Thursday, October 18, 2012

Social entrepreneurship and ecommerce

Social entrepreneurship is many things to many people.  Some aver that social entrepreneurship entities have to be not-for-profit, while some other are willing to look at profits as just another avenue for fund-raising, and yet others believe that there is no conflict between for-profit and social entrepreneurship goals as long as the eventual goals for social change are clear.  So, that social entrepreneurship is different things for different people is not so strange given that it is still an evolving business form.

Personally, I believe I am in the latter group seeing no conflict in a for-profit enterprise having clear goals, both in terms of profit as well as social change. After all if a country like Bhutan can attempt to measure its success, not just on GDP but also GNH (Gross National Happiness), corporate entities that are so good at coming up with metrics to track should be able to come up with ways to identify, measure and track how they are progressing towards their stated social goals.

One area where I believe the next generation of social entrepreneurship will flourish is in the area of ecommerce.  Already things are underway.  Take a look at Sasa (www.sasaafrica.com) - a women run and operated ecommerce platform for the developing world.  They are using the internet and mobile wallets to ensure that women producing handicraft are able to directly reach the buyers without having the go through layers of middle men.  They believe empowering women and ensuring they earn more for their work will result in such profits going directly into the community and help improve education, healthcare and increase the number of small businesses.

If we take India as a target market for social entrepreneurship through ecommerce, there are more options available than you can point a finger at. The number of poorly served, under-valued and neglected sections of our population are many including the physically challenged, the mentally challenged, the AIDS affected, sexual workers, transgenders, senior citizens, the burgeoning nomadic construction workers community, people living inside and on the peripheries of national forests and reserves, and unfortunately even women and children.  Each of these groups can be a target for several social ecommerce ventures.

Idea 1:
To give you some examples, in the last week I have met three different NGOs that have approached me to help raise funds for their organization by way of  buying something made by their members.  SCARF (Schizophrenia Research Foundation) had some tablet boxes and wall hangings to sell, Thozhi, an organization for the upliftment of transgenders wanted me to buy some of their pretty photo frames that they had made and another NGO, the Irula Tribal Womens welfare association (ITWWA) had a wide array of wood craft for sale.   Over the years, I have seen many NGOs try and raise funds by selling such products with limited success.

One immediate idea would be to build an ecommerce platform that allows these NGOs to display and sell their products online and promote the site to all corporate entities so that they can buy from the site the corporate gifts they give to their customers, distributors, guest speakers and visitors as well as gifts they give to their employees during festival seasons (Diwali, Navrathri, Christmas, New Year, etc.,).

Idea 2:
A friend of mine has a son with CP (Cerebral Palsy) and the trouble he has had in sourcing products for his son has to be seen to be believed.  Thankfully he is fairly well off and hence has been able to travel to the US and Singapore for operations, product customization and fitment and further treatment.   An entire population of CP patients in India are unable to get the attention and support products they deserve due to the lack of such facilities here.

Here is another opportunity for a thriving business that could create/source a whole range of products for CP afflicted children and sell that online.  With children outgrowing these products on a regular basis, the site could also be the centre for people to donate used equipment thereby not only reaching and helping people who can afford full prices but also help the people who cannot pay full price for products but will be more than happy to get used products at low cost or even free.

Idea 3:
I am myself currently involved in another organization that is providing products and services for senior citizens in India.  Though the elderly population in India is nearly touching 100 Million in number, this is yet another population segment that is grossly neglected. The enterprise is called Old Is Gold Store (www.oldisgoldstore.com) and currently runs a showroom and an ecommerce site offering a wide range of products aimed at making the lives of our elders safe and comfortable.   I believe that such companies can  make a great deal of difference in terms of improvement of quality of life for the elderly while working hand-in-hand with government agencies and non-government organizations.

Let a thousand for-profit social entrepreneurships bloom!

Sunday, September 23, 2012

India Ecommerce - Finding the sweet spot

So FlipKart has raised another 100 Million! This news is probably spurring entrepreneurs in India to start another rash of ecommerce sites in the hope of making it big!  However, I would advice caution here.

If you are looking to start an ecommerce venture now, think carefully and understand the environment thoroughly before giving up your day job. Some food for thought:

1.  A few biggies have got a lot of funding - FlipKart, Jabong, Infibeam, IndiaPlaza, FashionAndYou, Myntra, HomeShop18,...  In all probability, the VCs who have invested in these companies would continue to pour their money into these companies rather than look at new entrants, so raising funds for new ecommerce ventures is likely to be difficult.

