Indian ecommerce is over-invested
27 Apr2012
It was so heartening to read about Avnish Bajaj talk about how the Indian ecommerce is over-invested (in the short term). I have maintained that a large part of the reason why ecommerce is nothing but a subsidized sales industry right now, is the investing world. A lot of institutional money has flown in, with unreasonable expectations. And built due to this the philosophy that transactions are the only metrics that matter. Acquisition costs, servicing costs are secondary.
India is a market with atbest 10mn online shoppers. Let’s assume 20Mn. I can get that ENTIRE base registered on my site, by spending no more than Rs 50 CPL or a total of INR 1Bn (or $20Mn). Most companies have got funding higher than this amount. What happens then?
1. You start commoditizing your products, to gain these customers faster (in the hope that they will be yours forever).
2. You start ignoring costs because you have a buffer to play with
Basically – you create a shit hole for yourself.
So what does this mean – dont get in ecommerce? That would be foolish!
1. Raise money cautiously and through investors who have a long-term view. Ofcourse, always raise more than you need. That Capital Raising 101! But figure how much is much!
2. Get into categories with lesser competition, if your value prop isnt distinct. This lowers your CPL/CPA because you are not fighting against similar offerings on google! There are atleast 15 categories I can think of consisting of no players and scale of 100 Cr and upwards
3. If in the same category, focus on creating a brand that customers love (before that, get an investor that can spell brand with a B). Not become a sales setup. Flipkart has done it really well. Rest others are experiencing transactions ONLY because they advertise. You should advertised for scale, not for survival!
Well done Avnish, for being the sole glimmer of hope for your industry. It is obvious that you have been an entrepreneur yourself! :)
5 Things that an MBA is not!
26 Apr2012
The number of ISB counselling requests have gone up considerably. I guess the fact that this year ISB became India’s largest BSchool (with Mohali) has got to do something with it.
With it, unfortunately, the quality didnt go up. People are still not thinking right about an MBA. Or atleast are not being forced to. At times I wonder who is to blame.
I dont tire telling people what an MBA will and should not do. So here it is:
5 things that an MBA is not
1. A Placement Agency
Please! Dont think of an MBA school as a placement agency. Its not the source for finding jobs. Linkedin perhaps does a better job. It is only meant to equip you with tools to find (or figure) the best job. And then offers you an opportunity to take a shot at it.
But dont blame the school if your dream company doesnt come. Or your dream role isnt offered. Honestly, the school didnt sign you up for that and thats the cruel truth. It just promised education, not a job.
2. A 100% ROI investment
In the same breath, dont expect your placement to pay off your your MBA cost, in the first year itself. If that was the case most Wharton grads would commit suicide.
How many investments have you made in your life, that paid for itself in 12-24 months? If there are many, you are probably smart enough to not require an MBA!
3. An opportunity to party and have fun
An MBA will suck the last drop of blood out of you and then ask you to take a vodka shot! Its rigorous (especially 1-yr programs) and require 16 hour days, most days. Get ready for that. Party schools are made famous by the 5% who came in with that agenda.
4. A place to learn management
Nothing can teach you management. No class, no professor and no case study. An MBA equips you with the skills to manage, but doesnt tell you how to manage. Its obvious because almost all managers are MBAs but few of them are good. So don’t think that you will do an MBA and will be fit to become a GM, if you have never led a team, made decisions or handled budgets! It will be easier, but it wont be automatic!
5. A place to slog and get grades
The worst mistake you can make during an MBA is to focus on grades and not on the learning. Its unfortunate that in India, the trend doesnt die. But as far as possible – escape the temptation. Consulting might require it, but honestly, the ones who get in dont really slog. It usually comes naturally. For the rest – pick courses you want to learn – specialize in areas you wish to and strengthen your fundamentals. The dean’s list will happen by itself and if it doesnt, the world will still survive and so will you!
Before you step in for the MBA interview – ask yourself – are you stepping in thinking that an MBA will be this magic wand that will change your life! If yes, take a break and apply again!
- In: ISB
- Tags: isb admissions, isb interviews
Do you want to change?
14 Apr2012
If you continue doing what you do, you will continue being what you have been.
Nothing changes, except when you want to change!
I have been home for almost 1.5 months now. And have learnt some awesome things that I wouldn’t have otherwise.
- You don’t need to go to office to get work done.
- It’s awesome when your son wakes from his sleep at noon, and comes to say hello for 5 minutes. Everything else stops
- Your body can stand on one leg. You won’t be fast, but you can still move! And that matters the most
- But not being able to move fast sucks. Sucks big time.
- It is not about where you go to take a break. Even your balcony, in the evening, seems like a whole new world!
- After everything else is done, it is your family that stays with you! Nothing else matters.
Pits a change I didn’t want. But it’s a change I am thankful for!
The power of 1!
