Business to the Buddha

Tag: Business Model

  • Flawed business model







    There was a company Kingfisher Airlines which owed 7000+ Cr (70+ billion INR or well over 1B USD) to a consortium of banks in India. The company could not pay its debts; its owner/company recently was declared ‘willful defaulter’ by few banks. Now, the owner Dr Vijay Mallya is shifting to England with all funfair.

    Indian Big Corporations debtThis event and the total debt (sourced from a LinkedIn post above) makes one seriously think – is it true that “The wall streets fraud” as Bernie Sanders US presidential candidate has said earlier? In India, we have very contrasting examples – one side there were many farmers who were committing suicide because they couldn’t repay loans and on the other side we have banks with NPA (Non Performing Assets) & professionals who do “Corporate Debt Restructuring” resulting in many if not all NPAs in future. At present Indian PSU’s NPA is more than their Market Capitalization.

    Isn’t it “a subsidy transferring wealth from the rest of us to a select few” as the article rightly says?

    Just imagine – the debts given above, tax evasion, Satyam case and many other cheating happening not just in India but in almost every corner of the world. For me ‘wall street’s fraud’ is just a metaphor, there are many more frauds we are confronting daily. I have written on a few earlier – Volkswagen & Toshiba, Rajat Gupta and Moral Markets! to name a few. Are we really maturing as human race? Or we have become more deceptive and satanic?

    Just another example is the double speak of developed world on saving the earth – read Profit over the Planet.

    The point, after lamenting so much is always – how do we solve these problems? Only way I see is spirituality – Paris attacks – solutions please moving towards being saint in suits rather than Thief in Tuxedo.

    Related blogs – What are you searching for?

    Image source – LinkedIn post of Mr Hariprakash Visant

  • Question your Assumptions







    This is a repost of author’s article on LinkedIn – Question your assumptions.

    In 2008, in the winters of Pune, I along with one of my friends were having sumptuous buffet dinner in a restaurant of the hotel. In the candle lights and gentle music of the restaurant we discussed the lighting of the hall. This hall was lit with yellow colored lights not so bright, neither dimly lit. My friend asked me why the height of this restaurant room is more than the rooms of the hotel rooms upstairs? That was an interesting question I never asked this question to myself or to anyone else.

    Next day we were sitting in a meeting for exploring possibility of licensing some IP of my friend with another interested professional group. We finished the meeting late in the evening. After the meeting we had some snacks and went out for a walk. We were speaking on various issues right from our meeting and way forward to how is his business going and what are my plans, I was planning to do my MBA at that time. It was evening, therefore in a while street lights lit up. The moment these lights lit, he suddenly asked me – “have you ever thought why these streetlight pole are this tall? Why these poles are say X meters and not 2X meters or X/2 meters in length? Can you think of possible reasons for the height?” I tried some possible answers as per my knowledge. However I didn’t know the actual reason, so I requested if he can tell me.

    He said, the length of the poles have not been change for almost a century. In old days there were some type of streetlights that gave best illumination (light rendering) on road if the bulb is kept at a certain height. Though in the whole century technology of bulbs have evolved not the length of the poles (specially in India).

    I asked him, so why not change the length of these poles? Is it a rocket science to find out best illumination for current street bulbs? He said, now for the current technology length of pole can be reduced to about 70%. Just imagine if we save 30% of steel on each pole how much we can save? That was an interesting idea.

    This dinner, meeting and walk as a whole taught me a lot. My friend was so thoughtful that he questioned many assumptions. He could convert these questions into useful opportunities. I realized that an innovator is always on a lookout to question the assumptions. Why are we doing this thing or that thing? Why are we doing this in a particular way. He is always looking for some workaround, solution or better way of doing it or multiple ways of doing the same thing. Occasionally this results in breaking the assumption themselves.

    In past I – along with some of my colleagues – was working on a business model, we had thought of some possible monetization approaches. These approaches included what assumptions we have in our mind, what is the target market et al. When we went to the market our prospective clients (partners) started giving us more options, create more slice and dice of the services, customization of offerings/schedule of charge. Initially, we were somewhat restrained we were reluctant to consider the ideas / service offering charges with reservations. Slowly we started accepting this. It was interesting to see these slicing and dicing by prospective clients. They were creating more opportunities for us. They were unwittingly helping us explore more possibilities.

    There were learnings in these experiences. The challenge we face many a times are not outside, the challenges are our owns assumptions. When we start looking at things in a different perspective, when one starts questioning assumptions new opportunities emerge. An open mind provides opportunity for innovation as well as doing business in a better way – so Question your assumptions.

    Image source – http://s20.postimg.org/bmt4ul5ot/IMG_20140216_WA0000.jpg

  • Freemium – business model







    The Buddha shared his knowledge for free, you know these universities charge so much for the degrees!

    One argument could be – 1. That time was different. 2. The Buddha asked for bigger fee – leave all material possession, family, even ‘self’. What fee are you talking about? But yes, what the Buddha taught was priceless and of course for free.

    The second is – Well you have a MOOC (Massive Open Online Courses) – Coursera, EdX etc. These MOOC are based on a freemium Business Model.

    “Freemium” is a coined word; it is made using two words – free and premium. A business model which is based on this term “freemium” offers products/services free as well as paid. What is so great about it? Well, in this business approach few basic functionality of product/service are free and advanced features are premium. An example is LinkedIn. This business model is possible in cases where marginal cost of distribution and production are low – most commonly internet and software businesses. Advantage? It can offer huge scale for premium access. How? Once responded to free and limited period premium content business can expect to convert higher % of free users to premium users. LinkedIn has been doing this successfully.

    I liked this idea. It relates to offering your services – though limited – to everyone. Here everyone means – meaningful target audience which needs it. The business offering such service is not creating a complete monopoly – by asking users to first PAY and then USE. It gels with the concept of Business and the Buddha as well.

    Well, a word of caution – fremium can be wicked as well – when pricing is done to squeeze “consumer surplus”#. That is where it may not be what “Business to the Buddha” would apply. At the end of the day – there is no limit to squeezing the consumer, isnt it?

    An interesting business concept I have seen in Singapore [searched on net they are in India too!]. There is a restaurant near China Town MRT station – Annalaxmi. There you can have lunch and pay as much as you want, Sing $ 0 or even 100. There is no cashier. The amount such collected goes in running this not for profit restaurant and rest is utilized in organizing cultural activities.

    Whatever said, freemium seems to (should) be the way to go!

    Image source – Consumer surplus – Wikipedia

     

    consumer surplusesConsumer surplus – it is a term used in microeconomics in demand and supply analysis. Though the author is not a PhD in economics, still in his simple words – consumer surplus is what a few consumer “can” pay to avail the service but would not pay as company selling the offer keeps the price lower so that the company can reach scale.