I was in a bus going home from work the other day, when I
noticed an ad for Yoga and Satsang
session by a “guru”. What struck me first was it did not talk about Yoga or
meditation, but instead about “Inner Engineering” and “Technologies for well
being”. My first thought was to laugh at the description of the Yoga class, but
then I thought more about whom the target audience was and the cognitive
dissonance with the medium used for advertising to that audience. Now, I am not
an expert on Satsang’s and the people that attend those, but clearly, the
audience that goes on a local bus would not necessarily appreciate the use of
jargon to describe the gathering was my thinking. So I did a quick poll among
the 5-7 odd people standing next to me about what they understood about “Inner
engineering”.

Turns out most of them actually did not notice the ad until
I pointed it out to them. This, given the fact that the ad was inside a bus,
with posters surrounding the entire top half was surprising to me. Upon closer
questioning though, most admitted to not actually understand any other word
except engineering on that ad, and were too embarrassed to admit it. They had
seen photos of the guru with a flowing beard and assumed it was another of
those “religious gatherings”.

As marketers, most of us are constantly looking for ways to
educate our target audience and also look for ways to differentiate our
offerings. The unfortunate part of being in generic, well understood spaces
such as mobile phone services, Yoga classes and restaurants is that most people
“know what you do”. So, mobile Internet connectivity is now “3G hyper speed connectivity”, a
regional restaurant offers “Nouvelle
Haute Kerala cuisine”, and of course Yoga is “Inner engineering”.

I notice though that this level of specificity is not
limited to technology companies. It permeates our consciousness with titles – Barista for a coffee maker, Sanitation engineer for a janitor and Productivity associate for an admin
assistant.

There are multiple reasons we do this I believe, and here
are the ones I have heard.

 First, the increased
competition for any given space now, versus a decade or two ago, means you have
to clearly differentiate among several similar offerings with very little
possibility to actually be different. What better way to be different that
position your product as “unique” goes the thinking.

Second, is the rise of search and the need for marketers to
“not want to compete for the generic keywords”. These words are very expensive and
so, we look to make up our own words to describe offerings, which albeit
generic, are very jargon heavy.

Finally, the rise of technically savvy generations of new
young audiences, which having grown up with Internet, Facebook, mobile phones
and tablet PC’s is looking for specific descriptions of products and services
and is quickly bored by yesterday’s terms.

I do wonder though, if as marketers will end up with
unwieldy product names and get a backlash against the use of technical but
unnecessary jargon. I’d love you hear your opinion on why we are accepting more
jargon in our lives as consumers.

First appeared on Pluggd.In

Many eCommerce companies offer Cash on Delivery (CoD) to their customers as a mechanism to pay for products purchased online. Since the number of credit card holders in India is fairly small, and Indians tend to pay cash for most items, this seems like an excellent option to reduce the friction for customers to purchase.

The other benefit to customers is that they can actually ensure that the merchandise arrives before they pay for it, instead of paying for it upfront and not knowing when it will actually be delivered. Of the 6500+ eCommerce companies in India, less than 5% offer CoD as a payment option. So if it’s hailed as the savior of eCommerce , why are more companies not adopting it?

First it costs more. The two major companies, Blue Dart and Aramex charge a transaction fee (about INR 50) plus a percentage of the amount (about 1 to 2%) collected. Customers are not necessarily willing to pay more because they are paying by cash so this eats into the merchant’s margins. Although the fees are similar to credit card transaction fees, payments from them are much faster to the merchant.

Second the return rates (across all eCommerce companies) for merchandise is about 40%, according to Blue Dart. This may vary for certain companies (Some companies have undocumented claims of 15% returns, whereas others claim to have 60% non acceptance).  So if a small merchant (doing 100 transactions a day), about 30% through CoD  (30 TX/day), and their returns are at 40%, then INR 1200 is lost daily. The courier company charges an extra INR 50 to 100 as return fees to ship merchandise back.

Finally, when customers use the CoD option they don’t place a firm order. They indicate intent to purchase the item. So there’s no fallback for the merchant if the product is not accepted. Reasons for not accepting have been many including, “changed my mind”, “wife did not approve purchase” or “did not have cash when the courier arrived” or “found a cheaper price elsewhere”, usually offline.

Still it’s a very interesting option for many vendors who are tackling each of these issues with small innovations of their own.

For e.g. some vendors call customers after they place a CoD order to ensure they actually want to purchase product. Some even charge CoD customers a small transaction fee.

There are 3 vendors who have already started to report users who do not accept orders to a credit reporting agency (one is maintaining their own database and refuse to ship to customers who return goods after placing a CoD order). They have had limited success so far they claim, because the unique key to connect users tends to be missing, but they are using the user’s name and address pair as the  combination to track errant customers.

Other innovations include using their own local courier personnel in major metros to reduce transaction costs.

Although the number or merchants offering CoD is fairly small, given the opportunity (especially in tier 2 cities) I expect a lot more merchants to innovate further to reduce returns. This would make CoD as a viable payment option for merchants and a safe one for consumers.

