Business Model Enhancement

Business Model Enhancement

The ultimate aim of a business is to make money. To achieve its goal, the company aligns its resources into a business model to generate the product or service for its consumers. A business model is the framework of a company by which it generates revenue and makes a profit through its operations.

The metric to analyze the efficiency and effectiveness of a business model is the gross profit and return on investment.  Another way of comparative analysis of different business models is the value addition or convenience that it provides to its consumers by solving their problem or by providing a new dimension to handle situations. More the value addition to consumer, more will the willingness of the consumer to pay and hence more will be the scope of revenue and profit generation.

Since a lot of players of same domain are coming on the horizon every day with almost same business model, consumers are having choice to move from one to other. As a result, it has become an inevitability for every business model to enrich it as per the market trends or as per the consumer expectations.

Let’s take an example of logistics business model. Simple logistics solution is to collect goods from point A and drop it at the desired destination B within the defined timeframe. Now, there are two basic aims that needs to be looked while deciding the improvement strategies –

  1. Making the existing business model more attractive for consumers
  2. Removing non-value added services/ steps to enhance the performance of the system

Simple Business Model - Logistics

To achieve both of these aims, here are few suggestions from FS –

[A] User-Friendly and More Accessible Business Model

Convenience is one of the major factors that attracts consumers to select a specific product or service from a particular player. Reason, why hyper-local delivery concept became so popular in major cities of India, is the value additional that it provides to the consumers in terms of time-saving. The more simplicity is added into a complex business model, more are the chances of market reach. So, the first milestone towards business model enhancement is making is the most user-friendly model by removing the obvious obstacles from it.

For logistics business model, following strategies can be used –

  • Easy access for consumers to check the availability of feet as per their requirements can avoid the unnecessary struggle of getting the right information.
  • Stress-free booking, change or cancellation process can add more convenience to consumers.
  • Real-time tracking of shipment can help consumers to get the right status at any point of time.
  • Easy payment solution can help consumers to get rid of the hard cash involvement.
  • Convenient process of solving consumer queries, discrepancies can bring more consumers to the company.

[B] Use of Technology to Improve the Performance

Technology is the need to enhance the performance of simple business model. Eg – GPS enhances the performance of cab aggregator business model, payment wallet enhances the performance of manual exchange of currency for buying. Technology not only attracts the consumers but also reduces the operational cost if utilized in a proper manner. So, it’s good to add technology into business model to optimize the revenue model –

Logistics business model can be enhanced by adding following technologies –

  • Autonomous fleet has potential of bringing more efficiency and cost saving over manual operations. Autonomous guided vehicles, cranes, robots, truck platooning etc can bring more intelligence and efficiency to the simple supply chain.
  • Data analytics can provide the solution for optimized movement of goods and hence can reduce the fuel consumption.
  • Internet of Things can provide highly integrated “Transportation and Warehouse Management Solutions” connecting in-vehicle sensors and other integrated devices over the network. This real-time tracking of data can enhance the efficiency of the system.

Business Model Enhancement - Logistics

[C] Incorporation of Supporting Products and Services

Any product or service requires supporting products or services to sustain or enhance its defined life span. Eg – spares parts are always required for maintenance of automobile, warehouse management support is required to run the inventory based e-commerce. Consumers are always in need of these products or services once become user of main product. So it’s a good idea to incorporate these services in business model to provide more value to the consumers under the same umbrella and hence, to enhance the scope of revenue generation.

Approach to integrate such supporting services shall be as follow –

  • First, add those services which require less resource utilization and can easily be recovered if anything goes wrong.
  • Once the stability and acceptance of above services are visible, those shall be added which requires less development time.
  • In parallel, services having high development time shall be established and merged in alignment with consumer demands.

For a simple business model of logistics, following services can be incorporated based on the above approach –

  • Delivery planning and management solutions like optimization of delivery flow, tracking, and handling of missed or pending consignments are the service requiring less resource blockage and hence shall be incorporated to add more value to consumers.
  • Inventory planning and management solutions like forecasting, consumer analysis, and Inventory allocation are the services with short development time if the required data is available to analyze. So, these services shall be added once consumers start showing interest in delivery management solutions.
  • Other services like after sales support have high development time and resource utilization and hence shall be incorporated at later stage.

[D] Removal of Non-value Added Activities

Any step that doesn’t add any value to the final product is non-value added service/ step. Eg – Inspection activity of semi-finished or finished product at any stage is because of the system inefficiency and hence a non-value added activity. So focus shall be on system development rather than inspection improvement. These activities not only surge the cost of the product but also increase the production time. Removal of all such non-value added steps is essential to maximize the efficiency of system.

Value stream mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer. So, any step that is not adding any value to the final product shall be removed from the chain.

In the contemporary competitive world, it’s necessary to provide more and more convenience to consumer to remain ahead in the race. A business model that can handle all the needs of consumer under one umbrella will definitely have high probability of success.

Wish you luck for your startup. Stay tuned with FS for more updates.

Startup Idea Selection – When you have Multiple to Execute

Startup Idea Selection – When you have Multiple to Execute

“My original business model – I actually wrote this down – was ‘interesting work for interesting people.’”- Tim O’Reilly

Today is the age of entrepreneurs. Everyday entrepreneurs are coming with their new business model to woo consumers. They are not only creating opportunities in market like additional jobs but also giving better solutions to consumers for the pain areas. Idea which seemed like the craziest one few years before are now the need of daily life. No one could have imagined computer in every home before Steve Jobs and Bill Gates made it happen.

Most of the times entrepreneurs have multiple ideas in their mind to execute, but which one to select and which one to discard is the real struggle and challenge. Some concepts might sound good but doesn’t make any business sense while some may sound crazy but are profitable. The concepts which are reducing the pain areas of consumers have high probability of being appreciated by mass. There is no point of investing resources when success doesn’t seem to come in near future.

Though success of any business model is the result of passion, hard work and determination, it doesn’t give any assurance of success of startup. A lot of factors are involved behind the success of startup and shall be evaluated before moving ahead with your concept and utilizing available resources. Here is a generic analysis from FS for optimum startup idea selection when you have multiples in your mind to execute simultaneously.



[A] Available Market Size

Market size/ volume is the estimation of consumers for some particular product/ service. Based on the type of product, the potential consumers can be categorized easily as per age groups, gender, affordability limits, geographical boundaries etc to estimate the numbers.

To know the market size before execution is helpful in terms of predicting the potential of the concept. Out of the total market volume only few percentage is penetrable at initial stage unless the consumer trust is gained.

When you have multiple startup ideas in your mind, it’s better to move ahead with the one having maximum available market volume. A product designed for specific consumers is difficult to scale up rapidly. Also, convincing the limited consumers’ volume is more difficult.

[B] Market Competition

One of the biggest challenge for startups to survive in long run is the “Market Competition”. Players working in same domain of the product or service are direct competitors while biggies getting diverse are the indirect competitors. Betterment of existing business models have a lot of competition as anyone can incorporate the additional features/ product/ service at any point in time once it start attracting consumers. A completely new business model has less market volume as it always has the advantage of first mover.

Since the available market volume within operational boundaries for a particular concept is limited, every single player of similar domain is trying to grab the maximum slice. Who will win the race is dependent on the consumer trust that it is able to gain. Consumer trust and loyalty are majorly driven by the quality of product/ service, cost effectiveness and reliability. Players with ample resources are able to gain the consumer trust and liability easily, hence get the maximum slice of market volume.

To stand against a biggie is not only risky in terms of gaining consumer trust but also in terms of resource wastage. Players with limited reach and resources are easy to handle by achieving operational excellence and providing better alternative to consumers. So, when you have multiple startup ideas, it’s better to go with the one having less market competition. Bigger the market competition, greater is the probability of failure.

