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Why You Should Never Round Off The Invoice Amount for Your Client

November 21, 2016 Leave a comment

 

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Top keep for our consulting businesses running, we need to get work, execute that work and then invoice the clients. One of the biggest mistake that consultants make while preparing an invoice for their clients is to ‘round off’ the amount. Say the total amount comes to $1,847, we tend to round it off to $1,800 or $1,850. My advice is, don’t do that.

Let’s agree that most of the clients are always going to be suspicious. They have had consultants who would have ditched them- did not perform to the expected level and felt cheated. Now, for every assignment they want bang for their buck. May be the business guy is friendly with you, the finance guy would love to look at the invoice figures more than the business benefits you brought to the organization- and, he is always suspicious of round figures. So, don’t give him round figures.

Sending an invoice of $1,847 rather than $1,850 gives an indication that you have worked out the perfect math and not thrown an arbitrary amount. An odd figure suggests that you have worked hard and know your trade well. So, next time, you have to send an invoice, keep the numbers odd, don’ t round them off.

About The Author: The writer, Mr. Harshdeep Rapal is the co-founder and CEO of Feelance Co.– an online platform for clients to discover and engage with senior independent consultants and consulting firms for short-term projects and interim roles

2 Companies Who Will Hit the Most from WhatsApp Video Calling

November 20, 2016 Leave a comment

 

Many users of Whats App were surprised yesterday when they could update the app and start video calling their contacts. With a lot of people using WhatsApp for texting and calling video calling was the next logical extension of the app that has taken the world of communication by storm (I am not talking about Line, WeChat and China for a reason here).

Everyone know who will benefit the most from this new feature- Yes! You guessed it right. WhatsApp and its parent company Facebook.

But who will get ht the most? 1. Apple (FaceTime) 2. Skype

Most of the time when I have to video-call my wife or take interviews of candidates, I generally use either Skype of Face Time. For that matter if e have to slit the two between business and personal use of the video feature, I use Skype for Business and Face Time for Personal (family and friends) use.

WhatsApp has been till now the medium of choice for many of us for texting, sending images, voice message and various other attachments. I have seen people of all ages using WhatsApp for one to one messages, group messages, coordinating for executing various events- parties, birthdays surprises, delivery of packages etc. Now with the video call option on the same application, there is no need to open Skype or FaceTime.

Since the time WhatsApp has rolled out video calling feature, I have stopped using FaceTime or Skype for at least personal communication. Skype is still my medium of choice when it comes to professional/business communication. I know a lot of people around me who have made the same move- from Skype & Face Time to WhatsApp Video Calls. Having said that, most of my views are based on observing the behaviour of people around me rather than surveys and data. This, similarly, is my personal view. It might take a few months or even a year to see who actually benefits and who loses. For now, its a Thumbs Up to WhatsApp!

 

 

Why Snapdeal merging with Flipkart or Amazon will not make sense? Or might.


 

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Last couple of days have been ripe with rumors of Snapdeal reaching out to Flipkart and Amazon for a merger/buyout. YEstreday Kunal Bahl poked fun at these rumors with a tweet on the name that the merged venture will have. Fun aside, lets see is this kind of acquisition/merger would actually make sense or not.

On the face of it, acquiring Snapdeal will not make any sense for Flipkart or Amazon. Take the case of Amazon’s attempt of acquiring Jabong in late 2014. Rocket Internet (at that time I was leading one of Rocket Internet’s ventures in South East Asia) was looking at a valuation of $1.2b whereas Amazon was in no mood to pay more than $700m. Within weeks of the talks falling through, Amazon launched Amazon Fashion to counter Jabong. Later Jabong bled to its on death and was acquired by Myntra (a Flipkart group company) for $70m. That’s peanuts.

Jabong acquisition actually made some sense as Amazon was not very strong in the Fashion category. Snapdeal on the otherhand is a smaller Amazon. Learning from the Jabong experience, I don’t think amazon would even consider bidding for Snapdeal.

Now for the same reason, it does not make sense to acquire Snapdeal. Why would either of them not wait for Snapdeal to bleed weak till it dies or can be bought at a much lower valuation (just for the brand) as in the case of Jabong-Myntra deal.