Many suggestions and analysis on Groupon’s IPO filing. Interesting points, and I think they hit many of the key questions that any knowledgeable person reading the S1 should have. Lets look at it from 3 different perspectives a) potential investor b) customer and c) merchant.

I was speaking at a start-up event on Saturday when an entrepreneur came up after the event to talk to me about ‘how slowly investors move.’ He had been in discussions with three investors and although the time invested was about 40 hours, the elapsed time was close to four months. There was still no term sheet available. The investors had expressed an interest to participate but they were not ready to pull the trigger. In short, there’s no pressing need for the investors to move quickly was what I learnt from my discussion with him. The solution is to create a sense of urgency.

In sales, we often call this creating a ‘compelling event.’ When doing deals with customers, most sales professionals realise that customers have both time and money on their hands. So, customers move quickly if there is a trigger event by when a decision needs to be made. Here are some examples of driving a compelling event in sales.

a) Expiration of certain discounts which will not apply beyond a certain date. This may include promotional offers or freebies, which will no longer be available after that date.
b) Resource non-availability to implement the solution by a certain date, since other customers may sign up early.
c) Competitive advantage for the customer by a certain date. They may be the first to procure the solution and hence, gain the benefits earlier than their competitors.

The same strategies work well with investors as well. Keep in mind that the key emotional motivators of investors are greed, fear and herd instinct. Use these to level the playing field and help move your deal faster.
Using greed: If your true valuation, as expressed by recent competitive deals, is X, offer a 10-15 per cent discount on X as your valuation if the deal gets done quickly. Savvy investors know the ‘market value’ of companies and if they see a potential ‘steal’, they will move quickly.

Using fear: Creating competition among investors (make sure you really have competition for the deal, else it backfires on you) usually works well for both higher valuations and for moving quickly.

Using herd mentality: This is mostly not in your control, but you can leverage this as well. If e-commerce deals are the flavour of the month, most investors want ‘one of those’ in their portfolio. The other way to leverage this is to let investors know who the others are who have committed and when the train leaves the station (i.e. when you are closing the round).

Finally, thanks to my investor friends Rajesh Rai and Anuradha Ramachandran for helping me refine these thoughts.

We (my wife and I) have reviewed 57 start-up ideas by budding Indian entrepreneurs over the last six months who are looking for angel investment. While 35 per cent of them (the highest number) were related to education, 24 per cent were in services (marketing, IT, security) and 17 per cent were e-commerce ventures specific to India. The source of our deals was VCCircle events (11), NASSCOM regional meetings (9), Morpheus demo day (7) and the rest happened to be introductions from friends and other entrepreneurs. We ended up with five term sheets and two investments. The reason we invested in only two was a combination of our interests (we don’t like services companies, have little knowledge about the education vertical and so on) and valuation concerns.

Before that we were LP’s in Zodiac Ventures (USA) and another venture fund, which is now defunct.

However, here are some overall patterns and some pointers to entrepreneurs on how to obtain angel investment in India. These do not apply to all angel investors, though, but we think that these criteria are important.

Show The Short-Term Roadmap

We prefer to review 30/60/90-day business plans rather than five-year projections. Show us exactly how you are going to use the money to reach the milestone you have promised (whether it is shipping product, paying customer or hiring team).

Clarify Your USP
Think about what makes your business unique. Indian entrepreneurs spend very little time trying to be different. The theory I have heard multiple times is: The market is very large and I just have to fulfil the demand.

That you have a unique website name is not good enough differentiation. We reviewed four e-commerce companies that all showed the same – 100 transactions per day at the end of the year, 1,300 per day at the end of the third year and over 10,000 at the end of the fifth year. They were all different e-commerce companies – one is in the mom-baby space, another is in apparel and the third in in travel (hotels).

Will Angel Investors Help?
Ask if the angel investor would help syndicate your deal. Most companies we looked at were looking to raise between Rs 20 and Rs 40 lakh. We have no problem writing a quick (1-2 week) Rs 20 lakh cheque, but at Rs 40 lakh, the due diligence and legal processes become more arduous.

Get To Know Your Investors
It is mandatory before you take money from them. Much as you would like to get funded quickly, focus on execution and grow your business, it is important to get the right investors on board. Four companies that I know have suffered slow, painful growth because they have investors who were more interested in capital preservation and removing risk, rather than gunning for growth. I would recommend at least 3-4 meetings (most of these should last about 45 minutes) with your investors before you close the round.

This is more important in India than anywhere else, since investors tend to have multiple options for their money and most of these opportunities promise lucrative returns. But in case your investor has unrealistic return expectations, move on.

Follow up with personalised e-mail

We had three promising start-ups that we did not hear back from within the first week of meeting them. We did hear from them much later, but by that time, we had forgotten about them altogether. Sending a cut-and-paste generic e-mail cannot help one unless the communication is prompt and personalised.

Even if your e-mail follow-up boils down to 4-5 sentences with specific mention of the conversation with the investors, it is more valuable than a generic 4-5 paragraph message.

If you have been following cricket, there’s a new star in town: Paul Valthaty. After 2 tremendous innings with the Punjab Kings XI, his stock has risen several fold.

Read a very timely post from zillow on 6 common mistakes made by home sellers. There’s a particular piece that I found very interesting: