Archive

Posts Tagged ‘entrepreneurship’

Let’s face it: Neutrality does not exist for start-ups.


download

There have been a lot of heated arguments going on against the telco’s plan to encroach on net-neutrality in India (and the world). Last couple of weeks, the internet was up in arms against the telcos and their internet partners. So much so that the likes of Flipkart faces a social media crisis and pulled out of the infamous AirTel Zero platform. One of the arguments being given was that it will be difficult, or rather impossible, for startups to compete against the big boys. Point taken.

But neutrality never existed for startups. Let’s face it.

Take the case of e-commerce startups in India. Majority of the big players are in losses. Huge losses. In e-commerce today, one of the major factors for survival is that how much loss one can bear. And, the loss bearing capacity depends on how much funding one has. The kind of money funded startups can spend on advertising, discounts and partnerships, the boot-strapped or self-funded can’t. Discounts and marketing is just one area. The funded startups can spend a lot of money on the best of the systems, can hire the best talent from the market and can create best of the workplaces for this talent.

Eve the internet today is not as ‘free’ or ‘neutral’ as we assume it to be.On the internet, we donot see what we want to see. We see what is shown to us. Organisations spend a lot of money on Facebook and Google ads to reach out to the customers. Again, the company with deeper pockets is ‘seen’ more.

The path for a new startup has never been easy and will continue to be so. Startups have always been innovating to beat the big boys. Some are able to, some don’t. That’s how it will be always.

Starting an E-Retail Venture in India: Five factors to Keep in Mind

September 9, 2013 1 comment

00d4d_1ecommercetrolley

Organized retail in India has been a grand success in the last decade-and-a-half. The rapid urbanization in Indian cities gave rise to malls, multi-brand and single brand stores. The increase in income levels across the population as well as double incomes of the new generation nuclear families contributes to the substantial increase in the disposable income of the Indian consumer. Of late, the physical infrastructure is not able to keep pace with the rate of increase in urban population, giving a chance for both the consumers and sellers to explore alternate options.

With the increase in accessibility of the internet in India, the retailers have started going ‘virtual’. The ‘virtual stores’ or the ‘e-stores’ scene is already bustling with activity in India and given the demand there is a huge scope of expansion for established players and also a scope for new entrants. E-retailing scores over traditional retailing in a number of ways. The retailer is spared of the costs related with the brick and mortar set up whereas the consumer gets the benefit of choosing from a wide range of products sitting in the comfort of her home thus saving on travel costs and time.

A country’s prospect for online retail success is closely related to how many people use the internet and how many of them are comfortable purchasing online. There are almost 120 million internet users in India and looking at the 2020 vision it could reach to 1 billion if it continues to grow at this rate. A quick look at the demographics of India reveals that 64% of the Indian population is in the working age group of 15-64 and 35.0% is relatively young, aged 15 to 34. This is the user group readily willing to adopt the e-retail culture.

Given these figures, the Indian e-retail market is a very attractive proposition. There are already many e-retailers in India and many are planning to set up shop here. Even though the market is attractive, every day there are stories of online stores going bust. This is because online retail in India differs in many aspects from the other parts of the world. I have listed below the top five factors which an online retail business needs to pay attention to if it wants to avoid failure in India.

1. The ‘hybrid’ shopping experience: The Indian e-retail market is not a pure-play ‘online retail’ market. It is gradually moving to and will firm up as a ‘hybrid’ model where the customer ‘orders’ the product online but ‘buys’ only after checking it physically at the time of delivery. Although, this happens more in the cases of apparel where the customer needs to try the fitting and size of the product before buying. With the customers already feeling comfortable with the model, it will spread to other product lines such as electronics and even consumables.

2. Reliable delivery and returns: One of the most important factors contributing to the success of an e-retailer is the on-time delivery of the products. It is a known fact that the supply chain infrastructure in India is not up to the global standards. So, an e-retailer has to ensure that either he sets up its own delivery network or partners with a trusted party. The delivery network not only needs to ensure the delivery of the products but also the returns in case of change of mind at the time of paying or in case of faulty goods.

