Do they “need” us?

A friend, who is doing some great work in the space of delivering quality healthcare to remote rural customers, narrated a story of how she went to meet an old lady whose medical tests revealed that she had a high risk of cardiovascular disease but when suggested regular monitoring and diet restrictions,the old lady said that she is doing absolutely fine and that  she does her daily chores without any problem!  Even her family thinks she is fine.

My friend asks, do they need our “help” at all? Who are we to them? Are we being forceful ? What is their purpose and what is ours? A good set of questions for all those “BoP enthusiasts”. (I admit I am not very impressed with the way in which the term BoP is used by most “experts” today.A clear urge to sound “cool”. For all that you can see, I avoid using the term BoP. But then, who cares if a minnow like me is not impressed?)

Ok, coming back to the topic. I face a similar situation. In the work that I do, we sell cattle insurance, purified drinking water, smoke free stoves, all of which, by all means have little or no felt need amongst our existing remote rural customers. If need for healthcare is not felt, it is obvious that the same people will not value any of the things we are selling.

I hav a very different analogy for this. Imagine the world before iPods. People were happy with normal MP3 players and could never believe that hearing experience could be better. Even if they knew that hearing experience could be better, they couldn’t justify spending the exhorbitant amount for ipod. They said, whatever quality the normal MP3 s offer, is good enough and that there isn’t any problem with that quality of listening.

Then some of the rich brats started purchasing iPods either because they appreciated better quality of  sound/design or because they wanted to be a part of the elite tribe that owned sleek,stylish and expensive ipods. Slowly, more and more people wanted to buy iPods and soon a lot of the “normal MP3 people” now wanted to buy the ipod! They were suddenly dissatisfied with the sound quality and clumy shapes of the normal mp3 players. After a while, iPods became the defacto music player for the great “discerning” middle class. The “normal MP3 people” have  now started seeing and appreciating the better quality of sound/design of the iPod.

I believe, the same route has to be followed for the things like cattle insurance, purified water, quality healthcare and smokeless stoves (and possibly even information). This means we have to use a sly marketing plan to first break in to the “territory of aceeptability” of those who can spend and then ensure that the “fad” becomes a normal way of life. I must point out here that, aside from the great marketing, iPods are inherently a great product. It has a great sound quality and a brilliantly done design. This means that there has to be an underlying benefit in what you are trying to provide. The product and service quality has to be brilliant if not flawless.

I know I sound like a dirty capitalist (and it might be too simplistic to compare healthcare to iPods) but some where back of the mind I know that the stuff that I want them to purchase (healthcare, cattle insurance, purified drinking water, smokeless stoves) has some underlying benefit which would positively affect lives. Customer “education” as a way of “changing” habits and adopting better products/practices has proven to be expensive and fairly unsuccessful. We have to be sly. Not emotional. Anybody is free to argue against what I say. Opinions invited.

Off course, I do not want a moral debate on what should be available for free and what the job of the state  (a la healthcare, primary education, market information)is to provide. Let us get real and accept the fact that the state run machinery has not been able to do a good job of making these available. However, you are free to question whether  better risk mitigants like healthcare, purified water, smoke-less stoves and better risk transfer mechanisms insurance are needed at all!

Would you pay for “Information”?

The biggest problem plaguing rural supply chains is lack of information and/or information assymetry. However, owing to the developments in technology in recent years, it is now possible to reach out to the remote rural locations and make such information available at a fraction of a cost than what was possible in the past. The Govt. has tried several measures to reach out to the remote rural locations through pamplets, radio and now television to provide the information for free. However, the fact that there is a huge difference between the prices of vegetables leaving the villages and the prices of vegetables reaching the urban consumers’ table indicates that there is a certain case of lack of information (on how to sort vegetables, how to grow vegetables which spoil a little slower) or information assymetry (demand for the vegetable on a particular day).

 It is obvious that availability of such information with the rural entrepreneurs/rural masses enables them to improve the way in which they run their business/ take care of basic needs (like education, health). It is also true that technology has improved and penetrated to a great extent and permits the development of  a platform that can deliver information at a very low cost.

The hitch here is two fold: 1.) Would people be interested in paying for the information?

2.) Do they have the money to pay for the information?

When it comes to businesses or life saving information, the second question is not important. Off course, there is a need to share information for free (something like where is the nearest shelter in a floodhit area) but in cases where you get to know a better agricultural practice which can be implemented at almost no additional cost, would there be people who would pay for it?

