The Gray Hair Speaketh

Advice that is largely Unsolicited..

GroupOn, Living Social, Snap Deal etc. – Is Deep Discounting the last resort of the failed salesman?!

For those who follow this blog, it is no secret that Group Buying, especially in the shape that it has taken in recent months, is my favorite whipping boy!!

I attended a talk by Prof. Nirmalya Kumar a couple of weeks back, and he was talking about how CMOs and CEOs need to worry not just about the short term, but also about the long term. He gave an example about how Coke could get away with absolutely no marketing spend for a year, and it may not impact its sales for the year. And yet, what does it do for Coke, in the longer term?

So a CEO / CMO has to take into account not just the next quarter’s results, but also the long legacy of the brand!

So what happens when such brands get lured by the GroupOns and the SnapDeals of the world? When a brand starts selling for 10% of its price, or even 50% of its price, no matter what justification marketers give internally to justify these moves, there are two consequences in the eyes of the consumer:

– that if they can sell for 10% of the price, they have been taking 90% too much from us, all these years!

– that I will wait for these discounts, and not buy at the full price at all!

Is this doing good for a brand?

Yes, the justification is that, instead of putting expensive advertising, I divert those marketing dollars into deep discounts, and get people to buy. To experience my product. And get a better and immediately measurable ROI on my “marketing” money! Sounds like a perfect plan, something that the CFO may like for the short term.

But who carries the responsibility for the brand, in the long term??

The moves would have been fine, during recessionary times. When you have capacity and the consumer offtake has reduced drastically. And you still want to keep your factories busy. At that time, a deep discount strategy is good.

But in India, at this time, it is a booming economy. Brands who are getting their act half right have cash registering ringing away to glory, and those who are doing better, are putting up new factories to cope with the demands!

In such times, who wants to sell cheap? Who wants to give those deep, deep discounts?

Only those who have no means to sell it right. Yes, I think that Deep Discounts are the last resort for the failed salesmen! When they can do no better, they discount. Well, if you give it away for free, you are sure to “sell” well (I heard an interesting rejoinder to this also, in fact, in reference to a specific community in India, and it said “if you give it free to them, they will ask for money to take it”!). And the reason for the inability to sell well, is their lack of understanding of how a consumer’s buying process has changed. If all that a marketer can do, is to blast advertising into the face of the customer, and the customer refuses to acknowledge these and purchase his brand, it is the marketer’s fault that he has not changed his ways. To the tunes of the new consumer buying decision journey (I cover some of that in this presentation).

If you do not get your marketing and sales right, you go and sell off cheap. Even in boom times! Report good numbers, get your bonuses, and walk away. And leave the brand bleeding in the long term.

No can do. If I hold shares in companies that are doing this, I would sell those shares, and get out. As I’m sure the future isn’t bright!!

January 26, 2011 Posted by | Uncategorized | , , , , | 1 Comment

The Social Network: My Learnings from the movie

Yes, this is kind of a movie review, of ‘The Social Network’. And ordinarily, I post my movie reviews on my other blog, but I am writing this one here. This blog here, is more focused to budding and fellow entrepreneurs, and I usually review startups here. So what is a movie review doing here?

Well, the movie ‘The Social Network’ is an entrepreneur’s movie, if anything! And there are many learnings to pick up, for entrepreneurs, and hence, I felt that this was the right place for this movie review.

The story is supposed to be of Mark Zuckerberg, the youngest billionaire in the world, and the founder of Facebook. Well, there have been some liberties taken, and hence I state that this is ‘supposed to be’ Mark’s story. Be that as it ma be, even if it is close to being Mark’s story, it is fascinating to learn about the man behind the name. Biographies of successful people are always interesting from that point of view. Usually of course, these are written (or made into movies) when the person concerned, is of advanced age. But in this case, the person has achieved success – stupendous at that – at a very early age, and so you see a movie about him, while he is still very young.

And perhaps there will be room to add a sequel. For there is no mention in this one, about the Microsoft investment. Or for that matter, about the move to take Facebook beyond the schools and colleges, and out into the public. And of course, I am sure bigger things are in store. Be it his battles with Google, or building pieces to take on the likes of Twitter, Foursquare or Paypal, there are interesting new things happening in Mark’s life, and in his business, and a sequel few years down the line, could well be in order!

