Replies to This Discussion

Permalink Reply by Alok 'Rodinhood' Kejriwal on May 9, 2011 at 2:51pm

I know this model very well.

 

Questions (Himanshu please answer them) - then I will reply with additional comments:

 

1. Do you need PRINT MEDIA for Teckno Point to advertise and get students? Do students like Suresh and Sanket (in my games2win office who are your students) ever read the newspaper or should you be using TARGETED GOOGLE AD sense ads and Mobile ads for them?

 

2. Your business is a services business. If you adevertize 100, you should earn 101 at least. So why should ADVERTISING BE exchanged for EQUITY?

 

(In the case of businesses like games2win, where we are building assets and audiences and not cash flow, advertising without paying for it makes more sense)

 

3. If you get LOTS of ads - will you be able to service the student flows? 

 

4. TOI demands an exit in the next 3-5 years - that is either via IPO or Sale. Are you prepared for that?

 

5. Debt or cash borrowed to GROW is always returnable - EQUITY is never returnable. So THINK - IS THIS A P&L investment or a BALANCE SHEET INVESTMENT?

 

6. How do they VALUE their media? At Rack Rate? or the rate a media firm like Mindshare will buy it at?

 

7. How do you value your unlisted company??

 

Tell me these answers and I will give you more 'ganna' to chew on :-)

 

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Permalink Reply by Himanshu Mody on May 9, 2011 at 4:01pm

 

1. Do you need PRINT MEDIA for Teckno Point to advertise and get students? Do students like Suresh and Sanket (in my games2win office who are your students) ever read the newspaper or should you be using TARGETED GOOGLE AD sense ads and Mobile ads for them?

 

I am not sure if I need print media so much , but I think they have a lot of media inventory in online properties as well is what I was told.My problem is that I am at mercy of working professionals to realize their need for upgrade and then they come to us. However if you see other retail training institutes , they almost run like a parallel college in terms of number of students. 
I get requests for recruitment for my students continuously but I am unable to supply as most of our students are company sponsored candidates. Will spreading of word via print media help me to acquire more students is a question that even I do not have and answer for ?  

 

2. Your business is a services business. If you adevertize 100, you should earn 101 at least. So why should ADVERTISING BE exchanged for EQUITY?

 

 It is more of a cashflow thing , I started with almost 0 money so working capital is always a challenge. And when we have couple of good runs , money was mainly reinvested in business or at times to improve my life. 

 

(In the case of businesses like games2win, where we are building assets and audiences and not cash flow, advertising without paying for it makes more sense)

 

3. If you get LOTS of ads - will you be able to service the student flows? 

 

If lot's of  ads get us lot's of students :) Yes we should be able to scale and considerable amount will be spent in acquiring talent to meet my expansion needs.  

 

4. TOI demands an exit in the next 3-5 years - that is either via IPO or Sale. Are you prepared for that?

 

I am yet to decide on this.  

 

5. Debt or cash borrowed to GROW is always returnable - EQUITY is never returnable. So THINK - IS THIS A P&L investment or a BALANCE SHEET INVESTMENT?

 

I have taken the debt route as of now as I find that more comfortable as well. need more clarity on what you mean by P&L or Balance Sheer investment. 

6. How do they VALUE their media? At Rack Rate? or the rate a media firm like Mindshare will buy it at?

 

Discounted price is what I am told. 

 

7. How do you value your unlisted company?

 

I have no clue on valuations. 

 

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Permalink Reply by Rakesh Sidana on May 10, 2011 at 8:42am

 

Good discussion ;) It is required for those who want newspaper to help them taking their venture to next level (like me ;)

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Permalink Reply by Alok 'Rodinhood' Kejriwal on May 9, 2011 at 2:53pm

Himanshu - Can you edit your post to descrive your business a bit and the services your provide? I want to throw this question open on my FB/Twitter/Linked in walls...

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Permalink Reply by Ashutosh Joshi on May 9, 2011 at 5:05pm

The TOI private treaty is a total rip off, its a win - win situation for them, they sell you all their advertisements at rack rate or about 15% below rack rate.  Their online portals as you mentioned above doesn't match your TG between the age group of 18-25 its niche segment and not sure how much does TOI has reach in this TG both online and offline.  Not to mention after the end of three years, no matter what your ROI on the investment has been TOI can either take a call on IPO or sale of the company. Once you are locked in the treaty, irrespective of whether there are returns or not, breaking the treaty is a hard sell.  

