Supply as a business moat — Part 1
In the not-too-distant past, watching TV was a vastly different experience compared to what it is today. We used to have to sit in front of our cable or satellite channels at specific timeslots, eagerly waiting for our favorite shows to come on. We had to plan our schedules around these shows, and missing them meant no chance of catching up. Additionally, in households with only one television, there were often arguments about what to watch.
However, a magical change occurred that we didn’t even realize had become mainstream in our lives. A new type of content format emerged as a platform play, starting with YouTube, which would forever alter the way we consume media. Suddenly, we had access to a world of videos at our fingertips. We could watch anything we wanted, whenever we wanted. It was like having our own personal TV station, customized just for us.
Soon, other platforms emerged, each offering something different. TikTok came along, with its short, addictive videos that we couldn’t help but watch repeatedly. And then there was Netflix, which completely revolutionized the way we watched movies and TV shows. With its vast library of content, we could binge-watch entire seasons of our favorite shows without ever having to leave our couch. Before we could understand, these platforms had become integral parts of our daily lives. We watched YouTube videos during our morning commute, scrolled through TikTok during our lunch breaks, and settled in for a night of Netflix after a long day at work. The convenience and endless choices offered by these platforms have become addictive. And, this isn’t true just for video content. The change happened across content formats but stayed popular in their niche due to their varying consumption style.
What are B2C content businesses and how they are defining their content strategies?
Businesses belonging to the B2C content space, create the market for consumer-facing content products and services, such as digital media, online content platforms, social media, streaming services, e-books, audiobooks, podcasts, and more. In this space, companies create and distribute content directly to individual consumers rather than businesses or organizations. The B2C content space is highly competitive and rapidly evolving, with companies constantly innovating and experimenting with new formats, business models, and technologies to attract and retain.
Broadly speaking B2C content businesses fall under the four major categories.
Aggregators — which include services like Kindle and Inshorts that curate content from various sources and offer it to their consumers.
User-Generated Content (UGC) platforms — such as YouTube, TikTok, and Pratilipi, where users create and share their content with consumers.
Platform Generated Content (PGC) platforms- include platforms like HBO, DiscoveryPlus, and Alt Balaji that produce and distribute original content for their consumers.
Hybrid — businesses that combine elements of the above three categories, such as Amazon Prime or Netflix which offers a mix of original content and content from other sources. A bunch of businesses fall under this category at various points as a part of building a go-to-market strategy or offering an all-in-one experience at a later stage.
In the realm of B2C content businesses, a key factor for success has always been the ability to offer highly distinctive content to consumers. This differentiation creates a sustainable competitive advantage, often referred to as a “moat,” which sets a company apart from its competitors and makes it challenging for them to replicate or surpass. Various elements can contribute to building a strong moat, such as brand recognition, unique technology, patents, economies of scale, network effects, high switching costs, and regulatory barriers.
To achieve long-term profitability, engaging paid consumers on a platform is of paramount importance. And, content plays a crucial role in this. However, the dynamics of content differ across these businesses, including aggregators, user-generated content (UGC) platforms, professionally generated content (PGC) platforms, and hybrid models. To explore this further, consider the following question: When you subscribe to leisure entertainment services, do you primarily do so for specific content or for the overall experience and value it adds to your life? Think about popular platforms like YouTube, Netflix, Prime, or Audible, and how they influence your subscription choices.
You may have noticed that some over-the-top (OTT) players heavily focus on acquiring live sports streaming rights. PGC platforms and aggregators, on the other hand, rely on tentpole shows like ‘Game of Thrones’ or ‘Sacred Games’ to attract and retain users. These high-profile shows act as major draws that bring audiences to the platform and keep them engaged. Netflix, for instance, invests significant resources in producing Netflix Originals and acquiring popular series like ‘Friends’. By creating compelling, exclusive content, Netflix has established a strong reputation and differentiated itself from competitors. Hit shows such as ‘Stranger Things’, ‘House of Cards’,and ‘The Crown’ have not only garnered immense popularity and critical acclaim but also driven user subscriptions and retention. This emphasis on exceptional original content enables Netflix to offer a unique value proposition to its subscribers on recurring bases.
However, consider the case of YouTube. Have you noticed how it thrives without relying on a particular show or specific content genre? This is where UGC content businesses differ significantly from other players. Instead of investing directly in content creation, these platforms provide the infrastructure and tools for creators to generate differentiated content. UGC platforms often cater to specific niches such as fitness, healthcare, sports, gaming, or leisure reading. They operate as two-sided marketplaces, bringing together content creators and consumers. Platforms like YouTube allow creators to upload their videos and build an audience, while viewers can discover, watch, and share these user-generated contents. These platforms also provide monetization tools for creators and offer engaging features for viewers to interact with their favorite creators. Patreon, for instance, enables creators to offer exclusive content and services to their patrons in exchange for recurring payments, providing creators with management tools and financial tracking capabilities.