3. Cash-On-Delivery payment mode: The unreliable delivery infrastructure in India helped ‘cash-on-delivery’ option gain popularity. The customers were wary of paying upfront in the wake of uncertainty of delivery. The COD option allayed the fears of the customers as the cash exchanged hands only at the time of delivery. Even with the improvement in delivery infrastructure, cash-on-delivery will always be preferred payment option. Consider the fact that an established e-retailer such as Flipkart, which has a robust delivery network trusted by the customers, receives 60% of its payments as cash-on-delivery of card-on-delivery.

4. Pass on the savings to the customers: The Indian customer is very price sensitive, especially in the case of branded products. She would check the price of the article at multiple websites or stores before buying it. The e-retailers generally save on costs which tradition brick and mortar sellers incur on the physical infrastructure. Majority of the e-retailers are already passing on these savings to the customers. This has helped building a perception that online prices of products are and should be lesser than the store prices. Any new entrant in the market will have to follow the trend.

5. Difficult to fit one size to all: Always remember that India is a country with 1 billion plus population which speaks 20+ major languages and boasts of diverse cultural and demographic characteristics. No organization to have uniform policies and tactics across the country and hope to succeed. Same is the case is with e-retailers. They have to customize the products and services according to the requirements. The mantra here is to be receptive to the feedback, sense the needs of the consumers, tweak your operations and serve the customers.

On a concluding note, although the Indian online retail market presents a great opportunity for retailers to explore, many factors need to be kept in mind before taking the plunge. The entry barriers are low and there are hardly any restrictions from the government agencies to set up an online store. This is bound to increase the competition. Only those who go to market with a customer centric approach will be able to survive and flourish.

Rise of the Angels- Why are Angel Investors so important today?


images (1)

Before the arrival of the computers and later internet, most of the enterprises were either based on manufacturing, trading or providing services. It took a good amount of money and time to take the idea from the drawing board into the hands of the first customer. Back then, a start-up could easily employ 20-50 employees even before getting its first customer. Even when the computers came, it was still very costly to acquire or lease a computer and build a team to work on it.

The last 15 years have seen the computers becoming affordable, internet reach wider and tools to ‘build’ the idea cheaper. The affordability of the computers and the internet, has drastically reduced the cost of creating a prototype and building a small team.

Venture Capitalists generally are process driven and have a long ‘Due Diligence’ process and like to invest an amount which falls in their ‘investing range’ and also would want a ‘Board Seat’. A start-up which requires just a 4 member team and softwares worth a couple of hundred dollars and a small place to work for a couple of months to create a prototype or ‘start-up’, might not want to go through the due diligence process or offer a board seat. And, yeas, the amount of money required to start-up and scale might not be that large.

Enter the Angels!

The Angel Investors generally invest much lesser amounts per start-up than the VCs. Angel investors are typically well-connected, wealthy individuals. The lesser amounts of initial funding required these days to start-up (which means a lesser risk to the investor in case the start-up fails to take off), has induced more investors in the start-up ecosystem. They have a much shorter or no due diligence process. For a start-up looking for small yet quick investment, Angel Investors become the automatic choice.

So, Angels are here. And, they are here to stay. The lesser amounts of money required to invest in start-ups today and the bigger risk appetite of the Angels, has made them very important to the start-up eco-system. They are the ones who germinate the seeds of entrepreneurship.

So what makes Start-ups prefer Angel investors over VCs?

There is no hard and fixed rule which separate the Angela and the VCs. Vcs behave like Angels and vice-versa all the time. Sometimes the investor participates in one or both the funding rounds- As an Angel or a VC. So, if you are ‘starting-up’ and are looking for investment, just check on the intentions of the investor.

Company vs the Product: Where as VCs come with a bigger investment, they are more committed to the creation of the company and guiding the entrepreneurs, the Angel Investor helps developing the product, or, as we say- prototyping the idea. So, if someone is looking for scale and growth, VCs are the ‘to go’ investors. The VCs also bring in their experience, contacts and also the early adopter customers. The Angels will just give you the money and generally do not involve in mentoring. So, take your pick. Carefully!

This is what Apple should be doing!

March 3, 2013 3 comments

Apple-Logo_51

Apple stock tanked to $430 last week in the wake of concerns on the future of the company and its future range of products. The stock is 40% down from its peak.

There are rumors of Apple working on a ‘wearable gadget’ and has even filed for a patent application. But there are doubts on the success of this product. Also, this is going to be in the low price band ($100-$200), which definitely means lower margins. Also, going by the trend, Apple now will be spending much more on marketing its products than it did earlier. Times look tough for Apple.

Now what should Apple do? I have a suggestion.

It is high time Apple gets into Gaming. Apple, especially in the US dominates the UI for mobile phone and tablets (and to some extent the laptops as well). Given the ‘mobility’ of mobiles and tablets, Apple does have a great chance at Mobile Gaming.

Now, there are many games available in the Apple Store as app downloads. Yes, Apple is also making considerable amount of money from the downloads. How different Apple Gaming should be from the normal gaming Apps available at Apple Store? Apple should make the best use of the hardware available in its devices and introduce the ‘elevated gaming experience’- both online and offline, single player and multi-multiple leveraging the wi-fi and the 3G. Currently there are a few players in the mobile gaming arena but all of them either offer downloadable apps (Angry Birds by Rovio) with online integration or online games using the internet (Zynga on Facebook). There is also another category of devices such as the Sony PSP providing the ‘portable’ gaming experience. The true mobile gaming experience is still missing.

Now, if Apple is able to capitalize its dominance of the mobile UIs and its expertise in the hardware-software integration, it can usher a whole new arena for Apple to spread its reach and find a new revenue channel.

Whats new with Mega?

January 22, 2013 Leave a comment

Kim-Dotcom-appears-in-a-N-007

Internet entrepreneur- Kim Dotcom came up with his latest venture a couple of days ago- MEGA. Mega is a the reincarnation of Megaupload- the cloud storage service that was declared an outlaw- accused of facilitating copyright violations and piracy. The site was shutdown in wake of an ongoing investigation while Kim is out on bail. In its heydays, Megaupload boasted of 50 million visitors daily and accounted for 4% of Internet traffic before it was shut down in January last year.

Dotcom launched the “Mega” site with a lavish party on Sunday, the anniversary of his arrest on charges related to Megaupload. Half-a-million users registered for Mega within 14 hours. The publicity for the new venture generated so much interest among users worldwide that within hours Mega was facing server troubles and Kim offered his apologies on Twitter.

So what is different in Mega? Mega users will have access to 50 GB of free storage space and will be able to share their files with other users. This is ten times the free storage space offered by Google Drive and 25 times the amount of space offered by Dropbox.

And what is the difference between Mega and Megaupload? Mega “enforces” encryption on the data being uploaded. This means before the data is loaded on to the Mega servers, it is encrypted and the encryption key is not with Mega. This means, Mega can not and will not have ‘access’ to the data. The encryption is more to save Kim and his company of accusations of copyright violations than for the benefit of the users.

I bet the investigation agencies will be already trying to find holes in Kim’s vest and I can only speculate whether they will be successful or not in finding one, but, I consider the launch of Mega and the kind of attention it has managed to draw nothing less than dramatic. Wish you success Kim!

An advice for Flipkart (and other start-ups)

January 20, 2013 Leave a comment

flipkart

Flipkart established its name as an online bookstore. Although it has ventured into many more product categories in recent years, it has been only moderately successful in establishing its name as an online retailer and grow beyond the ‘bookseller’ tag. One reason for the same is customer satisfaction beyond delivering books. I had a first hand experience of a major flaw in their delivery network last week.

I have been using Flipkart for order books for more than two years now and they never gave me a chance to complain. The service was just perfect.

On 13th Jan ’13 I ordered some fitness equipment and was assured of delivery within 3-4 days. I got a call from delivery boy on 17th Jan morning that he will be delivering the package at my address in next 30 mins. I waited till evening and no one came. I called the guy in the evening to enquire about my package, he assured me that the same will be delivered next morning. I waited whole day, no package came. In the evening I called up the Flipkar helpline and on enquiring the status of my ordered was told that the order was cancelled (although the Flipkart website still showed me the status ‘approved’). On enquiring further, the call center agent told me that the delivery boy could not find the address and cancelled my order. I was astonished to know that the order was cancelled- that too without informing me! I protested to the call center agent that how can you guys cancel my order that too without my permission and without caring to inform me? The agent squarely blamed the ‘Blue Dart’ courier guys on the fiasco and told me if I still want the item, I’ll have to place a fresh order.

