Knowing a Winning Business Idea–Reflections

A few reflections of the article, ‘Knowing a Business Idea When You See One’.

The article broadly talks about three broad areas:

1) Creating Utility 2) Setting a strategic price 3) Overcoming adoption hurdles.

I present my thoughts on each of these three areas as applied to my venture.

I. Creating Utility

I tried fitting my business idea into the ‘Buyer Utility Map’ mentioned in the article. I realized that my business targets the following ‘squares’

	Purchase	Delivery	Use	Supplements	Maintenance	Disposal
Customer Productivity			$
Simplicity
Convenience	$	$
Risk
Fun and Image
Environmental Friendliness			$

The dollar sign represents areas in the matrix where my business might create utility to the consumers. What was interesting in this exercise is that in addition to identifying value added by my business, the map helped me identify my risks. For Example: The intersection of ‘Environmental Friendliness’ and ‘Disposal’ made me think about the disposal of lead acid batteries used in the solar lamps. This is a serious health concern and if not taken care of right now, could lead to a large scale pollution in rural India. This was something I had completely overlooked while planning my business. This exercise also made me think of the risks that come along with the innovation in delivery methods. Training on installations and sales to the ‘corner-shops’ and ‘street vendors’ is an issue that needs to be addressed. I need to brainstorm and come up with some ideas to tackle these challenges.

II.Setting a strategic price

I was initially very influenced (and still am) by the idea of  ‘Gandhian Innovation’. For those of you who want to learn about this, read the HBR article: http://www.nif.org.in/dwn_files/hbr_Mashelkar+CK_MLM.pdf                                      and see the TED talk: http://www.ted.com/talks/r_a_mashelkar_breakthrough_designs_for_ultra_low_cost_products.html

So my challenge is to innovate to the lowest possible price and target large volumes. This is especially due to the social mindset of the masses in India – ‘Cheap is always Good’. Having said this, there was one line on page 5 in the reading for this week which said ‘The right price isn’t necessarily the best price’. That got me thinking. I then tried to fit my business product into the ‘Price Corridor of the Mass’ and realised that my product falls into the – ‘Low degree of legal and resource protection, easy to imitate’. This is because there is not much in terms of innovation in my design and it would be impossible to protect my innovation in the distribution process.After all, I am merely applying ideas from a different business (vegetable selling in this case) to my business. I initially envisioned to launch the product at $10. However now, I ask myself, is there a way I can increase my profit margins by pricing the product higher and still being able to offer a value?

What do you think? Isn’t price the major driver especially in poorer countries? And more importantly isn’t that especially true for ‘Social ventures’?

III. Overcoming Adoption Hurdles

I got thinking about the hurdles in adoption that may arise in my venture. I realised that my business partners are the major hurdle. My business partners in the delivery chain are largely ‘barely literate’ and it would be a very difficult challenge to get them to see the benefits of selling a solar lamp. Firstly, how to you convince a rural vegetable seller to sell a solar lamp. Isn’t that a HUGE shift in his business? How do you train him effectively? How do you convince him that he could make a much more money selling lamps instead of vegetables. This is when an idea struck me (as I am typing this out). Traditionally, these street vendors shut shop by 6:00 PM. They rely on sunlight for customers to ‘see’ their products in order to buy them. But if we could pass on the benefits of the solar lamps to the vendors themselves, they could roam the streets at night with the lamp attached to their carts. This would increase their business and convince them of the advantages of the lamp. That was a Eureka moment! When soap, toothpaste and vegetables can be sold on the streets, why not lamps costing $10? Why do we not see technology being sold on the streets? Is there an obstacle? Is it just price? What are your thoughts on this? Do you see any risks or challenges? Let me know.

As I progress, on the journey to shape my idea into a reality, I just can’t help but think about the number of uncertainties that lie ahead. But then there is also the immense satisfaction of seeing your ideas transformed into a tangible reality, much like a painter who stands back and admires each stroke, pensively.

And THAT, I will take any day. Any day.