Fortune at the top of the pyramid

I should make a product a lot of people will use, or better still, everyone will use “, answered the would be Entrepreneur.   This got me thinking and wondering.

As a person starting up , should you go broad or go narrow ?

When you are trying to please all, are you able to please all or disappoint all?

The biggest fortunes on earth have been made by people selling to top of pyramid or bottom ?

Apple, the most successful company ( Market cap U$ 826 Bn on 13 Feb 18)  is selling to 0.1% of top population  or to the bottom ?

Those frying Pakodas which serve the bottom 10% of population, are they likely to grow BIG?

Is Nike which makes shoes for the richest on top of pyramid  a more successful company or a Sri leather creating cheap footwear for masses at the bottom?

Its often misguiding to look at Facebook and say, here is one example where a product has been made for all. However, if you dig into history, you find that even Facebook was built only for Harvard campus male students at inception to let them ogle and lech at pretty faces  of girls on campus.


What are the challenges of starting up and looking for a large, diverse audience in the beginning  ?

  • Heterogeneous acceptance : For the same need, different humans have different quality, shape, color, experience, price at which people will accept
  • Very low HCF for positioning :  Different positioning of product appeal to different people and its impossible to create a  marketing message which appeals universally at start to everyone.
  • Huge customer acquisition cost and low profits:  When you are aiming wide, the messaging needs to travel very very wide and there is huge cost to just reaching an audience. Then comes the cardinal law that a normal user must hear good things about your product/ service from 7 different sources before she decides to give your service a try.  Its impossible to have a high NPS ( Net Promoter Score) in early stages. Being a mass product, the margins have to be kept low.

These principles can be well understood if you look at the philanthropic cause Ratan Tata took up to make Nano.  He target the bottom of pyramid, kept the margins low, thought a multitude of people will pick up this car for various reasons and did multiple bets on it ( Singoor, Gandhi nagar, integrated plant etc) .

Think about this. When a product backed by enormous financial muscle of Tata, despite a large market failed Nano as a product,  how far can a  mass aimed product from an entrepreneur travel?

So what should an entrepreneur do ?

Who am I to sermon the brilliant ?  Andrew Chen , the early investor of Facebook had once shared a hack.  If you are creating a digital product, do just this one thing :

a) Create a Google Adwords account and  run a search keyword tool. Now,  try to find the search volume using sentences normal people use to find your offering in the geography you are targeting.

If  ( Search volume is < Few millions )

Either the need for your offering doesnt exist or its too small to make your business viable.

One of the  better strategy is to look at a niche but rich homogeneous segment who are in a state of dislocation/ disturbance and are concentrated in one physical or digital location. Examples : New mothers in Grade X hospital, Fresh batch of students at College, Tourists arriving in peak season, Youth flocking to Game of Thrones 😉


What are the exceptions to this hypothesis where people targeting at bottom through fair means have survived and won the startup battle ?

Arvind Kejriwal’s India against corruptions- A model startup?

Arvind Kejriwal – A model startup?

Last week I wrote a post in reaction to a ‘personality‘ calling Arvind Kejriwal a moron. This post found resonance with1000s on Quora. Many promoted it across various media. Yesterday, I was at a Nasscom Emergeout event at Westin Pune and after an boring banal,cliché ridden talk by a self proclaimed startup Godfather, I was awakened by an extremely thought provoking talk by V Srinivas. He mesmerized the entire audience by giving insights on how just one word which defines entrepreneurship and that is “Purpose“. This morning, I saw that Times Crest has featured Arvind Kejriwal on front page and finally admitted that he is a “Game Changer “. I am happy that opinions are fast changing and success of one more entrepreneur is in making . I was trying to correlate Arvind’s movement and relevance to startups. Here are my thoughts:

1. 5. Purpose : An entrepreneur is born when she discovers such a BIG purpose that she can rededicate her life to it regardless of insecurities. These insecurities may be financial, physical or social. Arvind shows all three, he quit his well paying prestigious job, he is attacking the powerful (His life may be under threat now ), when he started he was derided by established players and citizens as moron. To startups he is a hero nevertheless. To startups it means finding this big purpose. Great purposes create great markets if they do not exist. Steve showed it when with a purpose to revolutionize cell phones he went into touch phone mode which was junked by Nokia in 2004 as stupid. Finding a big cause is the essence of a startup.

