At the beginning of the last decade of the last century when the internet started permeating the consciousness of the educated middle class Indian, launching ventures by copying successful American business models seemed de rigueur. I remember seeing a hoarding in Bangalore, from that time, put up by the Indian version of eBay. The hoarding read “Wondering what to do with the Elvis records in your attic?” or something to that effect. I don’t know how many Indians rushed to find Elvis records but am sure many more would’ve rushed to figure out what an attic was, and if they knew, then rushed to locate it in their house and if they indeed kept their records there! Of course, how many would’ve responded to Elvis and records is another matter as well.
Recently, a month or so ago, I was part of an evaluation team at a startup event. One of the teams presented their idea of setting up a web-site for people to lend and borrow common every day items that one uses occasionally and therefore doesn’t buy it. The example product they used in their presentation was a lawn mower! While lawn mowers are used quite frequently by the average person in the US (who has a house and a front yard), it isn’t something the average person in India has or uses. The team that was presenting was led by a few who had recently relocated to India from the USA. The lawn mower was a great example in the context of the US but an entirely inappropriate one in India.
An Indian fast foods company was planning a revamp of its menu. It wanted to offer a meal to the young working professional that included 2 parathas and a vegetable and some raita for a little over 100 Rupees. Their competitor offered a full meal, including a choice of parathas and rice, for less than 100 Rupees. How many young working professionals would spend over a 100 Rupees every day on lunch alone and that too for just parathas?
Myntra, an Indian ecommerce website, has been boisterously advertising itself on TV. The ads show a bunch of hip youngsters running through the streets and alleys of small town India carrying, of all things, colourful surf-boards! I don’t know how successful this ad campaign was but it certainly looked incongruous. How many Indians swim in the sea, let alone surf? And running with a surf board through an Indian street?! The logo of Myntra too appears to have been made up of these surf-boards.
A telegenic personality espousing apparently worthy causes and calling for action, receiving media coverage while travelling all over the state, caters perhaps well to the English speaking well-heeled class in urban India. But that class isn’t voting as the recent UP election results show!
A well meaning earnest social venture wanted to build toilets for the urban slum. They had designed a low cost dry toilet and tied up with NGOs for distributing the product. Everything looked great. But the product didn’t take off. Among the many reasons – people didn’t know how to use the toilet and felt uncomfortable in a small closed room, there wasn’t enough space around the slums to house these toilets, security for women at night in these closed spaces was an issue and so on.
These examples show the importance of (mis)understanding the market-customer context. Does the communication convey the value proposition of the offering to the customer? Does the customer understand what is on offer, how to buy, why to buy? Does the company understand the market context within which its target customers reside? Just because a product or service has worked well in another environment where it conveys meaning doesn’t mean it does the same in another environment. What prevents someone from trying out a product or service, while being able to afford it and avail of it, brings into question the relevancy of the market-customer context and whether the product or service fits this. Understanding the context – market and customer – is therefore crucial. This understanding parlays into product design, packaging, pricing, distribution and customer support methods. Observing how people behave, interact with and use products and services is a crucial requirement for developing this understanding. Something no market research report will tell you. But something every entrepreneur has to learn to do by actually doing the observing, using, interacting with the product/service or with those using the offering from the company. As the old saying goes, you don’t learn swimming reading books, you learn swimming by being in the water!
What do you think?
Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at firstname.lastname@example.org. The views expressed here are his own.