Category Archives: consulting

Only New; Not New & Improved

This is a short post – largely motivated by some questions that we are asking ourselves. How do we survive in an established market which already has so many service competitors? Is our strategy wrong or are we just not trying hard enough. Maybe we should figure out what clients want and then carve out a niche for ourselves, or maybe we should only go after a particular type of client? Or maybe we can invest a bit of time and effort to create long-lasting insights that open our clients’ eyes to the possibilities of tomorrow? Yes. That last one sounds like a plan. At least we won’t be creating a host of “me-too” offerings.

It’s important that we refrain from telling our customers what they need. In fact, we should open their eyes to things that they might need in the future. Do they know what could potentially disrupt their comfortable lives? Can we become their partner in future-proofing? At the very least, we would be doing a favour to both ourselves and our clients by creating new categories, instead of fighting for market share.

Market research is good. It spouts a lot of data, is exciting for the quants, but it comes with a bias. Customer feedback will mostly be about things that customers know about and hence, all their preferences & non-preferences will be constrained by their knowledge of needs. If one were to ask the average media consumer of the ’70s and ’80s, not many would have asked for the internet or a smartphone. Or maybe 150 years ago people would have voted for faster horse-carriages instead of a car.

Similarly brand communications also need to undergo a more forward looking change. Instead of increasing their messaging frequencies, brands should work to create a higher purpose of existence. Technology is on our side. There is great fragmentation of media. Brands can really get close to customers and create tailored conversations. Brands can afford to wean themselves from preachy/informing advertising and give the stakeholders something to talk about, engage them, co-opt them, titillate them and be their friend.

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India’s Tier 2: Incentivize Hidden Liquidity

I’m back from a yet another trip of one of India’s holiest cities – Allahabad – a city with deep historical and mythological underpinnings, yet fast trying to embrace modern India’s newest fads. It’s a city I grew up in and therefore I have had the chance to observe social and economic opportunities first hand. On this trip it seemed that everyone in the place was buzzing with the promised conversion to a “smart city”.

However, what could easily derail any “smart city” dream is the lack of basic necessities, infrastructure, education, growth mindset and talent drain. Sure there is enough economic growth as anecdotal evidence from local business that are proxies of consumer spending & confidence like entertainment, food, consumer goods, etc. suggest. But the growth is ad-hoc and haphazard. There has been growth in transactions and economic activity, but not HDI. I don’t think a “smart city” can be made without effecting change in fundamental mindset, infrastructure and employment dynamics .

But here’s an idea. Why can’t such mid-sized cities build an eco-system which nourishes a variety of new businesses spanning areas like social, infrastructure, education, medical, consumer, entertainment, information & media, transport, etc? Why not put the huge amounts of idle cash/hidden cash to good use by incentivizing the hoarders of such money?

The problem is that this liquidity is either invested in real estate through legal and illegal means or it is spent on consumer purchases & entertainment outside the city (typically in big cities or abroad). But hardly any of it is ploughed back to be reinvested for the good of the city.

It is my belief that such liquidity can fund a lot of new start-ups in a variety of areas – there are plenty of higher educational institutions churning out bright students. But lack of exposure to new ideas, the absence of a viable guiding platform and the fear of such cash coming under the taxman’s scanner are holding back many bright ideas. Therefore for the youth, the only way to progress is to move out of the city after graduating.

So when one can have tax amnesty schemes like voluntary disclosure of incomes, why can’t we have another such amnesty scheme which mandates the pooling of money into an fund that bankrolls new business ideas that will make a difference to the city, generate employment, discover new talent, change mindset, and truly prepare the Allahabad to usher in the “smart city” tag.

Fundamentals Of A Good Business Plan

In my line of work, clients, business partners and prospects often ask me what a good business plan looks like. I don’t have a straight answer to that because each business, each category and each industry has its own idiosyncrasies and it’s hard for me to generalize. I’m sure that I could offer a standardized answer if I put my mind to it, but I like to feel my way into engagements rather than check off items on an objective list of things-to-be-done.

My work is a delightful mix of business development, strategy consulting, category creation, market expansion, brand management, forging partnerships, financial analysis, and portfolio management. All of it becomes even more exciting given that I am not constrained by any sectors. Hence, my belief in co-creating businesses by fusing my lateral experiences with the vision & mission of the entrepreneur.

Very often the most basic issue with business plans is that owners fall in love with their product and/or ideas so much that they fail to justify the existence of the business from the prism of an investor. And that’s very crucial. There’s nothing wrong in really believing in your business, but one should always strive to answer a few critical questions:

What unmet needs are being addressed? Why now? And, what is really different?

There are many I’ve met who believe that their product/service is the best or first of its kind or not replicable. But what is the main customer pain point that you are addressing and is the time ripe for it? Many businesses die an early death simply because they are ahead of their times, or because an ecosystem to support the business or expand the market has not matured adequately. For instance, online grocery shopping may not have worked in India five years ago, but today with technology, logistics, payment mechanisms in place it seems to be a viable method.

However, the toughest part, and the one that requires maximum attention, is to identify the one or two strongest customer propositions. This is what defines your business in the market place; this is what your entire business strategy will be based on; this is what each and every employee in the organization will align towards.

Do you understand the chosen industry and competitors well?

Are you trying to be an entrepreneur because it’s sexy to be one, or are you entering this having done the necessary research? Passion is important, but that alone doesn’t pay the bills. It goes without saying that unless you do understand the forces at play, the outcome will at best be mediocre. Will you be able to both open up a new market/category and sustain market share? Or will you be the guy who opens the market, educates the audience, only to see others with deep pockets rush in and edge you out?

What are the key factors that will keep the business in business?

You obviously know where the revenues will come from and may have even formed very scientific assumptions to predict future revenues & costs, but you might have to consider every tangible and intangible aspect that will keep you going. You need to be adaptable to evolving needs; in fact you should be able to proactively cause people to change their needs & habits. That’s a very important skill. For example, if you are a healthcare company, are you going to choose only the unwell as your target client, or do you want to inculcate a habit of regular check-ups among the larger population and thereby create a much larger catchment area for yourself. Similarly, you should be aware of how government policies can affect you, what wind is blowing politically and how that could shape the policy environment. Is your universe of target audience expanding or shrinking; and what adjacencies to explore?

Do you understand your potential investor?

The potential investor is probably reviewing several plans simultaneously. She/he may not have the time to do detailed research on the businesses at this early a stage. So try to present her/him with as many relevant information nuggets as possible, with due reference. If you are presenting a certain market size & dynamics and you got the numbers from Report XYZ; please do mention – after all you don’t want anyone to think that those numbers were pulled out of thin air. Tell the investor why you are the right person to back, who are the others that take decisions in your company and what are their backgrounds. Support your financial projections with rational assumptions and go into as much detail as possible.

And don’t forget the most important aspect that any potential investor looks at – a successful exit. Every investor will want to engage with a player who has a definite plan to provide an exit – whether through buybacks, IPO, trade sale. So it comes to 3 things: Ability to Scale, Ability to Execute and Ability to Exit.

The list can go on, but the fact is that a well-researched business plan, that showcases the entrepreneur’s passion and gumption, always wins. The trick is to tell a compelling story, grounded in rationality, which excites everyone!