[C] Potential Revenue Models

Major motive for any business idea is to make money. Revenue model is the cash flow of any business, cash input, output and profit. Cash-in must be greater than the cash-out to earn profit.  Since fixed cost of set up is generally huge as compared with running cost, so return on investment is dependent on profitability limit.

Though the revenue models associated with business idea might be multiple, but their applicability and growth depends on time. Revenue models with limited profit margins require huge volume to overcome the fixed and variable cost of execution hence require comparatively more time to reach breakeven point, while more profitable business models can reach at breakeven with lower volume also.

All the possible revenue models might not be clear at the idea stage itself or some are anticipated to come in picture at later stage of execution, comparative analysis of possible revenue sources combined with time frame gives a good estimate for selection of startup idea.

[D] Availability of Required Resources

One of the major contributors of realization of idea into running business is the availability of required resources. Manpower, money, technology, assets etc. are essential element to run a business model. Based on the estimated penetrable market volume, the required resources can easily be determined. For example – if the product is completely technology based having specific potential customers, it requires technology knowledge, sale and marketing skills.

At initial stage of startup, available funds, technology and manpower are limited, hence the entire scope of work needs to be distributed within the existing team and the funds. Few skills can be learned with minimal effort while few are time consuming. Outsourcing of work might be a good choice if the quantum of work is large or not manageable but it depends majorly on the available funds.

So one of the major selection criterion out of multiple startups ideas is the availability of resources. There is no point of working on a concept which is going to get stuck with progression of time. It’s better to start with something and make some money with the possible concept and then working on other parallel on later stage.

[E] Feasibility of Execution and Market Acceptance

At starting stage, Idea itself might seem impressive but more important is the feasibility of execution. Also, the new concept might seem appreciable by targeted consumers, but the real scenario is based on the actual acceptance by them once the product is out there in the market.

So at initial stage, it’s better to check the feasibility of execution at all the stages and analyze the mitigation plan for any risk associated. The benefit of having this clarity at start itself is that no surprise will stop the execution at later stage. Also, it’s better to interact with targeted consumers with prototype/ MVP and get their expectations aligned with the product/ service. Though it seems impossible to contact with all of the consumers but a section of good sample is suitable to get the insight about consumer behavior.

Selection of one suitable idea can be done based on the higher probability of execution feasibility and market acceptance.

[F] Other Critical Parameters

Other critical parameters for startup idea selection are government rule and regulations, liabilities, proprietary issues etc. Also, the product specific or segment specific challenges must be considered while selecting the idea.

So the right combination of critical parameters applicable for all the idea shall be analyzed to finalize the execution of one. Based on the highest probability of success, right idea can be selected. Though no foolproof mechanism can be developed to evaluate a business on idea base only as the evolution of right business model is a continuous improvement and experiment process, a good judgment on success can be made on the above basis.

“The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives.” -Alexander Osterwalder

Wish you luck for your startup. Stay tuned with FS for more updates.

Startup Revenue Model – Design, Development and Enhancement

Startup Revenue Model – Design, Development and Enhancement

Startup Revenue Model is a frame work to generate revenue for startup. While a business model majorly shows the work flow of startup, revenue model gives clear idea about which revenue source to pursue, what value to offer, how to price the value, and who pays for the value. Financial projections are generally based on the two types of approach –

Top-down Forecasting – In this forecasting the market size is first estimated and the targeted market volume is decided based on the anticipated penetration rate. This figure is then frame wired how to reach from zero to the total potential revenue.

Bottom-up Forecasting – In this forecasting, first the achievable market volume is identified and then based on the expected growth, total revenue is decided.

Both of the above mentioned financial forecasting approach needs to be balanced with revenue model to remain realistic as well as aggressive. A lot of startups are found struggling with revenue model out of their business model. Cash burn to attract and acquire consumer might be a need of startup to stand in the market, but unless it is balanced with the cash-in flow, it will lead towards financial failure.

Here are guidelines from FS to develop revenue model based on the type of product/ service involved in it –

Direct Product/ Service Based Business Model

If the startup is based on some salable product or service, basic revenue model involved is quite simple – profit per sale of product or service. A product with high specifications and features will definitely be of high price as compared with the same product of competitor and hence will narrow down the targeted market unless the concept is strong enough to force consumers to pay more. On the other hand, a product on lower side of performance shall not be able to fulfill the need of consumers. Important thing is to estimate the right price for the product / service with an aim of capturing the maximum market volume. So the following factors must be considers while deciding the cost of product –

  • Fixed cost associated with the setup of getting product/ service ready for consumer
  • Variable expenditure to provide the product / service to consumers
  • Competitors’ cost of similar product / service
  • Affordability limit of targeted consumers
  • Specifications and features desired by consumer in the product / service

Combination of above factors, gives the actual cost per product / service. So based on the right profit margin, selling price of product can easily be decided and also, the minimum volume required to reach the breakeven point (no profit no loss volume).

Revenue Model - Direct Product Service Based Business Model

Following approach can be implemented to develop the revenue model –

  • First acquire the easily available consumers to start the cash in-flow without much considering the profit margins
  • Then expand the reach of startup to grasp to the required sales volume of breakeven
  • Then analyze, implement and validate the other ways to enhance the revenue model

Revenue model of product based startup can be enhanced by finding all other applicable ways to enhance money flow –

  • Find all the other possible ways/ portals to sell the product or service. Eg – A product can be sold on all the related famous e-commerce portals, service can be provided to consumers through aggregators
  • If the product is being re-used at a certain frequency, it’s good to introduce subscription based model. Eg – Grocery needs per family are generally on monthly basis, so monthly order management system should be incorporated in grocery delivery business
  • Check for the other similar products that can be incorporated in the same business model to enhance the product portfolio and become one stop solution for consumers’ need. Eg – spare parts business is a good source of revenue for main product
  • Check for the related business verticals that can enhance the business model as well as generate revenue. Eg – Service of the product can be provided through the same player
  • Check for the additional innovate ways of making money like advertisement etc.

Indirect Product/ Service Based Business Model

If startup is providing the product or service of some other player, the basic revenue model is commission per sale. Eg – Aggregator model of food delivery. Larger the volume of sale, larger will be the commission in total. Generally the profit margins of aggregator models are quite limited, so the operational excellence plays the major role in reducing the cash burn. Commission per sale can easily be decided based on the combination of following factors –

  • Fixed cost for the setup
  • Variable/ Operating cost associated per product / service
  • Market trend of commission ratio per sale
  • Competitor commission of same domain

Also, the minimum volume required for no profit no loss condition can be determined based on the combination of above factors.

Startup Revenue Model – Indirect Product Service Based Business Model

The approach to develop such revenue model is tricky as the expectations of service/ product providers as well as consumers need to be balanced –

  • First keep the commission to minimal level to acquire product/ service providers
  • Then achieve the operational excellence to acquire consumers and reduce the loss if any
  • Once the band name is constructed and loyal consumer base is obtained, commission per sale can be increased

Generally the commission based mode alone is not able to survive unless the volume is too large to overcome all of the cash-out flow activities. Few suggestions from FS to enhance the revenue model of such business model –

  • Try to find the best practices to optimize the operational cost to enhance the profit margins. Eg- operational cost of delivery aggregator can be optimized by route and number of delivery based on the committed time to consumers
  • Try to make the setup attractive for consumers to return again. Eg – Loyalty points per sale
  • Introduce self- product or service to enhance the revenue ratio per usage
  • Enhancement of product portfolio with other related product/ services and business verticals. Eg – cab service aggregator model can be enhanced by introducing other model of transportation as well
  • Solutions for product/service providers. Eg – Inventory management solution for market based e-commerce model

Free Model or Freemium Model

Free model is when consumers don’t pay for the product or service. Eg – Social Networks are free of cost (though few features are paid) to consumers while their revenue come through advertisements. Freemium is “Free + Premium” where some of the features of the product are given to consumers at free of cost while other are based on payment. Eg – Free and paid versions of software.

