FEBRUARY 2013
Guest Column
India will soon have several Googlesized firms, says Vivek Wadhwa Page 22
Marketing Magic
The Magazine for Growing Companies
Leadership
Why reading what's happening in Zimbabwe can help your business Page 42
How to help your team members plan their careers Page 14
Aakash Chaudhary director, AESL locked onto the widely watched TV show KBC to get visibility for his coaching brand.
The magazine for growing companies
Marketing
Magic
February 2013 | 150 | Volume 04 | Issue 01 A 9.9 Media Publication | inc.com Facebook.com/Inc
@inc
Are your CFOs happy? Page 9
How 4 high-growth companies are using principles of the 4Ps to craft their business success Page 24
February 2013
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contents
24 Marketing Magic
Too often people seem to think of marketing post-facto. We decided to pick out companies that have built their successes on the traditional essentials of marketing—the 4Ps. by ira swasti & shreyasi singh
PRODUCT RedBus PLACEMENT Jawed Habib Hair & Beauty PRICE Micromax Informatics PROMOTION Aakash Educational Services
34 How I Did It The Rice Baron
How Vijay Kumar Arora reaped one of the most popular rice brands in India—Daawat—with his crop of learning notes from peers, mentors and a management school. as told to sonal khetarpal
Photograph by Subhojit Paul
42 Leadership How To Think Globally Reaping Profits The man behind the 1,100-people business that created the popular rice brand, Daawat on page 34
on the cover
Aakash Chaudhary, director, Aakash Educational Services. Photographed by Subhojit Paul in Delhi. Cover design by Anil VK and imaging by Peterson P.J
This edition of Inc. magazine is published under license from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 39-43 were all originally published in the United States edition of Inc. magazine and are the copyright property of Mansueto Ventures, LLC, which reserves all rights. Copyright © 2009 and 2010 Mansueto Ventures, LLC. The following are trademarks of Mansueto Ventures, LLC: Inc., Inc. 500.
A lot of people do business overseas. Fewer really think globally, says Bhaskar Chakravorti, senior associate dean at the Fletcher School at Tufts University.
48 I Wish I Knew Then...
Trying to raise investment for Indiaplaza has taught serial entrepreneur K. Vaitheeswaran an important lesson—you can’t time things perfectly. as told to ira swasti
february 2013 | INC. | 1
contents
February 2013
14
39 06 19
17 The Goods
03 Editor’s Letter
06 Behind the Scenes
Artists, tricks and daredevil acts. Companies that make the Great Bombay Circus one of the greatest shows in India
09 Launch
Life’s Balance Sheet: Are your CFOs happy?
12 Innovation
Three defence robots for use on land, air and water that keep soliders out of harm’s way.
14 All Things People
By Hari TN Smart CEOs should go beyond reviewing their team’s performance; they should help plan careers
2 | INC. | february 2013
Sturdy monitors Net Savvy: Route your routers right Multi-tasking printers Celebrate your anniversaries with these gift ideas
22 Guest Column
By Vivek Wadhwa Indian tech entrepreneurs are primed for tipping point—they will solve not only their grand challenges, but those of the world.