For now, lets look at this first film on him, The Social Network.

The story is engrossing, for understanding the drive and the passion that it took to make Facebook. Like my daughter remarked after she saw the movie, “he was coding non-stop for 36 hours”. Well, that was just a part of it. But a crucial part, where there was amazing conviction, and which was supported by the commitment to ‘make it happen’.

I was not aware of the Sean Parker connection, so it was good to see that part. About how his biggest contribution was about dropping the ‘the’ from ‘thefacebook.com’ and making it to what it is today, viz. simply facebook.com. Or how he showed Mark, the path to California, and how it was a crucial shift for Mark and for Facebook.

The conviction that he saw, where he realized that reaching 75,000 users, or even a million for that matter, was just about taking smaller steps to the very big goal that he had in his mind. Many, including his co-founder, could have got satisfied, felt that they had already achieved a lot, and tried to monetize early. And which would not only have meant the lack of further growth, but would have stunted what was already there, due to drop-outs on account of the monetization drive!

These, however, are the most crucial three moments that I picked in the movie, and which are my key questions to fellow and budding entrepreneurs. Whether you have got these moments for your business yet, or not?

1. After the short-lived success of Facemesh, when Mark is working towards the new project (what became Facebook), he learns from the Facemesh experience, that people jumped on to Facemesh, not to see hot girls (which can be seen at many other places), but to see girls whom they knew.

It is a very crucial observation, and a very critical one too. Do you pick these nuances, naturally, in your business too??

2. The second Eureka moment is what lead Mark to put the ‘relationship’ field in the Facebook profile. Where he was trying to replicate the physical Harvard experience on a social network, and he could have simply put all the physical activities and efforts into the virtual world, the important thing was about identifying the key driver. Sensing that ‘relationship status’ will be one such factor, was an excellent breakthrough.

Other Social Networks have replicated many of the standard features that work on social networks. Say,Orkut for example, has done that. But they have not picked those crucial driving moments. And due to which they have not struck the serious growth levels that Facebook has managed.

So have you got those defining aspects that can be the game changers, in your business??

3. The third crucial dialog is what Mark has with Eduardo, after he has blocked the account. That money is required, to ensure that business flows without slightest interruption, to ensure the servers keep chugging away. As he says, “Facebook cannot stop. These are friends who know friends and so on. Even a few moving out, can be like a domino effect!”.

Well, against this obsession, we also have Twitter where fail-whale is a regular occurrence. And yet, it has managed to hang in there, as a business. But I would call it the exception!

The obsession of Mark to do all he can, to ensure that users get an uninterrupted, perfect experience, is what all businesses should strive for. It is more crucial perhaps for Facebook, where people are friends, and as Mark says, few guys moving, could cause a domino effect. But in today’s connected world, this is true for ANY business or service. If you do not do everything in your means to keep your existing customers, and few start leaving, you do not know when you could have a domino exodus away from you!

Are you as obsessed as Mark is about keeping each and every customer of yours??

All in all, it is a fascinating story to learn about a successful person. And it is clear that he is brilliant, but also extremely focused on what can work, how he wants to provide clear value, and how he has a bigger picture in mind, to take Facebook to newer and newer highs!

Looking forward to see where the business goes further, and to a possible sequel to this.

And looking forward to entrepreneurs being inspired by the story!

Have you seen ‘The Social Network’? What did you think of it? Do share your thoughts in comments below..

November 15, 2010 Posted by | Social Networking, Startup | , , , , | 11 Comments

Group Buying: Thoughts About The Business Model

What is your reaction when you see a physical product offered at an unbelievable low price??

Like a two-wheeler at 50% of its price? Or a TV at 40% of its selling price? Or even gold – at 30% discount??!

My own first reaction (tampered as it is by standard thought process on gross margins available, etc.) is that it cannot happen! Or that maybe it’s a scam. It is not the real thing. It is second-hand. It is fake gold, etc. etc. etc.

And then you look deeper. And get a bigger understanding of the process.

Every advertiser is looking for that eternal ROI. How many crores spent on making the VW Vento ad speak to Times of India readers? How many increased walk-ins to the showrooms? How many cars sold?

And calculations of that kind!

So when a group buying company suggests to you that:

–          you spend money on expensive advertising (hoarding, print, TV etc.)?