Now, can it make sense as well? Remember when Ola acquired Taxi for Sure a couple of years ago for $200m? That deal not only helped Ola become the undisputed champion of ride-hailing space in India, but also removed an irritating competitor who was forcing to burn much more cash than what Ola would have liked to. Is Snapdeal that kind of rival for Amazon and Flipkart? The answer is- Yes. Do they want to remove Snapdeal from the competition? The answer is- definitely Yes. But do they want to right now? The answer is- No. Paying $200m for Taxi for Sure was peanuts as compared to the benefits it brought. Snapdeal is a unicorn. I don’t think either Amazon or Flikpart’s investors would ever agree to shell that kind of money ever. Even buying a small stake in Snapdeal would be equal to a billion dollar funding round for the two larger rivals.

So, let the rumors be rumors. I am not sure if anything is going to happen on this beyond being just rumors.

Learnings From AskMeBazaar Shut Down


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Today morning I woke up to the news of AskMe shutting down its services leaving thousands of its employees and lakhs of its vendors and partners in quandary. It is not unusual for startups to stumble and fail. Globally more than 95% of the startups shut down.

AskMe was a different care altogether. The startup had raised $119m from Astro Holdings and other investors and were in talks to raise another $200m at a valuation of $1b. But then Astro decided not to participate in the next round. Things came to a dead end when Astro skipped the last Board meeting and AskMe wrote a letter to Registrar of Companies not to let Astro wind up their operations before clearing their dues (Approx Rs300 Cr).

I was surprised why it came to such a situation that the company had to shut overnight and lay off all its employees. The reason I found out was that Astro Holdings owned a whooping 98.5 % stake in the company. Let that sink in.

I am not sure what the founder were thinking while raising funds, but this is an insane amount of stake to be offered to a single investor. It does not leave room for other investors to have their say. In this case Astro did not want to participate in the next round of funding and I am sure the legal formalities would have got messed up for bringing in new investors of raising funds from other minority investors (if any).

The biggest learnings that the other entrepreneurs should learn from this incident are:

  1. Never have one single investor own an insanely large chunk of your company. 98.5%….never!
  2. When you get money in the bank, try working out the unit economics rather than burning the money at an insane rate. AskMe spend a large chunk of money hiring Bollywood brand ambassadors for TVCs. The same would have given much better ROI had the amount been spent on online marketing.
  3. In case such a situation arises, take care of your people. They trusted the startup ecosystem and toiled for your venture day in and day out. Never leave them high and dray by wrapping up operations overnight. I am sure the founders would have known the situations months ago. They should have told the truth to the employees and held them in faith to turn around things. Now the employees will not only lose the faith in the founders, but also the Indian startup ecosystem.

I failed in a Food-Tech Startup- Here are my five key takes from that failure.

February 27, 2016 2 comments

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I incubated and ran a food tech business (EazyMeals) for about 8 months and reached a volume of 100+ orders a day. I was in talks with a few investors as well to raise the angel round but then took a decision to shut the business down and write off the investment (why we did not pursue investors even after a commitment of $250K from the CTO of a billion dollar e-commerce company is a different story for a different day). But, before I shut down the business, it taught me quite a few interesting lessons about food tech sector. Here are some key takes:

