Island Fort @ Murud

Murud Janjira- is an island fort along the Konkan coast. Its about 50 kms from Alibaug & the drive from Alibaug to Murud is so picturesque that it would be criminal to do that stretch during night.

You are on a hilly stretch with western ghats on your left & the Arabian Sea on your right. This sparsely populated area has some good beaches on the way- the favorite being Kashir Beach. My advise- take a break at Kashir- have food/drinks at the shacks,play some beach volleyball, take a nap on the hammock & then start your journey again towards Murud.

The Murud fort was built in the 16th Century and is strategically located at the islet-the idea was very clearly to control all marine movements in the area. The fort walls rise some 80-90 ft above water & its first glimpse leaves everyone with awe- coz u cant stop admiring the reslilence of the people who would have toiled hard to build this structure.

The local guide would impress upon you the following facts

– One cant see the entrance of the fort until you are about 30-40 ft away

– The fort had huge fresh water wells that ensured regular supply of drinking water

– There was once an under sea tunnel that connected the fort to the mainland

– 4 cannons of this fort were the most powerful guns of those days- which ensured that this fort was never captured.

So theres a lot many reasons why u must go there- but my favourite experience was the sailboat ride that you take to reach the fort.

The fort cannot be accessed during the monsoons (or so we were told)- so time your trip accordingly.

Selling @ Traffic Signals

Have you ever noticed the kids who are busy selling at Traffic Signals- from tissue paper to calculators, glossy magazines to Indian prints of best-sellers- they seem to have pedelled it all.

The overall logistics here works something like this:

Selling at traffic signalsMultiple traffic signals in an area are “managed” by a single “dealer” who issues the daily ration of goods to be sold in the area to each kid. The dealer would in turn get his assortment of goods from various company reps & bigger dealers. He would carry all the possible products you would see across signals in his “area”. The kids would then daily turn up at the dealer’s godown amp; based on their judgement, past experience amp; the pressure of the dealer- pick up the products to be shown & sold at the signals that day. They have to pay the dealer a minimum for each consumed item (like the cost price) amp; they can keep the margin (introduces flexible selling price). This means that the kids are given some room for price negotiations & they can swing profits by a mix of volume & price manipulations.

But have you ever stopped to wonder as to what products make it to this “channel” & why?

How do these traffic signal salesboys decide on their product mix- one of the most important of the 4 Ps in marketing.

Consider the following facts:

  • One can target only the communters through this channel- amp; the primary way to communicate to them is the product display- most of the cars would have their windows up and music playing inside- so the kid has to get the customer interested – by just displaying the product as he walks past the vehicle.
  • Not all products will sell through this channel. One obvious way to find those that will make the cut is to put them through the “time test”- can a person decide on buying it in 20 seconds? Ask yourself- how many things have u bought with that small a decision cycle.
  • Since there is no service or product guarantee associated with this channel- the product has to have minimal involvement- which typically means a lower priced product. The typical ticket size here ranges from 30-50/- Rs.
  • Inventory carrying capacity: These kids dont have a push-cart that they can carry to the market- so they can only sell as much as they can carry . Which means if they choose a product which is bulky, they cannot carry too many of those-cannot sell too many items-low revenues
  • Most branded players would not want to leverage this channel due to fears of customer complaints & some serious dilution of the brand.
  • The rising interest in Chinese goods has shifted the product mix to mostly electronics & other gadgets. Though a healthy # of them still sell books & car utility stuff.

My gut feel is that they tend to focus on either utility (water bottles , window screens and hats during summers, car tissues or cleaning clothes) or obvious value difference (have seen people buying Da Vinci Code for Rs 40/- & a lighter for Rs 15/-).

But if you were to work on a serious project, wherein you are told to identify items that can maximise revenue for these unique salesboys- what would you do?

Rural mobile telephony: Show me the money !

Remember the famous lines from “Jerry Maguire”-” Show me the money”

With the next battles for telecom shifting to the countryside- I guess most of the telco honcho’s are rattling along the same lines…Coz exciting as it may seem, rural cellular telephony doesnt seem “profitable” enough in all its entirety- or maybe I am missing something.