–          you want to drive footfalls and sales

–          what if that is assured to you anway

–          and you cut to the chase

So that, essentially is the model for group buying!

Divert the money out of advertising.

Put the same budget in offering exciting discounts.

Use the group buying vehicle to reach the customers who want your product.

There.. the ROI is in for the budget allocated.

But.. is it really that simple?

If its not that new mousetrap, but rather the unbelievably cheap mousetrap, there are good chances that you’d have a queue outside your door, and you can sell as much as you want.

But the questions then, are:

  1. Did you advertise only to reach those few buyers who would walk-in or purchase? If that was your intention, then some means of targeted direct marketing / telemarketing would have been better options, than mass media advertising, right?
  2. Your purpose of advertising was to also reach those were not going to walk-in today or purchase in the near future. People who may still register your brand somewhere in their heads, and think about you, as and when they get to a point of purchasing your product category. Or to create a general brand hype / visibility etc. Just cutting to the chase and getting those 40 walk-ins, gives you ROI, but does it give you that visibility at all?
  3. Will the buyer perceive that maybe your product is actually worth 50% of your selling price, and the rest of your normal mark up, is your huge profit. And which you should not be earning, really? Could that actually cause more harm than good, in the long run?
  4. Also where do you create your market for tomorrow? If you have not pushed the brand out as much, and have resorted largely to the short cut, discount driven, group buying options, the rest of the world has not been impacted by your brand. And you have left tomorrow’s market open for your competitor to lap up?!

At a time when brand managers are pushed to deliver ROI and a group buying option appears to get them there, there will be temptation to pick it up. And sell at less than cost, by explaining the difference to the marketing budget account. But I wonder if this is sustainable in the long run.

So is all group buying bad for brands? Certainly not.

Where you have perishable inventory, group buying is a beauty. Airline seats, hotel room nights, even food products approaching ‘best by’ dates. Better sold at cheap than not sold at all. And good for the buyers too. Perfect win-win.

Or for categories like services. Where each new service customer is not draining away real cost, but only utilizing the excess capacity that is anyway, idle. Theatre seats, saloon chairs, gym memberships are the examples I refer here.

What I have concern about, are physical product areas, where attempts are made to sell cheaper than cost price – by a lot – and which can over time, potentially do more harm than good, to the concerned brands.

What do you think? Love to read alternate opinions on this.. please comment below!

October 12, 2010 Posted by | Ecommerce | , , , , , | 14 Comments

What does it take to run a successful digital business in India?

This was the topic given to me, by the organizers at the Shailesh J Mehta School of Management, I I T Mumbai. Originally meant to be a panel discussion (would have been a very interesting one, I bet), it was later converted to a talk by me.

Even as I was preparing my thoughts for this subject, I posted the question on my Facebook page to ask my friends, what they reckoned, does it take to succeed in a digital business in India. And I got responses that included the need for velocity, passion, doggedness, understanding local nuances and culture, etc.

Which were all right, in their own way.

But I guess all of those factors, and many more, are relevant for just about any business, and not particularly digital businesses. So focusing specifically on digital businesses, and for India in particular, I put some thoughts together.

It was important to appreciate key words here, viz.

Success – not about winning a business plan competition or getting angel funds or even VC funds. Success, for this context, was about generating a sizeable business, making money (as against burning money), creating a brand, perhaps an IPO, etc.

Digital – every business nowadays has some digital component. So we are not referring to those. We are also not referring to creating applications for deployment on the digital space. Since creating applications is a software business, whether for online space or otherwise. So digital in this context, was about close to pure-play digital businesses, typically online types like e-commerce, services on a digital platform, portals, and the like.

India – for me, meant that the operations are based here. But that is not to stop serving a global market.

With that context, and focusing more on the business side and less on the technology side, this is what I put together (note that bullets are cryptic, as there was talk that supported these; so, not sure if all of the points get across – no, don’t have the time right now, to elaborate the points!):


Would love to have your views on the subject. Please share in the comments below.

September 25, 2010 Posted by | Ecommerce, Startup, Technology | , , , , , , , | Leave a comment

Wanamo.com – Best Deals for Group Purchases!