2. 4.Pleading and cribbing doesn’t work : For every one Arvind Kejriwal who is walking the path of fire , there are 1000s who just ‘wish‘ that the political system changes for good. There are 100s of morons who still sing praises of Congress , Mandmohan or Khurshids. Similarly, for every one startup which starts building something useful there are 1000s who will just claim google, Microsoft, daily deals or groupons are great stuffs. Cribbing, criticizing, Dharnas, Bhookh hartals may be good beginnings but the real change happens when you drive the  bus or can influence the driver. Getting in to the ring works , you have to go out and start fighting to make a difference. You cant clean the gutter by being outside it. Those in the gutter are minting money and spreading the stink for us. We need to get in, kill the scoundrels who are blocking the cleansing process. The fortifications in gutter
are robust but we need to get into it and dislodge.

3. 3.Ekla Cholo Re : When you startup you will have co founders. They will appear good at the start, show some degree of commitment but only the determined will burn their boats. Anna kept jumping back to his boat Ralegan Siddhi, Kiran Bedi always found a BJP ticket from South Delhi sexy. The guys who don’t burn their boats will always have disagreement with those who have. Those with purpose will keep walking ahead. Those with other safe constituency will be indecisive. Love your purpose, people will come and go in your journey towards a purpose. Whenever they wish to go back to their safe boats, let them go. Be a Johnie Walker, keep walking, you may not know how the paths will turn out to be but be confident there will definitely be some new ones discovered, or they will be created by your journey.

4. 2.Attack the holy cows , be brave and be stupid : One great thing Arvind and startups can afford to do is be irreverent to
holy cows. Arvind attacked Vadra(He is moron ), he incorporated is startup ( He was a moron to start with ). He doesn’t have decent chances to win against Giants like Congress, BJP, Mulayam. You do not have decent chances of winning against Googles, Facebooks or Microsofts or Cisco,but be irreverent, attack all places where they suck. Attack all places where these corporations have been unethical abusing your privacy. When you bring them to the fore, the pimps of these big corporations will call you stupid , moron but persist and relentlessly attack the unethical and inefficient. Speak fearlessly.

Taking the gas out of politicians

1.Set the mission from within and do whatever it takes : The purpose of Arvind emanates from within. A deep desire to cleanse the politics and establish greatest form of governance, are what drives him. The purpose of political parties comes from outside i.e their constituencies their corrupt figure heads, their caste, their holy family, their religion, power grabbing etc . Startups similarlyneed to be driven by their inner purpose to make world better for their target users, customers. They need to be driven by their internal intuitions of what is best for their users , not what the users think is best for them. Great products, services are not made from what customers want because they do not have awareness of what can most delight them. You need to out think your customers to create elements of delight.

Conclusion : Arvind Kejriwal is an entrepreneur with a big purpose, his purpose is his business model . He doesnt have a revenue model but he does have a success model and I believe he, like all great entrepreneurs will figure it out.. Corporate India and VCs tell they invest in great team. He doesn’t possess world class team but his team will become world class during the course of this movement. Great teams are born out of war, they are not created in assembly shops. He is a first mover and is covering a good mindshare. As in reality there are some people who are investing in his purpose and also there are doubtful investors playing
pocket polo to invest in him when he gets enough traction so that they can make a quick buck . Yes and like all startups you can tell about the exit opportunity.

Entrepreneurship aint sexy ??? 2 little paragraphs with a view

The world is full literature mentioning that entrepreneurship is hard on knees. Some say, its as hard as falling in love. It brings in a lot of uncertainties and it keeps most of us from taking a leap of faith. We remain glued on to our day jobs. We do not know how long the battles will last. We do not know whether we will succeed, yet the desire to turn entrepreneur and create beautiful businesses which transform the world is very high. Its one of those forbidden fruits and those with heart choose to go for a bite.

Its been 2 years of setting a farm, ploughing it hard, sowing seeds, adding manure and then irrigate it with sweat with a hope that it will rain. The saplings will blossom , they will grow into beautiful crop. For us at Simplibuy , the crop is still far off but the plant has come out of ground. It will get irrigated when you bless it with you love. Check out the baby plant  It transforms your experience of asking of friends where to buy a product from, at what price etc easier. Here you  can discover interesting prices on high quality. You gain a lot from reusing your friends’ decision to buy. When you share your own buying experiences the entire community benefits and thanks you for this. In the long run it can ensure that no body is fooled about the price she should pay for her purchases.