Revenue Model – Free or Freemium Model

Since the success of free or freemium model is purely based on the traction that it is able to attract, first step for developing revenue as well as business model is to get the maximum possible traction for the product or service. Once the users become addicted to it, following ways of making revenue can be implemented –

  • If the model involves consumers as well as service providers, revenue can be generated through both the stake holders. Service providers can be charged for registration, service management solutions etc while users can be charged for premium features and services.
  • If the model involves only consumer, either consumers can be charged for premium services.

Eg – A directory portal of restaurants needs to be made popular among consumers first. Then the revenue can be generated by charging registration fees from restaurants, by providing them CRM and other solutions, by incorporating food delivery chain etc.

So, based on the type of product, single or combination of revenue model can be developed for a business model. Wish you luck for your startup. Stay tuned with FS for more updates.

Startup Launch Strategy – Promotion as well as Customer Acquisition

Startup Launch Strategy – Promotion as well as Customer Acquisition

Startup life-cycle has simple stages – Idea Stage, Prototype / MVP phase, Real Product phase, Expansion / Modification phase and finally either survival or death phase. Idea stage is the most promising phase when nothing exists in real and every entrepreneur is confident enough to be the next Mark Zuckerberg. When prototype or minimum viable product is constructed, entrepreneurs realize the need of improvement in the initial thought. When actual product developed based on the prototype feedback is made available in the market, the real struggle begins to convince consumers to use your product, stand against direct and indirect competitors, manage cash flow – in and out etc.

In all the stages, it’s only consumer who allows startup to survive or die at any point in time. A startup attracting more and more consumers day by day and making its loyal base generally survives in long run.

Role of consumers starts to decide the fate of startup since the idea phase itself. It’s only consumers who give the hint of acceptance on prototype basis. It’s again consumers who accepts the final product and recommend it to others. So the development of startup must be done considering the mind set of consumers from very first day.

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” – Jeff Bezos

Here are few thoughts on startup launch strategy considering the consumers satisfaction and acquisition from the very day –

Startup Launch Strategy

When the product or service is ready after the prototype testing and validation, the very next step is to launch your product in the highly competitive market. The launching of startup includes two major objectives to make it successful–

[A] Startup Promotion – Allowing concerned people to know about the product / service being provided by the startup and convincing them to use the same.

[B] Customer Acquisition – Forcing consumers to return back as per the frequency of usage of the product / service ie making them the loyal consumers in first time itself and the brand ambassador to refer other potential consumers as well.

Promotion of startup covers the objective of developing market reach of product and service excellence and lucrative strategies­­ helps in acquiring consumers.

Startup Launch Strategy – Promotion as well as Customer Acquisition

Startup Marketing Strategies

Marketing is the essential tool to make the presence of startup visible in the market. To fulfill the objective of startup launch, following qualities must be incorporated in the marketing campaign-

[A] Convincing – Marketing tactics must be strong enough to convince consumers to get attracted towards new startup concept/product.

[B] Comparing – Most of the people have habit of comparing the available solutions. So the marketing campaigns must include the benefits of new concept/product over the existing ones.

[C] Converting – Finally the marketing campaign should be strong enough to convert unaware users or users of other players into the loyal consumers.

Based on the targeted consumers of startup concept, any of the suitable marketing medium – social media, press media, targeted marketing, television ads etc can be selected to reach the maximum number of consumers –

[A] Social Media – Based on the type of product and targeted consumers, any of the social networks – Facebook, Twitter, LinkedIn, Tumblr, Reddit, Pinterest, Instagram, Slideshare, StumbleUpon etc can be used to reach the maximum number of people with little efforts. Though approach required for every platform is different based on the working mechanism of the same, ultimately it helps in marking your presence visible in a short span.

[B] Press Media – Press media is one of the oldest and reliable resources for marketing. Most of the people have habit to read newspaper every day, so based on the reach of the targeted consumers, local or national newspaper can be used for the promotion.

[C] Media and Television Ads – Promoting the startup on television, YouTube, startup news portals, promotion platforms etc are good techniques to allow people to know your existence.

[D] Targeted Marketing – Targeted marketing is one of the most effective technique for your startup. Door to door marketing, targeted canopy marketing, email and SMS marketing etc are some of good examples of targeted marketing.

Based on the budget of marketing, suitable medium should be selected for startup marketing.

Customer Acquisition Strategies

Though reaching and convincing maximum number of consumers is good to penetrate the market of other players but for long term survival loyal consumer base is required.

Based on the frequency of use of product / service, following startegies should be followed to acquire consumers –

[A] High Frequency Purchase Products – Products with high frequency of use have advantage to attract same consumer base if the service is strong enough to convince them. Following are some of the good customer acquisition strategies for such products –

  • Providing better service than the existing alternatives to force consumer to return
  • Giving discounts, loyalty points to consumers who return back
  • Making the process of procurement simplified for high frequency of procurement

For example – Grocery delivery startups can provide daily, weekly, monthly inventory management system to attract consumers.

[B] Medium Frequency Purchase Product – For products having medium frequency of usage, following strategies should be adopted for forcing consumers to return –

  • Providing related services and products for next need of consumers
  • Recommending accessories to consumers
  • Consumer luring offers on recommending other consumers

For example – An e-commerce startup offering clothing can recommend related accessories and products on particular purchase and offer some additional discount on the same.

[C] Low Frequency Purchase Product – For products having low frequency of next purchase, it’s better to attract them by giving service, spare products etc and rewards on recommending to others.

Promotion combined with customer acquisition has high probability of giving good initial traction that needs to be maintained by managing the relationship with consumers in the best possible way.

Wish you luck for your startup. Stay tuned with FS for more.


Startup Idea : Reverse Analysis from Consumer Point of View

Startup Idea : Reverse Analysis from Consumer Point of View

Most of the times, when entrepreneurs think about some new startup concept, they generally evaluate (or are advised to evaluate) the business model from their point of view on different verticals, for example – problem being addressed, solution being provided, potential market volume, marketing strategies to reach the targeted consumers, long term acquisition target, revenue model, profitability, scalability, funding etc. This straight approach is strong enough to conclude the way forward for your startup with an aim to capture the maximum possible market volume.

But the reverse approach ie thinking from consumers’ point of view is also of equal importance. Once the mindset of consumer is clear, it’s quite easy to align the work as per consumer need. What forces consumer to use some product or service, why consumers prefer some particular solution, when consumers need the service, are some of the basic parameters to evaluate idea from consumer view point.

“Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.” ~ Donald Porter

“Your most unhappy customers are your greatest source of learning.” ~ Bill Gates

Startup Idea Reverse Analysis - from Consumer Point of View

When both the approaches are combined together, combination gives the right direction – capturing the market volume as well as creating the market potential. Here is small analysis from FS on Startup Idea – Reverse Analysis from Consumer Point of View –

Consumer Approach for Selection of Product / Service

Let’s take a look on the parameters that consumer consider while selecting some product or service. Based on general feedback from consumers, knowingly or unknowingly, partially or completely, everyone is following almost same approach –

[1] What is my actual need? For what purpose I am going to buy/use the product /service?

[2] What are my priorities while selecting the product? Like economical factor, technical specifications, features of the product etc.

[3] What is the urgency level in terms of need/ usage of the product or service? Do I need it right now or I can wait to do my research?