I was pleasantly surprised when @sampad shared the link of wanamo.com one day, and I went and checked it out. The concept was so close to my heart that I loved it at first sight. The concept. The site, I still had to go over and see! So this concept that I have loved for long, and which finally sees the day in the form of wanamo.com, made me come out of Gray Hair Wisdom Hibernation, and restart my startup reviews.

Category: B2C -> E-commerce -> Group Buying / Reverse Auction

What is it?

Wanamo.com is an online business that offers great deals, provided large number of people are willing to pick up the deal. In short, it is a group buying concept, and in some ways, a reverse auction also, since more the buyers, the better the deal that can potentially get generated!

What more?

The site does not expect to deliver any products to you. In that sense, there is a “local” factor to it. At this time, Wanamo.com has deals to offer, for major Indian cities.  The concept is that many individuals who do not know each other, may be considering making the same purchase around the same time. If they could somehow be got together, and they position themselves as a “group” to the seller, this group now has a buying power to negotiate best deals from the seller. Likewise, if this disparate group of buyers, individually, could have walked into different outlets to make their independent purchases. Now if some dealer offers the best prices, and all those footfalls are diverted to that one dealer, he in turn, is grabbing the market from the other dealers, who did not offer that great deal.

This in a gist, is what Wanamo.com enables.

My Quick Two Cents:

I am totally prejudiced to this business idea. In favor of the business concept, per se. So some of that will show in my thoughts here 🙂

Wanamo works for many reasons:

  1. It brings together people who want to buy the same thing, but did not know each other. And the group translates to discounts!
  2. The supplier of the product is transparent. The buyer knows what he is buying, from whom (traditional supplier) is he getting.  Buyers get the vouchers directly of the brand / supplier.
  3. Products do not need to be shipped. Takes away the issues of shipping, handling, octroi etc. The costs and the pain! Once deal happens, the buyer prints the voucher, and goes and picks up the product / service from the supplier directly.
  4. Everyone loves a deal. And deal is what everyone gets. For a simple reason that it’s a quantity purchase each time, and which assures a deal!

All of these reasons are from the point of view of the business model. Then coming to the actual implementation and execution, it looks good, mostly. The concept is not easy to explain. This is the clear make-or-break. I think Wanamo does a reasonably good job of getting the message across. Also the implementation has been kept quite simple and straightforward, and that can play a huge role in the ultimate success.

And now for some Wisdom Nuggets:

There are things that can hasten the path to success.

  1. The screen, as you can see from the home page snapshot above, is crowded. If the aim is to reach a highly mature Internet user, who can understand the various links and blocks all over the screen, then its fine. However, I suspect, to drive numbers, Wanamo will need to reach a slightly lower common multiple of the user base, and that user may just find the screen too busy.
  2. Speaking of screen design, it is a fine balance between temptation (to put everything there) and restraint (to put nothing but the very necessary items there). In the day and age of Facebook, Twitter, etc., there are the Facebook Fan boxes, Twitter widgets, besides the feedback link, the subscribe to newsletter link, etc. that seem like good things to have on the screen. Ultimately these will impact transactions. If its your blog, Sampad, you can get away with it. It is not a transaction engine. Where you want people to transact, to remove their wallet and put in the advance payments, there, you want nothing to distract and turn them away. Least of all, a crowded screen. So think about it.
  3. The one-deal on the home page may be a good way to start, and may also be what is logistically possible to be achieved. But with one deal a day, it will be very very tough to scale. Users have very low attention spans, and very low patience. And very little time. If I get a link of Wanamo.com, and I reach the site. I see a deal. And that is all I see. And I am not interested in that one. Then, thats it. To get me to visit again, out of curiosity, is difficult. Unless there is a lot of money spent, and I keep seeing and reading Wanamo everywhere, there is a tough chance that I will go back on my own. Since I just have too many other things to do in life! Offering many deals across multiple products and categories is a way to interest more number of people.
  4. Finally, this is a great B2C e-commerce model. But the only way it will succeed, and succeed really really well, is if it gets scale. If there is even the slightest of satisfaction or relaxation perceived, with a few hundred participants or transactions, that is doomsday. One only needs to look at Ebay or Amazon, and see what kind of engines have been set up. In fact, Ebay should be the model to ape. And what is it about Ebay that should be aped? That you put up a great engine, keep investing in software and features, but then let vendors and customers go out there and help themselves. And you count the pennies that they keep leaving behind. And since these will be pennies that are left behind, you need a lot of transactions for these to count up to a lot of dollars. THAT is the only serious way to make this a business of massive proportion. If there is a large manual component in the transactions, or in pushing each vendor or customer, then I am afraid, it will grossly under-deliver to its potential. I mean, the founders will move from a small to a mid-size car or even a big car, but if they can set up their own VC fund in a few years or not, depends on whether Wanamo can look to be the Ebay of group buying-reverse auction, and churn out millions of transactions, or not!

