After a hiatus of 3 odd years, I return to the cool career of entrepreneurship. Don’t judge me for that. Once upon a time it was cool to be a guitarist and a few years back it was cool to have long hair. But now it is uber cool to be an entrepreneur. Am I right or I am right?
Though I wasn’t running my own venture the last few years, I was heading an entity which was doing brisk business and was profitable. At any point when we ventured into something new, we would create a separate cost centre and observe it over extended periods of time before we merged it with the main stream of business. If at any point we felt that we couldn’t turn that new vertical profitable eventually within a set time frame, we would abandon it. The business was set with own money over a period of 15 odd years and any loss was a burn in the pocket.
They are successful businessmen today. Inspite of all the struggles of ups and down and heavy competition, they have managed to sustain and grow over the years. And recently, when there was a downturn in market demand, they took the decision to scale down operations and costs overtime instead of increasing the ad cost. Few things they did not compromise on was quality product and never offered a discount. People paid for what they got in return. Ofcourse it was a very different industry and hence there was technically no requirement to create a market for it.
But is Indian consumer a loyalty driven segment?
Years back my parents were loyal to Sony for all electronic products at home. Today, we have a Voltas AC, Samsung TV, a Panasonic Fridge and Videocon Washing Machine. We simply match our requirement with price and buy it. We may be selective of the brands but loyalty seems to be absent. So when lot of the players in the industry flush out funds in the name of ‘creating market’ – they are basically creating market for someone else to capitalise on. There will be a time when all their discount offerings will exhaust. What will remain is multiple players vying the same ‘created’ pie.
Companies like Tata, Birla and Reliance are large conglomerates today and were not created overnight. Trying to replicate their success in a shorter duration by giving money to consumers does not create any attachment to the company. Tomorrow someone else with more money shall come and the consumers would flock to them. What the Indian consumer needs is reliability at the lowest price. Being online is not a unique proposition anymore, everything is available at the click of a button. Offering discounts is not wrong, but it cannot be the way of running a business. Spend the money on improving your product and features and enhancing the customer experience. Spend efforts on sustained reduction of the cost of the final product or service. Don’t try buying a customer, you’ll feel cheated eventually.
What we are doing?
When we were contemplating our business idea – the first question we debated is what are we creating – something that lasts a lifetime or raise some money, scale up, don’t know how to sustain and eventually sell off or shut operations. We opted for the former. Because if we run the business right, money and scale will eventually come in.
Before pricing any product or service, we factored in all possible direct and indirect costs. Any marketing campaign whether hiring a resource or google Ad words or FB ads were monitored for ROI. We are a consumer centric business but we did not want to reach out to the entire city at one go. We ran a pilot to test the waters on how the end to end operations were being managed and revenue being collected. And after doing that successfully in month 1 of operations, we have been adding new products and expanding to new locations by simply replicating our learnings and growing at almost 100% month on month. The idea is to use all our resources efficiently.
I don’t know how the business would eventually pan out, but we are going to do it the right way and not the fancy way. There are competitors in the industry who are helping us create the market. There are players who have scaled down, sold off or shut operations. We intend to be the acquirer sometime down the line.
So, probably it is time we relook at the poster boys and idols we follow.
Stop starting up a startup, Start running a business.
P.S: I have intentionally not shared the name of startup that we run currently as we are still in the beta stage.
You can reach out to me on twitter @simply_hardik