Strategy 39 Marketing Using crowdfunding sites to get something money can’t necessarily buy: feedback on your business 40 Managing Healthier employees, healthier bottom line—the benefits of virtual doctor visits
44 the way i work Anand Shah, co-founder of Enaltec Labs, makes sure his “switch on-switch off” policy permeates everything he does. Focussing on one task at a time is key to getting it right, says this marketing professional-turnedentrepreneur. as told to sonal khetarpal
editor’s letter
MANAGING DIRECTOR: Dr Pramath Raj Sinha Printer & Publisher: Anuradha Das Mathur Editorial managing Editor: shreyasi singh assistant editor: Sonal Khetarpal feature writer: ira swasti DEsign Sr. Creative Director: Jayan K Narayanan Sr. Art Director: Anil VK Associate Art Directors: Atul Deshmukh & Anil T Sr. Visualisers: Manav Sachdev & Shokeen Saifi Visualiser: NV Baiju Sr. Designers: Raj Kishore Verma Shigil Narayanan, Suneesh K & Haridas Balan Designers: Charu Dwivedi, Peterson PJ Midhun Mohan & PRADEEP g nair MARCOM Associate Art Director: Prasanth Ramakrishnan Designer: Rahul Babu STUDIO Chief Photographer: Subhojit Paul Sr. Photographer: Jiten Gandhi community team assistant product manager: Rajat gupta Sales & Marketing senior vice president: krishna kumar (+91 98102 06034) business development Manager: arjun sawhney (+91 95822 20507) assistant regional manager (south & WEST): rajesh kandari (+91 98111 40424) Production & Logistics Sr General manager (Operations): Shivshankar M Hiremath Manager Operations: Rakesh upadhyay Asst Manager (Logistics): Vijay Menon Executive Logistics: Nilesh Shiravadekar Production Executive: Vilas Mhatre
Logistics MP Singh, Mohd. Ansari OFFICE ADDRESS nine dot nine mediaworx Pvt Ltd A-262, Defence Colony, New Delhi–110 024 For any queries, please contact us at help@9dot9.in Published, Printed and Owned by Nine Dot Nine Mediaworx Private Limited. Published and printed on their behalf by Anuradha Das Mathur. Published at A-262, Defence Colony, New Delhi–110 024 printed at Tara Art Printers Pvt ltd. A-46-47, Sector-5, NOIDA (U.P.) 201301 Editor: Anuradha Das Mathur
Dial M for Strategy Digital marketing seems to be the new sunrise sector for our economy. Everywhere I look, there is a snazzy,
new digital agency at work—crafting Twitter campaigns and creating online avatars for clients. Many are doing commendable work in building brands and outreach. Yet, I can’t but help wonder that—swept away as many young companies are in the exciting world of social media tools and campaigns—the understanding of marketing as a concept is sometimes reduced to merely the “creative”. But, marketing isn’t a post-facto activity. Marketing essentials are intrinsic to getting the offering and the business model right; and determine the core value a company adds through what management guru Philip Kotler famously called the 4Ps—product, price, promotion and placement. Over the past decade, Kotler’s 4Ps may have been reinvented or retooled to keep pace with a changing marketplace, but they continue to provide a useful framework to understand marketing. Our cover story this time on Page 24 takes off from that by profiling examples of four companies that have tasted success and growth by using these principles wisely. That we were fortunate to have Vikas Gupta, the former head of marketing at Coca-Cola India, as the resident expert and anchor for this story, has made this feature both insightful and a must-read. In other news, Inc. India has turned three with this issue. As we continue to mould our brand (by learning from the examples in this issue, of course!), I wanted to thank you for your goodwill and feedback. Against the headwinds of an economy that’s been more than challenging, it’s what keeps us going.
Shreyasi Singh shreyasi.singh@9dot9.in
february 2013 | INC. | 3
BEHIND THE SCENES Hoarding art
Companies at the Heart of Everyday Life
As soon as you enter the gates of the Great Bombay Circus, your eyes wander to the beautiful paintings embellishing its premises. These gorgeous handmade hoardings and paintings are provided by Babu Painters, an Agra-based company that specialises in authentic artistry. It was started more than 50 years ago by Babu Bhai, a well-known artist, and is now run by his son Hamid Ali Khan. It creates art work for all major Indian circuses including the Gemini Circus and the Jumbo Circus.
6 | INC. | February 2013
The Great Bombay Circus, Delhi
07.01.2013 3 p.M.
Security One can feel safe and secure within the circus arena because of the presence of numerous security guards provided by Captain Management Security Service. The company was established in 2009 by C.D. Singh, and now employs around 250-300 security personnel. It provides a whole range of security services such as personal security, installing CCTV cameras and providing handheld metal detectors.
Tickets Circus tickets need to be made very carefully with proper sequencing to prevent forgeries. For this circus, tickets are printed by Ashish Arts Press. K.M. Dilip Nath, a partner at the Great Bombay Circus, stresses that this company founded by Rakesh Saxena six years ago, is the only establishment he’d trust to do this for them. This Andhra Pradesh-based company prints tickets for other major circuses such as the Jumbo Circus and the Apollo Circus.
photograph by SUBHOJIT PAUL
reported bY ADITI AGRAWAL
News. Ideas. People.
