JUNE 20, 2008
The Indian EXPRESS 55
Epitomizing social networking boom
PRACHETA SHARMA BHATIA tracks the journey of Hi5 Networks, which was launched by two friends from a loft space in 2003 and today has over 80 million registered users in over 200 nations
T
HE o ffice of the social networking site Hi5 Networks in the heart of San Francisco has a casual look to it, like the website itself. Headquartered near the Silicon Valley, this leading international social network website was started in 2003 by two young and ambitious Indian American entrepreneurs Ramu Yalamanchi and Akash Garg. Launched from a friend’s loft space, today Hi5 has over 80 million registered users in over 200 nations and is considered the number one social network website in 26 countries across Latin America, Europe, Asia and Africa. “It has definitely given us a sense of accomplishment,” says Yalamanchi, founder and CEO of Hi5 Networks. Looking back to how it all started, both the founders remember sharing the same vision of working on the consumer internet business, which brought them together. “When we met we realized we had the same goals and objectives and decided to come together to make our dreams a reality,” adds Garg, cofounder and CTO of the company. While the focus of their enterprise was always the global audience, both these young entrepreneurs entered the Indian market with a matchmaking website called Sona. “We knew that we wanted to be the first to enter the international consumer market and decided to work on the model of Match.com, which was doing really well,” explains Ramu. As the CEO of Hi5, Yalamanchi is responsible for the website’s key partnerships, business and product strategy, and helps guide the overall growth of the organization. After doing a B.S. in computer science from the University of Illinois, Urbana, Champaign, Yalamanchi started technology companies like eGroups and AdKnowledge, working on advanced online advertising and the progression of Internet communities. “This experience helped me realize my passion for consumer products and I quickly learnt that the growth for Internet business was outside the US. Somebody once said to me that you don’t have a company unless you convince one person to join you,” quips Yalamanchi. Garg, on the other hand, holds an M.S in computer science from Stanford University. As the company’s chief technology officer, he oversees Hi5’s technology infrastructure and software development. He originally developed the core product concepts and underlying technology that accelerated the rapid growth of the company. Having an entrepreneur father helped both these founders in learning about company building and business leadership. And yes, it also helped in the initial capital required to run the company. “It took us over a year to raise $250,000 to start Hi5 Networks, with money coming from our dads and friends,” recalls Yala-
(L-R) Co-founders Ramu Yalamanchi and Akash Garg with director of Products Anil Dharni
manchi, describing it as their biggest challenge. “In 2003, there was no real venture money flowing especially in consumer internet. And need being the mother of invention, we evolved our business model to stay frugal and yet achieve profitability at the earliest.” In April 2004, Hi5 Networks touched 40,000 members, and in July 2004 the number was a whopping 1 million already. “The one million mark was a memorable milestone for us. When we had this traction, we knew we had a profitable venture on our hands”, says Garg. The focus, however, was always the international market. “Our ultimate goal was to be the first to enter the international domain, that way ensuring a long standing association with our consumers,” states Yalamanchi. Realizing double digit growth in the internet domain beyond US, Hi5 effectively captured the global local markets as the first social website to provide a regional approach to the personal communications process. “While we knew that social networks are providing more than what emails and IM could in terms of communications, it was really the sharing of any kind of media like digital photos, music and videos that made us unique and distinct,” explains Yalamanchi. “When we became the number one social website in Portugal, that was really inspiring as we had successfully matched up our perceptions with the needs of our consumers.” Today, Hi5 Networks is available in 23 languages with nearly 44 million unique monthly users.
According to the company figures, it is also the number one site for the global Spanish community. “The global consumers are now building our content through translations in local languages, sharing relevant information and using applications to share information. That is what makes us more meaningful to people from different cultures around the world in staying connected,” says Garg. “We were interested in creating a service that attracted people only by the virtue of its functionality, and this international traffic was our key to monetization,” says Yalamanchi, explaining the company’s revenue model. For this young enterprising team, Latin America and China are huge markets. And with over million users in India, the South Asian sub-continent also fikiojgures prominently in the future plans of the company. “India is an interesting market, and we are focused on capturing the regionality of the country by adding six Indian languages to the site very soon. Hi5 is re-
ally a global brand with local flavors,” adds Yalamanchi. So how does Hi5 keep this platform of personal communications alive amidst growing competition? “Through constant innovation and keeping our information sharing process compelling, fun, interactive and socially safe,” says Anil
Dharni, director of Products at Hi5 Networks, and part of the company’s 60 plus team. “Consumers are fickle, but if we can connect them with people they want to communicate with regularly while keeping their content sharing process unique and engaging, they will stay on our site,” adds Yalamanchi. Hi5 Networks’ evolution is also a personal growth process for these Indian American entrepreneurs. “Social networks are really filling the void of personal communications that was earlier through telephone or emails,” says Yalamanchi. “Right now we are the choice of the younger population, but as this seemingly casual interaction grows popular, networks like ours would be the forums for the older generation as well through which they would discuss and share mature content,” he predicts. In July 2007, Hi5 Networks raised nearly $20 million, and by the end of that year their funds grew to $35 million. But there is more to come, as Yalamanchi says, “60 percent of the online population of social networks is in the US. Internationally it’s only half of that. There is a huge market waiting to be tapped, and once again we are ensuring that we’re the first to do so.”
N O R T H
A M E R I C A N
E D I T I O N