Dear Startup: Don’t try to Change User Behaviour.

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When I am talking to a startup team and they tell me that they are going to “change behaviour”, it sends red signals all the way.

I didn’t know how to explain it till i thought about it a bit. Truth is, a young startup (a fledgling and not the flipkart types calling itself a startup) has ridiculously limited resources. Assume you don’t have bucket loads of funding, don’t come from a filthy rich background, or have a pedigree and reputation that people will throw money at (I am talking about you 98 percentile population), then by defacto you have to go after the low hanging fruits.

The minute i say low hanging to anyone, they immediately assume two keywords – ecommerce, and hyperlocal. Shocking. But neither of those two spaces are low hanging.

While trends come and go, a good way to define low hanging would be, any opportunity where resources are least spent convincing your target audience that they need your solution.

There are three fundamental costs to a business – getting customers, delivering on what you promised and delivering on support. (2) and (3) are hard, but they are covered by the revenue that you receive. If you have to spend an awful lot of work on (1), that usually doesn’t end well. I’m being nice. It almost always never ends well.

So you want to find opportunities where all you have to do is show up and let people know that you understand the problem they have (and it better be as essential as their pants being on fire) and let them know you have the solution ( a fire extinguisher). They’ll do the rest – they’ll run over you to grab it with both hands.

So technically speaking, if you find a problem statement, that is really a problem and can solve it. Voila, you should be good to go.

The second aspect that you need to keep in mind is margins. If your target customer is all about pinching pennies and saving etc etc you wont be able to hang on to them for too long. One time solutions – Yes. But recurring, perhaps not. So the key would be to find out opportunities where there is a healthy (i didn’t say obnoxious) operating margin.

If you don’t know what that word means, its time to drop everything and go google on it and read up on some related words. Because all said and done, as my uncle taught me – if you decide to run a business, you really cant outrun the fundamental logic of every business – that revenue minus cost has to add up to profitability.

If you find spotting problems difficult, take a look at this platform that we’ve put together called Ideaspace. We are building a platform and a framework to build startups that solve real problems.

Disclaimer: It is only for the 98% of you.

 
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Opensourcing your core, as a strategy

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Open-sourcing your core is such a powerful move.

Years ago when Reddit was getting way too much competition all around – Digg was reinventing, Stack overflow was trying to build something similar etc – they did a radical thing and open sourced their code base.

It sounds like a dumb strategy, but is a brilliant way to stagnate the competition in the market. For one, for a short period you spawn 10x more copycats, and everyone starts verticals that they have a interest over, and have social influence in – but they are teaching the audience how to use your tool. Suddenly all those guys who are attempting to capture the same market with new UIs or a different take are fighting an uphill battle.

Give it a year or two, and when the new spawns die out, the newly created audience, finds its way back to you – for one simple reason, familiarity.

Tesla is playing that same card. Commoditizing the stack means, you kill differentiation very quickly (you realize if you want to “borrow” one part of the technology stack, there is a dependence on the other and so-on and so-forth) and he who built the stack can command leadership for a long time to come.

The lethargy to reinvent the stack is what will kill most competitors who even want to attempt disrupting that play.

PS: You need to lead in atleast one vertical / niche before you do this, or don’t be surprised if someone takes your own code and beats you at it. That’d be ouch!

 
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Be warned of the Culture of Excess

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The big moves, are made to polarize. You can’t win everyone, at the sametime, it is important to let go of those who aren’t pretty much bhakts of what it is that you are building to get to the finish line. But you can also lose your right hand man if you decide to go the other extreme.

When I saw pictures of the Flipkart office, I knew Amazon had won the war.

In the west, entrepreneurship is a bug that bites you when you are in school (college). Hence the reason why there is an ecosystem around Cambridge, MIT, Stanford, Berkeley etc. In India, it is the org where you get your first job. It defines, well, it will define who you are and how you think. Unfortunately, if you worked in one of the top four body shops, getting one to have an eye for detail is next to impossible – there are rare ones though.

Workspace sets culture. I would close my eyes and back an entrepreneur who comes from Amazon, Microsoft, Yahoo or Bosch. These are entrepreneurial orgs, and there is a culture of frugality and innovation built into their genes. People work hard, without expecting to be pampered. They don’t expect an art gallery to work out of. Art galleries aren’t productive spaces. And startups and offices are quarries, not galleries.

I still remember the story of Amazon, where they refused to spend money on fancy tables. So they took doors, put it on four legs and used them as tables. Startup legend says, there are still offices where they have those tables.