launch
Is Your CFO Happy? A recent report finds them engaged, but stressed Chief Financial Officers (CFOs)
undoubtedly occupy pride of place among the top management of most companies. They have a unique position in the organisation—not only are they the allies every founder needs to build their business, they often also play the critical role of a devil’s advocate. When somebody is that important to your business, it’s wise to find out what’s important to them. Towers Watson, the global professional services firm, recently did just that with a survey of 128 top CFOs from across various industries in India. The findings were insightful, to say the least. In line with the expectations and trust invested in them, the CFOs polled showed a remarkable level of engagement with their organisations. Ninety seven per cent said they are willing to stretch beyond their required role to support the organisation in succeeding and 92 per cent took pride in being a part of the companies they work for. The study further explored other Illustration by pradeep g nair
FEBRUARY 2013 | INC. | 9
launch
Based on excerpts from CFO India January 2013 issue
aspects of the job and their emotional connect to it to find that 81 per cent of CFOs are engaged with their jobs where engagement is driven by the extent to which they would commit discretionary efforts to achieve professional goals. Clearly, something is working well with CFOs in India. So which factors are driving such high engagement? The CFOs polled highlighted a high level of autonomy in decision making, the opportunity to try new ways to address work related challenges, the freedom to voice their opinions even if they differ from others and a high potential for their own career growth to be some key factors. These are characteristics companies must preserve if they’ve already got it right, or make efforts to achieve them. The CFOs surveyed also laid out their most common challenges and obstacles—the increasing unrealistic expectations of shareholders, and the lack (sometimes) of a well-articulated company vision. What stresses them? At first glance, the response of CFOs on engagement gives an impression that their work pressure is fine, and that the paramount expectations from them offers just the right catalyst for added energy. On a closer look, CFOs don’t seem to agree with that sentiment. At least one in four CFO feels her work load is excessive and impacts her job effectiveness significantly. Further, 22 per cent of the CFOs added the work pressure does bother them, with 83 per cent going on to say that over the past three to five years, their roles have become more complex and challenging. Internal bureaucracy and strategic ambiguity top the reasons of workplace stress for CFOs. Poor internal communication and the broader macroeconomic uncertainty follow as other significant reasons. Interestingly, their company’s poor performance worries very few CFOs. This particular reason found its way on the stress list of only 16 per cent of the CFOs polled. Internal vs external environment Even though the macroeconomic environment of the organisation features as a significant factor of stress among CFOs, there is 10 | INC. | FEBRUARY 2013
In current role, CFOs
81%
Report directly to the CEO
8% Report to one level below the CEO 0% Report to two levels below the CEO 0% Report to three levels below the CEO 11% Other
Factors causing most stress at work
0% 5% 10% 15% 20% 25% 30% 35% Internal bureaucracy Strategic ambiguity Poor internal communication Macroeconomic uncertainty Changing regulatory environment Power struggle Inadequate resources/support to accomplish functional responsibilities
Poor company performance Other
Quick facts 1IN 4 : feel workload is excessive 2 IN 5 : say role has become challenging and complex 3 IN 10 : bothered with excessive work pressure
little control one can have on it since it is an external factor. However, work environment is an internal factor that is directly in control of an organisation and also directly impacts an employee’s association level with it. Thus, CFOs’ rating “internal bureaucracy” and “strategic ambiguity” as top-most factors causing them stress seems to fit at the right place and further reinforces the importance of work environment. There is no doubt that
decision-making at the right level is a critical aspect of top management roles. And any type of power centres or hierarchical structures may hinder flow of information and influence where and when the decisions are made. In today’s volatile economic scenario, financial management has become far more critical and a pivotal requirement, making CFOs work harder for managing cash-flow, investments, compliance and an even rigorous and stringent risk analysis for organisational survival and sustainability. With these as part of their scorecards, CFOs would feel concerned with the decision-making process and also challenged with ambiguity in strategy and the way forward. This is further reiterated by the CFOs response on whether the decisions are made at the appropriate level and in a timely manner. Though 70 per cent of the CFOs agree that decisions are being made at the appropriate level, the conviction in their response tells a different story. Of this 70 per cent, only 14 per cent respond as “agree” while the rest only “tend to agree”. This seems to indicate that though organisations may be setting the right levels for decisions to be taken, it may not always translate into practice. How do you retain them? Since CFOs are also a part of the group running the organisation, when looking at what attracts and retains them, it is no surprise to find that the ability which the role will offer to have a real impact on the business’ performance along with a high level of autonomy in the role is critical for their job satisfaction. The organisation’s brand, reputation and a trustworthy promoter group are also amongst the top five drivers reflecting that the perspective of a CFO is both of an employee and a business leader—one who manages the organisation and is thus responsible for attracting talent as well as managing and maintaining the engagement levels of other employees in the organisation. It also seems that CFOs are now looking for opportunities to be more innovative at the workplace and trying new ways of doing things. As leaders, they seem to feel the need for reduced standardisation. CFOs are engaged but need stronger roles to stay.
