At the beginning of the last decade of the last century when the Internet started permeating the consciousness of the educated middle-class Indian, launching ventures by copying successful American business models seemed de rigueur. I remember seeing a hoarding in Bangalore, from that time, put up by the Indian version of eBay. The hoarding read ?Wondering what to do with the Elvis records in your attic?? or something to that effect. I don?t know how many Indians rushed to find Elvis records but am sure many more would?ve rushed to figure out what an attic was, and if they knew, then rushed to locate it in their house.
Recently, I was part of an evaluation team at a startup event. One of the teams presented its idea of setting up a website for people to lend and borrow common every day items that one uses occasionally and therefore doesn?t buy. The example product they used in their presentation was a lawn mower! While lawn mowers are used quite frequently by the average person in the US (who has a house and a front yard), it isn?t something the average person in India uses. The team presenting it was led by a few who had recently relocated to India from the USA. The lawn mower was a great example in the context of the US but an entirely inappropriate one in India.
An Indian fast foods company was planning a revamp of its menu. It wanted to offer to the young working professional a meal that included two parathas and a vegetable and some raita for a little over R100. Their competitor offered a full meal, including a choice of parathas and rice, for less than R100. How many young working professionals would spend over a R100 every day on lunch alone and that too for just parathas?
Myntra, an Indian e-commerce website, has been boisterously advertising itself on the TV. The ads show a bunch of hip youngsters running through the streets and alleys of small town India carrying, of all things, colourful surf-boards! I don?t know how successful this ad campaign was but it certainly looked incongruous. How many Indians swim in the sea, let alone surf? And running with a surf board through an Indian street? The logo of Myntra too appears to have been made up of these surf-boards.
A telegenic personality espousing apparently worthy causes and calling for action, receiving media coverage while travelling all over the state, caters perhaps well to the English speaking well-heeled class in urban India. But that class isn?t voting as the recent UP election results show.
A well-meaning earnest social venture wanted to build toilets for the urban slum. It had designed a low-cost dry toilet and tied up with NGOs for distributing the product. Everything looked great. But the product didn?t take off. Among the many reasons?people didn?t know how to use the toilet and felt uncomfortable in a small closed room, there wasn?t enough space around the slums to house these toilets, security for women at night in these spaces was an issue and so on.
These examples show the importance of (mis)understanding the market-customer context. Does the communication convey the value proposition of the offering to the customer? Does the customer understand what is on offer, how to buy, why to buy? Does the company understand the market context within which its target customers reside? Just because a product has worked well in another environment where it conveys meaning doesn?t mean it does the same in another environment. What prevents someone from trying out a product or service, while being able to afford it and avail of it, brings into question the relevancy of the market-customer context and whether the product or service fits this.
Understanding the context?market and customer?is therefore crucial. This understanding parlays into product design, packaging, pricing, distribution and customer support methods. Observing how people behave, interact with and use products and services is a crucial requirement for developing this understanding. Something no market research report will tell you. But something every entrepreneur has to learn to do by actually doing the observing, using, interacting with the product or with those using the offering from the company. As the old saying goes, you don?t learn swimming reading books, you learn swimming by being in the water.
Sanjay Anandaram is an advocate of entrepreneurship. He?s involved with Nasscom, TiE, IIM-B and Insead. sanjay@jumpstartup.net