The “sale” of information on better methods of crop production, crop prices, better dairy management, etc is something that a lot of people have considered with the use of technology but only few have been able to monetize it.

Is it completely impossible to monetise information dissemination? Is giving infromation as a Value Add to existing product or service sales the only way? Should the channel partners delivering products/services to the rural masses finance the cost of delivering the information or should the rural masses (who make use of the information and services to increase returns) also pay for it? How do we make them pay?

You may find it interesting to go through a presentation on the use of ICT for Agricultural development, which lists out the various methods used to make information available to the farmers using technology.

Characterisitics of good franchisees

  • Methodically screened agents (Implies that a fair amount of trial and error has to be done to decide upon the best fit profile of a potential franchisee operator.)
  • Strict quality monitoring and follow-up training (Standardised and exhaustive training modules )
  • Uniform branding and product mix (Centrally experimented and released based on the learnings obtained by the franchisor on the effect of tweaks on different aspects of the product mix. Implies a lot of trial and error again.)
  • Effective promotions
  • Low cost of goods achieved through scale (This is crucial. In order to ensure the quality of the finished product, it is essential to ensure that the raw material that goes in is standardised and of the same quality. The only way this can be ensured is by offering the raw materials at the least price.)
  • Stiff penalties for violating the rules (including expulsion)

Niche in life

Wrote this sometime back for my friends but thought I should put it on the blog.

When I was a kid, I was not very good at games….frankly speaking, I never had the opportunity to play many games. The only game that I ever played was football. In fact, childhood Bengal was a football academy. From Kolkata’s maidaan to the the small muddy villages, it was football allover. From the wooden spikes to the naked feet, it was football allover. From the anklets to the crepe bandages wrapped with safety pins, it was football allover. From the twisted ankles to the badly swollen shin bones, it was football all over.

Every year the city and the towns (not the villages generally because the people in the villages wouldn’t normally have enough to drape themselves) would be draped in Green and Maroon(colours of Mohunbagan club) or Red and Yellow (colours of East Bengal club), every four years the city and towns would be draped in Blue and white (colour of Argentina) or Yellow (colour of Brazil). Practically everybody was a footballer! Even if somebody did not play, HE had something to say about the game. (Frankly speaking Bengalis play a very few of the “games” on which they have a strong view).  The HE is capitalised here to point out that Bengali women were completely missing from this area of having a view on football. The women grew up attending music or dance classes, learning how to cook and getting ready to become a good marriageable “package” right from childhood. Once they are married, they concentrate on controlling the lout who happened to spend time mostly outside the house solving away all strategic worldly affairs. This lout is the husband.

By the way, all that is history now. People do not discuss football and girls are not limited to the home. Its cricket and its Mamata Banerjee.

Anyways, I was digressing a bit too much. My point was “Practically everybody was a footballer!” so finding a place in the class team, college team was always difficult. Given my physique which was several times worse (read thinner) than what you see now, football was a difficult game for me. Well, that is what people thought when they would look at me to decide whether I could join the team or not. Certain answer was a no. I figured out a strategy to ensure I was in the team because I knew that once I was in team I would give my team ample reasons to continue having me in the team. The strategy was, I said I play in the wings (a winger sticks to the right or left flank of the ground during the game).Nobody wanted to play in the wings. Everybody wanted to be in the middle. Everybody wanted to be a midfielder, a forward! But, I said I would play in the left wing. Playing in the left wing meant you’ve got to be able to kick with your left foot. I was lucky to be able to kick with both my feet. So there I was, giving my team a proposition to play in a position where nobody would play! Normally amateur football happens in the middle with everybody chasing the ball around the middle, the flanks remained empty. There lied my opportunity. I took the ball right down from the bottom and went past the midfield upto the corner of the opponents side. Nobody stopped me because every player of the opponent was stuck in the middle of the field! By the time I reached the other end, the opponent players would rush from the middle towards me in the side to prevent me from scoring. Now the middle would get empty. I simply lobbed the ball and centered it in front of my forward who would wait in front of the goal, unmanned and then a smooth header or a slow nudge saw the goal!

I scored a goal only on rare occasions but I had to adpot this weird strategy to ensure I was in the team. To ensure that I could strategically be at a place where no one else wants to be and yet have a ball!! I enjoyed my game.

The approach to the “marketplace” business model

Jason is back with another great post on market place business model. By marketplace, he refers to a platform which connects buyers and sellers who find it difficult to connect.