innovation
Companies on the Cutting Edge
Able defenders
Imagine a world where wars would not involve bloodshed, and soldiers would be made of metal instead of being armoured in them. That is certainly a future Omnipresent Robot Tech, a Delhi-based manufacturer of indigenously developed defence robots is working towards. Omnipresent’s robots—Hansa (the aerial robot as seen in the picture), Angad and Ro-Boat— are designed to keep soldiers and first responders out of harm’s way. Founded in 2009 by Aakash Sinha, who earlier worked for iRobot Corp., an American company widely known for its packbots, Omnipresent counts key Indian defence institutions as its clients. In fact, Omnipresent has partnered with ISRO for its Chandrayaan-2 mission; and has already developed robots to service all three primary branches of the armed force. This ability to build defence robots for use in air, water and land is a key aspect of being called “omnipresent”, Sinha claims. But, the real innovation is the portability these robots have been designed to achieve as they are both extremely light weight and easy to deploy.
12 | INC. | FEBRUARY 2013
Hansa
Key clients Achievements Lockheed Martin India Defence Research Innovation Growth and Development Programme 2012 Organisation (DRDO)
Hansa Hansa is a highly portable, extremely light weight fixed-wing unmanned aerial Awarded the gold Indian Space vehicle. Its basic use lies medal by the Ministry Research Organisation in remote surveillance of Science & Technology (ISRO) and reconnaissance. It is fully autonomous, has a Awarded DARPA Indian military range of 10-15 km and Robotics Grand weighs only 1.2 kg. National Security Challenge medal by Sinha claims Hansa has the US Department of Guard (possible) received encouraging Defense for developing feedback from both the a driverless car Northern Command Army and ISRO, both of which hope to use it for aerial mapping.
Angad Its name refers to the mythological messenger from the Ramayana who helped reunite Rama and Sita. The robot, like its namesake, can enter dangerous terrains and send back useful information using its cameras, radio and explosive sniffer detection sensors. Extremely light-weight at 25 kg, it measures 25 cm in height in a curled up position.
Omnipresent Robot Tech
Ro-Boat The Ro-Boat is an autonomous, selfdriven, unmanned boat that is designed for covert surveillance utilising cameras and radios. It is small in size, approximately one square metre. The design has been shortlisted by the USAID Millennium Alliance for the possible use of cleaning rivers.
“Using these robots in situations like the November 2008 terror attack in Mumbai will help save a soldier’s life.” —Aakash Sinha, CEO and Founder, Omnipresent Robot Tech
PHOTOGRAPH BY SUBHOJIT PAUL
reported by ADITI AGRAWAL
All Things People BY
HARI TN
Hari TN is the global head of human resources at Amba Research, a Bangalore-based investment research outsourcing firm. He likes busting myths.
Don’t give in to the myths of career “planning” A CEO should understand what people want from their careers, and help them achieve it
myths about career planning, and career paths are often discussed as if they were static and predictable. Much of the literature and discussion on career planning, like on some of the other topics of management, is full of misplaced exuberance on the purported “methods” of the famously successful, so much so that one wonders if this is merely some form of chicken soup for the weak soul or real stuff that people could do proactively to influence their careers. Inspirational stories have their place, but there is a widespread tendency to use these as easy substitutes for more sound principles. For business owners (especially those who haven’t had long stints in corporate careers), it could be a little tricky understanding and appreciating what their employees, expect from their careers. Most founder-CEOs have different expectations from their chosen career. Yet, as an organisation grows bigger and begins to attract high-calibre human capital, helping team members “plan” their careers becomes a potent tool for bosses to have. Doing this isn’t as tough as it might appear.
