#Mobile #Phones do have Bearing on Road Fatalities

It is often discussed and ‘guessed’ that whether the mobile phones have any impact on a person’s ability to drive safely. The Government and Road Safety Interest groups strongly support the view while the regular drivers, who are habitual of multi-tasking in this world, say well they dont agree with this.

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Inspired by these conflicting opinions, I did a quick correlation test for Mobile Phone sales per country and the number of road fatalities as reported by WHO.

With a magnitude of 98.76%, mobile phone sales have a direct correlation with number of road fatalities. This correlation stands true with data of over 25 countries with China and India topping the list of mobile buyers and fatalities both.

Check it out –

No of fatalities and Mobile Phone

Sources of Data :
Road Fatalities – Wikipedia
Number of Mobile Phones Sold per country – Wikipedia

Clearly a candidate for Causation study.

Drive safely!

8 thought provokers – Part (2/3): Arena & Operations

As we continue our surge to identify the right mix of success factors, there is always a common thread that stitches them all. It is not to do with just the ability to dream but also the willingness to do and determination to complete what has been started.

This all started with the blog I wrote in response to a question – What is the a Brilliantly New Idea that no one has thought?

A deeper research into this question led to identifying the 8 thought provokers that eventually lead to first blog in this three part series. To learn about the first blog (and for continuity sake), please go to my earlier blog named – Study and Plan forward: 8 Thought provokers.

Abstract Background Triangle Squares Polygon

With this 2nd blog, I am going to explore the next three Thought Provokers:

  1. Whats my arena?
  2. What kind of operations are required? What can I NOT do?

Whats my arena?

The arena defines what kind of market competition you are entering. This is one of the most important and complex activity but is most overlooked. Reason being impatience and urgency to jump. This impatience is very much visible in mushrooming online businesses – as its easy to start a website. Any business that is easy to start by you, CAN BE EASILY STARTED BY SOMEBODY ELSE.

And this should be a significant red flag for you.

Arena definition can be done very easily –

  • What does it take to start this business? In our MBA employment skills example, one would require first to be an MBA or a significantly accomplished professional who can guide the MBAs. An MBA for all the investment s/he has done in their career will not pay attention to what somebody who they think is inferior in education tells them. This is harsh but real.
  • What are other players in the market already? In the world of internet, this should be fairly easier to find out. With good keyword searches, you should be able to nail down this. For our example of services to MBAs for employment skills, we see that there are numerous examples but hardly any proper services that come in the results.

Employment skills

So Research on competition is very important. I find the various Landscape diagrams published by leading VCs and consulting firms as very useful for any research.

What kind of operations are required? What can I NOT do?

It is always fascinating to look at success of others and mimic it. This is typical human behaviour and there is no surprise. After all, the iconic iPod was a ultra improved version of all the music players out there in the market.

Years 2013 to 2016 saw a significant spike in number of e-commerce and internet based startups in India.

Check out the list of E-commerce sites in March 2012 compiled by Amrita Kriplani.

From this list more grew and many or most are closed now. One of the key reasons why many/most of these startups failed is because they underestimated the operations involved in shipping goods from one place to another and then return in case it was not accepted by the customer. Here is a quote from A. T. Kearney report on E-Commerce in India:

“India currently doesn’t make it into  the top ten of A.T. Kearney’s eCommerce Index because its infrastructure  is underdeveloped, and there are still cultural reservations that keep  it from leaping ahead.  India is a big market (1.2 Bn people) but  infrastructure—technology, finance, logistics—still needs a lot of work,  and only 8% of the population uses the Internet.

The proliferation of Indian IT industry was primarily attributed to simplicity of the local operations. On the other side manufacturing and e-commerce are complex in operations.

I use a simple formula to understand the complexity of a particular operation. Based on number of touch points, the complexity of processes can be determined.

COMPLEXITY OF OPERATION = 2^n

where n is the number of touch points

Any operation with Complexity > 64 is a highly complex one and one must think on how to simplify it or outsource it to the right people.

In case of IT industry, any project has following touch points:

  1.  Getting requirements
  2. Development of software
  3. Testing of Software
  4. Deployment

Complexity of this is 2^4 = 16. So this is simple and is easy to start business.

The complexity for E-Commerce operation is below:

  1. Getting customer to the website
  2. Give them the right product that they need
  3. Make them to do the payment
  4. Identify the right logistics partner to dispatch the product
  5. Dispatch the product
  6. Get the product delivered to the right customer and confirm delivery
  7. Reconcile payments with the payment partner and with the logistics partner

Complexity of this is 2 ^ 7 = 128. So this is highly complex operation.

I have found this as a good rule of thumb to help and identify the nature of operations. Complexity when combined with arena helps to be a good combination to determine competitive advantage.

I shall conclude this blog here. In next blog we shall explore all the open questions remaining for this series.