All in all, a great business model. One of the best e-commerce plays that I have seen in recent days, and if all goes well, this is the one that we will hear a LOT about. Knowing what I do about at least one of the founders, Sampad, I know that he has huge determination and an excellent sense of the medium, and he  and his team just need to stay on track, and deliver this well. Wishing them the very best!!

GRAY SCALE RATING: 4.0 / 5.0 (only because its early days and it can go up, as we see good execution too!)

ADDENDUM: By coincidence, noticed this Tech Crunch article just the same day that I wrote this review of Wanamo.com. And it is quite disturbing. I await the founders’ clarification, since Abhishek had already commented here. Where lies the mystery? If Wanamo is a copy-paste copy of Groupon, then its bad. If there is a legitimate tie up, same needs to be mentioned clearly!!

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April 4, 2010 Posted by | Uncategorized | , | 12 Comments

DeskAway.com – collaborative SaaS project tracking tool

Priyanka Dalal asked me to review their business at DeskAway.com.

deskaway1deskaway2

DeskAway.com

DeskAway.com

Category: B2B -> SaaS -> Collaborative Poject Tracking

What is it?

DeskAway.com is an online, collaboration software to track a project between team members, potentially located anywere globally.

What more?

DeskAway is a very easy to get interface with simple, step by step instructions on what all it offers, and how it can be used. The features packed application can be  delight for any colloborative activity, which can be defined as a “project” form. Offered in a SaaS structure, the use of the application is easy on the pocket for users, and yet, it should earn DeskAway good money, for large scale adaption.

My Quick Two Cents:

My quick two cents are all positive! The site is done very well, with a lot of thought, and addresses a large scale requirement in terms of collaborative project work. I would believe that DeskAway wil get excellent response and is poised to be a winner.

More Wisdom Nuggets:

1. Like I have mentioned in 1 or 2 reviews earlier, my first nugget would simply be to keep up the good stuff. I think DeskAway has been built very well, and also positioned very well, so I would recommend strongly that it is kept that way, and the rewards will come.

2. I am not familiar with the competitive landscape for the business. So of course, from a feature comparison point of view, or pricing point of view, if there are any reasons for customers to consider other options, those need to be addressed by DeskAway.

3. My nuggets this time around, rather than for DeskAway, may be for other entrepreneurs, who could look at various specific elements of DeskAway and learn from the same:

a. The home page: is very focused. Drives home the key communication at the outset. In few quick bullets – not long, drawn paragraphs. As you scroll down, there are specific horizontal sections (although not separated by any kind of separators) each of which drive home one key point, that could be critical for customers to move ahead. The identification of the key points and then, the presentation in this manner, is very impressive.

b. The overall colors and fonts used on the site are very refreshing. Easy on the eye, soothing colors, yet eye catching, enough white space there, absolutely no problem in reading the content!

c. The individual links on the home page are again, simple, straightforward and exactly what prospects may look for. A tour of the product, FAQs, comparison with other options, pricing details… nothing left to the imagination. Quick and simple links to get you the information.

All in all, I have been very impressed with the website. I have not tried the product, but assuming the same diligent effort in the product as well (and do note this reaction – looking at a good clean site, I am giving them the benefit of doubt, without knowing, that the product will also be good; likewise if you have a great product, but the site is poorly done, a prospect may have already formed an opinion about the company, before he moves into the product area!), I have all the reasons to believe that DeskAway is going to be a brilliant success! I urge other entrepreneurs to make DeskAway a model to learn from!

GRAY SCALE RATING: 4.5 / 5.0

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April 17, 2009 Posted by | Uncategorized | , , , , , , | 10 Comments

NoJobJitters.com – to manage your career

Val Cummins asked me to take a look at his site, NoJobJitters.com.

