Category: Uncategorized

Places & Internet – Evolution of reviews & ratings and the future of local discovery

Our lives revolve around places. Every day its your home, office, neighboring shops, malls, parks or dining out and when you traveling its the airports, train stations new cities/countries, tourist attractions etc.

This is how place information over internet has evolved over time.

Pre-internet era (before 1990) – Yellowpages / books / guides.

1990- 2000 – This was the era when yellow pages went online. Information available remained the same but now searchable (a BIG change).

Amazon allowed customers to leave reviews of products (in 1995). Letting consumers rant about products in public was a recipe for retail suicide, critics thought 🙂

Trivia: Elon Musk (& his brother) founded Zip2 in 1995 & later was acquired by Compaq in 1999 for $305 million

2000 – Online reviews / ratings started. Epinions, RateitAll & Deja were the early movers. People could now leave feedback for almost any kind of business, product or place. This fundamentally changed the dynamics of how places were discovered and consumed. Tripadvisor was founded.

2007 to 2019 – The period with maximum action in this space

  1. Yelp takes off with millions of reviews.
  2. Foursquare is founded and introduces concept of social check-ins
  3. TripAdvisor is firmly the largest travel site in the world. With close to half a billion monthly vists and very profitable!
  4. In 2012, Facebook comes from nowhere and has the largest quantity of reviews, only to be beaten by Google in 2017 as Google introduces smart notifications and tweaks their search algorithm to give more weightage to business ranks.
Comparison of local review sites

If you look at the last 20 years, places and their information has largely remained unchanged
– Reviews & ratings are more or less same. Mainly text first & then photo/video and primarily opinions of the past.
– Information you get is the same – phone numbers, location, working hours etc
– Social networks have added layer of recommendations directly from your friends.

The future of places on internet – consumption and creation 

Next 2 decades will redefine how we discover places, share our feedback and build new forms of engagements. I define them broadly under

1. Live Information
2. Augmented Reality
3. Real-time communication
4. Ephemeral Communities

  1. Live information – A new layer of information will be created on the web – live information of places with context. 
    – Similar to what twitter does for topics today (follow any event in the world via certain hashtags), we will have a network that will allow you to tap any place/locality in the world.
    – Visualize in realtime what is happening and also have context with engagements via audio commentary, augmented reality, comments, polling etc.

An example of how we do this at Markk

2. Augmented reality – Reviews/ratings in future will involve people seeing AR models of places and creating their own versions of it and then sharing their experiences as it happens.
Example people will visualize a Taj Mahal or a shopping street in AR, build their own version of the place, share snippets of that as stories and a community that can build on top of this.

What Snap is building with their local lenses and Landmarkers feature is very interesting



3. Real-time communication – As chat between friends is instantaneous, our places experiences will also become live. Before going to the park I will not only quickly visualize the place (for crowd, seating, rush etc) but also engage with the people there on the go.
Businesses will have a more robust live presence. Today businesses struggle with multiple platforms, devices and hence majority remain inactive. A real-time model will help them realize immediate impact and return on investment.

4. Ephemeral communities around places –

A network of places that will create short duration social bubbles. Connect with people who happen to share your likes of a place at that moment (but are otherwise strangers).

Example, connect with people at your boarding gate, engage with people who are or plan to be at the same bar, at sports stadiums and so on.

A network of places that connects people will be an interesting aspect of consumer internet in coming years and will redefine local discovery.

Data sources ShopperApproved ChatMeter SearchEngineLand HBR

Doing stock options right

PJ tweeted this excellent summary & this topic needs more details.

Best practices in ESOPs in India

This post covers:

1. How founders need to look at ESOPs
2. How we handle ESOPs at Markk
3. What founders should do if they make a promise & do not have the paper work in place (when an exit event happens)

  1. Founders and ESOPs

One of the biggest motivations for me as a founder is when people who trust you & your vision early days make money. A lot of money. This includes all shareholders like investors, but employees come first.