Thanks for reading!

Interesting #Correlations: Miss India and Meghalaya

The world of data offers very interesting correlations. I published one of Sehwag’s Centuries and Dairy Product exports to Australia from India recently.

Here is another interesting correlation with a strong Correlation of 82%.

Unrelated data sets thankfully don’t give any hint on causation 🙂 Enjoy reading.

chart(1)

Data Sources:

  1. Age of Miss India Winners – Wikipedia
  2. Number of Persons Killed in Road Accidents in Meghalaya – Data.Gov.In
  3. Facts about Meghalaya– Find more here.

Write to me if you have ideas for interesting correlations.

Study and Plan forward: 8 thought provokers – Part (1/3)

My previous post on ‘Brilliantly New Idea – No one has thought‘ generated lot of interest in my readers. So much so that some came back asking for more suggestions on what else one can do to be successful.

workers

Image Courtesy: http://acreelman.blogspot.in/2015/

Frankly, this is a difficult ask. And more frankly, there is no cookie-cutter formula. Starting up any initiative or business is a risky proposition. Successful ones ride on, ones that don’t succeed teach many things and get buried.

I consider this as a trick question. Why? There are plenty of ‘known’ scientific and qualitative mechanisms that are available. Consider surveys, focus groups, qualitative mapping etc. These techniques are great to understand the customer and define the offering. However, we need to go to the next level of detail on where to start. This is something that bothers many.

I have put together following 8 questions that give you a fair idea of what can be done – whether a new initiative or a new business.  Note that these are ‘outcome’ focused and not ‘technique’ focused.

  1. What need am I fulfilling?
  2. What is my market – who and how big?
  3. Whats my arena?
  4. What kind of operations are required? What can I NOT do?
  5. Whats the right technology mix for me?
  6. Do I have any Government Support – anywhere, any form?
  7. How easily or difficultly can I access funds?
  8. How far can I go?

They take you closer to success.

Lets begin with the first question.

What need am I fulfilling?

Any initiative (business or in corporate) that is not fulfilling a need should not be even considered. Any manager or businessperson or ‘starting up’ individual should be able to define the need properly. A company like Cashify (run by my dear friend Mandeep) is addressing need for sales and repair of old mobile phones and other electronic gadgets once a new one is bought. He is very successful in doing so. At a different scale, the next door milk or vegetable vendor is serving the customer need of providing the daily supplies to the customers. Large companies all have a need that they start with and gradually grow into fulfilling multiple needs. This is what the business does. This is what a new initiative in the organizations does. So as a budding manager or as an entrepreneur, you should be able to clearly articulate the need that you are fulfilling.

There is no better judge to identify the needs then you yourself. If you can’t articulate the need then dont proceed. Stop right away and work more to find the need.

What is my market – who and how big?

Once a need is defined, one needs to go back to the previous blog and start identifying the scale. This is a tricky but an essential exercise. Its intimidating for some but not as difficult as people think. I generally find it a hypothetical exercise wherein one can make assumptions and then test in the market. Lets say you want to start a new service for servicing employment based skills to all MBAs graduating in India. We shall use the indirect or secondary methods to map the customer and then size the market.

  •  Secondary Methods (Desk methods) – These methods generally are done from your desk. These include researching over the internet or business articles. For our example, we are clear with the map. We need to cater to the students of MBA schools across India. Before, we start sizing exercise, lets assume few things –
    • Students in Alpha Primary B-Schools in India are assumed to be employable so they may not require our services. Lets not consider them.
    • Students in all other B-Schools would have a large percentage of students who are either not getting placed or are having tough time in finding the right job for themselves.
    • Students in point No 2 above lack the skills required for the hot sectors in the market and are assumed to be good in all other skills like communication skills, presentation skills etc.

With this if we run a google search on number of B-Schools in India, we shall get the following results:

1. Number of B-Schools in India – 4500

2. Number of MBAs graduating every year – 3,60,000

This is good enough numbers to get started. Assuming that we have 80% of these students who require guidance, we get a total market size of

3,60,000 * 0.8  = 2,88,000

Lets say our service is going to be worth Rs. 1,000/- in that case the total market available is

2,88,000 * 1000 = Rs. 288,000,000

This is a compelling proposition to explore. The additional advantage in this services model is the fact that this is going to be a growing and annually churning market. So for this particular case, we have a reasonable market size to begin our next study.

As you can see, we have mapped the market first and then decided to size it for a basic service. In another case, where lets say we have a flavoured drink that we want to serve to the same set of customers, we would additionally assume that MBAs are likely to consume the drink 3 every week and when we are able to reach the complete market then, we have an opportunity of

360,000 * 3 * 52  * 15 =  Rs. 842,400,000 /-

Assuming that that price for the drink if Rs. 15/-.