[4] If the requirement is urgent –

  • What are the easy options available to fulfill that need?
  • Which suits the best among all the available options?
  • Which players / service provider can fulfill my need as soon as possible?

[5] If the urgency is not a priority –

  • What are the options available in the market?
  • What is the historical record of those product/ service?
  • What is the comparison of all the available options?
  • Why not should I take the opinion of my friends?

[6] How easily can I get the product or service? Matter of convenience.

[7] Which player is going to facilitate the best during purchase? For example – call, email, chat support, payment facilities etc.

[8] Which player provides the best service in after-market? Like easy repairs, return, exchange, spare parts etc.

[9] When the next use is going to take place? Can I use the same service provider or I need to find the new one?

Reverse Approach to Align the Startup Idea with Consumer Mindset

Based on the above mentioned generalized mindset of consumer, following lessons can be amalgamated while deciding the way forward for your startup –

[1] For what purpose consumer is going to use your product?  Is consumer fully aware about the existence of your product? How you can make your presence visible in consumer mindset?

So, such marketing strategy should be developed that can make a longer impact on consumer and he should be able to recall your presence while in need.

[2] Have you understood all the factors that consumer keep in mind during selection? Is your product affordable by maximum number of users?

So, the product should be launched considering the limitations of maximum consumers in mind or how you can alter your business model to enhance your consumer reach. One of the best examples is of “Ola Micro” that was started with an aim to capture the market volume that is not able to afford the costlier services like Mini or Sedan.

[3] How your product can minimize the level of urgency of consumers so that instead of looking for easily available options, consumer should be able to remain stick to your product?

So, the business model should be designed with proactive mindset. For example if you are a grocery provider, it would be a good concept to introduce weekly, monthly repetitive orders management system. The benefit would be consumer would remain stick to you for longer period.

[4] Can you provide some premium services to ensure the urgent needs of consumer? Again the selecting factor for consumer would be the combination of additional cost of premium service and affordability.

So, the system should be developed considering the usage of product in normal and urgent need. Once you are able to service your consumer in urgent need, he’ll definitely return to you only in normal time.

[5] Are you able to provide the basic facilities that consumer needed in your product? What additional can be provided to enhance the customer experience? Is your model /product is at least equal to your competitors in terms of specifications, features, services etc.?

So, all the features that matters from consumer point of view shall be incorporated in the existing setup. For example, while purchasing a cell phone, consumer always prefer to compare the different models. So for your e-commerce portal, it’s good if you have comparison facility for different models.

[6] How you can provide convenience to your consumers so that no other alternative should come into his mind for selection?

So, the product must be user friendly. Taking feedback from existing consumers for the problems faced with the product or what additional they wish for, will help in deciding the future prospects and development plan.

[7] Have you taken care for all the known problems that could be faced by your consumers? Have you developed the mechanism to facilities the consumer during usage?

So, the product must be analyzed for the potential problems that could be faced by users and counter measures shall be taken. For example – you can put all the normal queries in FAQ section while provide calling support for others.

One important consideration about those consumers who are not able to use your products is by providing additional support. For example – if consumer’s phone battery is dead or about to die and he is unable to book a cab via your App or an old age person is not able to handle your complex user interface, by taking what measures you can make him able to be your user. Why would you like to miss any user who can be a part of your revenue model?

[8] Are you facilitating your consumer even after you are able to sell your product? Are you providing all the related services to your consumers to become one stop solution for him?

So, the business model shall be developed to cover the feasible maximum requirements of after purchase. Easy exchange, repair, return policies shall be incorporated in the setup to maintain the relationship with consumers.

[9] Are you able to make a position in consumer mind to force him to come back to you again and refer your product/ service to other consumers as well?

So, the relationship with consumer shall be developed and maintained to win his trust. A satisfied consumer will definitely return back to you and also recommend others to use your product. A happy consumer becomes your brand ambassador while an unhappy consumer takes away other potential consumers with him.

Once you start thinking by keeping yourself in consumers’ boot, you can easily find the loopholes in your system and the scope of improvement. Though the forward approach gives the direction of market potential of concept, reverse approach gives the scope of making potential of concept in the market. Accepting your faults, limitations is not a sign of your weakness but of your determination to make your product better.

Wish you luck for your startup. Stay tuned with FS for more updates.

Simplest Guide for Thinking about Startup Ideas

Simplest Guide for Thinking about Startup Ideas

“In every single person there is an entrepreneur hidden deep inside the valley of thoughts. There are very few who shed the comfort zone and strive to let that valley of thoughts come alive.”

Most of us including me brag about not having an Idea to work upon. Otherwise, as we declare, we could have been – more successful than the guys who own Microsoft, richer than the Bansals of India, more famous than Steve Jobs and smarter than Zack Ma.

But from where did these current day Pirates get the Idea to make such a loot in the public which runs into billions? Apple alone is valued at $651 Billion. Flipkart, in just 5-6 years, is able to achieve valuation of $15 billion. And those non live video aggregators – Youtube –  they have revenue running into billions too ! Ecommerce, Social networking, Food Delivery Apps, Hyper local delivery Apps, Maps, Games, tutor sites ! My boy ! There is an opportunity everywhere.

For those who generally have a tendency to quash the spark of “ Entrepreneur inside” for the want of a blockbuster idea (Nah, they don’t rely on a small idea which will run out of steam after earning only few Billion bucks), I must admit that there is opportunity right there in the every single action we daily do.

And So we have intended to identify the areas which could be looked for Idea generation. FS Labs has compiled the simplest guide for thinking about startup ideas. Let’s begin the journey with the beginning of the day.

Simplest Guide for Thinking about Startup Ideas

[A] Morning Blast

The very first thing that most of the people do once they come out of the imaginary world into reality is checking the major news and events of the day. Websites, Apps or newspaper all attract consumers based on their priorities. If you are a bachelor, the probability of waking up just before few minutes of your office departure is more. If you are a girl, the biggest question that revolves in your mind is “What should I wear today?” In all of these hurries, most of the time you forget the major belongings that you need to keep with you for office work or entire day.

So based on the major struggle of morning, following startup ideas could be generated –

  • Personalized News App – An app to customize and prioritized the news as per customer requirement is an idea that gets drive from above description.
  • Personalized Clothing & Styling App – An app which suggests the best suited clothing based on the options available with you is generated from the common struggle of girls when getting ready.
  • Personalized Organizer – An app that reminds you the required belongings for your entire day is driven by the morning struggle of mass.That App will definitely take care for the type of routine you have – Office/ Meetings/ Touring/ Travel/ Class/Makeup/ Movie/Running etc.
  • Personalized Breakfast App & Service –Most of the time while running late for the office show or class, either we tend to miss the breakfast or we feel too clueless about what to make. A personalized app based on the diet chart/ eating habits which could suggest you first thing in the morning about what to eat as breakfast, could be a great help. Breakfast service on demand – nothing could be more complimentary than this.  

[B] Office Struggle

Once you are ready to move for office, the struggle starts from the same moment. If your car is broken or fuel meter is reading zero, you need to look for the other alternatives. If you are stuck in the traffic and your boss is able to manage to reach office in time, all of your explanations will be considered as just excuses. Rising fuel prices might have forced you to think for the cheaper alternative for daily transportation.

After attending all the meetings of your hectic schedule, another issue that you face is “Lunch”. If you are not a good chef or not having someone to cook for you, you are forced to eat whatever is available in the office canteen. Getting back to home, if by mistake you recall what you were supposed to do in office and what you have done, the probability of forgetting some important work is quite huge.

In this entire hullabaloo, the chances of buying something important on the way back to home are negligible and the ultimate result is “a big fight with your spouse or parents”.