14 | INC. | FEBRUARY 2013
I believe there are certain broad principles to consider when managing one’s career, or when mentoring a team member. These principles are not based on any study of how the famously successful people got to where they are. They are based on my observations of how most ordinarily successful people (those whose names don’t necessarily appear in articles on leadership) looked at managing their careers. Self awareness is crucial: No career plan-
ning is possible without a degree of selfawareness. As a business owner, it wouldn’t be unusual for you to have come across
young people who underestimate the importance of this only to discover its value a decade or two later in their careers, typically when undeniable symptoms of burn-out begin to set in. Ambitious young professionals need to understand that opting for roles that do not play to their strengths (just because they may be associated with power, prestige or the perception that they will get you to the top), sooner or later results in fatigue and burnout. One of the more visible manifestations of wrong career choices based on poor self-awareness (or deliberately ignoring good judgment) is what is commonly referred to as a “midlife crisis”. The magnitude of this crisis is inversely related to the extent of selfawareness demonstrated by an individual for most of the early part of her career. High self awareness helps in making the right job choices, turning down the wrong jobs (even if they pay the moon), switch jobs for the right reasons, and focus on the right things in any job. Help your team members know themselves. Making the right job choices: “How long
should I stay in my current job?”, and “what should be the profile of my new job?” are crucial questions that are often not handled with enough thought. Stability, or the
PHOTOS.COM
There have been many
ALL THINGS PEOPLE
lack of it, is one of the most visible indicators of how a person views a career. A string of short tenures on a CV is a sure indicator that the individual does not have tenacity. To top it, such individuals are usually very articulate about the reasons for their many changes and can come across as convincing, especially if you are under pressure to staff the position. When the going gets tough, they will walk, and find another gullible employer. As an employer, how should you evaluate stability? In fact, why is stability even important? A financial investment analogy comes in handy here—in investing, there are longterm investors and day-traders. Those who take a strategic and long-term view of their careers are like long-term investors. They make bets based on “principles” and then have the patience for results. While interviewing, candidates should be asked three questions: a) what new skills or competencies would the job help them develop?; b) what opportunities does this job offer that would leverage their strengths and c) what strategic gap in their repertoire of skills would it fill that can put their career on a different trajectory. The best-fit candidate is somebody who is able to give you satisfactory answers to all these questions. Do what you enjoy doing, but complement your strengths: This is something I
have seen a lot of ordinarily successful people do consciously or unconsciously. Management authors such as John Zenger and others have very aptly brought this out in an article in the Harvard Business Review titled, “Making Yourself Indispensable”. They say that there is a limit to enhancing your strengths. Someone with high integrity and personal honesty cannot make a greater impact by being more honest. Instead, she could enhance her impact by articulating her beliefs to larger groups and influencing company policy on ethics. She needs to learn a different skill to be able to do this. Similarly, a person who can think strategically can increase her influence and impact if she can also communicate and/or execute better. For her, there is a limit to increasing impact by becoming more strategic. In fact, if she doesn’t work on execu-
Ambitious young professionals need to understand that opting for roles that do not play to their strengths sooner or later results in fatigue and burnout. Help your team members know themselves. tion and communication, people around her may even get impatient. In the past, people didn’t pit “leveraging one’s strengths” against “working on one’s weaknesses”. This was never an either-or debate. Instead, it was always a bit of both. However, some people were confused after the publication of a series of articles and books that emphasised leveraging one’s strengths, where the authors resort to extreme examples of success (Warren Buffet, Colin Powell etc.) to claim that leveraging one’s strengths (as opposed to a balance) is what is the only way to success. Zenger et al argue that strengths get amplified significantly if one also works on some complementary skills. In the article, the authors have defined what constitute complementary skills for different strengths. Take some risks and be open: Most forks
that one encounters in life require one to make a choice between two or more options. Some of the concerns that deter a person from making the choice with a higher risk could be—I have never done something like this before, so what if I fail?, will I be wasting some years of my life if I pursue this passion of mine? Will this option be financially rewarding or will it help me get to the top more quickly? But it is worth taking some risks in life. They enhance the probability of your striking something that could boost your career. Learn continuously, and develop depth in at least one area even if you choose to be a generalist: Every person who views a career as a marathon would appreciate the importance of continuous learning. In fact, when you interview such a person she can neatly summarise the learnings in every