And how were the books delivered to me on the same address? The agent told me the books and small items are delivered by their own delivery boys and for other items, they use Blue Dart.

Here is a perfect example of choosing your partners in business. For a customer like me, who was very satisfied with the services of Flipkart, the expectation was to match the expectations they had managed to set with me. But, itwas not the case. Why? because on all the earlier occasions, the delivery was done by Flipkart itself and on this last occasion they entrusted the responsibility to Blue Dart and messed it up. Even though Flipkart have been able to set high standards of service delivery for their own delivery staff, but the same lacks in their partner- Blue Dart. For a customer like me, I don’t care whether the package is being delivered by Flipkart or someone else, I expect Flipkart to own the responsibility.

May be, this is the reason that Flipkart is not able to go beyond being a very good ‘online bookseller’ to becoming a full fledged ‘online retailer’.

A lesson for all start-ups (and other businesses as well) on how an improper partner can derail your long term goals and business strategy.

Food Chains- Consistency is the key.

January 6, 2013 1 comment

WAH JI WAH Delhi Graphic

I first ate at “Wah Ji Wah” about a year ago at their outlet in Sector 18 Noida. Since then I have seen the chain expanding by leaps and bounds. I recently ate at their outlet in Patiala and then at South Ex, New Delhi- although the dish I chose was exactly same I had at their Noida outlet, the taste, the tinge and the tenor of their “Soya Chaps” was different at all the three outlets.

Of late we have seen many such chains (Soya Express, Dosa Express etc) expanding their outreach footprint into many Indian cities. Frankly speaking, I have had lunch at Soya Express only once and that was not a very good experience and I have never tried Dosa Express. Now, take the case of Mc Donalds or Pizza Hut or KFC- when I walk into one of their outletss and order something, I already know what it will taste like. They might have localized their offerings in terms of taste and portion size, but within a country, I hardly feel any difference when I order a Farm Fresh Pizza from Dominoes in Delhi or in Chennai.

I really appreciate the efforts being put in by the Indian fast food/takeaway chains in offering their wares in multiple locations, but the key to achieve customer satisfaction is offer consistency in terms of taste and customer service. The customer should relate the eating experience to the brand and not the location. I should not be a customer of a particular outlet, I should be a customer of the brand.

[This post should not be considered a complaint against Wah Ji Wah or any other chain. This should be considered as an advice for all such startups and SMBs striving for expansion.]

Building Cold Storage Capacity- A big opportunity in India?

December 25, 2012 1 comment

While reading about the supply chain infrastructure for agriculture in India, I came across a startling fact- India has only 5386 stand-alone cold storages, having a total capacity of 23.6 million metric tons. However, 80 percent of this storage is used only for potatoes. Believe it or not, the remaining infrastructure capacity is less than 1% of the annual farm output of India, and grossly inadequate during peak harvest seasons. This leads to about 30% losses in certain perishable agricultural output in India, on average, every year.

Some of the companies have already started contract farming in India. They work with the farmers right from the time of sowing the crops till the produce is ready to be shipped, refined and sold. In such kind of a framework, the companies have a lot at stake in the percentage of the produce that actually makes its way into the shopping cart of the consumer.

With the Indian Govt. opening up gates to the FDI (Foreign Direct Investment), the farmer to consumer-cart chain is set to become tighter. More the losses in the chain, lesser the margins for the food chains. When it comes to perishable agri-products, cold stores (both short term and long term), become a necessity to reduce, if not eliminate, losses-in-transit.

Now, back to where I started the post- the current cold storage capacity is good enough for less than 1% of the annual farm output. The retail chains have limited shelf space, but when the produce comes from the farms, it comes in bulk. Without proper storage facilities, the farmers tend to get rid of the perishable produce as soon as possible. Thus, getting a very low price for their harvest. Same happens with the next person in line who buys the produce. The end result of this ‘hot-potatoes’ game is that for some part of the season, there is a glut of a particular produce and for the rest of the year, it is not just available.