NoJobJitters.com

NoJobJitters.com

Category: B2C -> Recruitment

What does it do?

NoJobJitters.com intends to be a one-stop destination for job seekers, or for anyone who desires to manage his career.

What more?

The site offers several direct resources for job seekers like interview tips, job fair information, job searches, resume guidelines, etc. Additionally there are also a host of other support services covering topics like Emotional Intelligence, Work / Life Balance, Overcoming Obstacles, etc.

In other words, the site is indeed an extensive resource for job seekers, as a one stop source.

My Quick Two Cents:

While the site does appear to be an exhaustive resource for job seekers, there is much to be desired in the design and layout, to make it more compelling and attractive to users. Also like I have asked many others on this blog, “where is the money”??

Wisdom Nuggets in more detail:

1. The first thing that hit me when I opened the site was, “where am I?” There was a lot of content all over the place, and I did not know where to begin. And yet, there was no one place where I could find a quick note about what this site was about, and where all do I go from here. There is a definite need to cut the content by a whole lot on the home page.

2. There is temptation for any site owner to put a lot of information out there on the home page. After all, one never knows what specific item a particular visitor would need?! You know what, you can carry this thought to an extreme.. what if you put your entire site on the home page?? You can’t do that, can you? Likewise, you can’t put so many links on the home page.

3. What you need to do is to figure out your best bets. For the rest, perhaps just put titles. And of course, there is Ajax to the rescue. An interested reader could mouseover or click the particular link of interest and see the details right there and then. That is highly recommended here.

4. Also the color combination needs to be rethought. A dark blue background and a lighter blue text on top of it, is not the most easy on the eyes. While there is merit in trying to be “different” so that people will remember your site, it cannot be done at the cost of making it harder to read content on your site. There is indeed a lot of merit in using a lighter background and a darker color text. Just stay safe on some of these basics of website design!

5. “Where is the money??”! Really.. where IS the money? If there are chargeable services, they are hidden away deep inside. Most everything seems to be free. Yes, we all know Google did it that way. But really they had invested heavily into a technology that would be so compelling that people will throng there in the millions, and ulimately, there will be ways to monetize those. If there is a recruitment site, with a good compilation, but with otherwise, not a whole lot of differentiation, and at least not something which is a serious entry barrier for others to replicate.. now, that is not a fomula to invest a lot of money in giving a free service. You are clearly incurring cost in making and managing this site. How long will you do it free of cost? How are you expecting to make money, even later? Don’t lose the focus on that critical piece of the puzzle. If there IS a strategy, well and good. If you hope that things will figure themselves out, well, they don’t. You figure them out!!

In summary, I can say that NoJobJitters.com has a good effort in compiling a large number of resources and creating community, and also offering new and fresh news and information, for job seekers. So its a great service. They do need to figure out a way to serve their own selves. Like make some money out of it. Good luck!

GRAY SCALE RATING: 2.5 / 5.0

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April 12, 2009 Posted by | Uncategorized | , , , | Leave a comment

Been busy working on my own business.. !

I have not been able to do reviews on startups in recent days. The reason for this is that I have been busy working on my own business! And that takes priority over reviewing others’ businesses 🙂

But no, I love doing these reviews, and I hope to restart soon, and carry on doing a few reviews regularly.

Please bear with me, folks!!

April 12, 2009 Posted by | Uncategorized | Leave a comment

LifeMojo.com – a very useful diet and fitness resource

Himanshu Khurana, co-founder, asked me to review his startup, LifeMojo.com.

LifeMojo.com

LifeMojo.com

Category: B2C -> Healthcare -> Diet and Fitness

What does it do?
LifeMojo.com is an excellent destination for those conscious of diet and fitness. It provides ample information about dieting, different fitness regimes, lifestyle based information, and also has nutritionists on call, for personal assistance.

What more?
The site is very well designed, and although it caters to an Indian audience, it has a very international appeal, and an excellent look-and-feel. In addition to one-way information about diet and fitness, the site also enables interactivity, in the form of a user being able to track his efforts and target certain fitness goals, and see the progress in form of charts and graphs. Lifemojo also offers tracking and updates via mobile, and engages its users via social media through Facebook, Twitter etc.