role that she has ever played. In one role she may have understood the power of “prior consultation” before implementing a policy; in another role she may have figured out a key soft-skill in managing a globally distributed team; and in a different role, she may have mastered the art of telling a story. It is important to recognise that no learning is too small, and in search of the big strategic lesson we often miss out on the small lessons that really matter and give meaning to our career and life. It is therefore not surprising that learning is more of an attitude and less of a capability. So, encourage your team members to embrace different roles and responsibilities which will lead them to pick up learnings and skills they weren’t even on the lookout for. In many ways, people should appreciate that managing a career is like managing one’s financial investments—a long term approach wins hands-down. According to psychologists, one of the most difficult decisions for all living beings (including humans!) is giving up short-term gratification for long-term gain. Each one of us is confronted with the need to deal with this trade-off in different aspects of life, including in one’s career. The more evolved an individual, the more equipped they are to do this effectively. A smart CEO knows that by contributing to this journey she will be building a cadre of team members who are productive and effective inside the organisation, and become its ambassadors when they leave. Contact Hari TN at haritn@ambaresearch.com. FEBRUARy 2013 | INC. | 15
Your Business Toolbox
Stare without care Sturdy monitors for your viewing pleasure
The Goods
Much of our adult lives, and certainly most of our time spent at work is in front of a computer screen. Clearly, a good monitor then is an essential for the workplace, much like comfortable running shoes. With an ever-increasing array of options and specifications available, settling on a PC monitor best suited for your needs isn’t an easy decision. Our group publication, Digit makes that hunt easier. Here is a review of some latest monitors straight from Digit’s gruelling test labs.
BenQ XL2420T
BenQ XL2420T is the successor to last year’s BenQ XL2410T. In terms of performance, this was the second best monitor, packed with a boat load of features. It is a 3D LED backlit LCD monitor that comes with a black equaliser to get more details from shadowy areas on the screen. It employs active 3D and you get dedicated profiles for movies and text. It also comes with a mouse-like accessory called the S-switch along with a monitor to control the OSD with the help of three buttons and a scroll wheel. cost: `22,000 Philips 273P3LPH
This 27-inch monitor with a TN-panel was the sturdiest monitor we tested. It’s also got some other key advantages—an option to adjust height, a rotating base, a brightness adjuster and special infrared sensors to detect the presence of the user. The only pain point was the touch-sensitive buttons on the monitor—too responsive for our liking. Its contrast ratio was 908:1 at 100 per cent brightness levels and its colour reproduction was quite good. Viewing angles aren’t that great but its black levels are pretty decent. cost: `19,990 BenQ EW2430V
The EW2430V delivered a brilliant overall performance across most of our tests. It is a PVA-panel based monitor and comes on a sturdy silver-coloured stand sporting a glossy black bezel. In terms of performance, it offered an amazing contrast ratio of 1439:1 at 100 per cent brightness levels. The BenQ XL2420T was the only other monitor which came close to it in terms of pure performance. But black levels were the best on the EW2430. cost: `20,990
Dell S2740L
This is a 27-inch monitor which performed well. It gave a contrast ratio of 630:1 at brightness and contrast levels of 50 per cent. The build quality on this monitor is top notch. It does have a highly reflective screen though, which tends to merge with the bezel. What that also does effectively is prevent accumulation of dust. This one is geared more towards multimedia use (good for design and animation firms). cost: `23,000 FEBrUARY 2013 | INC. | 17
the goods
Products + Services
Net-savvy Route your office internet right An uninterrupted internet connection is a staple
for any office to function and yet, wireless routers remain an obscure category for most users, mainly because of the intricacies involved in correctly setting up and managing one. We would classify a good router as one that would be easy to setup and that offers hassle-free performance. So here’s the verdict on some great routers that should find place in your office cubicles. —thinkdigit.com
18 | INC. | FEBrUARY 2013
ASUS RT-N66U
This was the best performing dual-band router in our tests. It is a bit expensive but it includes almost everything you would need from a router including DD-WRT support. While the router has USB ports (2.0) at the back, setting up an HDD can be a pain. Performance at 2.4 GHz is a bit lacking and it is only in the 5 GHz band that this router really comes into its own. That said, the range at which this router can operate (at 2.4 GHz) is quite good even if the speeds are comparatively slower than the TP-LINK TLWR841N. cost: `13,000
