If you have 10 million customers on whom you earn on the average $10 per year you have revenues of $100 million. ( The service could be free for the consumer and paid for by the provider/advertiser. Alternatively it could be a fee paid by the consumer or a combination ). When you think of the Indian market there are large number of individual and business users.
Existing pain points , unmet needs and low service levels provide an interesting context.
The nice thing about these kinds of businesses is that doing an alpha version does not cost much. Building scale is tough and once built the barriers to entry become high. I hope over the next few months I can be an advisor/investor to some entrepreneurial teams who want to build elephants with a high volume low margin strategy.
Over the next few weeks I intend to add comments to this thread based on my experience in building these sorts of businesses. I hope this thread and the comments will help some elephants to emerge.
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Looking at the stats just published here, we have an Indian E-Population: 38.5 million in 2005-06
Expecting 10 million of them to use the services and pay up Rs. 500 approx. seems far fetched. Unless the return or benefit the user gets is 2-3 times that. That leaves us to the second option of provider/advertiser paying the amount, again there should be significant ROI for them to pay up.
The lesson I guess is to find the “value add” for both. I guess thats not too far…..
Lesson #1 – Building a team
I was the product champion so initially it was a one man show. Once I was able to put a plan together and land my first customer excitement started to build internally. I had to convince a lot of people to get further resources assigned to me and deal with a lot of skeptics. I think probably the greatest contribution I made to growing this business was managing to get a superb team in place. Besides me I had a product head, a sales head and an operations head. The four of us today are still great friends and have all ended up being very sucessful.
The team built the business so the key lesson is if you want to build an elephant, getting a good team; advisors, lawyer, CA, management team and key employees is probably the most important task you have to do.
The thing that worked for me was that I had clear vision that I was able to articulate. People felt that there was more than a reasonable chance that I would be a winner and they wanted to join a winner.
Very useful Post. I can easily find a direct relevance of 10 on 10 in our model. We help people buy a car in more pleasant, informative and simple process. Though cars are only 13% of total automobile industry, we can look at the smaller share of a far larger pie by catering to whole of automotive industry, and thus cater to around 30 million consumers and thousands of mid/small sized delaers/enterprises.
I would put your 10 points to benchmark our efforts.
From 1985-1989 we built a business for Citibank India where 275 of the top 300 companies in India used Citibank for their collections and disbursements. 5% of India’s GDP at that time flowed through Citibank though it had only six branches in the four metros. I would like to in a series of comments talk about the learnings. Some of these may help in building elephants. The ten lessons are
1. Building a team
2. Service guarantees & a passion for excellence
3. Domain knowledge
4. Hybrid thinking
5. Developing partnerships
6. Understanding customer hot buttons
7. Growing customer wallet share
8. Understanding Value we add to customers
9. Few right priorities and avoiding pitfalls
10. Dealing with competition
Hello, I am interested in hearing more about this. I have some ideas in mind that fit this 10-10 thinking concept. Thanks.