WiC helps you eliminate your market surveys
Where is cheapest seller for product X in my city Y ? Feedback suggestions welcome

Deal sites, media and why we should smell the rotten fish in them

Recently there was an article in Economic times about, “How you can save a lot of money by going online and using the sites like snapdeal, taggle, sosasta etc.  It makes its advertisements look like they are news items. Wikipedia on ethics in media campaign talks about making advertisement look distinct from news items. Often we have front page sold to marketers and news items which promote advertisers. On inside pages you find articles which run like news and you see ‘Advertorial’ written in nondescript font somewhere.  Considering this, should we expect popular media to give us any bit of information which is trustable?

Coming back to this article about how you can save money, we tried to check facts by visiting these sites. The basic requirement was : We wanted to buy ipad 2- 32GB for ourselves . This as claimed in the article is a gadget. Lets see how these helped.

1. Snap Deal : This was our first stop. We saw a lot of noise about dance classes, vacation and nothing about what we needed. They do not provide any deal on what we needed. They provide deals on what profits them. More like a seduction to spend on some thing we do not need. Will that save me money ?

2. : This was our second destination. “More for less “ screamed a clichéd statement. I remembered an elephantine COO of a company who himself was pathetic but used this to honk engineers with this stick. It used to mean take less pay and work more 😉 . We heard that Taggle has a great management team with very bright people. If this team of bright people had to copy Groupon they must have found something brilliant must have done something good for the users Poor Groupon still has not yet found a business model and learn from its imitators. I searched for ipad 2 and this is what we got now at 1711 hrs, August 21, 2011, Sorry, inspite of all the media noise this doesn’t help us in our simple need.

3. : This site had made a lot of noise after acquisition by Groupon. Now if the Big daddy is dying in US of Yay!! ( It needs USD 750 Mn to stay afloat) we had little hope that it would be of any use. We gave it a good try. This again was selling something which I do not want. This time , a stainless bar set. See below: and then to my chagrin, we found that there was no way to search. We went to see all deals. We expected and saw the same stupid deals for Spa, tattoo and irritating Machhli pedicure. This too didn’t help . We didn’t have intention to carry on with the anymore deal sites but to complete to this post , we had to kiss the last post.

4. : It cleverly took me to its Pune page ( IP detection ) . It was selling an irritating local icecream for Rs 49 /= but to my relief , it had search. And we searched ipad 2 and this is what we got:

We realized that these imitators of Groupon do not help you with what you want.

Conclusion : These deal sites are flavor of the season with India’s investors and gullible customers. We know of people who bought coupons from such deal sites for Spa and realized that the coupon was applicable for such hours that they could not use it even after 3 months of wait.

The conclusions then can be :

  •  The news articles need to be read with some scepticism though you may not like smelling the rotten fishes between the lines
  •  The deal sites don’t save you money on what you want but on what they can profit from or have arrangements done.
  •  The deals offered mostly are on things which don’t sell at particular time for example, a dinner for two at 1100hrs on Monday mornings.
  • If investors have put in money on some site and its spending on advertisement of paid news article its not necessarily a good site
  •  India is mammoth country with lots and lots of people with really bad taste and anything / everything is being sold with loud media campaigns

PS :  Like swines give birth to 20 piglets in every lanes there are dealsites  launched by everyone. In Singapore there is a dealsite for every lane. Imagine, India having that many and the stink in cyberspace will be suffocate us. Its not practical and feasible to discuss or tolerate every other dealsite erupting like sores.