D-Link DIR 636L
This D-link router represents best performance and value for money in the dual-band segment and even though it has a lower overall bandwidth (300N vs 900N) than monsters like the ASUS RT-N66U, the bandwidth should be sufficient for an average small office set-up that needs a dual-band capable router. The router itself has sufficient features for most usage scenarios and the USB port is a bonus. Not a bad deal at all. cost: `5,000
TP-LINK TL-WR740N
At this price, it was the cheapest router in our tests, and its performance for this price tag was astounding. The router performed much better than many of the more ‘powerful’ dual-band routers and though it is a very basic router, it does its job beautifully. The only glitch: it is a single-band router which could prove to be insufficient if your office network gets congested often. cost: `1,100
Photograph courtesy company
TP-LINK TL-WR841N
If it is performance you want, this is the router for you. The best performing router in our tests so far, this single-band router was almost twice as fast as other competing dual-band routers, some of which were selling at more than three times the price. The signal strength was also excellent and while it lacks features such as a USB port, this level of performance at such a low price is hard to find. cost: `2,000
Products + Services
the goods
must-haves
Multitaskers All-in one printers for the office Is your office space still cluttered with gigantic printers, scanners and
photocopiers? If so, switch to these multi-functioning devices that pack all, in single compact, space-saving bodies. We tested four high-performance models of these devices for your office. Here are the results. —thinkdigit.com
HP OfficeJet Pro 8600 Plus
Our favourite, the 8600 Plus offers three unique options: ePrint, Airprint and Wi-Fi which allows you to print through e-mails, iOS or a Wi-Fi network. This printer comes with a 4.3-inch touchscreen which acts as an easy-to-use operational panel. For text printing, it took 12.97 seconds and high quality mixed document printing just took 24.12 seconds. Thus, the 8600 Plus is ideal for a small home-office setup as it gives very fast speeds and good quality prints. cost: `20,000
courtesy company
Canon PIXMA E510
The E510 is geared more towards users who want a photo printer with other functions such as scanning and copying, making it an office essential for your company’s branding and marketing department. This multifunctional device provides great value for its money proposition and has the lowest cost of ownership amongst all competing devices in its category. cost: `6,780
Epson ME Office 960FWD
This printer is a worthy mention when it comes to multi-functional devices for the office as well as home. In its traditional allblack body, the 960FWD has an operational panel that can tilt, making it easier to use in a sitting or standing position. It uses Durabrite Ultra Ink which successfully resisted smudges when we used a fluorescent marker to highlight text from the test document that we printed. Plus, it gave speedy prints and was particularly good with glossy colour photo prints. cost: `14,999
Brother MFC J625W
This printer is not a recent entrant into the multifunctional devices market but is still selling strong. The J625W sports a memory card slot as well as a Pict-Bridge slot. It supports the iPrint and Scan app which allows you to print documents from your iOS device as well as scan documents or pictures directly to them. This one offers a decent price to performance ratio and deserves a mention. cost: `11,920
An easy way to know who your customers are sahil parikh founder deskaway mumbai
To build products according to your customers’ needs, you need to understand how they interact and engage with your product. This isn’t easy when you are running a web business like ours—an online project management software company—because we can’t see our customers face to face and sometimes we don’t even know who has signed up for our service or taken a product trial. So when we launched our new cloud-based project collaboration app Brightbod, I decided we needed to understand our customers better and engage with them more. I heard about Intercom, an online customer engagement tool that helps you identify and stay in touch with the users of your product, and signed up for it a couple of months back on Quora. Intercom has helped us achieve three key things. It helps us understand who is using our product and how, by displaying a live list of all users using our app, along with their location, plan type (free or paid), the time they signed up and the number of sessions they have used. It even pulls out the users’ Twitter stream so that I can get to know more about our customers’ likes and dislikes. It allows us to send personalised, targeted messages to customers to drive engagement. And finally, any feedback, complaints etc. that we receive on our customer support id, comes into Intercom, providing us with a great support tool. We pay $50 a month for a subscription of this app. —As told to Ira Swasti
FEBrUARY 2013 | INC. | 19
the goods
Beyond Business
Happy Anniversary! Entrepreneurs on their favourite gifts
As we celebrate the third anniversary of our magazine, we asked five entrepreneurs about their favourite gifts on their wedding anniversaries. Bring out the notebooks, people. Here’s what you can gift on yours this year.—Ira Swasti
FIAT LINEA EMOTION PAC.
