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The Big Idea
"Anup, I wish I was as smart as you," Wipro chairman Azim Premji mentioned in a hand-written note to Anup Tapadia when they met at a conference in 2003. One cannot be sure if Premji spotted the entrepreneurial streak in Tapadia, but that was the time Tapadia was toying with the idea of an interactive medium. Six years later, the 24-year-old Pune-based software engineer started TouchMagix, a firm that delivers a break-the-clutter medium for marketers who are concerned about their advertising message getting lost in the chaos of mass media.
"It can convert any wall or floor into an interactive surface, engaging consumers in a whole new brand experience," says Tapadia. It is a high-tech digital display that provides a much better brand recall than placing an ad using other outdoor digital solutions.
"The founder understands theneed to get out of the niche marketto avoid hitting the wall at some point"
He can say that confidently because the interactive systems set up by his firm are capable of doing audience measurement analytics — tracking the number of interactions, average interaction time and day-time based analytics. "This data is essential for advertisers, which other traditional media don't give," he says. These systems have been used in high footfall locations such as Mumbai's airport, where TouchMagix measured peak activity time and found that on an average, a customer interacted with the system for 20-30 seconds. "It's a good attention span for an advertiser," he says.
Tapadia's Eureka moment occurred while watching the 2002 Steven Spielberg science fiction caper Minority Report. The idea for interactive displays was inspired by one of the scenes in which Tom Cruise, who plays pre-crime officer John Anderton, flicks images on a 3D screen with his finger. "I started thinking about how to make it happen in reality," he says. During his stay in the US from mid-2005, he started working on this idea of building the next generation of interactive systems. Tapadia took a break from his PhD at the University of California to pursue his idea. Before his return to India in early-2008, he had the prototype ready.
But it was not a smooth ride from there on. When it came to practical installation at malls or other high footfall areas, TouchMagix executives found that the system was responding erratically against ambient light and intensity. "We went into hibernation for three months to find a solution. We then re-engineered the product to make it deployable in the market," says Tapadia.
|Rank: 4 (Category A)|
|Name: TouchMagix Media|
Sector: Media & Entertainment
Founder: Anup Tapadia
Year of inception: 2009
Capital invested: Rs 1-2 crore
Key customers: Nike, Castrol,Accenture
Key competitors: GestureTek, EyeClick, Lumin Vision
The Business Model
TouchMagix plays in the global outdoor media market that is, by its own estimates, worth over $4.5 billion. Since inception, revenues have grown at a CAGR (compound annual growth rate) of 53 per cent, while profits have registered an impressive 265 per cent CAGR, though the actual numbers are low. In another three years, it projects revenues at Rs 70 crore.
Interestingly, TouchMagix's first customer was not a corporate but a household in Mumbai. The company never targeted the product for home use, but a high net-worth individual in Mumbai expressed interest to install the MotionMagix floor system at his home for entertainment and to welcome his guests. "We had to deliver what he wanted as he was our first customer," says Tapadia. That's why he feels that the size of his market need not be restricted by the global outdoor media. "With our technology, we are not just replacing part of outdoor, but creating new budgets and markets that never existed in the past," he says.
The future may look bright, but it's not easy. The company anticipates challenges in penetrating some of the European markets as it is still struggling to get over the recession.TouchMagix executives say that they had a hard time therein 2009-10.
Another barrier is the language in certain countries. However, the company plans to forge stronger partnerships in that region and establish regional offices. It already has about 10 active partners in the European region. "I am sure 2011 will be a good year in Europe for TouchMagix," says Tapadia. Let the ‘Magix' begin.
(This story was published in Businessworld Issue Dated 06-06-2011)