A few months later : This blog starts sounding the deathknell for deal sites :

6 Things startups can learn from Osama Bin Laden Inc

Osama Bin laden was a fearless entrepreneur. He like most start ups had disruptive aspirations. He wanted to take the Biggest bull(y) with horns. He had to raise a good amount of money to realize his objectives. He probably used to pay his recruits much less than market and used to extract the best out of them.  The tasks and work he offered were the most challenging ones and he was ready for a long haul sacrificing all. Above everything, he was willing and living like a saint. These are highly revered entrepreneurial attributes. He met with great initial success and then his business started fizzling away. Here are top 6 things which we all  can learn from his  not so failed startup.

operation Geronimo
Osam killing Cowboy style
  1. Do not assume a fixed form : Often startups assume a fixed plan, a fixed interface design, just like Osama assumed a fixed place of residence in Abbotabad. If you do this, assault can be planned against you. Sufficient ammunitions can be gathered by more resourceful Big companies to annihilate your defenses.  Keep altering your design, form look to keep your competitors surprised. This not only keeps the competitors guessing but this keeps your team members excited and your customers engaged
  2. Do not take refuse in your Biggest enemy’s ally : Inspite of all the assurances he might have got from Paki Army generals, Presidents, ISI staffs ,finally the will of US prevailed . So in the startup world avoid the investors who have put in money in the companies you want to disrupt. Had he taken refuse in China, the yankies would have just kept on begging Chinese for any tip offs.  For example if you are trying to put make an educational hangout avoid  raising funds from Sequoia capital or in e commerce avoid Kanan Partners. There is great likelihood of they passing your unique proposition, your brilliant idea to strengthen their existing investments.
  3. Portray yourself to be warrior  : Osama could sustain his ventures for so long because he himself was a trained warrior. He could fire most of the weapons. He was good at hand to hand combat. The testimony to this was the rifle he had snatched from a Russian military officer. This inspired the terrorists who worked with him. In software world, try to hack/crash a mundane system and display it like a trophy. Zuckerberg hacked a moderately secure university database and ensures that he is defined always as a ‘Hacker cracker’. The idea then is not to over do it. There are guys like @dharmesh who will bore you with tweets like , “ This weekend I am going to code for 40 hours “ .  A business is at most 15 % code and rest all is FIGHT. Do not get obsessed with being a coder. Coders even the great ones can be hired. Its the leadership and inspiration which is difficult to create.
  4. Avoid public eye, cameras etc: What actually killed Osama was the trails he left in his video releases. By using some of the footages and surrounding analysis it was possible to guess with some degree of accuracy, the region he was operating from.  As startup founders as little personal information let out about self is advisable.  The people who assume a dumb demeanor normally rise and stay their for long. Its imperative to retain the mysticism and enigma of the founders and shield them from public attacks just like you protect your Kings from checks in chess.
  5. Have a self destruct button : Osama should have always had a solid self destruct button close to himself.  In missile technology we call it a K6 command. If in 45 seconds the missile doesn’t destroy  its target it shoots up vertically and self destructs. In startups one must have duration in which to disrupt an existing company or customer behavior. The success here doesn’t mean a feature or a product, it means being cash positive and holding on to that.  If its not attained by a deadline, the idea must be abandoned. If Osama had a really strong self destruct mechanism all around him, it would have taken Yankees at least 30 yrs to think how to defuse that before planning an offensive. I can assure you if there were a probability of atleast 6 Navy seals surely dying in operations, US would have never been able to give approval for Geronimo. As startups we can develop a similar self destruct mechanism around. If by a given reasonable time , the product , the team , the model doesnt work redeploy your energy, life and cash to something more promising. Remember Max Levchin , founder of Paypal abandoned more than 5 of his pet projects before making it big.
  6. Develop  a strong counterintelligence team : The death of Osama was a huge counter intelligence failure. While FBI was gathering terabytes of data about Osama, he didn’t even f****g  know that a mansion similar to his was already up 18 months ago and Yankees were practicing on it.  Such a dud counterintelligence is a surefire recipe of failure. As startups one should always keep smelling whats cooking inside google, Microsoft or other startups. Dedicate one person to just study the competition and submit a report. If your dudes are not able to give you threatening stories about competition they must be incompetent. If no body is cooking the snack you want to sell as hot cakes either you should change your sensors or may be you are cooking a dud.

 Conclusions : From this analogy we can  see how we can learn from some of the good bad and ugly traits of one of the most dreaded terrorist of all times  🙂 and how it applies to the wonderful world of starting up and preventing it from failing.

Arun Purohit

Founder and CEO

Prices matter for cool products, Shit sells cheap everywhere and who cares

I have always believed in buying world class products, however what I have paid for them is Chinese prices
🙂 This means buying Levi’s Red loops for Rs 800/= Puma shoes for 500/= a Nintendo Wii for 11,500/= or 
Hi Design leather jacket for Rs 1400/= . The habit has continued in my start up and with no salary, the 
money needs to be spent even more wisely now.

