Supraja Srini­vasan

Prod­uct De­sign Chal­lenge: Dis­cov­ery Chal­lenge:

The Economic Times - - Power Of Ideas -

Man­ag­ing Part­ner, Blume Ven­tures

chal­lenges. The risks may be huge but the ef­forts are not with­out hope, as­somein­vestor­sputit.“Mosts­mall and medium busi­nesses are out­side the met­ros and that is a huge wave. (Small cities and towns) will be the next huge mar­ket that needs to be tar­geted.But­both­thechal­lenge­and the op­por­tu­nity in this is that it is ex­e­cu­tion-heavy,” said San­jay Nath, man­ag­ing­part­ner,BlumeVen­tures, which has in­vested in m.paani, a mar­ket­ing plat­form for lo­cal re­tail­ers to con­nect with con­sumers.

“There is def­i­nitely will­ing­ness to in­vest in such mod­els,” said Vinod Mu­rali, man­ag­ing part­ner at Al­te­ria Cap­i­tal, In­dia’s big­gest ven­ture debt fund with a cor­pus of Rs 1,000 crore. “It is no longer fea­si­ble­toignoreti­er2andti­er3lo­ca­tions as vi­able mar­kets. Some of the com­pa­nies that have been es­tab­lished in larger met­ros have to go out to th­ese smaller mar­kets be­cause the met­ros are sat­u­rated… From an in­vestor’s per­spec­tive, there is bet­ter hold­ing ca­pac­ity for th­ese com­pa­nies and bet­ter dif­fer­en­ti­a­tion so it is def­i­nitely in­ter­est­ing.”

ET ex­plores how star­tups are build­ing busi­ness mod­els around chal­lenges posed by the smaller mar­kets.

Prod­uct de­sign can be ar­rived at only if one is able to un­der­stand well the in­tended au­di­ence, be­lieves Farid Ah­san, CEO of re­gional-lan­guage so­cial net­work­ing app ShareChat. “Once we got our (au­di­ence) hy­poth­e­sis in place, in­stead of build­ing a full-fledged app we con­stantly tried to it­er­ate. From Jan­uary 2015 to Oc­to­ber 2015, we made three piv­ots. We kept it lean and kept dig­ging deeper,” he said. Al­most 85% of ShareChat’s 3.5 mil­lion ac­tive users are from tier 2 and 3 re­gions and be­yond.

Any tech­nol­ogy prod­uct needs to ful­fil a core need, be­com­ing a ‘must-have’ for small town users than a ‘nice-to-have’ propo­si­tion. “We were very clear that a prod­uct de­signed for the met­ros can­not be used (in small towns),” said Ku­mar Ab­hishek, CEO of con­tact­less pay­ments so­lu­tions pro-

Ovider ToneTag. “This seg­ment has lim­ited re­source. Do they have enough rea­son to switch to your prod­uct? The au­di­ence might as well say, I have a fea­ture phone... I am happy pay­ing in cash. The prod­uct has to be de­signed for that mar­ket.”

The trick is to think and live like the user you are serv­ing, said Ah­san. “If you try ac­cess­ing the in­ter­net from a tier 3 town, you won’t get seam­less in­ter­net. We had to build a tech stack as good as What­sApp—ex­tremely re­li­able. The idea is to trust data over gut. Be the user your­self.” Akanksha Hazari did that and came up a pro­gres­sive web app—a mo­bile web page sim­i­lar to an app and con­sum­ing very less space and band­width. “With PWA, (we have an) op­por­tu­nity to of­fer a much bet­ter ex­pe­ri­ence than (in­ter­ac­tive voice re­sponse),” said the CEO of m.paani. “Any brand has to go wher­ever the con­sumer is.” pti­mi­sa­tion of cost struc­tures for smaller mar­kets, es­pe­cially on mar­ket­ing, comes from iden­ti­fy­ing a ‘Below-The-Line’ mar­ket­ing ap­proach that avoids mass me­dia. “Metro ur­ban prod­uct ser­vice of­fer­ings fo­cus on Above-The-Line (mar­ket­ing via tele­vi­sion, ra­dio, etc). But for com­pa­nies that are go­ing in­side smaller ge­ogra­phies, their fo­cus is (Below-The-Line), where you do off­line mar­ket­ing, you go door-to-door, event­driven mar­ket­ing, which is not ex­pen­sive,” said Mu­rali of Al­te­ria Cap­i­tal. An­other key ap­proach in small mar­kets is use of word-of-mouth to cre­ate aware­ness. “You need to have feet on the street to make this ecosys­tem au­di­ence more so­cially aware. Dif­fer­ent hy­brid cam­paigns in­clud­ing town­halls, leaflets and sem­i­nars to mar­ket the of­fer­ings are im­por­tant. There is a cer­tain cost struc­ture and one has to in­vest in that. It’s not the same as tak­ing an ad on TV or print,” said Blume Ven­tures’ Nath. “But the fact is that once you get into that, it is likely to be stick­ier be­cause it has a ten­dency to get vi­ral there. Word of mouth has bet­ter re­call value and en­sures more cus­tomer stick­i­ness.”

Kan­nan’s brain­wave to tie up with tel­cos to en­able pay­ments on Doc­sapp is just one of sev­eral ideas to tap into ‘ha­bit­ual’ meth­ods.

“Two things in In­dia that have the max­i­mum pen­e­tra­tion are cig­a­rettes and mo­bile phone recharge shops. We have this be­lief that peo­ple in small towns will not pay but at least 40 % of my pay­ing cus­tomer base on a daily or monthly ba­sis come from tier 3 towns and below,” said Kan­nan.

Test­book de­vel­oped a scratch card-en­abled pay­ment sys­tem for its cour­ses. Just like with the good old Air­tel or Voda­fone pre­paid cards with con­cealed codes, Test­book’s stu­dents have to buy cards and text the code in it to ac-

Com­pany: Test­book In­vestors: Ma­trix Part­ners In­dia

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.