5 Things A Software Startup Firm Must Not Forget

This is a back post from my contribution to the VoiCE blog. Find the original article here.

India is a land of opportunities these days. The last decade saw lot of new technology companies letting their baby cry out and then biting dust as well. Delving deep inside the ones who failed and the ones whose success sky rocketed, we come to know why some were successful while most of them bit the dust. Here are the following simple steps a new company must never forget before getting into business-

1. Plan for the future– Most companies, whether service providers or product developers try to emulate what is already there in the market. While it might earn you business immediately, you need to keep yourself abreast of what the future of your product/service is going to be. New technology becomes obsolete even before it reaches the masses in the corners of the world. Plan for future. Your services might be a hit today. But they will soon be useless if you dont improve upon them.

2. Handle your product life cycle well– Every product has a life cycle. It starts slow. With good marketing, it picks up and the consumption of your product/service increases. If you meet the expectations of the users, the value continues to grow till a time it reaches the maturity. Lot of companies fail to understand the maturity phase and when the product starts its decline. They keep on milking the cow when they should have been raising another calf. As a result, just version control doesn’t help and the product falls steeply in the gorge.

3. Standardize– Indians have a habit of customizing every thing. It leads to many bad things such as slow delivery process, difficulty in getting the right expertise, too many different versions and hampers the brand name of the service/product. Instead, your focus should be on standardization. It is good to give options to the customers. But even the options must have standard configurations and most desired features. Apply the pareto’s rule. 80% of the users are going to be satisfied by 20% of your features. So you have room to experiment with the rest.

4. Collaborate– No company achieved every thing on his own. To ensure better performance and usability of your product/service, complement it with matching products/services from other companies. Make sure it adds value. It will also help you sustain better in case of slow down or product failures.

5. Technology and People– Please note that better technology and better people are the only two things that contribute to the success of any IT firm. Respect your people and update them as well as yourself with the latest trends and game changing innovations. There will be people with brilliant ideas and very bad executions. Boeing learnt from Douglas’s mistake and went on to become the largest aircraft company in the world. Remember!

Hope this was useful.

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Consultancy Retail

Please spare your 10 cents to read the following hypothetical example before we go into the depth of the concept I’m trying to explain.

Imagine a guy named Jagmohan Das. He is a fruit vendor, say a grapes exporter from Nasik or oranges exporter from Nagpur. He has implemented various advanced techniques to increase his produce. He has successfully managed to do that. His normal business model is grow fruits, segregate them as export quality and domestic, tie up with exporters and domestic fruit vendors, make provisions for logistics and at the end of day earn money by selling his oranges or grapes.

However he has some problems with the business and is not able to generate expected returns. They can be (1) His export quality fruits are being rejected by customers as they exceed the minimum level of use of chemicals. (2) He has an option to bring them to domestic market. But due to the perishable nature of produce, he ends up wasting half of his oranges/grapes. (3) He can sell them locally. However he knows only his exporter and do not have the knowledge of the place. So he cant get a good price.

As a solution, he walks in to a ‘Max Consulting’ kiosk locally (in his own city Nagpur or Nasik) and becomes a member. Here he is counseled by the best people in fruits export business and advised on how to tackle various problems related to fertilizers, logistics, export procedures etc. Max guys help him to reduce his export rejection, and also help him sell his export rejected fruits locally. Jagmohan travels from Nasik/Nagpur to Cochin in order to find a market for his oranges/grapes there. Again, he knows no one there and has a language problem. So he walks into the local ‘Max Consulting’ kiosk. Since he is a member, he is counseled, introduced to the right people and helped to set up his business locally. Jagmohan is happy as all this is done at a minimum annual subscription fee. Plus if chooses to use Max Consulting sales channel, he can share a small piece of his profits.

I call it consultancy retail. Making sales, supply chain and logistics consulting solutions available to every town in the country in order to help SME’s do their business better. We enrol small and medium businesses as members and help them to grow their business better. We earn through the membership fees as well as through the percentage profit if they meet their targets. At the same time, we have logistics guys and other agents tied up with us to help our members. We charge them a minimum fees and again as per their deal size.

Is this a good idea?

Some Business Ideas

Have you ever wondered how much a guy selling flowers, books, napkins and what not on the signals of Mumbai earns every month? Try talking to some of these people on the streets and you will be amazed by the figures they quote. That is another fact that they will not be truthful to you 🙂

I always pass the Gandhi Nagar junction that connects Powai-Airoli road with LBS road. In the mornings, there is a guy who sells garlands to the auto rickshaws, trucks and buses. One day, while I was standing at the signal, I observed he managed to sell about 6 garlands within the 2 minute interval till the signal went green. Then there was a minute long gap and he again got a chance to sell his stuff. Meaning he had a 2 minute business time every 1 min he spent idle. So he got 40min every hour to sell his garlands. Consider his lethargy and time spent to replenish the inventory, he managed to sell garlands for 30 min per hour. Since he could sell 3 garlands per minute, he sold a whooping 90 garlands per hour. Wow! I decided to interview that guy the other day. He told me that he was there at the business every morning at 7 and sold garlands till 12 noon. So effectively he got 150 min of business time. He manages to sell about 400-420 garlands every day. Each garland goes for Rs. 5. By that equation, he earns about Rs. 2000, more than 50000 a month. Did you ever in your wildest dream thought a road signal vendor making such money?

Forget them. Have you ever wondered how much the juice corner (who sells that nimbu paani, rose and orange juice) at the local railway stations make? I spoke to one of the vendors. He said they manage to sell about 1500 glasses of lime juice every day. The price of one glass in mere Rs. 3. But it helps him earn Rs 4500 per day. A shop is typically open 365 days a year. So the annual income from the lime juice alone is, hold your breath, Rs. 16,42,500. Let alone other stuff such as biscuits, wada pav, samosa, mineral water and other things they sell.