“These desks serve as a symbol of frugality and a way of thinking. It’s very important at Amazon.com to make sure that we’re spending money on things that matter to customers,” said Bezos, 34. “There is a culture of self-reliance. (With the low-tech desks) . . . we can save a lot of money.”

Take the other extreme, where we have struggled turning entrepreneurs out of google engineers. They are given in to a culture of excess, and that is death in the startup world. Bring them into a startup and they expect free flowing food, colorful bean bags, unlimited computing resources and the attitude of “It doesn’t make business sense, but why not?” Sure, corporates that are lost in the dark with 1% of your products generating cash, taking blind shots can adapt that strategy, but such attitude in a startup is death. You can only afford to swing once or twice and miss, in the startup world.

So, they have set the tone for polarization. Here’s an org that survived through the dot com bust, is known for frugality and is publicly traded (and even though hasn’t made profit, is well regarded). And then there is this new kid in the block, who owned a subcontinent, and is now starting to give into excess.

Funny thing is, orgs like Google and Facebook and even microsoft can afford to give into excess. They have margins to be able to do that. All said and done, at the end of the day, Flipkart is a trading site, where they make margins out of goods sold. Close your eyes, imagine the biggest distributor in the world and imagine their offices. I’d guess it doesn’t look like an art gallery. Someone had made the decision, that they are going to go the way of the excess (not with money earned but with borrowed money), that unfortunately isn’t going to last long. Worse, you are also ruining a whole new wave of entrepreneurs who probably took the first job there, with a culture of excess.

If there is a war coming, and one that you need to win, you need by your side an army that gets the vision of what you are trying to accomplish (and makes the sacrifice to stand by your side). If you have to get people moving with facade and glamour, there is a chance that you don’t have a purpose to paint, just fashion. Fashion fades. Purpose wins the war for you.

[1]http://glog.glennf.com/blog/2011/10/16/the_true_story_of_the_amazon_door-desk

[2]http://bostontoseattle.weebly.com/blog/when-opportunity-knocks-make-a-door-desk

 
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Every Friggin Grocery Shopping App is Broken.

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There is so much money going into all these grocery startups, but i have a feeling that fundamentally the whole experience is flawed. Browsing through categories in an app is so tedious that I’d give up, if I have to do this every week over and over again.

I actually tried shopping for the list once, using Bigbasket.com – It was hopeless. I realized half the items were not available. My cook is also picky to the point of the brand of flour we use. at home my mom does the same thing. It is better not to buy at all, rather than buy a different brand.
So, I gave up and went to the grocery store. it took me far less time picking things out of a grocery store with a cart, than it did with an app. Well, caveat, I know what is where in which aisle in the grocery store by now, but I’m never able to predict what goes into what category in an app.

See, weirdly a grocery store is not categorized. If you notice closely you will realize there is a flow, it starts with ice creams, bread, eggs, milk right near the entrance (stuff that is often bought), and once you go past, its the munchies, and then the coffee stuff, leading to the pickles, leading to oil, spices, rice, grains and pulses, and the you’ll see islands where the detergents and other stuff are kept. Its like there is an invisible flow, you kinda can anticipate what comes next. You don’t hop from one aisle to another (like a category), you naturally flow into it.

The only time you look up (for category aisles) are when you are lost, or are coming to a store for the first time.

A really good grocery app – for that matter even if Flipkart goes mobile app only, has to be like that. Easy to browse, without killing us with categories and trying to make us guess. Nobody has that kind of patience.

Well, that’s a design problem. If you cant solve that, here’s a cheaper, faster, easier way to do this. Let me click the list I get from my maid and at times my mom and upload it to you. You either do magic or have people sitting there who convert it into a list and tell me price / amount. I can then add / remove things to the “basket” and check out. Imagine, me clicking and sending you a photo of a list with quantities and brands marked next to it. You can send me back a list with whatever you can recognize (I can’t guess a few things on the list at times), and suggest alternatives for what you dont have. I can quickly accept, reject, opt out and should be good to go. You don’t even keep inventory and are sourcing from nearby merchants, cant you atleast make my life easier by making the shopping list process easier rather than making me pay by putting out an app that belongs in the mid 90s?

Upsell, me on the add-ons and whats beyond the list (essentially the shelf near the cash counter when last minute tic tacs and gums are bought), cause I am quite set on those essentials and am just wasting time, browsing through categories.

Whoever gets that right, will blow all these bigbasket and peppertap fellows out of the water.

 
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