I assume that most of us start up with little fund which we want to spend very wisely. Even if we start with
large funds we must spend it with prudence. Our expectations however remain:very good or excellent products
for our companies. In our search for best price we google it, ask friends, visit shops/markets, seek 
information from those who already bought similar product,… there are so many ways we employ to find the
best product price fit. When we finally, find such sellers we are relieved and ecstatic. When some one
asks about it , we proudly tell how we could find a price which was absolutely a steal. Are we sure that
the product was not available for still lower price?

The problem with this is : The information is not that easily available or searchable. If it is searchable, , then
many a times it is not complete. If its complete, then we find it difficult to locate the sellers. 
Also, the information is available to a closed group of people in a network

While for selecting adorable products there is an application

Here people chose the products which they find fascinating. The adorable products are handpicked and 
liked by community so that you dont have to scan 100s of products which are banal.

Similarly, there are consumer review sites like which help you see the product
reviewed by end user. Also, there is preferred by most geeks for techtoys

Closer home this was replicated by

Referring them, one can select a product by eliminating the marketing noise. There is less admirable 
work done in pricing space.

4 ex Microsoft guys developed wishabi which is a consumer driven price discovery framework for Canadians.
Also there is : which works on Web 2.0 principle.

What was found missing in all these sites is a sense of hyperlocal and also the directions to reach
the Star sellers. The prices given are seller contributed and are aimed to maximize margins. What is
actually needed is a guidance to purchaser as to what was the initial price seller quoted and after a 
hard or wise bargain what was the price at which sale got consummated.

Closer home in India did a great job replicating the ebay model . They tied
up with many sellers and showed the best prices. This somehow didnt last long and they started importing
cheap fakes ( Gadgets- Black Verry, Roy Ben, Iped, ifone etc ) and started selling them on their site.
In India Shit sells, so they had large number of transactions and hence a good valuation. Its something 
similar to Big bajaar (The Indian walmart ) selling its own brands in place of Unilever or P&G products

Something is missing in this space and hence there is a need for a tool which not only allows people
to share the products worthy of buying but also prices which can save and are minimum possible. The 
efforts saved on survey can then be priceless

If you can find such tool which allows you to share your purchases or check the prices at which others
have bought, this can really create a difference. Please
post comments if you know one or to help create one click

Jump !! it wont kill . Even if you die, it wont suck you

I was sent a link (Given at end of post ) to an Article by William Quigley of Tech crunch by one of my
friends. This dealt with value creation in tech companies and timing of investment.

One sentence which touched me deeply was :

“The valuations of today’s private tech leaders – Facebook, Zynga, Groupon and possibly Twitter – are such
that I believe upwards of 50-75% of the terminal values of these companies will be captured by the folks
who did the real work and took the real risks, those who quit their jobs and begged, borrowed and cajoled 
friends, families and angel investors to take a chance on their far-fetched idea.”
Jump!!! The chute will open.. U aint gonna die like this
When it was my turn to look our of my Job, it was scary as hell. Wiping out years of saving, reputation,
house wealth everything but life was on stake
😉 . I had an inclination to keep thinking…

But I did quit my job… I didnt beg,

I did small time borrowing to meet my emergent expenses and returned it at the earliest.

I didnt cajole my friends but shared a vision of creating a price comparison tool every body on earth will
be able to use and enrich. They will have fun doing this.

There has been very little family investment. Some family members initially said they will fund the full
project but in the end didnt even put a penny, but yes Angels came in small sizes one after another,
convinced that this is a product of future and there money will be taken care of well.

The idea appeared awesome to some, far fetched and impractical to others. My patent attorney believed in it
right in the first 15 minutes of conversation. And then we set out to carve a company and came out with
a proto release. We still cannot prognosticate how much wealth our product will create or how long it
will take to be ramen profitable. Its like a baby whose career I would not like to define in infancy
with numerical precision. I am just loving the good vibes its generating from all who have touched, 
blessed and registered on it.

I invite you to have a look at the baby which has had 1 quarter of evolution :  

Hope every body will help it grow.

Also please read this article, it stirred me.. It will move you too 🙂