The wait time from the time of harvest till the produce is placed on the shelf to be picked up the the end consumer is the window where cold storage will play its part. That provides a huge window of opportunity to create and rent out cold storage capacity in India. Or, the storage capacity can be created at various stages- for the farmers at the village level, for the suppliers at the entry point of cities and the for the retailers near their outlets.

I am sure, some entrepreneur, if not already working on this idea, will pick it up soon and kick off the revolution!

Categories: Strategy Tags: , ,

Bus ticketing space gets hotter!

July 28, 2012 3 comments

When RedBus– an online portal to book bus tickets was launched in 2005, many thought it won’t be much successful. Who will buy a bus ticket online? They said. Last year RedBus sold 50 lakh tickets from its portal. Which essentially means 13,000 tickets sold per day! RedBus is also said to be looking for acquiring offline ticket booking companies in Singapore and Malaysia.

Last week, TicketGoose raised $4.5 Cr from angel investors. The details of the investors and stake diluted are not yet known but the company is valued right now at $7 million. I had never heard of TicketGoose until this news broke out. Now check this out, TicketGoose books 4000-5000 tickets a day- which by no means is a small achievement, given the fact that they started out in 2007. In ticket booking, they come next only to RedBus and claim to have the largest inventory (partner bus operators) among all the bus ticket booking sites.

There are not many players in theis segment as of now. But, with RedBus gaining traction and TicketGoose managing a decent angel investment and acquiring a good chunk of customer midspace, the segment is bound to get hotter and attract more investments. There is another company called AbhiBus- which is a very small player as compared to RedBus and TicketGoose.

 

 

 

Ghar Ka Khana – Home cooked food at your doorstep!


Last week I happened to learn about “Ghar Ka Khana” tiffin service in the City Beautiful- Chandigarh. I caught up with the founder (and owner) of Ghar Ka Khana service and was astomished to know that the venture is being run by a girl in her early twenties! Along with running her venture, she is also doing a day-job.

Here is interview with Gagandeep Kaur, the founder and owner of Ghar Ka Khana.

How did you get the idea to start Ghar Ka Khana?

Actually, I never had anything on my mind to start a business of my own. When I first relocated to Chandigarh for studeis, I was staying in a PG. There I experienced a lot of problems with food. I tried a few tiffin services as well, but all of them disappointed me. I thought over it and realized that there will be hundreds of people like me in Chandigarh facing similar problem with food. So, I made up my mind that if I got a chance, I will definitely start my own tiffin service which will provide delicious and healthy home cooked food.

What was the motive behind picking this name?

I wanted a name which should give a clear idea of what the service is about. There are lots of students in Chandigarh who stay in independent apartments and PGs and miss home cooked food. So I picked up this name- Ghar Ka Khana, which conveys what we deliver. Our current and prospective customers instantly connect to the name.

What type of clientele do you have right now?

Students and working professionals comprise of a major chunk of our customers. Presently we serve students living in their own rented apartments or PGs and offices. Our corporate customers include banks, IT companies and coaching centers. Our clientele includes ICICI bank, HDFC bank and JUSTdial besides many others.

How you distinguish yourself from your competitors?

We differentiate from our competition in many ways.

The essence of our venture is ‘relationship’. To start with we offer our new customers free trials. Once they are satisfied with our service, they can opt for the regular delivery.

We have a strict check on quality of ingredients we use. We make sure we sustain the standards we have set for quality in every single delivery.  A customer will never forget a single bad service even it happens once in 100 deliveries. So the hallmark of our service is good food, delivered hot and on time- every single time the customer orders. I personally buy all the ingredients and supervise the preparation of food.

We lay a lot of stress on hygiene. The tiffin comes in hygienically packed disposable containers.

How do you market your venture? Till now, its word of mouth. ‘Delivering what we promise’ is our marketing tool. It has been working fine till now!

What are your plans for the future? We are currently delivering 200+ tiffins a day. We are aiming to increase this number to 500+ very soon. From tiffin service, we are planning to move into organizing small office parties and outsourcing of office cafeterias. We do not have a timeline for it right now, but yes, I have it on my to-do list and will accomplish it in next couple of years.

Any message you want to to share with young entrepreneurs? From my personal experience I would only say that everything seems difficult before you attempt it. If you work hard enough, everything falls in place. Dream on, dream big and work hard to transform your dreams into reality.