My quick two cents:
LifeMojo.com is positioned very well. It is doing an excellent job in terms of its presentation, its focus, the detailing, the value that it provides to its users. Subject to getting the revenue puzzle right, LifeMojo is destined to go places.

Wisdom Nuggets in more detail:
1. At the outset, I am very impressed by the business. So I would suggest to the management, to continue to maintain a very high class of service, in all respects, and establish excellent brand equity for its service. It is a service idea that will appeal to the better class of society. After all, it is the more privileged section of society who have problems of weight and diabetes, usually. A classy feel will be appreciated by this demography, and LifeMojo must ensure that it does not sacrifice this appeal.

2. The “about us” section of the site mentions numbers in few millions, as people in India, referring to dieticians and fitness programs, and also those suffering from diabetes. These numbers become a kind of market size that LifeMojo can address. So the potential market size is large. How many of them make LifeMojo their online destination will be the question.

3. The challenge with diet programs or fitness regimes is that people do not stay disciplined long enough. There is a tendency to “go back to the old ways”. If LifeMojo can become a close companion of sorts, to these people, and somehow manage to keep people on track, then LifeMojo will become an integral part of the person’s life. And in that, could be the major breakthrough for LifeMojo’s sustenance.

4. Even after paying fees, there are statistics of very high drop out rates from fitness programs and gymnasiums. With an impersonal and free service, there is a bigger risk of drop outs from LifeMojo. Simply having an ability to track the progress is not enough to ensure a member’s continuity with LifeMojo. The challenge for LifeMojo will be to understand at a psychological level, the reasons why people drop off fitness regimes, and to find a way to address this issue well.

5. Community can be one of the critical pieces of the puzzle. People tend to remain members of a group yoga or aerobics class longer than sustaining an independent diet program. Groups matter. If there is a community, and it is active and buzzing, and it involves large participation, that could be one of the reasons for members continuing with LifeMojo.

6. The revenue puzzle is definitely there. Himanshu informs that revenues are expected from nutrionist and fitness consultations online, and on phone. This appears to be very “iffy”. People are comfortable to visit such consultants personally, so what percentage of the potential market will be happy to seek online or telephonic consultation, is something to be seen.

7. There could possibly be a freemium model introduced to generate some revenues from the users. Provided there is real value offered, and which can be appreciated by users. A personalized consultation, with the presence of an individual nutriotionist or a dietician, is not a great online model. It is also not scaleable easily. For an online model to be exciting, each subsequent transaction should be at marginal cost. And which points to an automated self-help situation, rather than having a personalized consultation. Alternate ways will need to be found.

8. Are there pockets in the country, say in semi-urban centers, where good quality dieticians or nutritionists are not available? Can the service specifically target such pockets? Or if there are sports related recommendations or other specific conditions related recommendations (e.g. pregnant women, seniors, recuperating patients, etc.) that can be addressed, then again, there is potential to create a good niche for those. There could be diet and nutrition recommendations for growing children. As soon as a high level of knowledge is created in the niche segment, there is also opportunity to go and tie up with large groups, e.g. private schools or hospitals etc.

9. The other option to scale is to go global. However then, the knowledge of global challenges, diseases, lifestyles, food habits, etc. all have to be incorporated in the knowledge base.

In summary, I would conclude that LifeMojo is an excellent proposition. It offers good value, which is presented well, it is interactive and engaging. However due to the nature of vertical that it is in, there is an inherent high drop out rate. Even when there is personal engagement offline. It can be worse in an online situation. LifeMojo will need to figure this out, and also ensure that revenues are generated. Otherwise, there is a risk of an excellent idea, not reaching high scales, simply on account of low adaption and lack of consistent traction from users.

GRAY SCALE RATING: 4.0 / 5.0

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March 18, 2009 Posted by | Healthcare, Startup | , , , , , , | 6 Comments

MnemonicDictionary.com – an excellent destination for vocabulary improvement

Amit Aggarwal, the founder, asked me to review his startup, MnemonicDictionary.com.

Mnemonic Dictionary

Mnemonic Dictionary

Category: B2C -> Education -> Vocabulary

What does it do?
MnemonicDictionary.com is an excellent source for all kinds of fun and learning, with and around words. It is a destination to expand your vocabulary, play word games, take quizzes, etc. In short, MnemonicDictionary.com is quite a complete, one place destination for any word lover and words learner!