So based on the above mentioned common struggle of office personnel, following potentials startup ideas could be generated –

  • Personalized Organizer – The above mentioned personalized organizer could be extended to remind other essential activities as well like – getting milk or grocery on the way back to home, when fuel needs to be refilled etc.
  • Economical Transportation Alternative – An alternative for daily transportation that reduces the traffic problem and is within the affordability limits is the concept generated from daily office struggle.
  • Affordable, Hygienic and Tasty Food – Supply of healthy and affordable food to office personnel is another concept driven by the same.
  • Laundry service on demand – On demand laundry service would help you in your daily chores.

[C] Personal Life

Once you are back to home from work and want to spend time with your family, your mind is occupied with the required shopping that you need to make like grocery, clothing, electronics, home appliances etc. If your cell phone is running out of balance or your DTH subscription is expiring soon, you need to get it recharged. If your maid is on leave and you are tired enough to cook food yourself, you either need to go to some hotel / restaurant.

If you are planning for a movie / event / sport, you need to check the available options near you and availability of seats. If you are planning for a long weekend trip, you need to check the best place for you and make the required booking to avoid last time rush.

If you are leaving in a rented apartment and the owner is creating fuss, you need to check for the other alternatives. If you are not feeling well, you need to check the nearby doctors and get the medicine.

So all of such problems, gives raise to following startup ideas –

  • E-commerce – Availability of required stuff at few clicks instead of getting it offline generates the concept of e-commerce.
  • Helper Search Portal – A portal with verified information of available cook/maid or other service providers is driven by the daily encountered problem by mass.
  • Hyper Local Delivery – A startup delivering the goods from nearby shops is generated by the time constraint problem of daily hectic schedule.
  • Nearby Events Search Portal –
  • Travel Planner – A portal controlling the travel management – flight, train, bus, cab search and booking is driven by the problem of pre-planning of travel.
  • Hotel Booking Portal – Hotel search and booking is also an extension of travel planner portal.
  • House Search Portal – Directory portal of house on rent, purchase, pg etc. is also driven by the major problem faced by mass.
  • Health Care Portal – Directory portal of all the nearby doctors, health care tips and tricks, e-commerce portal for medicines purchase etc are solving the health related concerns of mass.

[D] Fun Time

Once you are free from all the common worries of daily life, the time comes for entertainment resources. Kids are fascinated with new computer game while youngsters want to enjoy movie, songs, cricket, football matches etc. Housewives enjoy daily soap series, kitty parties while old age person prefer to enjoy yoga, meditation etc.

Above mentioned refreshment resources gives rise to following concepts to startups –

  • Personalized Music, Movie and Entertainment Channel – An app / website providing personalized music, movie or entertainment channels is driven by the entertainment preferences of people.
  • Party Organizer – An outsider arranging everything for your party is driven by the entertainment related concerns of mass.
  • Gaming Zone –  Online gaming options are excellent time pass.
  • Online Booking of court/field for playing – An outdoor activity center booking like cricket ground, tennis or badminton court etc

[E] Student Life

If you are in your student life, the concerns that keep you busy all the time is whether your study or preparation is going in right direction, what are the options available for your career path, which college / university is best suited for you, what are the jobs available in the market etc.

Such concerns give rise to following startup concepts –

  • Directory Portals of Education – A portal containing the information of all the colleges, study material etc is driven by the problem faced by students.
  • Guide Portals – A portal providing consultation for your career path is driven by the confusions of students.
  • Online Coaching Portals – A portal that provides coaching to students solves the time, money constraints problems of students.
  • Job Portals – Job portals help students to get the jobs of their interest.

This was a small guide from Team FS to encourage people to think about startup concepts. Stay tuned with FS Labs to know more.

Startup Marketing – Essential Element for Startup Success

Startup Marketing – Essential Element for Startup Success

Smooth and effective communication flow among all the stakeholders is essential for getting desired results. Communication gap leads to undesired failure. Marking is also a kind of communication between consumer and company. For startups marketing is essential tool to communicate and convince consumer about its product.

“Business has only two functions – marketing and innovation.” – Milan Kundera

For startups effective marking is essential from initial stage. Once loyal consumer base is developed, its “word of mouth marketing” that gives the organic growth. FS brings an analysis to help entrepreneur to develop their marketing strategies in right direction.

Assumptions for Case Study – To understand the outlook of marketing strategies, let’s assume two startup concepts –

  1. One startup is hyper local delivery model of medicines in demand in all cities tier I, II and III cities.
  2. Other startup is affordable, hygienic food provider in a city with great potential for such business (metro city where people have hectic life).
  3. The budget is sufficient enough to handle the marketing strategies.

FS Labs Startup Marketing - Essential Element for Startup Success

Startup Marketing – Groundwork

Following ground work is essential prior to deciding the effective and affordable marking strategies –

[A] Problem being Addressed–To understand the startup concept in terms of problem that is being addressed by it is necessary to determine the marketing strategies for it. For example – services based models like hyper local delivery provide convenience to its consumers while product based models like apparel, electronics products, home appliances provide availability to the consumers. Product based models focus more on additional information like comparison, reviews and rating etc.

[B] Market Volume for the concept – Once the problem that is being solved is identified, defined and evaluated; it’s easy to estimate the market volume for your startup. For example – the market volume of hyper local grocery delivery service in a potential city is all those persons that need grocery , are tech savvy enough to buy online and have lesser time to visit a local store either for the sake of luxury or time constraint – working couple, bachelors , singlet families etc.

[C] Targeted Market – Once the market volume is clear, the next work that is required is to categorize your targeted market base into relevant segments like – age groups, gender, purchasing power, location etc. For e.g. – Targeted market for matrimonial startup could be categorized in groups like parents, guys and girls or 25-30 and above 50 age groups etc.

[D] Market Competition – Analysis of the marketing strategies of the players that are of same domain is essential for your startup. For e.g. – one competitor of e-commerce startup is highly active on social media while other is working on press media and door to door marketing.

[E]Resources and Budget for Marketing – Clarity on the budget for your marketing campaigns and the available resources is necessary to choose the right marketing resources. For example – if the marketing budget is very high, press, media and door to door marketing tactics are useful; otherwise either one of these or social media is the best platform with limited resources.

Case Study – Ground work of our case study could be analyzed as following –

  • Medicines delivery startup is addressing the convenience problem for the mass who wish to have some service providers to deliver their medicines at home while the Food delivery startups are solving the problem of affordable and hygienic food in the city.
  • Any person who is tech savvy enough to rely on on-demand delivery startup and have the capacity to buy the medicines and food is the target customer for both the startups. So for medicines delivery startup the market volume is large in Tier 1 cities while limited in Tier II and III cities. For food delivery startup, market volume is huge in Tier I as well as tier II cities.
  • For medicines delivery startup we can categorize the targeted market based on type of city, age group and affordability limits. For food delivery startup the market volume could be classified in groups like – age, gender, profession etc .
  • Market competition for both the startup concept is decided by checking the players who are working in the target city.

Startup Marketing – Essential Qualities in the Campaigns

  • Convincing – Marketing tactics must be strong enough to convince consumers to get the attracted towards new startup concept/product.
  • Comparing – Most of the people have habit of comparing the available solutions. So the marketing campaigns must include the benefits of new concept/product over the existing ones.
  • Converting – Finally the marketing campaign should be strong enough to convert unaware users or users of other players into your consumers.

Startup Marketing – Techniques

[A] Social Media – Social media is considered as one of the most powerful marketing platform as millions of active users could be reached with little efforts and cost. Facebook, Twitter, LinkedIn, Tumblr, Reddit, Pinterest, Instagram, Slideshare etc are some of the most popular social networks with millions of active users on it. Though approach required for every platform is different based on the working mechanism of the same, ultimately it helps in marking your presence visible in a short span.