19 Mar2012
It doesnt matter how many people buy the deal. One bad review kills it all
It doesnt matter how many people buy the deal. One compliment makes all the difference
It doesnt matter how many people, anymore. YOU are powerful.
They didnt understand life
18 Dec2011
When I was 5 years old, my mother told me that happiness was the key to life.
When I went to school they asked me what I wanted to be when I grew up, and I replied – Happy
They told me I didnt understand the assignment. I told them they didnt understand life
- John Lennon
- In: Opinions
Never too late!
26 Oct2011
- In: Entrepreneurship
The irony of email – signal and noise!
22 Oct2011
Ever since I took over the fancy title, my email volume (both work and personal) has increased by about 260%. I am averaging around 230 work emails and 45 personal emails every day. But here is the ironic part
I feel I am getting more signal than noise now.
I am a BIG supporter of the signal and noise theory. Most times, people mistake noise for signal and chose to react. I don’t think I am an expert at deciphering signal, but I pick my “battles”. most things for me, work wise and personally, are noise. I don’t ignore them, I just don’t react.
But surprisingly, this has changed lately. Atleast when it comes to email. When I was expecting it to be the other way round. My response to email ratio has increased and that’s not because I am compelled to respond. I genuinely see the benefit of doing so.
Customers with feedback
Employees with concerns or suggestions
Decisions to be made
Follow up (people must hate me for the amount of follow up emails I send – thanks to boomerang)
etc etc
Yes – The big difference now, is my time to response. And that’s by design. I take time to respond. I want to. Because suddenly (atleast in my head) my words weigh a lot more than they did. So I want to make sure that I do justice to the one writing in. Give him/her what they want and solve it right then and there, so that my followup decreases.
Nothing really has changed. In me or in the world. But somehow there is suddenly more signal than noise! Fascinating. Maybe not long-lived though.
You learn everyday!
7 Sep2011
The deals business makes you go through a beautiful ride everyday! It’s so close to the customers – every step and action of yours is public. Margin of error is…well..zero!
So we had this deal, that I thought was interesting. It runs today in Delhi – doorstep beauty service by VLCC – you know the typical women works – facial, waxing, Bleach, hair spa etc etc!
So here I was – oh wow – all these nice elements from a good brand, at a great price and what more – at one’s doorstep.
The deal failed!
Hit by massive depression, I go back home and quiz my mom, sis and wife! Here is the reason:
Going to a nice salon, is an escape from home! The idea of getting these treatments done while their daily routine is happening alongside, isn’t a dream you can sell!
I love this industry. You learn something new everyday!
Any reason why you think this failed?
- In: Anecdotes|Entrepreneurship|Groupon
- Tags: Crazeal
The power of the right incentive!
24 Jul2011
“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”
- Warren Buffet
The pessimists might ask – who will pass such a law! Yes, Albert einstein! Smart of you
Look beyond the law. The message is the power!
Look – this is what I have done!
23 Jul2011
I have learnt this the hard way – people who need to tell you about how good the work they are doing is, are most likely not doing a good job!
Most likely.
- In: Entrepreneurship
What’s your team?
23 Jul2011
A leader is all about Top People and Top Sales.
It’s unfortunate that most ‘leaders’ forget that Top Sales is infact a byproduct. It’s almost automatic. Magic!
Build your team. NOW. And only you can build it. Not the HR. Not someone else. You!
- In: Entrepreneurship
IPL is about India?
29 May2011
I love rediff comments. I especially love what it does to every Indian.
Article on Chennai winning IPL…
…comment from reader!
Its amazing that an Indian has lifted the IPL trophy. Every team should have an Indian captain so that whenever someone wins, an Indian lifts the trophy!
Such joy! This is precisely what makes me forget my sleep at 1.30 in the morning.
Back to work! Rediff rocks!
Is anyone looking?
14 May2011
Seth Godin is truly a genius. To come up with what he does, on a daily basis, requires enlightenment!
And here is another gem from him
Perhaps you can burn 500 calories on the treadmill before you give up for the day. With a personal coach, though, you could do 700. The trainer gets you to exert more effort.
You wake up on a Monday morning after a long hard weekend of misbehaving. You have a splitting headache. You can easily call in sick, no one will freak out. But then you remember that there’s a $500 bonus at stake if you keep your attendance perfect. You make the effort because someone else is bribing you.
There’s an entire system organized around the idea that we’re too weak to deliver effort without external rewards and punishment. If you only grow on demand, you’re selling yourself short. If you’re only as good as your current boss/trainer/sergeant, you’ve given over the most important thing you have to someone else.
The thing I care the most about: what do you do when no one is looking, what do you make when it’s not an immediate part of your job… how many push ups do you do, just because you can?
——-
When you are an entrepreneur, the above acquires higher meaning. Very soon you realize that it cannot be the term sheet valuation, or the CEO title, or the media coverage, or the swanky office space that drives you. The drive has to be you yourself.
The question is – can you live with a sub-optimal structure knowing that it is a sub-optimal structure. Can you really get up everyday and do those push-ups, because you ought to!
