Startups: What are the major issues that a Social Media Startup can face if it targets only SMEs?

1. Do SMEs really care about brand presence? Answer: It depends. Some don't have a clue, some don't care, and those who do care are trying to manage their social media presence either in house or via freelancers/consultants. Many Small-to-Medium businesses that I come across during normal course of business aren't really fussed about Social Media marketing activities, beyond using Facebook as a customer service tool.   2. After we would've worked on making social media presence , what will stop our clients from discontinuing our services and maintaining the page in-house? In short,will client retention be a serious issue in our model? Answer: Your clients will stop paying if they don't see continued value. You can tie them into a 6/9/12 month contract, but you'll notice that contract enforcement is difficult, and sometimes not worth your time in India. (Eg. Enforcing contracts in India takes twice the time it takes in OECD countries and costs almost 40% of the contract signed. Source: http://articles.timesofindia.indiatimes.com/2013-07-11/edit-page/40493002_1_manufacturing-sector-new-manufacturing-policy-manufacturing-output)   In other words, client retention will be a function of your client's Marketing ROI. You will need to constantly demonstrate your value there.   3. Our model is based on the premise that social media platforms like Facebook are the best way to reach out to people .Do you think that social media is a fad which will die in next few years or is it THE next big thing where advertising will shift? Answer: I don't believe Social Media is a fad, but not everyone in the Small-to-medium business space requires a social media presence, or social media marketing efforts. Though the total number of SMBs will be huge, the actual number of SMBs that are a good fit for you will be much smaller.   4. What is the scalability scope for this business ? Answer: Let's do some back of the envelop calculations here.   One Tier-2 City Monthly recurring fee: Approx USD 450 (say an average of INR 25000 at USD/INR at 55) Contract: 12 months 5 clients in year 1 (assuming Tier-2 sensibilities) Year 1 Revenue: USD 27,000.00 Year 2 Revenue: Assuming 2 of your existing clients leave, you increase rates by 10% to existing clients, and rope in 3 new clients - USD 41,580.00 Can you scale this up to 5 Tier-2 cities in your region?   5. We are focusing on capturing the large market of small brands. We believe our USP is our market selection. Could this really an USP or people have already tried hands at this and failed? Answer: Monetisation will be your biggest challenge. Like I mentioned above, the actual number of SMBs that will consider Social Media marketing important enough will be very small. Especially in Tier-2 cities.   6. Considering that we'll be having local clients with not-so-deep pockets for marketing, does the model seem sustainable?Do such companies get funded? Answer: Not very sustainable purely as a digital marketing agency, unless if you have the links/ability to pull in some big ticket clients very early.   7. Can our idea of being an agency providing only social media management services, go against us? Should we also provide SEO ,website services etc. along with social media, i.e. in a nutshell become a company that manages the entire online thing for the business? Answer: Sure, but then what becomes your differentiator, given that everyone from web/graphic designers to journalists are getting in this space offering a 'seamless internet experience' or something like that? That being said, you can definitely add to your revenue streams if you are not solely relying on social media marketing. Web designing, SEO etc can be good earners, but being in a Tier-2 city, you will have price pressures on these services as well.

Very small market ==> lesser ROI of your hard work.

SMEs caring about branding really depends on the SMEs. Agree with Alok that talking to the next gen of inheritors makes best sense. It's not a category you are after, but a mindset. SMEs who have products or services to sell to customers will need your services. Also become a source for these businesses to go online - there are many of these smaller businesses who need online presence because they are speciality shops that have regional potential - maybe you can also help them do that. You will need to be stand for everything online - SMEs don't have the luxury of dealing with multiple service providers. Also, you will need to have a whole team for Social Media - might as well optimise capacity by offering more than one service. In Indore there is a shop my niece took me to, which sells, I think at least 100 or 150 varieties of shev alone. Fabulous stuff. But given a social media advantage, it could well become the regional shev hotspot. And a must for all visitors to Indore. The opportunity lies in helping them sell - if you can demonstrate you helped them increase sales, they will come back to you again and again but if you can't do that, you won't get anywhere. Funding is pretty much out - will need to be a bootstrapped venture. A few lateral ideas 1. If your town has tourist potential, tie up with an events company to create events there. It will help them and you too. Not only will you have content to flog on social media, you actually are creating more sell situations for your clients. The more your town becomes known, the more visitors you attract, the more easy it is for you to showcase your abilities. Many Jaipur jewellers have Delhi clients - also you get great Jaipuri quilts at Miya Bajaj and they export all over the world. Find the LMBs and the Miya Bajajs who want to grow. 2. Create 'days'. An online food community Eatlo announced a 'Chholey Bhature Day' on 2nd October and followed it up with a physical event at Nehru Park. Hugely successful both offline and online. People ate Chhole bhature that day and posted pix online. Use communities to popularise your 'Days.' Have a shev day at Indore or a Gathiya Day at Ahmedabad or a Ghevar Day at Jaipur. 3. This will need a multi-pronged approach - you have to be the Baap-Dada of online to your next gen of American-univ returned clients. There are consultants who cater to just such business houses and help them transition from old gen to new gen - these are the the kind of guys you will need to be. From no-line to online.

Thank You for passing the buck :) I got a bit perplexed by the Header- Social Media Startup- and was about to end this in a dire straits, given similar experiences that we had with nerdy entrepreneurs and self-proclaimed marketers from various beautiful cities, when my sight fell upon the last line- Your valuable insights are solicited- only to make the buck stop. If it's all about adding value then I would like to ask a simple question: 1. Why would somebody pay you even half-a-rupee, since 25 Paise is phased out,  to create a page on Facebook which definitely doesn't falls under Rocket-Science. These days even a 10th pass, even school dropouts, is capable to do the same and somehow every home in this country comprises of a tech nerd, one way or another. 2. How do you intend to capture the essence of Social Media Marketing? What kind of analytic or tools are you guys going to use? I presume you aren't talking about giving some 1k or 200k Likes for some nickel dimes. 3. Do SMEs care about brand presence and we are focusing on capturing large market of small brands (Q1 & Q5)- Looks like you guys need to work on your positioning and brand statement before doing it for others. Not sure if you guys are also planning to offer services around Brand Planning, Strategy, Management. If No, then that's good. If yes, then you can't be just a social media startups. 4. Become a company that manages the entire online thing (Q7)- In a nutshell you can be anything you want to be if it's all about managing the entire online THING. But, if it's about creating an Online presence, or rendering Internet/Online Marketing Service then you need to chose the right shell without going nuts. Last but not the least, am I evaluating your business model? I am yet to see one. And yes, I may not be right!!!!! But definitely not going to be left wrong. Thank You.

The issue with this is that social for every client is very personalized.. FB, Twitter, Youtube, might be few more platforms like instagram, pinterest.. none of these will have automated updates or targeting.. u will have to personally spend time on every client's each platform.. it requires content guy, designer, analytics guy even at shared resources level. and if the client can pay 20k-30k at the max, business becomes non-scalable and very resource heavy. Second issue u will face is that these guys start calculating ROI from the second month itself that becomes a big issue..