Based on the targeted consumers of your concept, it could be easily decided how to move ahead. For e.g. if your idea is location oriented there is no point of promoting it to other locations, so it’s better to stick to your limits initially.

[B] Press Media – Press media is one of the oldest and reliable resources for marketing of your startup. Most of the people have habit to read newspaper every day, so based on the need to capture the consumers right press media could be used to promote your startup – like local newspaper to reach out local consumers, national newspapers to reach out the maximum number of people.

[C] Media and Television Ads – Promoting your concept to television, YouTube, startup news portals, promotion platforms etc are good techniques to allow people to know your existence. Television ads are good resources to align the consumers of your product. For e.g.– promoting kids oriented portal on kids cartoon networks, housewives oriented portals/services during TV serials etc.

Promoting on startup news portals, promotion portals might be of limited use as it might not direct to the right consumers as most of the active users on such portals are those people who are startup enthusiastic.

[D] Targeted Marketing – Targeted marketing is one of the most effective technique for your startup. Door to door marketing, targeted canopy marketing, email and SMS marketing etc are some of good examples of targeted marketing.

For e.g.– Targeted marketing in societies for hyper local delivery startups, targeted marking in industrial / office area for transportation startup.

Case Study – Following marketing strategies are effective for our assumed startup –

  • Social Media – For medicines delivery startup the targeted market is large, so social networks connecting the people of desired locations could be used. Since, the food delivery startup is working in one particular city, so the targeted marketing is required through social networks.
  • Press Media – For medicines delivery startup press media is very helpful in Tier II and III cities. For limited presence startup of food delivery that too in a tech savvy populated city, the use of press media is limited.
  • Media and Television Ads – For medicines delivery startup, media and televisions ads could be good in Tier II and III cities while targeting age group consumers, while for food delivery startup it would be good for targeting house wives, old age persons.
  • Targeted Marketing – Targeted marketing tactics like canopy, door to door marketing are good for both the concepts.

Though startup marketing is complex but also a leading factor of startup success. Great idea might fail due to lack of recognition in the public while other might become billion dollar unicorn because of public attention and acceptance.

Wish you luck for your startup. Stay tuned with FS Labs to know more.

Customer Relationship Management – Leading Factor of Startup Success

Customer Relationship Management – Leading Factor of Startup Success

“There is only one boss. The customer, and he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Sam Walton

“Customer is king” is the well-known saying of the business world. The success of any business is directly dependent on the level of the satisfaction that the consumers have with the product or service and the future trajectory of growth or loss is decided by the escalation or reduction in the number of happy customers. A happy consumer is a source of extra business by becoming promoter of the business while on the other hand an unhappy consumer may take away the countless potential consumers with him.

“Companies and their brands need to reach out and speak directly to consumers, to honor their values, and to form meaningful relationships with them. They must become architects of community, consistently demonstrating the values that their customer community expects in exchange for their loyalty and purchases.” – Simon Mainwaring

One of the biggest differentiating factors among startups of same domain is the distinguishing services and satisfaction that they provide to their consumers. Why would people prefer to go to local vendor of grocery rather than a well-funded and growing startup is because of the relationship that the local vendor is able to manage by his nature, home delivery service, discount etc. Similarly, why would people prefer to buy clothing online when there are so many fancy showrooms are there in the city, is because of the discounts, reverse logistics management services of the startup etc.

“Your most unhappy customers are your greatest source of learning.” – Bill Gates

Customer satisfaction level is also a check meter of the operational excellence that startup has achieved till date. A single unhappy complaint is sufficient enough to show the quality of operational excellence of startup. Feedback of consumers is the greatest sources to find the loopholes and areas of improvement in the system.

Customer Relationship Management – The Leading Factor of Startup Success

FS Labs Customer Relationship Management - Leading Factor of Startup Success

Since the number of startups working in same domain is getting increased day by day, so the distinguishing factor among all those players is the relationship that they maintain with their customer. When consumer has options to select a product or service from different players, general survey comprehend that the selection criteria for consumers are trust, relationship and previous experiences with the service/product.

CRM has become one of the major focus areas for entrepreneurs to ensure the survival and long term success of their startup. The better you manage the relationship with your consumers, more are the chances of success. CRM strategies need to be planned from the planning phase of the startup and shall be regularly monitored and controlled since the day one of execution.

From customer relationship management point of view, we can divide the consumer base in two categories-

  • New Consumers – that are either unaware of your startup or using some other service
  • Existing Consumers – that are either using the product or service of your startup or have used it in past

The major objective of customer relationship management could be defined separately for both types of consumers –

  • New Customer Relationship Management – to convince the consumer to use your product or service and convert visitors into buyers.
  • Existing Consumer Relationship Management – to enhance the frequency of existing consumers up to their maximum limits and keep them engaged forever.

Customer Relationship Management – Strategies and Challenges

Assumptions for Case Study – Let’s assume that the existing setup is the market based model of grocery delivery service –

  • The consumer base is mixed – happy as well as complaining.
  • The competitors are aggressive enough to enhance their consumer base.
  • Cost effective and consumer attractive CRM solutions need to be implemented in the existing setup.

To manage the relationship with new and existing consumers, following strategies are effective for startups –

FS Labs Customer Relationship Management - Strategies and Challenges

New Consumers Relationship Management

The relationship with new consumers is started by letting them know about the startup concept and convincing them to use the product or service. The main contributor to attract new customers is the marketing strategies to reach, convince and motivate them. So all the marketing strategies should be aligned in the following way –

[A] Unaware Consumers – Consumers that are unaware for the product or service of your startup are the easiest target to attract. Targeted marketing to reach these unaware consumers is the best way to start and manage the relationship with this market volume. Social media, press, media any of the medium could be used to reach these consumers based on the addiction pattern of the targeted consumer.

Case Study – For our case study of Grocery Delivery Service, following CRM strategies could be implemented for Unaware Targeted Consumers –

  • Bachelors – bachelors could be reached out by social media as they have the addiction of Social Media
  • Housewives – housewives could be easily reached by television media, door to door marketing
  • Office Personnel – office personnel could be reached by deploying canopies at right locations
  • Press Media – press media could be used to reach out the remaining market base

[B] Consumers of Other Player – Relationship with consumers that are using other services or product is difficult to start and manage as they are aware of the pros and cons of similar kind of service/product. So the best way to start and manage the relationship with these consumers is by highlighting the benefits, features and attraction to these consumers in the marketing strategies.

Case Study – for our case study of Grocery Delivery Service, following CRM strategies could be implemented to target the consumers of other players –

  • Targeting the loopholes of other players and incorporating the solutions in the setup
  • Using cash burnt tactics to capture the market volume

Existing Consumers Relationship Management

The relationship with existing consumers is maintained by keeping them motivated to use your product or service every time as per their frequency of use. The main contributors to attract existing customers are the level of service, source of motivation and their additional demands. So following strategies should be deployed to maintain the relationship with existing customers-

[A] Consumer Complaints – One of the best strategies to keep relationship with consumers healthy is by providing them the best help to solve their problems with the product or service. Better is the service to consumer, more are the chances of healthy relationship with consumer.

Also, the Consumer complaints are the greatest source to learn the loopholes in the system. Eg- if consumers are continuously complaining about the timing of delivery, it implies that there is some problem with the supply chain management. If consumers are complaining about the payment failure, it highlights the problem in payment gateway and other payment mechanism.

So to manage the relationship with existing consumers, a proper channel should be deployed to solve the consumer complaints promptly.

Case Study – For our case study, call, mail, chat support system should be deployed to maintain the relationship with consumers.

