Making Sense of Business

Get your basics straight, and the rest will follow... this is one of the major take-aways from my b-school learning. And this statement applies to anything thats about business and business acumen.

For most enterprises, the prime business question is not about where to get the money from, or the day to day running of business. The question is, how do the entrepreneurs want to see their business grow; in what direction?

This question is crucial because it defines a lot of things, and clears a lot of clutter from one's head.

What is it that you really want your business to be? Volume driven or Value Driven? What is the precise definition of the customer you want to cater to? Simple, basic questions pertaining to who, why, and how. Thats it.

But more often than not, the entrepreneurs don't get the answers to these questions straight in their heads. From the very start, their ideas are not clear about what they really want to create.

And I dont blame them. The world is full of opportunities. And an enthusiastic entrepreneur would always want to make use of every opportunity even if it remotely helps his business. The opportunity might be a new concept/product/pricing/market... anything...

And in this flight of enthisiasm and excitement, they take up these opportunities which might not necessarily be helpful in achieving their final goal.. And few years down the line, you might find that the business has grown, but its scattered across all directions.

However, there's one reason why basics go a little haywire in the process of growing a business for which the entrepreneur needs to be given the benefit of the doubt.

When a business starts, the entrepreneur looks desperately for revenue. There's no better satisfaction than money coming into the business. How it comes, whether its "in-line-with-the-strategic-objectives-of-business" is immaterial. Better toplines are the start of making a business profitable. And in this gamut of achieving financial sustainability, certain objectives go haywire.

Although this cannot serve as an alibi for any entrepreneur for long. Once financial stability is increased, I believe one should always look back, and think of what one really wanted to build, and to what extent has that been achievable.

Numbers towards the end of the day speak a true picture of business. And as long as an entrepreneur is looking at the numbers closely, I doubt he would face troubles in the future. Re-visiting the basics every once in a while is the key to keeping oneself grounded, and in line with reality.

In the end, all I know is that looking back and reflecting on one's actions and looking at numbers are the 2 best ways of keeping one in harmony with one's own business.

Videocon ≠ Shah Rukh Khan

This is perhaps one of the lousiest cases in branding that I've come across. There was this aged prof who came to talk about marketing plans. The fellow seems to have worked with a lot of Pharma companies and consumer durables of which one is Videocon. Interestingly he seemed to brag about this example while I found it a complete nut-case. In fact its an eye opener to the fact that using brand ambassadors is perhaps the easiest route to supposedly 'enhancing' a brand's image, but does that really work well is a matter of question.

Anyways, the case was about the why's and how's of Videocon roping in Shah Rukh Khan as a brand ambassador for itself. According to the professor, Videocon was perceived to be as a 'middle-class' brand and was looking at upgrading its image to an 'upper middle-class' brand. And the best way to deal with this situation was to rope in Shah Rukh Khan!

There weren't many drastic changes in the product line, there wasn't a change much in the pricing patterns either. Just plug in a celebrity and you're done! How sick can you get?!

Also a brand ambassador works on the rationale that there's some connect between the brand and the endorser. Here there's none! Also the rationale for taking SRK is a funny one. Videocon wanted to project itself as a 'truly multinational' brand or something. Bottom-line it wanted to project itself as a multinational, and to prove that it took SRK. Why SRK? That has an interesting answer.

Now according to the professor, SRK is very popular amongst Indians outside India (repeat… 'Indians' outside India). Thus, if the company wanted to project itself as a multinational SRK was the best choice.

Hmmm. One question… no… make that two… Do 'Indians', or for that matter anyone outside India buy Videocon? Nope.
And do Indians in India really care about the fact that SRK is famous globally as well? Nope.

Then where's the connect? Indians in India don't care a damn about what SRK means to the foreign world and the foreign people don't care a damn about what Videocon is selling to the Indians.

Then why SRK? Or an even more fundamental question, why project to be a multinational?

The answer is simple. This is the easier way out.

P.S. In reality Videocon is much larger than what its image really is. It is the world's 3^rd largest picture tube manufacturer, and has a huge stake in Oil and Gas exploration with one of the lowest operating costs in the Oil and Gas exploration field. And SRK just doesn't do the job really well.

Trip also part of gift…

This is one story that I heard, and which perhaps summarizes how one is supposed to build a brand. It's not just about the product, but everything around it as well. Alright, here's the story…

Once upon a time, there was this primary school teacher, who used to teach a batch of students. Out of those students there was one kid, whose irreverence was quite rampant. The fellow never listened to what the teacher said in class. He was intelligent, didn't make a ruckus in class, but he never wanted to listen to the teacher as well. She never beat him for the reason that the kid wasn't a commotion maker. He was just indifferent. One day, it so happened that the teacher had to leave the town for good since her husband got a transfer. So, as a farewell, she organized a small party at her place, and invited all the students at her party. All but that kid turned up at the party. She was pretty sad on not seeing that kid for the last time. Sure, he wasn't one of the better ones in the class, but she didn't want to leave the relationship on such a sad note.

Just when she was thinking about this, she saw a faint image of a bicycle, and a small boy peddling like crazy approaching towards her. It was that kid. The fellow jumped from the cycle, ran towards her, and while he was still panting, he took out something from his pocket and gave it to the teacher. It was a sea-shell.

The teacher knew that such kind of sea-shells were only available at a sea-shore which was pretty far away from where they lived. She was touched after knowing the trouble the kid had gone through to get her the gift. A little overwhelmed by the kid's gesture she asked, "you got this for me?"

The kid snapped back… "trip also part of gift…"

In Economics, there’s no free lunch… but Linux is!

A batch mate of mine went through a revelation about Linux yesterday. He had come to get some codec installed on his lappy since he couldn't view video files.

And while we were downloading a codec pack off the internet, he's like, "How come these guys can give all these things for free?!" It came as a shock to me at first though; considering the fact that I've been a freelance page designer since long enough, and most of my projects have been done for free (yes free), I couldn't understand how to make him understand the concept of open source.

So I began with Linux, and said that a codec pack is virtually nothing, and that there are OS's that are also available for free. Initially he was quite surprised and like most people who've been using Microsoft product since ages, also thought that the OS must be substandard in its working. First of all I had to make him understand what actually the concept of 'free' meant as far as Linux was concerned. Free didn't mean that the software didn't cost a thing. More than that, a free OS meant freedom; freedom to modify it, change it, label the changes under your name, and even re-distribute it to the masses so that others too can benefit from it.

Come to think of it, Linux, is more like knowledge, which grows when shared. While windows is like an online tutorial, where you pay to get something, Linux is like a forum, where one just needs to register and the knowledge is shared freely on message boards.

The fellow still had the persistent question as to, "How do these guys make money?"

I stopped trying to make the fellow understand that it wasn't about money, but it was more about the passion and the irreverence towards the concept of 'closed source'.

Instead I just told him that Linux is a brand, and the fellow didn't ask for more. Sometimes when you try to derive syllogisms for a phenomenon people just don't get it, but when one uses jargons, they just seem to understand the whole thing in a split second. Weird I tell you!

Vietnam Tumblers

Another superb example of branding:

Most people from US, when they go to visit Vietnam, bring back metal coffee tumblers as a souvenir. Think... why would anyone bring metal coffee tumblers? Quite simply because during the Vietnam war, a lot of American planes were shot down. The Vietnamese used to extract the metal from these planes to make tumblers and other stuff.

True as on today the metal from those planes must have already been used up and today’s tumblers must be manufactured from some other metal obviously, yet the sentiment of the same still remains. And the Americans buy the tumblers since they feel they bought back something that rightfully belonged to them in the first place.