2.  Even these biggies are struggling to get out of the red.  The fresh funds that FlipKart has got, for example, is likely to help them move towards break even. So, the path to glory is anything but easy.

3.  Check out the 100s of ecommerce sites already out there that are languishing or dying each day. Just look at the number of  *Kart.com sites out there in the market already. How are you going to be different?

4.  Diesel prices have sky-rocketed (by at least Rs. 5/- per litre) and this is going to have a significant impact on cost of delivery, which is going to further eat into the already thin profit margins

5.  Even small retail outlets are getting into the ecommerce space through up and coming market places such as Tradus, Shopclues, SnapDeal and others.

Despite all this, if you still wish to enter the ecommerce space, choose wisely and find something (at least one thing) that gives you a significant advantage.  For example,

1.   Find an product area that is under-served.  Easier said than done, I know.
2.   Find something that does not require physical delivery or at least is light, small and inexpensive to deliver.
3.   Find a new product range that gives you 40%+ profit margins (after accounting for costs relating to packaging, delivering and collecting payment).
4.   Find something people will be willing to subscribe to or buy regularly.
5.   Find a product range whose market is not huge enough to be attractive or appealing to the ecommerce giants and yet large enough to make it viable for you.
6.   Invent a completely different business model.
7.   Find a demographic that is under-served and serve all their needs
8.   Be the sole manufacturer of the product or find a product that is unique.
9.   Provide faster delivery.  Can you say "We will deliver within 1 hr"?  You don't have to cover all of India obviously.  Think local.
10.  Operate in a geographical area that is under-served.  For example, delivery to the north-east of India is the most expensive, so many companies do not cover north-east.
11.  Find a narrow niche (ok, ok. I know a niche is already narrow, now you know what I mean) and be the best in that area.
12.  Crack drop-shipping.

Examples and ideas to follow.  Share your ideas in the comments.


Monday, August 13, 2012

The home advantage


The Olympics just got over and the US of A has got back to the top after having been relegated to second place by China at Beijing four years ago.  Given Great Britain's fantastic performance this year, I went back to look at the effect of home advantage through the Olympics and the numbers are quite clear.

Here are the performances of countries that have hosted the Olympics in the last few years.  Given below are the top locations by medal tally along with exceptions if any.  I am leaving out USA from the list here as they have been consistently good everywhere!

Location
Rank
Gold
Silver
Bronze
Total
Great Britain





London – 1908
1
56
51
38
145
London – 2012
3
29
17
19
65
Beijing – 2008
4
19
13
15
47
Antwerp – 1920
3
16
15
13
44
Stockholm - 1912
3
10
15
16
41
London - 1948
12
3
16
6
23
Exception






China





Beijing – 2008
1
51
21
27
99
London – 2012
2
38
27
23
88
Athens – 2004
2
32
17
14
63
Sydney – 2000
3
28
16
15
59
Barcelona – 1992
4
16
22
16
54






Greece





Athens – 1896
2
10
17
19
46
Athens – 2004
15
6
6
4
16
Sydney – 2000
17
4
6
3
13
Atlanta – 1996
16
4
4
0
8






Australia





Sydney – 2000
4
16
25
17
58
Athens – 2004
4
17
16
16
49
Beijing – 2008
6
14
15
17
46
Atlanta 1996
7
9
9
23
41
Melbourne – 1956
3
13
8
14
35






Spain





Barcelona – 1992
6
13
7
2
22
Athens – 2004
20
3
11
5
19
Beijing – 2008
14
5
10
3
18
Atlanta – 1996
13
5
6
6
17
London - 2012
21
3
10
4
17


As you can see, the best performances by most of these countries are on their home soil. If you were to discount the positive effects of hosting the Olympics on the performance in subsequent years, then the home advantage is even more striking.  This effect is seen for India as well if we look at the Asian games results.

Where does this home advantage come from?  Is it because of crowd support, familiar surroundings, biased umpiring/judging or something else altogether?

As this is largely a technical blog, I will try and make a connection here, however tenuous it may be.

As an Indian entrepreneur, do you believe that you have a home (dis)advantage when it comes to running tech businesses, especially startups trying to find a market within India.

Let me know what you think.