Earlier this week, we did an interview piece with Thomas Clayton, the CEO of Bubble Motion. We spoke about how there are multiple mobile chat platforms in Asia including Line, Kakao Talk, Whatsapp, Viber and WeChat. In this second part of the interview piece, we dug deeper to see what these platforms mean for the different stakeholders and how Bubble Motion is leveraging on them.
As a mobile chat app user, there are multiple platforms that we are using. Do you see this more of an opportunity or problem for startups and advertisers?
Ultimately, this is a problem and I don’t necessarily see it as an opportunity for startups – unless many of them were to start opening APIs to send and receive messages to and from their apps. However, there is a strong disincentive for the leaders in the space to not do this; thus, I don’t foresee this happening anytime soon. And given the strong “network effects” of communications and messaging apps like these, it truly is a “winner takes all” market. Many industry pundits point to the fact that it is very fragmented in many markets today in terms of market shares, as proof that it is not a winner-takes-all market. However, this is simply because we’re not at the end game yet – we’re still in the midst of the battle in most countries. If you want to see what the endgame looks like – look at Kakao in Korea or almost just as strong is Weixin in China – there isn’t much room for a second player in either of those markets at this point – at least from a user’s perspective.
These battles still have a long way to go. Switching costs are extremely low now – not like the early days of email or IM. With phone book and Facebook integration, any user can quickly get up and running on another chat app in a matter of minutes and often have many friends on that platform from the beginning. Moreover, with all of the viral hooks that instantly notify all of your friends that you’re using the app, entire networks of friends can switch over in days. One has to fear that this battle will never be won – and that any leader is ultimately susceptible to a new upstart with a cool, compelling set of differentiating features or a much slicker UI and UX. The lock-in is not nearly as strong as we’ve seen traditionally across so many other tech businesses.
This could cause problems for advertisers, as they may have to place early bets with the realization, they maybe betting wrong for the long-term. Today, there is not a ton of advertising on any of these platforms, so its not serious issue yet. Most of them are monetizing through means other than advertising, especially since mobile advertising is still in its infancy in Southeast Asia and it would be difficult to build a sustainable business of their scale focused on mobile advertising today. The closest is Line, which charges big brands upwards of US$200,000+ for “official accounts”, and reported that 92 brands as of Q1 have signed up for these accounts. Hopefully, most of these brands are in Japan, where 80 percent of their revenue is currently derived. I know there are a couple in Thailand, and that’s probably a safe bet for those brands as well. However, if I were a big brand in the rest of Southeast Asia, I wouldn’t jump on the bandwagon just yet, especially at that price tag.
How does Bubble Motion tap and leverage on these opportunities?
To date, we’ve largely steered clear of this space. Obviously, there are a ton of synergies between Bubbly and these players, but we’ve only begun discussing how to leverage this complimentary nature. We’ve been growing quite fast, as have all of them, so its hard to focus on partnerships when you’re so overwhelmed with organic growth and all of the operational issues that come along with it. Longer-term, as we’re more of a public microblogging medium primarily for short audio snippets, but also text and photos, we could certainly help any of these players become a lot more broadly social in any of our core markets – namely India and across Southeast Asia.
Moreover, with more than 1,000 regional celebrities actively using Bubbly, we could really help them in their “hyperlocalization.” Lastly, through all of our operator integrations, we can terminate both voice and messaging to the operators’ networks across the region. With more than 80 percent of the region still being on feature phones, I could see us helping these guys terminate to feature phones across the region – that would be a killer competitive advantage – as there is no other way to reach the masses in India and Southeast Asia today.
What’s new for Bubble Motion and what’s moving forward for the team?
We just released a completely revamped UI and are pretty excited about the direction. App UIs are evolving extremely fast and we felt like ours was very “2012″, so we upgraded it to be more “2013″. And we have even more innovative features planned for the next release next month. We’re doing a major release every month now, so things are moving fast.
We’re also very focused on our geographic expansion. Indonesia, India, Japan, and the Philippines have been phenomenal markets for us; however, this year, we started to seeing great growth in the rest of Asia, especially in Thailand, Vietnam, Malaysia and Korea. And the Middle East has grown like a rocket ship for us. We have 100+ of the biggest name celebs there that started using the service – literally overnight – and that has led to organic growth that wasn’t even on our radar six months ago.
We’re pretty excited about the rockstar team that we’ve built here in Singapore. I’ve had 6 companies back in the Valley and I feel like this is the best development and product team I’ve ever worked with. We’ve worked hard to recruit the best of the best from all over the world. We now have employees from 19 different countries and that diversity combined with their caliber has led to amazing results. Its definitely an exciting time to be a part of the Bubble Motion team!