Building a robust user-generated content (UGC) supply is no small feat. It requires careful planning and strategic thinking. How do these platforms decide on a specific category to focus on initially? How do they position themselves as the go-to platform for a particular niche? And how do they expand horizontally, like YouTube, Quora, or Reddit? Furthermore, how does the product drive growth in building this vast supply, and what happens when the platform begins to monetize?
In this three-part series, I aim to address these questions by sharing the challenges, opportunities, and strategies we encountered while building the UGC supply pool at Pratilipi. As the number of users on our platform grew from a few thousand to millions, we learned valuable lessons from our mistakes. By sharing our experiences, I hope to provide insights that can benefit others in their own endeavors.
In this first part, I will delve into the community and content-focused experiments we conducted to establish a solid supply base which was needed to identify product-market fit. The second part will explore our product-led growth experiments, which allowed us to scale the writer base to an impressive 500,000+ creators. Lastly, in the final part, I will delve into the dynamics of monetization on the supply side and how it shapes the platform’s ecosystem.
Part 1: Community and content-first experiments to build enough supply to figure out PMF
Onboarding the first 100 writers
On September 14th, 2014, we launched our beta website and within a few hours, we already had our first thousand users exploring the platform! In the beginning, we focused on three regional languages — Hindi, Tamil, and Gujarati — simply because our small team consisted of individuals who were well-versed in these languages. The early days were filled with immense hustle as we strived to build up our supply. Two months prior to the launch, our dedicated efforts were aimed at having a minimum of 200 writers onboarded before going live.
To achieve this goal, we embarked on comprehensive market research to identify regional language writers with existing networks. With a list in hand, we adopted an outbound sales approach, reaching out to thousands of writers to introduce them to Pratilipi and what we envisioned for the platform. However, we encountered a classic dilemma during the onboarding process.
Writers posed a simple yet crucial question: “How much additional audience can you provide?” Since we were not yet live, we couldn’t offer concrete numbers. While some writers declined our invitation, a few kindly agreed, driven by their benevolence towards our passion for uplifting Indian literature.
Despite the absence of a sizeable audience, we remained confident that we could bring more readers to these writers than they had collectively garnered on well-known platforms like Blogspot or Facebook. Our response to their concerns was consistent — sharing their work on Pratilipi held no downsides for them in general. If things didn’t work out as expected, they could easily remove their content at any point. Pratilipi functioned as a self-publishing platform, enabling writers to independently publish their content. However, due to initial trust issues, some of the writers who agreed requested us to take their content from other websites and publish it on Pratilipi. To avoid future conflicts, we diligently obtained written consent of sharing via email from these writers.
Establishing the outbound sales funnel to onboard writers with existing networks was an all-encompassing endeavor. We left no stone unturned in generating leads from various sources. Reaching out to hundreds of writers through Facebook and Blogspot was just the beginning. To attract interested writers, we created dedicated Facebook groups and pages. Additionally, we actively participated in book festivals, offline literature events, and local literary community meetups, seizing every opportunity to personally connect with these writers. This initial phase was crucial for building our network from scratch.
Simultaneously, as we onboarded these writers, we embarked on another monumental task: publishing public domain fiction content in three languages. Our aim was to provide readers with a diverse range of stories when we officially launched. With relentless hustle and determination, by the evening of September 14th, we accomplished our goal of onboarding 200 writers across these three languages.
Were we able to build an audience for these writers? Did these writers stay?
After our launch, a few notable things unfolded as we had anticipated. As expected, the famous writers we had onboarded started sharing their stories on Facebook, accompanied by Pratilipi’s backlinks. This led their own networks to discover Pratilipi and some of them stayed to explore more stories by different writers. Concurrently, we initiated demand generation primarily through Facebook. We shared snippets of stories on our Facebook pages and groups, gradually amassing a follower base of over 1,000 before going live. To read the full stories, users simply had to click on the provided links and visit our website.
During this period, we conducted numerous marketing experiments to optimize our cost-per-click to attract users to our platform. We experimented with different audiences, creatives, genres, and snippets. However, as we were initially operating on a limited budget for the first 1.5 years, scaling these experiments was a challenge, even when they showed promising results. Nonetheless, once users began coming to our platform, we focused on monitoring their onboarding and retention experiences, particularly those originating from Facebook. Our main objective was to determine if these users returned on their own accord to read more stories similar to the ones that initially attracted them to justify the CAC. We noticed variations in traction across different languages, with Hindi and Gujarati establishing a more solid base of retained readers, while Tamil took a bit longer to achieve comparable results.