As a founder you need to realize that wealth creation happens best when you take everybody along. It is also in your selfish interest to let people have ownership and create a win-win.

Recommendation: Have a 10% pool for ESOPs (to start with)

2. How we handle this at Markk

A benchmark against PJ’s table above

TopicMarkk PolicyScore
Who is eligible for ESOPsEverybodyOutstanding ✅
Vesting period4 yearsOutstanding ✅
Vesting schedule10+20+30+40Average 🆗
Allotment isTime LinkedOutstanding ✅
Vesting starts fromJoining dateOutstanding ✅
Top-up of ESOPsNot definedAverage 🆗
Vesting on leavingVested OptionsOutstanding ✅
Vesting on ExitAcceleratedOutstanding ✅
Sale of vested stocksPermission requiredAverage 🆗
Sale of ESOPsFacilitatedOutstanding ✅
BuybackNot defined–
Exercise PriceReasonable PriceGood 👍
Holding period7yrsGood 👍
ESOPs policy at Markk

There are 3 additional sections that need to be considered

Death / DisabilityAutomatically vested to heir / employee
Applicable to freelancersYes! ✅
Cash out Vs StocksYes! ✅

Vesting Schedule:
A equal vesting schedule should not be done in early stages of your startup. Startups are tough and take years before things add up, and majority of people will leave before things start looking good.

If you keep equal vesting each year you do not reward patience and also end up probably losing lot of equity for people who are not willing to play the long game.

Top-up of ESOPs:
Though we have already topped ESOPs for most employees (either based on performance or in lieu of salary), this is something we will define.

Sale of vested stocks:
A no permission situation works well once the startup is big and secondary sale is an option. Else, permission should be needed to ensure shares are not sold to competition or people you do not want to work with.

Buyback:
Again works after a certain stage of maturity of the company. We do not have this defined, but I will be more than happy to facilitate this when we are there.

Holding period:
Only reason we do not have an infinite holding period is this makes calculation of outstanding options difficult and also sometimes tracking of people (who have left years ago) and getting them to exercise can get painful!

Available for Freelancers / Contractors:
Sometimes you would like to engage with high quality talent (who are not open to full time employment), by ensuring your stock plan can reward such people is very important. Why?
a) You will not be afford this talent otherwise
b) Such talent will usually also want to own stocks.

Cash out vs stocks:
Stock rewards are delayed monetary gratification. Yes it also means you are an ‘owner’ but this ownership value will invariably be very small.

What matters finally is how much money can you make from that paper you hold. Based on this we have an option to directly pay cash to people (for the stocks they hold) or actually get them to own stocks. This works well especially for people who have left your organization and saves you on lot of paperwork otherwise needed for ‘shareholders’

Founder makes a promise but does not do the paperwork

There are many situations where the paperwork genuinely gets delayed (or forgotten by the founder).
– You are more focused on executing and surviving
– Paying lawyers and getting this documented is not on your mind
– You promise ‘x %’ to employees (with promise to do paperwork later)

– Then one day some outside investment happens or there is an exit event. There is no paperwork in place!
– The ‘x%’ promise is at best on email or usually as a conversation between the founder and the employee.

What should a founder do in such a situation?
Simple answer: Always honor your word. Apart from karma which will one day come to bite you, you also need to remember that as a founder the biggest credibility you have is your integrity.

Personal experience of how we handled this in TastyKhana:

This was my first startup and I had no clue how ESOPs work. As mentioned above I promised early employees stocks and never bothered to do the paperwork. (In hindsight, a very bad example)

Long story short, at our exit event we had no ESOPs in place and only promises that we had made.

Sheldon & I paid money (from our share sale) personally & also ensured we adjusted for the tax loss they had (from a share sale vs direct income)

I personally know many founders (with much celebrated exits) who have played foul on promises and pushed this to board, investors etc. But it is simply greed getting better of them.