… And we are languishing in our offices earning meager salaries, cursing governments, waiting for appraisals. Boy, its a sinking feeling!

Railway catering is a lucrative business story

Travel has been very frequent these days, mostly after my marriage. Its so much at times that we are on the wheels almost every alternate weekend. Indian railways should be paying me some rewards back for being so loyal to them. Not that I like them too much, I’m not denying the fact that almost all the recent journeys have been an enjoyable experience. In my earlier post I had written about the eventful journey in a crowded train. This one highlights one more facets of the Laloo Yadav army, the railway catering (or food they serve).

I boarded Lashkar Express, which travels between LTT (in Mumbai) and Agra Cant, last Friday afternoon. As most of us would expect from Indian Railways, it got delayed. We were just about 2 hours away from Mumbai and the train took an abrupt halt at a very small station. It was just about time for the sun to set. Being alone and with no body else on my adjoining seat, I had nothing to do. So I decided to take a walk to the door and get down on the low platform on the station. On the door I met this guy Sundar Prasad (I read from his name plate). From the dress he looked like a waiter in the catering services and from the partially grey hair he looked like a man in his mid forties. He was taking orders for dinner. I registered mine as he went inside our coach to ask if anybody else wanted the dinner as well. He returned in 5 minutes with a dejected face. On my enquiry, he said since the train was not running to the capacity, there were very few orders for dinner tonight, about 15 in our compartment. 15 is a pretty good figure, I said to myself, considering the quality of food they serve. 🙂

“So how much do you normally sell each night?’ I asked. “At least 20-25 per compartment. That too when we are not serving the one’s on waiting ticket.” Oh, cool. Thats a pretty big number. Considering that on an average an express train has about 10-12 second class coaches and 4 air conditioned coaches. So as a sales guy, there are 15 coaches as Sundar’s target. meaning about 1000 passengers to aim at. And he manages to sell 300 dinners at Rs. 40 each, an income of 12,000. My brain had already started doing the math. I prodded him more on other things, say what else do they do, where they earn more and how do they manage. He said they manage to sell about 200 lunches and 300 dinners every day (add another 8000). They could sell more but are not allowed to give to those on a wait listed ticket. Apart from that, they also serve snacks, about 800-1000 plates every day priced any thing between Rs. 10 to 20 (15 was the obvious average. It makes the income to further up by 13,500). Not forgetting the tea, it alone adds to a major portion of the total earning. Besides you also have the wafers, namkeen, cold drinks, mineral water bottles on the menu. Add the income from every thing I mentioned and you could be earning a whooping 50,000 per day per train if you were a railway contractor. Wow! That too without maintaining a proper restaurant and/or spending on over heads.

But of course, there are some obvious problems associated with it as well. Sundar rightly pointed out that the biggest problem was maintaining and replenishing fresh inventory. They had to depend on vendors that we outside their perview. For example, the caterer Sunder was working for was from Ghaziabad. So when the train came to Mumbai, they had to depend on the local supplier for fresh stocks of food. They had cold storages, however it was not always reliable. Moreover the apathy of Indian government in managing a decent kitchen often makes the contractor face the public wrath. Moreover the train delays only add to the wows. Another bad thing is to go through the hell hole of the Indian railway’s tendering process. Even though your performance was good or bad, the contract expires after an year and you need to bid again. Plus, as an owner there is no monitoring your team. SO this is subjected to lot of frauds unless you are a company and have deployed your employee in every train.

Anyway, the train halted for almost 40min on that small deserted platform. It was almost dark by the time we ended our conversation. I told him that I edit a forum with 23,000 members and said I’m going to write about him. Thankfully, he was pleased despite the low orders and the waste of time we did (rather I did). But it gave me a story to write here and a new (read yet another) business idea. May be I’m not going to bid for it, but railway catering is surely a lucrative business.

I would like to…

Alright, I’m not a fan of this book, The Secret, but I must admit that I read it and I see no harm in trying things it says. After all it is for good of all ours. So one of the things it says when you want to achieve in life, big or small, you should always yearn for it and put it on the wish list and a wish board. Good… so here is my wish list.

I would like…

  • World’s big companies to allow me to be a part of their management, one at a time. I believe in process improvement and I’m confident I can help them run their business better than what they are doing right now… I know I’m inexperienced, but I just want them to give me a chance.
  • To own a BMW 3 series Sedan (formerly 325i). I know its not the top end models in the BMW stable, but I believe its the best engineers car till date I have seen, read or heard of.
  • To be a business leader and owner of the most reputed business consultancy in the world, if not the largest. I hate stupidity and people who hinder growth by being stupid. I want to show the world how to think for the better.
  • To write and direct 3 films. I have stories in my mind. If there are few producers interested in genuine work, I can lend my intelligence. Yeah, lot of thought needs to go behind the entertainment industry too, which is not being done right now.
  • India to respond better to the challenge the world throw at it. Be it the cricket team or the Nuke deal, we mostly fail in the final stages. I would like to take India to the old “golden sparrow” days. The most powerful nation in the world.
  • To work in and for the stock market once, I need to know how to control stocks. So that I can ensure the economy never goes into recession. There are always 3 ways of doing things, one is the public way, other is a wrong way and third is the optimistic aggressive way.
  • To meet the terrorist outfits, under world dons. I want to know what is the motive behind their angst. I believe killing the militants or beefing up the security will not help. Killing the cause is more important. May be I can make a film on it.

I guess that is all. Buying a house, earning big bucks, big salary jobs… I feel these are generic wishes. I will get them even if they don’t feature on the wish list.

Anyway!