- In: Entrepreneurship
I hope this isnt true for Indian entrepreneurs!
Internet Entrepreneurs Are Like Professional Athletes, They Peak Around 25
What comes first? Product or Sales?
1 May2011
I have made a lot of mistakes in life. One in particular that I remember was during the early days of StudyNation. The product had not had a good start (we had launched as StudyTimes.com). Our SEO strategy hadn’t worked as well as we thought. We had to shut down the site and relaunch as StudyNation.com
The relaunch was immensely successful. Within 3 months we were very close to displacing the top sites. The traction on the traffic was fantastic.
As the one closely working on the project, I decided to do something that I shouldn’t have, in hindsight! Selling!
Sales is core to any business. And everyone in the world has to think of sales sooner than you would like, unless ofcourse if your last name ends in -kerberg! And thats what I did as well. Problem was, there wasnt anything core to sell. The product wasnt ready for sales! The traffic wasnt high enough to sell advertising and the lead generation side of the business needed me to work on the product before I stepped out into the market.
It was a discussion with Vivek that made me realize my flaw. It was evident the minute we sat down to chat about it. I had made the fundamental mistake of running after sales even before the product was ready!
That said, Seth Godin argues that the attitude should be to ship fast. Had the iPhone waited to do a ‘complete’ job of itself (heck, it didnt even have SMS forward. It still doesnt have an SMS way of sharing contacts!), it possibly would never have been the iPhone we know of! But then, that was the iPhone. It was a revolution as it is. The same logic, I reckon, doesnt work when you shipping out something that as already been shipped before, especially by someone else!
The idea is to ALWAYS place the product first. Make sure the sales you wish to achieve, is supported by the product you have built. No point building an ecommerce product that doesnt make buying simple. Or a lead generation product that doesnt make searching on the site simple. Thats core. Thats fundamental.
Product is your sales!
Now thats an achievement. And honestly, I am quite disturbed at reactions of ISBians who feel ‘saddened’ by IIMA being there at 11. It shows lack of maturity and vision. IIMA is a great school and has possibly single-handedly done a lot for this country. So lets not take it away from them. The ISB is NOT the IIM! It will never be and thats thebest we should all be proud of!
I am completely on Cloud Nine with ISB’s performance - Top 20 MBA School globally for 4 years in a row, when the school is celebrating its 10th year, is remarkable. Proud to be part of the family!
- In: ISB
Bing copies from Google – Brilliant!
4 Feb2011
Anyone who tracks the Internet space (which doesnt meant FB, btw) would have read Danny Sullivan’s article on how Bing is Cheating and Copying search results from Google.
This is brilliant! Not so much for the fact that Bing does this, but for the fact that this is possibly the first time that Google has ‘accepted’ in as many words that it can actually tweak search results to show what they want!
Let me repeat that
Google decides its mobile, and mobile it is!
21 Jan2011
Paid clicks increased by 18% over corresponding quarter, but CPC increased only 4%. Which could be interpreted several ways!
Eric Schmidt steps down as CEO and Larry takes over! Sergey, the nerd, still remains beind the scenes. All of which could be interpreted several ways!
Focus for the next 10 years will be mobile! No 2 ways about that!
Mobile is surely going to be the next big thing! I see it around me already. And I am sure FaceBook already knows it, by analyzing their traffic source split and the growth that mobile is experiencing. And hey, someone already knew it somehow before anyone else did, and they are kicking ass now!!
The world is going to be exciting 10 years from now! Whats going to be even more exciting is who amongst the giants will take the lead, or will we all see a new giant!
Tackling the MBA Hot Seat
10 Jan2011
Wrote an article for the Mint Newspaper for today’s Career Section.
Top business schools across the world follow an admissions process that goes beyond entrance exams and work experience quantum. Today the admission teams look for candidates who have thought through their applications and incorporate their life’s aspirations in these rather than providing rehearsed, socially desirable responses.
I have been mentoring MBA aspirants for over four years and still see a surprising percentage of them under-prepared for the interview process. Even basic questions are not well thought out. While it’s easier to get away with this lack of focus during the application stage, perhaps even at the essay-writing stage, the gaps in preparation become apparent and difficult to brush aside during the interview. Which is why there are four key questions aspirants should ask themselves before facing an interview panel. Read the rest of this entry »
ISB launches ‘young leaders programme’
5 Jan2011
The Indian School of Business (ISB) today launched a first-of-its-kind program titled the Young Leaders Program – India’s first leadership programme for students in pre-final year of graduation
Under the YLP, the ISB will select students who have excellent academic and extra-curricular credentials, and demonstrate leadership potential. They will be mentored and groomed by ISB faculty through a well designed learning programme that will equip them with skills to ensure a seamless transition from college to work life. And eventually offer them gauranteed admission to ISB’s flagship 1-year PGP in Management. Read the rest of this entry »