Now, from what I understand of this business- the two major costs are infrastructure (read that as towers etc)  bandwidth- both of which are semi-fixed costs. I say semi-fixed coz- these can be acquired only in batches- you cannot buy tower or bandwidth capacity for one incremental user. Even if the government subsidises the bandwidth in thr rural circles, the tower cost is not expected to come down.

Basic economic principles say that one should aim for demand maximisation in such conditions to ensure maximum utilisation of the installed capacity- assuming the Variable Revenue is more than the Variable Cost. Now given the population density in most of rural India, I can safely assume that there will never be (atleast in the next 5-7 years) enough # of concurrent calls to utilise the tower amp; bandwidth 100%. This is coz most villages do not have enough households (or househlds that can afford a cellphone connection).

Most rural users would not also relate to the “value-added-services” which currently account for a healthy 40% of revenues (in urban circles) and have been the key reason for rising ARPU in a market with reducing call-rates. The uneducated cell user will not really use the SMS/MMS functionality- which is 60% of the VAS revenues. They would infact need voice-activated services where content is also delivered as voice, unless the cell co’s decide to make the rural youth addicted to porn on the handset 🙂

Rural telephony

Add to this the govt’s keen involvement in tarriffs in this sector and one can safely assume that the cell co’s cannot experiment with higher tariffs in the rural circles. So how would these cellular operators make money in the rural circles?

There have been talks about shared infrastructure but even then the shared entity would not break even on its tower cost.I read somewhere that the govt. had experimented with giving a cell connection to the local postman in the villages- to be used by the village residents – something like a truly mobile STD booth. There were clear commissions demarcated for the telco amp; the postman- BUT the service never took off too well. So why are most telco biggies so excited about the rural circle. Well, to be honest- am not sure, but had I been a decision maker at Vodafone, I would have looked at it thus:- Most co’s want to get access to bandwidth at low rates- under the disguise of rural telephony. I would want to hoard on to this bandwidth for future or for roll-out in non-rural areas (see below) – The roll-out would be viable only in the villages of Punjab, Haryana,UP (W) etc ; not really the poorer states of the country.

– The villages that will see the roll-out (in other states) will be the ones close to some decent sized town amp; not the really interior villages. This is coz- in these villages one can expect substantial migratory population with enough disposable income. It could also lead to shared infrastructure between the town amp; the village at a much lower average cost (given that the bandwidth was acquired at the rural circle rate).

– The next lot of villages would be the ones closer to a busy highway or railway line- coz then I could provide roaming connectivity to my existing users and also look at some local customers in the circle.

So there’s some logic in getting to the village first amp; having that critical bandwidth( the only supply-constrained resource in this industry) and wait for the demand to pick up. But what beats me is why is the govt so keen on getting connectivity to the villages?I have been to many a villages during my road-trips and I can confidently say that this will only lead to an additional expense item for the rural households- something which is best avoided. What our villages need are low-cost, efficient and maybe shared resources of more basic kinds- irrigation, sanitation, healthcare,education,microfinance.

Surjeet wants to go solo….

Surjeet Singh is your typical sardarji driving a taxi for yet another typical sardarji- Giani Singh. Gianiji has a fleet of around 40-45 cabs that are doing decent business (if fleet expansion rate is any indicator).This has been largely due to the fact that Giani enjoys access to a captive audience – he is the only “reliable” cab operator in my area.

Indian TaxiNow it so happened that Surjeet paaji came to drop me to the airport yday somewhere during the long ride we started talking about how much he is paid, on what basis etc etc.

So here’s the maths around the taxi business:

Giani pays a salary of Rs 4000/- to Surjeet and all other drivers with an additional incentive of Rs 40/- per round trip. Surjeet manages to do 3 trips daily on an average – making his total monthly income around=Rs7600/-.

Assuming each trip is for an average 20kms- it would give Giani a revenue of Rs 300/- with fuel costs of Rs 75/- , this gives a per trip margin of Rs 150/- (keeping scope for other expenses).So on an average Giani Singh takes home Rs 18000/- per day.

Surjeet wants to be independent start his own taxi operations. I hope Surjeet knows what he is aspiring to do:

– A new Indica or other vehicle will cost a minimum of Rs 350K on road. With little credit history, its tough for Surjeet to finance the vehicle acquisition at a competitive rate

– Giani gets some steady business because we can rely on him. People would not “trust”- a single cab service as the availability will definitely become a constraint. So even if Surjeet gets the car- how will he get customers? Will this mean less than 100% utilization or marketing overheads?