  1. Getting Volume on Orders is Easy, Delivering the same is Tough: It is very easy to reach a number of 100+ orders a day. You may even reach 200+ in a short span of time but managing the preparation and delivery of these numbers is tough. We started the business in Indirapuram, one of the most densely populated areas in the NCR region. Food was great and prices nominal so getting initial traction was easy. We found out that bringing in new orders is not that tough. You need additional orders- Get on to FoodPanda. You need even more- Get on to Swiggy, Tiny Owl, Zomato etc. You still want more, invest in Google and FB Ads. Start Push notifications from your app or test SMSs. There is a lot you can do to increase orders, the problem comes in managing those orders. Reason being- whether it is 50 orders or 500, they have to be prepared, packed and delivered in a span of two to two-and-a-half hours. Where as a normal e-commerce company has a day or a couple of days to pack and ship a product, the food startups have just 30-40 minutes to arrive at the doorstep of the customer from the time he places an order. Believe me, its not easy. Customers do not care if you are a startup. Their expectations have been set at “30 minutes, else free” level.
  1. Focus more on Food than Tech: From the time the Food-Tech sector gained investor interest, there is a lot of focus “Tech” part in a food startup. My experience shows the focus should be more on “food” than “tech”. You can build a wonderful App or a website. You will have weeks and months to build and then improve it. But you hardly have any control on the quality of food when you are a small startup. The quality and taste is in the hands of the chef and what he does in those 10 minutes that he spends on the order. Those 10 minutes need much more attention than the website or the app. If the food tastes great, the customer does not care even if you do-not have an app or a website. He will come back.
  1. Focus on Retention than Expansion: Food is a business where one can achieve a very high repeat rate with customers if the quality of food is good, prices are nominal and service is within acceptable limits. The more your retention rate is, he lesser will be spend on marketing. Food is something which the person eats every day. Three times a day. Keeping your existing customers happy helps lowering the customer acquisition costs and in turn managing the unit-economics.
  1. Work on Unit Economics: Achieving unit-economics in food business in India is tricky. Customers want good food at a nominal cost. My venture was into low-cost-daily-meals. The average order value was around Rs100. The food quality was great, the repeat rate was high, we had achieved a volume of about 100 orders a day, but unit economics sank us in. While providing a meal at an average cost of Rs100, the COGS itself came around Rs40, the delivery per order around Rs18, if the order came via any of the food ordering platforms, the commission itself came out to be Rs15-18. We made a margin of around Rs30 per order (on COGS and Delivery) or about Rs1.2 lakh to 1.8 Lakh per month. This was not sufficient to cover for the salaries of one chef, two assistant chefs, a site manager, a cleaner and four delivery boys plus the rent for the kitchen and maintenance of the equipment.
  1. Use FOPs Intelligently to Your Advantage: Food Ordering Platforms are good for increasing the volume of orders. But, use them with caution. We were on four platforms- FoodPanda, Tiny Owl, Zomato and Hungry Buddies. These platforms do help you achieve volume of orders, but eat into your margins. On an average the FPOs charge around 16-18% commission and taxes. That’s a big chunk of your margin. I would suggest to use them for a period of time to build loyal customer base and then serve those customers from your own website or app. You will at least save Rs16 on every Rs100 that comes in.

Reflecting back, I feel I could have done many things in a much better fashion than I did. But will I go back and start-over again. No. But I thought these points would be of some help who has just started of is planning to venture into food space. These five are not the only points to keep in mind while running a food business, I am sure there are many others. But, they can be used to set some ground to build upon.

Real-Time Data from the Biggest Tech Companies

February 7, 2016 1 comment

Check out this wonderful platform for the real-time per second data from some of the biggest tech companies of the world.

Revenue & Profit:

Data  Stats:

#RIPTwitter is necessary to help Twitter survive

February 7, 2016 Leave a comment

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The hashtag #RIPTwitter has been tending ever since BuzzFeed reported that Twitter is making changes to how the tweets are fed into users feed. The plan, as I understand it, is to prioritise tweets based on the ‘interest of the user’. This is something similar to what Facebook does to the feed on your FB wall. Point noted.

Currently the Twitter feed for a user comes in chronological order. It does not discriminate among various tweets. Whether you are following President Obama or a local business, tweets from both of them are given same importance. Now prioritising content based on user interests is a pretty vague proposition and leaves many loose ends- both good and not so good.

The not-so-good part of this plan is that the users lose control over what they see in their feed. Over last few years Facebook shows you the news feed of users which it ‘thinks’ is of interest to you. There might be things posted by other users of importance to you but if they do not fit in your ‘interests’ cloud, you won’t see them. If Twitter’s plans go through, we are in for a similar treatment at Twitter feed as well.

Now, the good part of the plan is that Twitter will have more control of the content shown to its users. This means that Twitter will have the right to play around with the content shown to users of various demographies. The ability to play around with the content along with the ability to mix free and paid content gives an immense opportunity to Twitter to monetise the user generated content and user attention to the promoted/prioritised content.

