Of love, life and the internet

The following is an email interview of Fabrice Grinda, CEO of OLX. While I’m new to the space of online classifieds, I think these guys are on the right track. All the best to them!

Question: Tell us more about OLX story - who are the people, what was the inspiration, what motivates you about the space?

The decision to start OLX came from the observation of 5 large trends in the world:
1. A transition from offline media consumption to online media consumption.
2. A transition from offline advertising to online advertising.
3. A transition from paid business models to free online ad supported business models.
4. Emerging market growth with both GDP per capita and online media consumption growing faster in the developing world than the developed world.
5. An ongoing and massive disruption in the $100 billion classifieds space away from newspapers first to paid vertical sites then to free horizontal classified sites. As that trend was largely underway in the US and Western Europe, but at its infancy in the developing world, we felt there was a unique opportunity to build a next generation free classified site for the world.

Beyond the macro trends, we love the business. I am an economist at heart and I find it incredibly gratifying to be giving opportunities to people to trade goods, find jobs, houses, etc. all for free! By being free we are growing the market and providing opportunities to people who would have never had them given the costs of print ads.

My partner Alec, Amar, the Indian country manager and I all have auction backgrounds and love marketplace businesses with user generated content.

Question 2. How do you see OLX differentiating itself from well established brands - craigslist in US, gumtree in UK, slando in Eastern Europe etc. Do you have a vision on how the company will shape up in 3-5 years time?

We feel there are significant opportunities for product and business model innovation in the space.

Business model wise, we are 100% free to post and intend to remain free to post. Craigslist, Gumtree, etc. have started charging for jobs, real estate and other categories in certain cities. We feel that charging limits the number of ads on the site which we is a detriment to the user experience. We want our users to find whatever it is they are looking for.

From a product perspective, we aspire to be as good in every vertical as the best paid vertical sites. Already we have a number of innovations relative to many of our competitors:
· We have a fantastic mobile version such as http://m.olx.in reachable from any cell phone.
· We allow users to promote their listings automatically on social networks.
· We have a rich WYSIWYG editor allowing users to create colorful postings without knowing HTML.
· We support photos and videos.
· The site is multilingual even within countries with 39 languages supported.
· We have powerful search functions in real estate and cars.

Question 3. For an online buyer-seller marketplace, increasing participation from both sides is a chicken and egg problem. How do you go about solving that?

We have solved the problem in 4 ways:
· We spend a fair amount on online marketing.
· We run classifieds for many high traffic sites such as Friendster, MySpace Latin America, Sonico and Hindustan Times.
· We approach real estate brokers, car dealers and head hunters to convince them to give us feeds with their content.
· We have acquired many free classified sites in the past few years to help us reach critical mass faster. Mundoanuncio.com in Spain is an example of one such acquisition.

4. Tell us what you specifically think about the online classifieds industry in India - the potential, the challenges and any unique observations you may have made.

India is still a young classifieds market. Contrarily to the US and Western Europe newspapers are still growing their circulation. Online classifieds is a small and relatively new category with a lot of potential. We have had to make many adjustments to adapt to local mores including adding Hindi support, focusing on mobile and creating a matrimonial and a paying guest category.