Category Archives: Management

Five point someone – learnings so far..

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Last four months journey has been exciting, full of impatience, worry, happiness and all kinds of feeling one ever experiences…

As I am working on building one of the best Internet Media company, I am learning as I am failing, experiencing and observing.. Here are some of my learnings so far.

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1. Don’t ever under-estimate the impatience of internet audience: You can keep on mulling over on what is the product feature you are lacking and how you should make it more useful for the end consumer, but the problem might lie somewhere else.  Don’t assume that Internet audience has the patience to see what lies beneath. They are an impatient lot and want results quick, real quick!!

 2.  Hire Hungry,  Not Experienced Sales People:  When you are battling with so many things – product, marketing, operations, sales – you would think that hiring the experienced sales guys is the best thing to do as they would have least learning curve. My experience tells me that it might go wrong in a harsh startup environment where power of brand is not behind the sales guy. Experienced sales guys, working in large companies are like courier boys collecting cheques on the power of brand.  They struggle, or rather are not willing to work extra hard when power of brand is not behind them.

Therefore, look of hungry sales guys who have never say die attitude and can withstand the pressure and harsh environment.

3.  Invest Early in Brand Building: In the internet business, Search engine marketing is like a necessary evil. Sooner you reduce your dependence on it, better it is.   Bids only increase over the years and starts pinching you.  SEM is like putting an ad in classified where every ad is competing for attention from the user.. Display is like a insert in main line newspaper.

Invest in Display ads with powerful communication. Be patient in terms of results as brand recall takes time to build.  Be happy seeing more and more people searching you on google via brand keyword.  Have your TG well defined and have targeted publishers for Display ad.

4.Don’t invest early on on Design – fix the UX first: While undoubtedly design is super important in Web 2.0 world, but not more than UX.   And UX is not an elixir which somebody can tell you in 1 day. You need to rigorously experiment, measure and evaluate to fine tune your UX.  While this is a never ending process, spending heavily on Design makes sense when you have a good handle on UX, or atleast you have a good sense of what does not work, otherwise you might up end up in a beautiful UI but a crappy UX.

5. Every employee is an integral part of the success story: As you build the business, you will hire lot of people in operations and seemingly mundane jobs. I can’t stress on it more that it is important to keep every employee engaged and involved. If mundane tasks are not executed properly, a well thought strategic move will not result into anything.. As is rightly said, every brick in the house is important!!

Chief Marketing Officer,

http://www.realtycompass.com

 

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Internet Business: From Porter’s Five Force to Three Magnets

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Running an internet business, I wonder whether Porter’s five force model makes any sense for the Internet businesses.

Traditional businesses, would create a strategy which limits the Bargaining power of buyers, limits the bargaining power of suppliers, creates barriers of entry for competition and create models so that buyer is not able to replace/substitute the product…

But the internet seems to have redefined all of it…

1. Bargaining power of Buyers:  Rather than curtailing buyer’s bargain power, internet actually enhances it by its very nature

2. Bargaining power of Suppliers: Again, internet businesses typically bring the transparency..unless the company is not very big, suppliers have reasonable bargaining power… example if flipkart tries to squeeze samsung, samsung might decide to abandon flipkart and go to another shopping portal exclusively.. since suppliers are aware that customer switching cost is minimal

3. Threat of substitutes:  Most of the internet businesses have their IPs freely available in public..i mean code base of some algorithm/engine etc.. so technically there is a very high threat of substitutes / competition

So by very nature of the business, customers rule the game, suppliers cannot be squeezed to the hilt..especially the branded suppliers, and threat of competition and substitutes is very high..

If one would have evaluated internet business on porter’s five force, nothing would have made sense.. then why are these businesses getting crazy valuations…

Also, if all forces are against a company, how come this industry creates winners take all companies which are far bigger than No.2

How has the paradigm changed?

1. Customer Stickiness:   Rather than talking about Bargaining power of Customers, this industry speaks about Customer Stickiness… which is why should customer stick around with your product / company?

2. Power of Aggregation: Rather than talking about Bargaining power of Suppliers, this industry talks about Power of Aggregation which again is pro-consumer, denoting how much value you bring to the table for consumers aggregating suppliers and that in a way defines your relationship with suppliers..

3. Speed of Innovation: The model assumes that change is inevitable and only way to defend customer shift to new substitutes is that product constantly keeps on evolving… So speed of innovation defines the fate of the company…

So instead of 5 forces of porter, there are 3 forces – Stickiness, Aggregation and Innovation which defines Internet businesses.. Unlike the traditional way of looking businesses, which assume themselves as fortress and the one which builds the best fort wins, Internet businesses assume themselves as Magnets which attract stickiness, aggregation and innovation..

Redefined MLM/Network/Referral Marketing

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Limeroad, the Online Social shopping platform has launched a new initiative which enables to earn while promoting the products they like…

Source: LimeRoad allows users to earn

Limeroad enables users to create their scrap book in which they can add the items they like. They can later share the scrap book with their friends on the social network and they get a commission on the sale of items initiated through scrape-book.

A good scrap-booker can earn 10k a month….Here are the details

So it is, Social Referral Marketing, where the company gives incentive to users to market their product to other users…. very much similar to the existing MLM marketing popularized by Amway, but it utilizes the power of social network and also users need not buy items and become a member to start selling/promoting..

Also interesting is that Referral marketing on internet is moving from Site referral to item level referral.  How would Limeroad ensure that every user gets the incentive based on his selling effort… eg. he only gets incentive for item A bought by users in his social network… ..