I understand that the thought of someone making money by playing around with the content you want to see creates an image of manipulation and curbing freedom, but it’s not as bad as we think. The organisations need to become self sustainable if they want to survive for long. The attempt by Twitter to prioritise content for its users is a step in this direction. Unless it drastically affects the way we have been using Twitter and kills the fun it is, I would say let’s give it a try.

Where Entrepreneurs Succeeded Because Government Failed

January 20, 2016 Leave a comment

 

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This may come as a surprise to many but the government (both central and state authorities) has helped entrepreneurs in India in an unexpected manner – by failing in some functions, which it is expected to perform by default. I have been analysing the start-up ecosystem in India for some time now and have come across many entrepreneurs who succeeded just because the government failed to provide the required services to the citizens. Not only did these entrepreneurs step in to fill the gap, but they also provided livelihood and jobs to many others. In this article, I have tried to bring out 4 such areas where the enterprising minds found their opportunities.

1. Potable water: Every morning, we see scores of pick-up vehicles laden with plastic canisters supplying drinking water to homes and offices. The failure of the government to provide sufficient and quality potable water has provided an opportunity to entrepreneurs to step in. Over a period of time, supplying potable water has become such a lucrative business that it has created gold for companies ranging from billion-dollar corporations to small-time entrepreneurs – thus creating a multi-billion-dollar industry.

2. Power generators and inverters: The power situation in India is far from satisfactory and with the rising consumption of electricity, the gap between demand and supply is getting wider by the day. Many entrepreneurs have seen an opportunity there and now provide a number of solutions – from solar lanterns suitable for one-room huts in villages to huge power generators installed in factories and offices.

3. Security agencies: Security of life and property should be the prior concern of the government. But with the rapid rise in urbanisation across India, the security set-up has failed to cope up with the requirements of the growing population in the cities. The government agencies have failed to provide the required level of security and this has given a chance to private security agencies to provide services to home, offices, factories and apartment buildings. Thousands of people are employed by these private security agencies, providing security services to lakhs and more. So much so that a few Indian private security agencies have started taking up international assignments as well.

4. Sports: Of late, the best of the sports people in India do not come from government academies. Majority of the Indian boxers, who have been dominating world boxing, have come from the private sports clubs in Haryana. Similarly, Indian shuttlers, who have recently made their mark in world badminton, have all trained at a private academy in Hyderabad. And there are scores of private academies honing cricketers and other sports people in India.

Also, most of us are aware of the mess created by the government agencies in managing the Commonwealth Games. In stark contrast is the organisation and management of the Indian Grand Prix, held at Budh International Circuit or even the recently started Indian Badminton League. The success of such sports events have inspired many other entrepreneurs to come forward and they are now planning similar events for other disciplines as well.

But the Indian entrepreneurs’ ability to make the best of the situation (where we find below-average services) is not limited to the four areas I have picked up to discuss. If we look around, we will find many such areas where entrepreneurs have picked up the loose ends and provided the missing links.

So there is a ray of hope for other entrepreneurs as similar opportunities are waiting to be explored. Just look around and you might be able to identify the next big start-up for such services.

Why are organisations moving towards a flexible workforce?

January 16, 2016 Leave a comment

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As of today, 34% of the total workforce or approximately 53 million workers in America are working freelance. This number is expected to cross 50% by 2020. The trend is slowly but firmly getting magnified across all industry sectors and all geographies of the globe.

So why are so many consultants opting to go freelance?