– Delhi doesn’t have a healthy number of Black Yellow cabs plying within the city- which means that most Delhiites are not used to hailing a cab on the road. The only places that you get into a BY cab is at the airport/station etc. So Surjeet can hope to do routes to/from such places. Had he been in Mumbai- he could have gone solo overnight after getting the vehicle.

– Airport pre-paid cabs have to wait for 2 hours typically before getting a customer- here the ticket size is Rs 250/- and they can rarely manage a round trip. They pay-up Rs 10/- per trip to the Pre-Paid manager. At this rate Surjeet will be able to do 2-3 trips in a day earning him revenues of Rs 650/-.His take home after fuel etc would be Rs 450/-. which transaltes to Rs 13.5K per month- almost double of what he currently makes.BUT with the EMI’s that he would have to pay- this could be eroded to less than Rs 7K levels. Also with this – he would earn only on days that he is making trips. If he has no back-up, he doesnt earn the days he is not well or on vacation.

So how does Surjeet let the entrepenur bug bite him in Delhi? How does he get finance at an affordable rate? Should he wait for the “Nano” That will surely change the dynamics in his favor.

My suggestion to Surjeet was to go to Mumbai- but with Raj Thackeray picking up morcha against Northern outsiders, Surjeet declined that option rightaway. He wants to be in the city of Dilwalas i guess 🙂

Growth Boosters- Can i find em in Tea?

Ever since we moved office to this part of town – the whole of the team has become almost completely addicted to the corner tea-stall. The shop is your regular road-side tea kiosk managed by this ol man- who is the brewer, accountant, salesman and the delivery boy- all packed in one.

Growth Boosters in teaIt may come as a surprise but our “baba” (as he is fondly called) is an astute business man. His concepts of tracking demand , recovering Variable/Fixed cost are so well engrained, that he doesn’t deliver at our office if there are fewer than “X” people- coz he wont be able to recover the cost of the rickshaw he hires to reach the office. He also calls us on Friday nights to check and confirm if we are open on Saturdays and how many cups are required.

Baba also makes one of the best teas that I have ever had- He knows that this is the trade secret that keeps him in business inspite of his irregularity of delivery.He told us that he once had an assistant who “stole” his recipe and started his own shop- right across the road from Baba’s previous establishment. That explains why Baba is so scared to expand his “team”.

Baba charges Rs 5/- per cup of tea has a regular demand of atleast 200 cups of tea twice a day for atleast 5 days a week- which translates to a weekly sales of Rs 10000/-. Not bad for a road-side vendor you might be thinking ! Baba has been able to achieve this scale coz he selected a neighborhood that had “few” offices in a largely residential locality.

This had the twin advantage of:

a. Ensuring that there were few large customers (like us) with sufficiently high demand

b. There will be little or competition coz its a primarily residential area. Other tea vendors are close to business or corporate hubs.

Assuming his profit margin to be 40% Baba is currently at Rs 16000/- per month take home. Much better than a lot of call center execs huh? But Baba’s business is stuck at this level of scale for quite some time now.

Here are the reason(s):

1. Most corporates want the tea delivery once each in the 1st and 2nd halves of the day. Given that they are wide spread- Baba cannot deliver to too many offices, by staggering the time of delivery. He has already experimented with just sending his kettle with the rickshaw chap- but there were some trust and logistics issue involved.

2. Corporates that grow mostly start investing in a vending machine or eventually move to a more “corporatish” locality.

3. Baba is adamant to not hire a “chottu” to scale up his operations coz of the bitter experience in the past. And am sure there are no IPRs in their business yet.

So what if anything can this brilliant brewer do to grow even further in his quest to get more nicotine down more throats ?

Delhi-Gurgaon Toll Plaza: Is adding more Marshals the solution ?

There has been much hue cry about the mis-management of the newly openend Toll Plaza at the Delhi-Gurgaon Expressway. There have been reports of consistent traffic jams during peak hours where commuters have alleged that they were stranded for almost 2 hrs only at the plaza.

Source: http://adatewithdelhi.wordpress.com
Source: http://adatewithdelhi.wordpress.com

While I symapthise with all those who have to undergo such drastic methods of increasing their patience levels – the management of the plaza has some serious genuine problem at their hands. Consider this:

– Most of the “regular” commuters have still not shown any early indication of shifting towards the monthly token, which would ensure a smooth pass from the plaza.