What more?
MnemonicDictionary.com features a word of the day, for those who want to enhance their vocabulary gradually. It also has word lists for people working towards competitive exams like GRE, GMAT etc. The site exploits the various features of community by having an active forum, chat rooms, via email and also an active presence on social networking sites like Facebook, Twitter, etc.
For revenues, there are advertisements and affiliate relationships across the site.

*** Addendum ***

Amit pointed out to me a very interesting USP that MnemonicDictionary offers, in regards to remembering new words, viz. the concept of mnemonics.

For example:

  • Onus (meaning: burden)
    Mnemonic — ON-US you are ON US ie. you are burden to me,

Similarly,

  • Caulk , which means ‘to make watertight’ can be broken as follows:
    Mnemonic — caulk sounds like cork which makes bottles watertight

*** End of addendum ***

My quick two cents:
MnemonicDictionary.com is positioned very well in its area, and does most things right. In terms of exploiting the various options to an ideal web business, the site is doing nearly all that it can do. The challenge may just come in creating larger revenue base. If currently, the business is running at a low cost with a small team, they are probably well poised to make money. Some out-of-the-box thinking will be necessary however, to aim for large revenues.

Wisdom Nuggets in more detail:
1. There is genuinely not a lot to fix at a fundamental level, in MnemonicDictionary.com. Indeed, I am very pleased with the entire execution of the business. So the first thing that I would simply suggest is to hold it nice and tight, and keep up the good work.

2. Vocabulary building, for a common person, is a fun thing to do, for a few minutes a day, at most. So for the large user base, this is where the engagement with MnemonicDictionary will saturate. Can MD find a way to engage with such users beyond the few minutes a day, that they take, to learn a new word? This is where the thought juices must flow.

3. Of course, there are those who are working their way towards some competitive tests. For them, there is indeed a larger engagement possible at MD. And they will spend more time doing word lists or taking small tests. In these cases, MD still does not deliver a complete solution for these students. Thus the student may be still using other training forums / classes and will be coming here, only for additional support or tests. If MD can offer full fledged and complete training and testing environments for tests like GRE, TOEFL, GMAT etc., then they can secure a larger lock-in over this user base.

4. Due to the briefer engagement with the larger mass user base, and an inadequate lock-in with the students working on competitive exams, the revenues may not be large or consistent. Since they are restricted to advertising models only. An opportunity exists in introducing (as mentioned above) full fledged training and testing models, and convert the service into a freemium model, rather than keeping it totally free for the users.

5. If there is an opportunity to become a value-added-partner or even a white-labeled partner with established testing service providers like Princeton Review and Kaplan, involved in competitive tests, that may generate good additional traction, in terms of revenues.

6. The other time that a lot of language skills are learned by people, are during immigration to western countries. Here again, the opportunity could be, to develop training and testing modules for immigration related language skills, and increase earning potential for the site.

7. Overall, there is indeed, a huge demand, at least in countries like India, for English language skills. Notwithstanding current downturn, there is a basic irony – of large scale unemployment in tier 2, tier 3 towns, on the one hand, and a large demand of good English language skilled persons, amongst BPOs, call centers and the like. This gap points to a single and simple factor – English language skills. Due to lack of good teachers, who can travel to these small centers and teach English there, this gap remains. Can MD create a remote delivery model, for teaching English? This may be an ambitious leap from where they are, but can then create a significant opportunity for jumping the scale of the business.

8. The other option for jumping scale would also be, to create a proper English learning platform for people of other native mother tongues. Be it the many Indian language native speakers or even say, Chinese persons. Having covered the one side of the puzzle, namely the English language part of it, if MD can invest in the native language side, one language at a time, then they can present “learning English for Hindi speaking people” or offerings of that kind.

9. Lastly, there is a big opportunity also in learning how to SPEAK the language. With audio-video becoming common place on the Internet, if MD can find ways to deliver language skills, also via audio and video media, then the users can also learn pronounciation and spoken English.

In summary, I can state that MnemonicDictionary.com is on a good foundation, and if they decide their larger focus well, and work towards it, they can become a sizeable and very successful business.

GRAY SCALE RATING: 4.0 / 5.0

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March 18, 2009 Posted by | Education - Vocabulary, Social Networking, Startup | , , , , , , | 4 Comments