[B] Consumer Behavior Analysis – Consumer behavior analysis provides the pattern of consumer demand and source of motivation. So consumer behavior analysis provides the proper guidelines to manage the relationship with consumers. Based on the consumer behavior targeted marketing strategies should be applied.

Case Study – for our case study, following information of consumer behavior is useful for CRM-

  • Products being purchased the most
  • The time and days pattern of ordering
  • Source of motivation of service use – discounts etc.

Based on the consumer behavior results, targeted marketing strategies could be deployed to attract the consumers with specific needs.

[C] Consumer Recommendation – Based on the type of product, consumer should be recommended with the relevant products or services to enhance the relationship with him.

Products with long life have low probability of same consumer returning for the same product. For eg- Cell phones, consumer is not going to return very soon to buy another phone. So to enhance the relationship with consumer it’s better to send the suggestion of relevant accessories for the phone.

Product with less life like grocery product, consumer should be recommended with the pre-defined alert messages at the consumption of product.

Case Study – for grocery products, following recommendations could be made to consumers –

  • New products introduced in the setup
  • Alert message at the expected consumption of product
  • Weekly, Monthly order management system
  • Recommendation of better products – for eg- low cholesterol oil etc.

If we are able to make consumers dependent on us for managing his product need, the relationship would definitely get enhanced.

[D] Consumers Loyalty – Loyal consumers are the biggest marketing team of word-of-mouth marketing for any of the startup. So to manage the relationship with loyal consumers is important to avoid the loss of fixed market base and keep it increasing continuously.

Loyalty rewards are one of the best strategies to motive customer to use product again and again. For eg – free or discounted product/service after certain number of use.

[E] Consumer Demands – Modifying or changing the business verticals as per consumer demand is the long term relationship management strategy with consumers. Feedback surveys provide what consumer wants. Based on the results of these surveys, consumer relationship could be enhanced by changing or introducing the business verticals in existing setup.

So, for better CRM, consumers should be queried for the changes that they want in the system.

Case Study – For grocery delivery startup, following are the ways to know the consumer demands –

  • Feedback survey to know the area of improvement
  • Customer review on the service

Wish you luck for your startup. Stay tuned with FS Labs to know more.

Startup Buying and Selling – Right Direction for Acquisition

Startup Buying and Selling – Right Direction for Acquisition

“Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world”. -Joel A. Barker

At the core of its heart, every activity is associated with some specific target. To have clarity on the target beforehand helps in determining the right progress trajectory of the activity. Without clarity on vision, the activities keep on running an endless race. Same is applicable for startups as well.

If you are starting a startup, the target should be clear from the very first day, so that all the strategies could be developed and tracked as per the desirable success target and rate. Entrepreneurs have two major objectives for their business models, either to become the biggest player of market and acquire the small startups or the expert of some domain and getting acquired by big players.

So, if the target of your startup is to become an expert of some vertical and getting acquired later on, the focus of entire business model should be to develop the market base of targeted player so that it could become noticeable for acquisition.

FS Analysis on Startup Buying and Selling – Startup buying and selling has become a common phenomenon in contemporary market place. It helps in getting the established consumer base, expanding the business verticals, enhancing the business presence and getting the developed setup for business. Here are the major factors that entrepreneurs should keep in mind while getting into the market with focus of selling the startup in future to some big player.

Assumptions for Entire Case Study– 1. The targeted player to sell your startup is working in domain of e-commerce of electronic products and has developed a loyal consumer base by its excellent supply chain and related services.

2. The targeted player is well funded and have sufficient fund to expand or change its business model as per the market need or to stop the penetration of other players into its loyal consumer base.

3. The targeted player is aggressive enough to accept the changes in its business model.

FS Labs Startup Buying and Selling - Right Direction for Acquisition

Business Models with Low Probability of Acquisition- If you are targeting to sell your startup to the above mentioned player, following business models have less probability of acquisition.

[A] Same Model with Same Product–Let’s assume you are planning to start a business model of e-commerce of electronics items. Assumed that all the features and services of big player are already incorporated by you in your business model, you are planning to capture the untapped customer base or focusing on penetrating the customer base of big player. Now try to get the genuine reason for following questions-

  • Why would consumer buy from you, when they have the choice of well-established and trusted player?
  • Why would the big player not be able to incorporate the additional features of your business model into its own and through you out of the market?
  • Why would the big player allow you to penetrate into its established market volume? Unless this happens – Read Mayo War!
  • Why would the big player not be able to capture the untapped customer base before your business model starts getting prevalent?
  • Why would the big player not be able to apply “Cash Burnt Market Capturing Tricks” to stop your infiltration?

The answer to all of these questions leads towards one answer only that the big players are never interested in acquiring the same business model instead their target is to expand their own business.

[B] Same Model with Different Product- Let’sassume you are planning to start an e-commerce business model with different product of the assumed big player. Assuming you are trying to replicate the same model of established player of electronics items, your target is to capture the market volume as much as possible and sell it to the big player of electronics e-commerce. Now, try to find the answer to the following questions-

  • What would stop big player to introduce one more vertical into its business model on its own?
  • Why would consumers not trust on the established player?
  • What is extra in that new product of yours which will divert customer traffic toward your product?

The whole point is that the acquisition probability of same business model with different product is less because the big players have all the resources required to grow themselves in another verticals as well.

[C] Different model with same product- Let’s assume you are planning to start the review platform for electronics products i.e. your business model is different than the targeted player of same product. Assuming that your business model is nowhere linked with that of targeted player, the probability of acquisition is less. Reason being you are not affecting the direct market volume of big player in any way.

Business Models with High Probability of Acquisition – Following business model have high probability of acquisition by the targeted player of e-commerce of electronics items-

[A] Enhancement in Business Verticals – If you introduce a business model that gives an enhancement in the business verticals of targeted player has higher chances of acceptance, provided you are able to establish a loyal consumer base and big player is not able to develop that vertical soon.

Suppose you provide on demand installation, repair and maintenance of electronics products and have developed a good reputation in the market, the probability of acquisition is high because it provides an enhancement into the business verticals of targeted player and works as an added benefit to the CRM of existing player. Snapdeal acquired Freecharge, Exclusively and Esportsbuy to add new verticals in its business. (Read it here – Snapdeal Acquisition Trend)

So, FS advises founders to analyze the business models of all the competitors and start developing a setup that is directly linked with prospective improvement in the business verticals of established players and start developing a loyal market base for your startup. Chances of your startup buying and selling will increase in this scenario.

[B] Enhancement in Customer Acquisition, Pre Sale- If you are planning for a business model that would help the targeted player to enhance consumer acquisition through mobile/website or any other marketing technique, the probability of acquisition is high, provided your platform is robust enough with awesome user interface.

Suppose you provide a technology platform or a mobile app which reveals number of an electronics item which is being sold in the area related to a target customer. If customer is getting continuous information about that product being sold in big numbers, he is definitely bound to visit stores to check that product or buy it online. Flipkart acquired companies like Mime360, Chakpak, Adiquity and Appiterate due to same reasons – (Read it here – Flipkart Acquisition Trend)

So, FS advises startups to develop a tech based customer acquisition platform with good user interface to enhance its chances of getting acquired in recent future.

[C] Enhancement in Better Customer Service, During Sale- If you are able to enhance the business model of a big player by providing the related services to its consumers, the probability of acquisition is more.

For our case study – With customer expectation of delivery as soon as possible and the most challenging area of startup business is ‘Last mile delivery’. By any chance you are able to figure out the puzzle of having a better war to manage inventory or making the product reach to its buyer within least possible time, you are on the big radar of all online market sellers.

Warehousing, inventory management solution, delivery force, courier service are few to name which make the cut into this kind of service.