One early realization that emerged from our experiments was the expansion of the market. The users visiting our platform had limited exposure to traditional hardbound books, but they found our stories captivating enough to click on the links and continue reading on our platform. This prompted us to prioritize product-driven onboarding and the retention of these user cohorts, aiming to cultivate a reading habit from scratch. As we delved deeper, we observed that early users began discovering more stories within their preferred genres by exploring the category sections. To enhance this discovery process, we introduced our first feature, the ‘bookend recommendations’ which suggests similar stories upon completing the current one. Remarkably, even now, 40% of our readers discover new stories through the bookend recommendation after finishing a story. Within a mere six months, our hypothesis materialized, as readers who initially arrived at our platform via Facebook began exploring more stories and gradually transitioned to organic engagement.
We witnessed a surge in the number of readers consuming stories on our platform compared to other platforms catering to these writers. To keep them engaged and interested in Pratilipi, we personally curated and sent monthly reports showcasing the performance of their stories. This gesture proved invaluable, as we noticed some of these writers taking the initiative by sharing and publishing more of their stories independently on our platform. In fact, some even reached out to us via email, eagerly submitting their newer stories for upload. Thus, the influx of inbound content gradually gained momentum after the initial hustle of the first six months.
Next 1000 writers
As our engine roared to life, we witnessed a couple of exciting developments taking place simultaneously. The influential writers we had brought on board in our initial batch began to share their positive experiences and recommendations. In terms of organic growth tactics, we discovered that nothing could match the power of word-of-mouth, especially when it came to building our supply. Recognizing the immense potential, we made a deliberate decision to scale this phenomenon. To accomplish this, we launched a series of community-centered experiments, placing the community at the forefront of our strategy.
- Onboarding small scattered communities
We noticed that numerous writers were actively engaging with each other on WhatsApp due to their shared interest in writing fiction. There were over 10,000 such groups in Gujarati, Hindi, and Marathi alone. Within these groups, they discussed various topics, including writing styles, feedback from readers and fellow writers, and techniques for writing fiction. To tap into this network, we hired our first company employee, a community manager who actively participated in multiple WhatsApp groups. She introduced Pratilipi to these groups, and through her efforts, we were able to onboard the next wave of writers through these closed communities.
We realized that providing a platform for writers to receive real-time feedback from readers was an effective way to attract these groups, as it addressed their significant need for social validation. They began publishing their stories on Pratilipi and celebrated the feedback they received from readers (ratings and reviews) within their social networks. This, in turn, attracted more readers to our platform.
2. ‘Writer interviews’ to onboard the renowned writers
We quickly noticed the momentum in inbound growth. Happy writers were spreading positive word-of-mouth, attracting other writers to join the platform. However, there was an issue. Popular regional celebrity writers hesitated to join because it would place them on the same platform as beginners. To attract these writers, we conducted a social media experiment. We offered to interview them and publish the interviews on our platform and Facebook groups and pages, which had a combined audience of over one lakh. We requested them to create accounts on our platform and publish some of their stories, allowing our readers to engage with their work after reading the interviews. Idea was that once they understand the value of realtime readers’ feedback, they will publish their other ongoing webnovels also on our platform. The experiment was a tremendous success.
The interviews consisted of curated questionnaires that delved into the writers’ journeys and the inspiration behind their successful works, among other topics. This generated significant interest on Facebook from their own audiences. Once the interviews were published on our platform, the writers shared them on their social media networks, leading their Facebook followers to visit our platform on a large scale. This helped establish our reputation as an elite literary storytelling platform where even Sahitya Academy Award-winning writers participated. At the time, we were so small that some of these popular writers’ interviews drove the highest concurrent traffic to our website. You know the small victories! :)
We published over 200 interviews per language, and this experiment became so successful that we even received inbound interest from famous regional writers who wanted to be published on Pratilipi and be featured in interviews. The text interviews were a hit, and as we grew, we eventually expanded to video versions. Much later, we created our own YouTube channels to publish these interviews. Some examples - Hindi, Gujarati
3. Online writing competitions
We noticed that many new writers joining the platform through word-of-mouth were seeking themes or ideas to write about. To address this, we initiated an experiment that quickly became our primary channel for acquiring writers in the early days. We started hosting online writing competitions that lasted approximately a month. Participants were given a predefined theme, and within a limited timeframe, they had to submit their entries. These entries were then made available for readers to engage with, and the entry that garnered the highest popularity among readers was declared the winner. This tactic is still ongoing (check it out here) as a means to engage writers. It successfully attracted nearly 80% of new writers in the early days and more than 50% of existing writers to engage with the platform on a regular basis.