You are better of using and investing in social media, google adsense , or a strategic performance company like us to reach out and generate quality (read interested) students rather than on TOI treaty.

 

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Permalink Reply by Archana Shah Kotadia on May 9, 2011 at 5:05pm

Since most value is in the form of print media -that being the most expensive yet- the private treaty makes a lot of sense for new businesses aimed at the mass consumer market. For the kind of target audience u r talking about u maybe able to capture them better with online campaigns and social media campaigns - don't think todays youth really read newspapers...u can reach ur youth audience at pretty low costs using the right online campaigns - both traditional seo and banner ads etc and via social media..

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Permalink Reply by Archana Shah Kotadia on May 9, 2011 at 5:14pm

As part of pvt treaty arrangement the media is not presented as advertorials but usually as pure ads.. Their route of selling editorials was under the name medianet and that was where they sold editorial properties like straight answers on bombay times for money ... :) pvt treaty is barter of advertising space across their media vehicles for a stake in a start up n then they sell out and make more than the media was worth - this is v good for both parties if the start up needs a lot of mass consumer marketing - which in my opinion with 12 yrs of brand marketing experience u don't - u can use a mix of online, social media and unconventional promos at colleges and coaching classes to get ur audience..

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Permalink Reply by Himanshu Mody on May 9, 2011 at 5:39pm

We do following things online as of now

- SEO - we rank no 1 for important keywords related to our services and this is where most of the leads come from

- Google adsense  - from time to time we do campaigns 

- facebook ads - we created facebook page only recently adding over 100 student testimonials, but have been using facebook ads since long time. 

- listed on various classified websites both paid [ shiksha, sulekha ]  and unpaid [ clickindia , olx, training-classes, ask edu ] etc. 

Apart from above online activities , we recently chose outdoor which had great 'impact' and also generated good leads for us apart from reinforcing us as leaders to people who already know what we do. 

We have done workshops for over 1000 students in colleges in last 4 months however this was more of a community initiative from Adobe and we did not do any 'selling' in these activities. 

However we have realized that online media is good for targeting people who are probably already looking for the service. But not sure if it helps in creating awareness about the opportunity. Hence the inclination to include print media. 

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Permalink Reply by Himanshu Mody on May 9, 2011 at 6:02pm

Good question Jyoti :) 

 

We already attract students from other cities in India and even working professionals from abroad come to us to do our courses.  We have 2 locations , Mumbai and Banglore.  However we would like to expand to other cities. I have been skeptical about choosing the franchising way of growing business. From time to time people of shown interest in opening tekno point in different cities of India. But I have done nothing about it so far. 

 

So we continue to focus on delivery and grow organically with word of mouth and incremental help from online initiatives.

 

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Permalink Reply by Aalok Pandey on May 9, 2011 at 7:12pm

Infact, himanshu, jyoti has made a good point. that would be the perfect way to scale, at minimal cost, and maximum exposure. 

but i have a question. In training companies, a franchise model , is a highly complex thread, intertwined with IP, strategic entry barriers, and overseer control on which franchise is doing what, is a exorbitantly daunting task. But once mastered, world is at your feet. 

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Permalink Reply by Abey John on May 13, 2011 at 4:52pm

I totally second Jyothi on this.  Franchising is the only way to grow fast. And B and C Tier India have very strong aspirations that are as yet untapped.

 

Also, To see if TOI is worth it why don't you buy a slice of ads on TOI and run a campaign there.  TOI shows Google Adwords so you can run a Display Network placement campaign for the properties there. Also just tell 'em to do a test run for x days and if the result is positive then convert it into an equity deal or else pay for it and walk away. 

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Permalink Reply by Alok 'Rodinhood' Kejriwal on May 9, 2011 at 7:11pm

Wow - Priya Ramani - Editor of the Mint Lounge RETWEETED this query.

 

She has 23,000+ followers!!!

 

Thanks Priya!

 

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