A few insights distilled from his post: (I must say that the full post is a MUST Read. This summary here, is not the best!)

  • The biggest problem for this kind of business is which side’s problem do you solve first? At the beginning, neither the seller or the buyer would come to you! Jason suggests, tackle the seller side first. Create the right proposition for the seller. It is easier to convince the seller to sell through you because it would anyways increase their sales. This would help you in creating an inventory, so that the buyer knows you have inventory and returns.
  • Do not automate right from the beginning. Wait for some time and find out the right things to automate. Or else, a lot of money might be wasted in automating something which may turn  out to be a wrong approach.
  • In order to get people to your site, SEO and google ads is passe, use a novel strategy like writing a useful guide or something that the chance visitor would bookmark/twitter/FB because it is genuinely useful. This would start getting eyeballs for your website!

Given the fact that my colleagues are fighting with a similar business model in different sectors. I am forced to wonder:

  • How would a platform that connects rural homestays to tourists start? What could be their “novel strategy” as mentioned by Jason? What could get more eyeballs to their website?
  • What would be novel strategy for the marketplace which connects buyers and rural artisans?
  • What would be the novel strategy for the marketplace solution which connects rural distributors of energy saving stoves with manufacturers of energy saving stoves?

Economics of Happiness

US Federal Reserve Chairman Ben Bernanke talked about the Economics of Happiness in a commencement speech at the University of South Carolina on 8th May, 2010.

A few takeaways:

He moves away from the materialistic reasons of happiness as proposed by many economists and suggests the following as things that lead to happiness (off course in addition to materialistic gains):

1.) spending time with friends and family,

2.)getting engrossed in the “activity” you are involved with,

3.)recognising the fact that everything in life can not be under our control.

4.) Remember all the good that happened with you!

He also tries to answer the age old question that we often ask ” Are the people in the poorer countries less happy?” or ” Are the people in the villages less happy than the city people?”

He says that what matters is the relative possession of wealth. So he says,”If I live in a country in which most people have only one cow, and I have three cows, then I will have lots of social status and self-esteem and will thus feel happy. But if everyone around me has a luxury car, and I am hung up on status, I won’t feel very special unless I have both a luxury car and an SUV.”

He ends it off by saying something very interesting “happiness is nature’s way of telling us we are doing the right thing. True. But, by the same token, ephemeral feelings of happiness are not always reliable indicators we are on the right path. Ultimately, life satisfaction requires more than just happiness. Sometimes, difficult choices can open the doors to future opportunities, and the short-run pain can be worth the long-run gain.”

Perhaps, an effort to draw our attention to the fact that the desire to gain immediate proseperity through financial jugglery has led to a fatal crisis for all of us today. He seems to be telling us that it is prudent to postopne immediate happiness for “life satisfaction”!

Read the whole speech here.

No plan survives first touch with customers

  • The last word on startup success.
  • Why writing business plans is NOT done first. It is something different that needs to be developed first and that is – a business model.  A summary of the lessons learned is given below (copied from the original blog of Steve Blank HERE):
  • A startup is an organization formed to search for a repeatable and scalable business model.
  • There are no facts inside your building, so get outside and get some.
  • Draw and test the Business Model first, the Business Plan then follows.
  • Few if any investors read your business plan to see if they’re interested in your business
  • They’re a lot more interested in what you learned

Here is another article on the Financial Times (Read FT Article **). The article discusses the act of pivoting in a startup which refers to making minor changes in the original idea of a business rather than going for a completely new business altogether. It points out that though entrepreneurs start with an idea that looks perfect, it is the feedback from the customer that first triggers a pivot. The more successful you are in pivoting, better are the chances of your startup doing well. The article also discusses how along with many others Facebook and Twitter pivoted and then created history. I guess my previous article on Starbucks (Starbucked)also referred to the same without using the term pivot. I mentioned there that Starbucks didn’t start as a food service concept. Their idea was to sell coffee so that people could make it at home!

One interesting quote from Mark Suster in the FT article:

“Every entrepreneur starts with an idea that they believe makes sense. But then your customers start using your products, your competitors come out with new offerings and your partners decide to launch a similar product rather than working with you. You’re forced to pivot on a regular basis.”

For more from Mark, I suggest you follow his blog which is a must read for any entrepreneur. It talks more than just about pivoting!

** You will need to register for the FT article. Don’t worry, there is a free registration that allows you to see upto 10 articles a month. Trust me, it is a good idea to register free for that! Better still if you can go for a premium membership.