I have been closely following up the workforce trends in India and across the globe for about a decade now. There are various reasons that consultants cite which convince them to work independently rather than take up a regular job. Here the top three reasons which consultants cite:

  1. Flexibility: Working freelance helps consultants bring flexibility in their schedule. As a freelancer one can decide on the number of months a year or number of days a week or even number of hours a day he wants to work. The clients are more worried about the results than the time spent by the consultant working on the engagements. As long as the set targets and results are achieved, they are not worried about which part of the day or which day of the week the consultant works.
  1. Richer Industry Experience: A typical freelance consultant would work on multiple projects with different clients during a year. This undoubtedly increases the exposure of the consultant to multiple clients and projects. Over the years, the consultant gains much more diverse experience while working with different clients and industries than his counterpart who would have worked only for a single employer. This addition in diverse experience in turn helps the consultant charge a premium on his services.
  1. Higher Earnings: Not having a regular job is a risk. Working on short-term assignments where the consultants bring in niche skills help them price their services higher than the normal per hour wages of a similar skilled worker in a regular job. If a consultant is very good at his trade, he will ensure a regular flow of work through out the year. This enables him to earn substantially higher income than being in a regular job.

The increase in numbers of flexible workforce is also fuelled by the advantages that it brings for the clients. Some of the key advantages that a freelance consultant brings for a client are:

  1. Access to best the industry talent: Top industry talent is always scarce. Not every organisation has the money and resources to hire it full-time. Hiring freelance consultants gives an opportunity to the organisation to hire top-notch consultants for the period of time they require.
  1. Access to a wider pool of talent: Freelancers have huge networks, which include past clients as well as with other consultants in the same or related trade. They are generally members of associations and clubs to liaison with other fellow consultants. In a situation where the client may require additional expertise in the same or in a related field to make the initiative a success, they can bring in the additional hand(s) from the networks they are a part of. This ensures that the client’s work is completed flawlessly without having to worry about skill gap.
  1. Success of the engagement: One of the biggest worry of freelancers is getting regular work. To ensure they have a healthy pipeline of projects, the freelancers go all out to ensure the success of every project they take up to help them get future projects by referrals. The niche skills of the consultant honed while working with multiple clients and network of other senior consultants always increases the probability of success for an engagement.
  1. External Perspective: Over a period of time, organisations make peace and start living with their problems and don’t even realise the existence of the problem. A freelancer coming from outside the organisation brings an external perspective to the processes and practices and identifying the issues in the organisation. This is an additional advantage which the organisation gets by hiring a freelancer, that too without paying a dime for it.
  1. Cost effective: Organisations prefer to rent rather than acquire the assets that they use for short periods of time. The same principle applies to niche consultants. Even though the per hour fees of a freelance consultant might be much higher than the per hour wages of a similarly skilled full-time hire, in the long run the over all cost comes out to be much cheaper as they are utilised for only for the duration of the engagement. The employer does not have to worry for the benefits that are provided to the full time employees.

Startups & Technology come to the help- Of People & Terrorists

November 30, 2015 Leave a comment

 

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Two weeks ago we saw the deadly attack on Paris and closer home (India) the havoc caused by Chennai rains. While Facebook activated its Safety Check feature for the Paris attacks, Uber and Air BnB came out to help people travel to safer places and find a place to stay.

During the Chennai rains Ola came up with the innovative idea of rescuing people with boats and Oyo Rooms slashed rents and allowed group stay in the rooms on its platform. On many earlier instances we have seen people using Twitter to report live from the scene of accidents and attacks and also using Google Maps and other location based apps to track and inform on locations. There have been numerous instances of technology and the quick-moving startups coming to the rescue of people in distress situations.

With the pros come the cons.

The same technology that comes to the resume of people in distress situations also helps the terrorists and anti social elements coordinating with and connecting to each other. Post the Paris attacks we have seen Anonymous taking down the Twitter accounts helping recruit fighters for ISIS. The same Twitter which helps people connect to and help each other is being used by the very people who pose threat to our security.

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Toyota is known to build affordable and sturdy vehicles which require minimal after sales care. The Toyota trucks have been known to survive in the harshest conditions across the globe. Very good for the consumer. But, the same Toyota trucks have fallen into the hands of ISIS and other terrorist organisations and have caused much damage to humanity.

The advancements in technology are a wonderful thing. The unrestricted and easy access of these technologies is again a wonderful thing. But, the biggest question that arises with this kind of free access is that how do we ensure these technologies do not fall into the hands of people who intend to use it to harm humanity. I know there is no direct answer to this question. I am not even sure if such an answer even exists or not. But this is something we need to think as we move along developing new technologies and making their access free and fair.