweets collected via Twitter API from November 11, 2019, till September 14, 2020. This was up from 80 per cent in 2018, according to American think tank Pew Research Center.
Twitter didn’t reply to an email seeking comments for this story.
Despite that investors would want to back microblogging platforms. “Even if investors don’t make financial returns, it does great PR. If I was an investor in Twitter’s competitor, I would be telling my investors about it globally. They will relate me as one of the good investors. Microblogging is unlikely to get a lot of capital support in India because investors know it is a small market. So, you won’t find large investors putting money into it unless they have political reasons and objectives to do that,” the investor added.
For a small cheque though, it makes sense for at least early-stage funds to invest in the microblogging market as it is more about brand value. “It is like buying a logo of the company that’s taking on Twitter. This is worth a few hundred thousand dollars to invest. I would certainly be interested in the brand and visibility quotient that companies like Koo would offer if they become a significant player in a space dominated by Twitter,” the investor said. Koo, in its earlier form as Vokal — the Indian version of Quora, had raised capital from Chinese investor Shunwei Capital. However, Radhakrishna had claimed recently in a Tweet that the investor will be exiting the company soon.
In its conflict with Twitter and support to Koo, the Modi government has indirectly shown the American company who is the boss. Last week, IT Minister Ravi Shankar Prasad in the Parliament had said, “We respect social media a lot, it has empowered the common people. Social media has a big role in the Digital India programme. However, if social media is misused to spread fake news and violence, then action will be taken.” However, the government won’t like to go all out and ban Twitter, unless it wants to join the club of China, Iran, North Korea, and other countries, which had blocked the microblogging site, that might hit its global image as an investor-friendly and open economy. Instead, Koo has come in handy for the government to convey to Twitter that India has the wherewithal to build and do things on its own terms without outrightly rejecting any foreign enterprise.
“I don’t think keeping Twitter out is viable because its network effect is too strong. But strange things happen in technology and one cannot discard any possibility. The network effect will fade away only if it gets banned in India for at least 6-8 months to given enough time for Koo to create a critical mass that will be helpful for sustaining the network effect. Even in that scenario, once Twitter is back, people will move on as it has become a global news and communication product,” the second investor quote above added.
Importantly, for Koo, it would be critical to track and analyse each and every post on its app across languages to avoid any backlash from the government or any group. It would have to be on the right side of the law and yet remain a platform for free expression and ensure user privacy. Moreover, in situations of even a tiff with the local authorities or state governments, the app would have to be mindful of its responses. “Koo is working in multiple languages and in such scenario, their algorithm must be very strong to filter out the slangs out of the post that’s inciteful. There AI must be able to track all content in available languages,” said Mishra. Last week, French ethical hacker Robert Baptiste, who goes by Elliot Alderson on Twitter, had accused the Koo app of leaking user data including email, date of birth, name, marital status, and gender. However, Radhakrishna had refuted the claim.
Most of the user growth for Koo has literally happened in the last three weeks. Usually, in technology companies, teams that do content moderation fall under trust and safety which is a very rapidly evolving and complex field. While technology is critical, having dedicated teams for surveillance cannot be avoided. “While there is a basic role that technology can play for automated actions, you always need trained humans in order to detect nuances, such as legitimate news, satires, public interest, etc. Large technology companies have thousands of trained staff working on content moderation all over the world and still struggle to do a good job. For relatively new apps to do a good job on content moderation, they will need to have similarly trained teams in each of the languages they support to spot trends and carefully review decisions before taking content down. It certainly requires a lot of resources and technological capabilities to pull it off at scale,” added Tiwari.
Lastly, companies like Koo would also have to decide on whether an internal policy of the company would take precedence over the Indian law during an instance of conflict and if so, to what extent. “Several microblogging platforms had appointed nodal officers etc. in India and were equally participating in the legal proceedings before the courts in India and now for them to turn back and suggest that Indian laws do not apply to them is itself contrary to their past actions (especially before Indian courts),” Rahul Goel, Partner, AnantLaw told Financial Express Online.