4. ‘Writer/Story of the Week’ celebrations on Facebook groups & pages
We observed that writers were sharing their stories on Facebook and WhatsApp statuses when they crossed a certain mark of popularity, for instance, a story crossing 1000 or 10,000 readers, or a story getting a well detailed review from a reader. This inspired us to conduct a social media experiment where we released weekly celebrations for writers and popular stories on our Facebook pages and groups. Based on the popularity algorithm, we started identifying candidates for these weekly celebrations. We named them ‘Writer of the Week’ and ‘Story of the Week’. A wave of anticipation and excitement swept through the writing community, sparking a sense of FOMO (Fear of Missing Out) among those who had not yet discovered our platform. Through this initiative, we achieved two goals: keeping existing writers motivated to write more and attracting new writers to join our platform.
5. Celebrating Writers’ Identity
In the early days, when our writer community was still growing and had less than 10,000 members, we often used to hit the road to conduct field surveys. We traveled to different cities in Gujarat, Madhya Pradesh, Uttar Pradesh, and Maharashtra to gather valuable feedback and understand the cultural nuances at play. What we discovered was pretty interesting. Most of the writers were hobbyists, writing on Pratilipi in their spare time, while only a small number pursued it as a full-time gig. Interestingly, many of these writers resided in smaller towns and cities, juggling their day jobs and squeezing in time to build their fan base on Pratilipi by churning out new episodes every day. However, there was a common hesitancy among them — they didn’t readily identify themselves as writers, thinking that the title was reserved for those who had published a physical book.
We wanted to change this mindset and make them feel accomplished. As a surprise for Diwali, we decided to do something special for our most engaged group of writers. We sent them a package containing printed professional business cards, with their profession clearly stated as ‘Writer.’ It was a unique gesture that had a huge impact within the community. They proudly shared these cards with their networks, strengthening their connection with Pratilipi. Following this experiment, we witnessed a transformation. Many of them began confidently introducing themselves as ‘writers on Pratilipi,’ even updating their introductions on platforms like Facebook and LinkedIn.
This initiative had a significant effect on the platform, attracting a rush of new writers who were eager to join and get their hands on those coveted cards. The buzz around this spread like wildfire on social media, contributing to long-term engagement among writers on our platform.
In addition to the above set of experiments, there were several content and community-oriented experiments we did in 2015 and 2016 to bolster our supply. When we first started in October 2014, we had a modest count of 914 stories published within a month. However, as time progressed, the numbers grew exponentially. By the end of 2015, we had surged to a remarkable 12,000 stories per month. The momentum continued unabated, and by the end of 2016, we had skyrocketed to an impressive 45,000 stories per month. In essence, the growth of supply on Pratilipi has predominantly been organic. We refrained from running any paid marketing campaigns to attract new writers to the platform.
How did a self-publishing platform emerge as a storytelling platform?
Pratilipi, being a self-publishing platform, has always fostered an open environment, allowing individuals to publish a wide range of content without specific restrictions. However, it is essential to note that explicit and objectionable content has consistently been subjected to our moderation protocols. To provide equal exposure and opportunities for various content types, both on and off the platform, we ventured into diverse categories such as food blogging, travel, healthcare, and more. Yet, amidst this exploration, something intriguing unfolded.
Fiction stories began to organically flourish on our platform, garnering unprecedented popularity and capturing the attention of a wide audience. Users who engaged with fiction stories showcased high retention rates and excellent levels of engagement compared to other categories. Remarkably, this trend was also noticed by the writers themselves. Those who had been experimenting with different categories to cultivate their readership quickly realized that feedback, appreciation, and popularity came more effortlessly with fiction content. Consequently, they started publishing more fiction stories passionately building their audience.
The fascinating aspect of this development lies in the power of network effects. As the trend gained momentum, it propelled Pratilipi towards becoming India’s largest user-generated content storytelling platform. Today, we stand proudly as a testament to the immense creative potential and captivating narratives that thrive within the realm of fiction on our platform as 10M+ stories.
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In the upcoming second part, I will delve into the specifics of our product-led growth strategy that played a pivotal role in expansion on the supply side. We’ll explore how we went from 1,000 to an impressive 500,000 creators, providing insights into their journey on our platform and the experiments we invested in. Additionally, I’ll discuss how certain user behaviors helped us gain confidence in building specific functionalities, contributing to the development of a highly engaged writer community at a larger scale.
Meanwhile, If you have any particular aspects you’d like me to cover in more detail or any relevant questions, I’m here to listen. Your feedback is valuable as we continue on this journey together. 🙂