– The other option the plaza mgmt has is to manually charge issue receipt for each vehicle passing the plaza. Assuming it takes 20 seconds per vehicle- the bottleneck is pretty obvious.

– The peak demand for toll-marshals exists for only about 2 hrs each in morning evening and this is where the tricky nature of the problem is

– One can invest in multiple marshals per lane (as has been done currently)- which leads to parallel processing hence increase in the “capacity” of the plaza. But what do these “extra” hands do during the off-peak hours?

– The increased labour could be used to actively promote or even hard-sell the monthly tokens (during the off-peak hours) but I doubt the efficiency of such a step.

So is there an innovative solution to such problems where one needs extra “labour” to service intermittent peaks in demand? How does one ensure a good return on such investments? Should there be some “incentives” to drive more rapid migration to the token process. Plz do keep in mind that most of the tolled projects in India have had a history of not breaking even. Though my guess is that the Delhi-Ggn plaza will be an exception.

Hoysala Temple @ Belur/Hasan

I was at my first Republic Day parade today & was pleasantly surprised to see the Karnataka tableau inspired by the Belur Temple. The float had the Hoysala Emblem at the front & the rest of the it was designed as the temple complex. So I thought its only apt that I should write about the Belur Temple today.

Belur1

Located in the Hasan disctrict of Karnataka- this temple is one of most impressive achievement of art & sculpture in the country.

Built by the Hoysalas around 1100 AD this magnificient structure in black stone has beautiful sculptures inspired from a variety of sources-bharatnatyam,mohiniattam, hoysala emblem,kamasutra etc.

See the attached image for other details & history of Belur temple.

 belur2

The interesting thing that really struck me was that there is a “prototype” of the temple right within the same complex. The prototype is almost the same size as the temple… my guess is that the scale is about 0.7:1 Imagine how particular the Hoysala ruler would have been- to have comissioned an almost full scale protoype before giving a green signal to the main temple.

There is a KSRTDC guest house in Hasan very close to the temple that provides good accomodation.

Business Case Study # 1: What should the Indian Farmer do?

Indian FarmerWas on a road-trip when I came across a possible biz dilema that is faced by most mid-sized Indian farmers.

– Our man-HariRam has been able to save enough to either buy some more land or a tractor

– Hari like most other farmers is not sure about credit- either the rates are too high or the micro-credit firms have not really reached his village yet- This means that he cannot really buy both the tractor amp; the plot at the same time

– HariRam’s current plot size doesnt really need him to buy a tractor

– If he decides to buy land- he will have to stretch himself really hard for 2-3 years before he can afford a tractor.

– if Hari buys the tractor-he sees a high rate of depreciation on his asset which will not see full scale utilization

What do u think the Indian Farmer should do?

I suggested Hari to find a few other such farmers in his community & then

– Either pool the money amp; buy a common tractor

– Or buy a tractor & start lending/leasing to these other needy guys also. He rejected my 2nd idea rightaway- saying “If i start making money by lending tractors to others- these other guys will also buy it &  I would not see the ROI on my investment”.

So put on your strategic mgmt caps & tell Hari what he should be doing.

The evolution of the Truck Graffiti

The Indian creativity has now found a new canvas- the truck rears ! Gone are the days when the only thing you saw while trailing a truck was Horn Please or Buri Nazar wale tera muh kala.

truck

The interesting ones that I remember are
– Singh is King !
– Buri nazar wale – ankhen theek kara le !
– Call on mobile # for side (enclosed snap)
– Kela(i.e Banana) King !!!!!

Shall keep updating this with more…

Sadhus- Most Photogenic Indian Models ?

If you have travelled extensively in India and you love to capture those moments on your Canon/Nikon…… I am sure you would agree with me- that some of the best potraits are those of Sadhus.

These men of god have long been the ambasadors of our country(the land of mysticism) & they surely havent disappointed.

sadhu1

So what is it with these sadhus- that makes em so photogenic
– their bright colored clothes
– the “Blessing Buddha” pose
– the wrikled faces
– the rockstar kinda hairstyle
– Salman khan inspired shirt collection- here now, gone tomm

What do u think?

sadhu2