So, FS advises founders to understand the business models and products of targeted player and provide the related services that are remaining untouched by the big players.

 [D] Enhancement in Consumer Relationship, Post Sale- If you are planning for a business model that would help the targeted player to enhance its consumer base service management, the probability of acquisition is high, provided your services are robust enough to make big players trust on you.

Suppose you provide a Consumer Relationship Management platform for electronics products, where experts and users can solve the product related queries of other users would attract the big players, so that they can drive traffic to their product base via that platform.

So, FS advises startups to look into the consumer relationship management tactics of big players and develop a better solution of it.

FS Outlook-

Here is the overall advice to entrepreneur for being specific on the long term goal of startup buying and selling-

  • Analyze the problem for which you are providing the solution.
  • Estimate the market competition for your startup – Direct as well as Indirect.
  • Get consumer feedback on startup prototype and check the potential of your startup concept.
  • Based on the market need and acquisition trends of targeted player, alter your business model aligned with your long term target of acquisition.

Wish you luck for your startup. Stay tuned for more updates.

Startup Check Metrics

Startup Check Metrics

Checks at the Start of Vehicle Drive: Whenever we start driving a vehicle, just before beginning our journey, we check for the functionality of brake system, gear system, horn, fuel and speed indicators and obviously its look or dirt/dust freeness. These checks are simple and intuitive. Almost every person knowingly and unknowingly performs these checks to ensure glitch free ride.

If all the systems are functioning perfectly, you will reach destination without any concern. And in case you forget to check the fuel level – I guess you are well aware of what happens next.

Once you have decided to convert your Idea into a business, you are already ahead of 99% of the crowd who can’t dare to follow their dreams. Your startup is speeding up on runway to take a big leap. Now what is the check point – like the one in case of driving a vehicle – to ensure smooth glide of your startup from Idea stage to a big market player?

Resources which are required for survival and growth of startups are scarce. Entrepreneurs are generally blinded by their passion of converting vision into reality and they forget to keep a check on necessary information flow about the availability and usage of these resources.

Few metrics for keeping a check on information related to all resources and its flow – in & out – will not only be helpful but will keep founders updated about the current status & will help in planning further resource requirement. A dashboard that tracks metrics that flash green, orange or red to inform founders about the current and projected state of your startup progress on various types of flows will be a big help.

Various types of resources and information flow that are very important are as follow:

  1. Cash In and Out Flow
  2. Investor Confidence & Capital Inflow
  3. Talent Acquisition and Team Composition
  4. Customer Acquisition
  5. Product/Service Development Tracker
  6. Supply Chain Partners’ Health
  7. Customer Relationship Management
  8. Feedback, Review and Rating in General Public

FS Labs Startup Check Metrics

Here is the detail of these metric and how they are going to help in assessment of success of your startup –

1. Cash In & out Flow Rate Metric: This will be responsible for assessment of cash availability. Net cash inflow is sum of your business operating margin plus funding from various sources. Cash outflow is the money you are spending on running the show.

 The cash-burn rate tells you how long before your startup will run out of cash. It details how much cash you have available, the biggest bills you must pay and when the payments are due. Keeping a check on big bills due, available cash amount and dues will keep founder aware of the ground realities.

Through cash burn details if you are able to plan for ten to 12 months of sustenance, then your company is in good shape. If cash burn is around 4 to 9 months, you need to act real fast to secure support through funding. And if there’s less three months, you have a cash crisis that will require a big financial infusion, a huge layoff or an orderly shutdown.

2. Investor Confidence – Capital Inflow Metric: Though investment is never an initial requirement for initiating any startups but down the line after planning for business expansion, funding gains importance.

The capital-inflow metric maps out how well you are faring in securing funding for your startup. It measures your goals and the cash received from sources like customers (quick-payment terms), suppliers (slow-payment terms), founders, friends and family, angel investors and venture capitalists.

Funds from family/friends etc are always available at your service (hope you have good value proposition among your well wishers) but are limited. Getting Funds from venture capitalists/ Investors is always a tough nut to crack. While they evaluate the founders on parameters like flexibility, determination and imagination, they also check the feasibility of your business as a constant source of income in near future.

Good capital inflow is always a blessing if you are able to direct it to the proper channels. Too big capital inflow always prompts founders into taking over ambitious decisions and too little capital inflow is always a worry.

3. Talent Acquisition and Team Composition Metric: Your employee meter lets you know whether you are building what investors would consider as a good team. By job area (such as engineering, sales & marketing , CRM manager, HR etc), it details the number of industry big shots you’ve already hired, the number to whom you have made offers and the number that you’re interviewing. But before that you need to understand the actual number of heads that you require to run and expand your business model.

Another issue to look for is that you need to build a vertical team with flow of information from top to bottom & vice versa. Initially a flexible team which can work in multi-job kind of role will well fit into your plans. Too many experts and too many people for a single type of job generally create friction among team members.

Your employee metric should correctly graph the complete organisation structure, should always tell you about the next talent requirement or emptied post. You should always try to build a strong team.

4. Customer Growth Metric. Product’s penetration in the customer base is most vital factor for business growth. The customer-growth metric should begin with clear mention of your target customer and how much your product has been able to penetrate into that customer base. Few elements of this metric could be – Product growth rate, revenue generation, number of customer using the product and frequency with which they use it, recommendation trend in customer circle and how much they are ready to shell out for your product.

Good penetration in target customer base and positive recommendation trend in their network, increasing proportion of customers paying higher price for your product is a good sign. If it’s otherwise then try finding some real reason behind the same and try some radical measures to change your product’s image.

5. Product/Service Development Tracker Metric. Automotive industry employs a very good tool – APQP (advanced product quality planning) for tracking down the product development. It’s a comprehensive tool which tracks real time progress and allows advanced planning for customer satisfaction. This tool is the major reason behind the timeliness of the launch of number of automobiles into market.

This metric lets you know about being on schedule for building the right products. It details the development timeline for products, about your team is meeting its milestones and if not, what are the reasons behind same and finally customer’s feedback on product’s prototype given to them for trial.

Staying ahead of schedule or meeting timelines, positive feedback from customers (on prototype parts) will keep this metric green. Otherwise it will help in identifying the problem and finding solution for making perfect product.

6. Supply chain partner’s health metric. Unless you are a self dependent startup, there is high possibility that your finances & operation will be affected by your supply chain partners. Whether it is part/product suppliers or delivery service providers, your product’s review is based on complete supply chain’s ability to deliver it to target customer.

This metric lets you know the financial and operational health of your direct and indirect stakeholders. Percentage and priorities of your dependency on that partner – is also a factor of this metric.

If the partner is in good health and is supporting your day to day product delivery to customer in a great way then this metric signals green. In case of any problem in the supply chain you will be identify party responsible it and in devising strategy to tackle the same.

7. Customer Relationship Management Metric. Pre and post sale customer relation management is important factor for any startup. This metric will be responsible for getting an insight into how your sale and service team is able to generate traction of new customer and how your team is able to sort out post ale problems. Time taken to close a call can also be the check point for this. What is the number of customers which you are able to retain is equally important.

Startups backed by better CRM performance are hit from day 1. Customer retention and excellent post sale services are the steps for successful business venture.

8. Feedback, Review & Rating in General Public: This metric is a check about how public is taking your product. If there is any critical assessment of your product, be open to accept it and look for the best possible solution you can provide. Reviews & rating on various social media platforms also can be helpful for this purpose. Customer feedback is always a reality check for every product.

If customer’s rating and reviews declare your product a success, this metric could signal green. Otherwise this metric could act as refining agent for your product.

Wish you luck for your startup. Stay tuned with FS for more updates.