Note : Both these cases are very crude, back of the envelope type of calculations. it is important to do more research and authenticate data from 3-4 sources. A Government source will definitely give more credibility to numbers. Though generally the government numbers are conservative.

  •  Primary Methods (Field Methods) – These are also called as Field Methods. Generally, surveys, product tests and more specifically gauging the interest of the consumer. The methods typically engage the hypothesis testing kind of approach where the researcher or the manager or the entrepreneur should approach the target group with specific agenda for engagement. This is also the first time when you speak to the potential customers so it is important to do a thorough secondary research before you reach out. The inputs from the primary research shall help in doing the right kind of preparation to enter the market. Many a times it throws a lot of surprises too. For example, in your study for employment skills services business above for MBA, a fundamental assumption that MBAs are good at communication skills may be completely wrong. You maybe compelled then to change your offering. Some of the common methods of primary research are given below:
    • Observation – Of a focus group when a product is given to them or a service is being discussed with them.
    • Surveys – online and paper based
    • Focus Groups – Groups that would give their feedback about a product or service in a closed, lab type environment
    • Test Marketing – Popularly called as Beta Tests by software firms to check out features or entire products with select customers to fine tune offering. generally it is done away from the eyes of the competition.

One thing that needs to be kept in mind before proceeding with the Primary Research methods is identifying the right sample for survey or focus group or any other technique. If this is not done right, then you may get skewed results and consequently the research would be a failure. For example in our case of employment services for the MBA students, if we pick a sample only from one college or from one geo or just males then it would not give us the right study results.

Will stop here in 1st of the three blog series. The vastness of the subject leaves too much to cover in a single blog. Feel free to share your comments and your feedback to make it a fun learning series.

 

Brilliantly new idea – No one has thought

I wish it was true to have a ‘Brilliantly New Idea’ that no one has thought. I was asked recently whether one needs a ‘brilliantly new idea’ to start a successful business. Tough question to answer. This is for 2 reasons – novelty is scarce, brilliance is contextual.

Idea

I clearly remember when I was starting my own sports and fitness startup, I and my partner thought that we had a brilliant idea that no one else had thought about.

Within 2 months of starting, we realized that there were 3 other serious players in the market who were doing the same thing as ours. Did that mean our idea was not brilliant? If we speak to people who were not familiar with the competition, it was brilliant. However, for customers of the customers, it was a routine thing.

Similarly,

  • iPod, the revolutionary product that led to iPhone was not the first music player in the world.
  • Google was not the first search engine in the world
  • Reliance Jio was not the first Mobile operator in India
  • McDonald’s was not the first (and not the best) burger maker in the world
  • Arvind Mills was not the first automatic textile manufacturer in the world
  • And the list goes on…

So does the problem really lies with brilliance?

Same idea may be brilliant for some and mundane for others and vice versa.

Elon Musk, the idea and brilliance powerhouse of the world, is thinking about solving world’s transportation problems with EVs and the Boring Company; and also of the Universe with SpaceX.

For ISRO engineers, the problem that SpaceX is trying to solve is everyday job. Does that mean Elon Musk is not brilliant?

Similarly, people who embraced digital payments early were merely early adopters. When digitization via demonetization happened in India, the man on the street became a customer of the digital payments. Does it mean that early adopters are more brilliant than the man on the street?

The answer to both is No.

Further, when Flipkart started in India, it was not a brilliant idea. India already had IndiaPlaza.com. World already had Amazon.com. Flipkart copied over Amazon.com.

Amazon.com was (and is) brilliant in identifying the opportunity of product sales using the internet.

Now if Flipkart starts its operations in US, would it be a brilliant idea there? Certainly not. Unless, Flipkart addresses some of the gaps in the offering of Amazon.com in the US. Obviously it requires a lot of research and identifying the right gaps. Then making the right solutions to fill those gaps and then communicating to the customers about this value differentiated offering.

So brilliance has to sit in the context right. Any idea has to be brilliant if it is serving a need contextually.

The question then arises of one needs to do something successfully and at scale – whether a new project that is done for commercial purposes or to start a new business.

The two important things that one needs to look at then are below –

  • Scale of problem – One needs to spend time to identify the problem. Then the research should be to understand the ‘scale of the problem’. The bigger the scale of the problem that one is trying to solve. The greater is going to be the impact of the solution. The bigger the impact of the solution, the more the opportunities of making money/ reaping benefits.

 

  • Comprehensive research – This is one of the most ignored part by most young managers and entrepreneurs. Research may help you to find answers to some of the questions that you may have like below –
    • What is the current solution for the problem?
    • How many players are there?
    • Are there any gaps in the offering?
    • Can a marriage of technology with the field of interest make any impact?
    • Do I or my team have the skills to solve this problem?

A comprehensive approach to a given problem shall help to solve the most impending problems.

So instead of ‘Brilliantly New Idea’, one must focus on ‘Scale of the problem’.