For a whole week, I heard my daughter talk about an impending visit from an “Italian Aunty” for my wedding anniversary. But I couldn’t fathom who that was because we don’t have any Italian relatives, forget any close ones to invite them to our anniversary. Then came my anniversary and lo & behold— my wife had presented me with a brand new glittering silver Fiat Linea Emotion Pac. I love the car and my daughter loves her Italian Aunty. —Shyam Sundar Znwar, managing director, Alacurity
iphone On my third anniversary in December 2012, my wife Divya gave me an iPhone5 as an anniversary gift. I had a Blackberry which had been hanging up for quite some time now and the battery was dying out quickly as well. She knew I had been thinking of switching over to one for long so she got me an iPhone. I am now happily WhatsApping away and downloading all my favourite apps. —Ishan Gupta founder and CEO, Edukart
IPad
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Joyalukkas Gold Bracelet
Out of the countless gifts I have received from my wife, the best one was the personalised bracelet she got made with her and my name embedded on it. The gold bracelet studded with nine diamonds reads Jayadeep and Divya. I truly cherish the thought behind the anniversary gift as it signifies a timeless bond and is a beautiful expression of commitment and love. —Jayadeep Reddy, CEO and managing director, ehealth Access
PHOTOS.COM
I had been yearning for one for so long but just couldn’t get my hands on one. It had eluded me for three months since its launch—a very long time for a gadget freak like me. Come our second anniversary and my wife presented me with one! In the current digital era, it is like a gun for soldiers especially, for a businessman. It offers me multiple benefits of completing my work anywhere, whether I am in a café or a mall. — Sunny Nagpal, managing director and co-founder, Httpool India
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Guest Column BY
vivek wadhwa
Vivek Wadhwa is the VP of Innovation and Research for Singularity University and a Fellow at Stanford Law School.
Why India is primed for tipping point Despite government inefficiency and corruption scandals, India is on its way to many $1 billion tech firms that will solve its grand challenges
Despite my belief that India’s IT industry will soon peak and that its
government will be embroiled in even more corruption scandals (thanks to a more vigilant and vocal public), I am more optimistic than ever about India. That’s because as they have done before, India’s entrepreneurs will save the day. They will reinvent India and solve not only its problems, but those of the world. All the government has to do is to get out of their way and steal a little less. There are three trends that will converge and give India its advantage: more IT executives will tire of working for their white masters and take the leap into entrepreneurship; exponential technologies will enable them to think bigger; and a tablet revolution that the Indian government inadvertently started will transform education, commerce, and society—and this will become the government’s worst nightmare, by empowering the people to hold it accountable.
Indian IT: In its third decade, in addition to doing the grunt level IT maintenance they are known for, Indian engineers are now designing aircraft engines, automotive components, manufacturing plants, nextgeneration microprocessors, telecom products, and medical devices for western companies. There are now hundreds of thousands of
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highly skilled workers who have worked for these companies for more than a decade and are reaching middle age. They respected the wishes of their parents and joined brand-name corporations, and built a nest egg of savings. Now, they are yearning to break out on their own and become entrepreneurs. American entrepreneurs typically start their first companies when they are 40—they get tired of working for others and want to build wealth before they retire. Indians are doing the same. So in any city you visit, you find hundreds of former IT execs taking the leap into entrepreneurship. The exponential era: Moore’s Law documents how computing power
is growing exponentially—computers are becoming ever more powerful while prices drop. The same exponential growth is happening in an assortment of other technologies—in fields such as robotics, AI, computing, synthetic biology, 3D printing, medicine and nanomaterials. These advances are making it possible for small teams to do what was only once possible by governments and large corporations. For example, the price of genome sequencing is dropping at double the rate of Moore’s Law. Today, it is possible to decode your DNA for a few thousand dollars. Genome data is becoming available for millions of people. Soon, this will be billions of
Illustration by pradeep g nair
GUEst column
people. Using IT-like tools, we will be able to discover the correlations between disease and DNA and to prescribe personalised medications—tailored to an individual’s DNA. This will create a revolution in medicine—which Indian entrepreneurs can lead with their IT skills. We can also now “write” DNA. Advances in synthetic biology are allowing the creation of new organisms and synthetic life forms. It isn’t just DNA that we can print. In an emerging field called digital manufacturing, 3D printers enable the production of physical mechanical devices, medical implants and even jewellery. Within this decade, we will see 3D printers doing the small-scale production of previously labour intensive crafts and goods. In the next decade we can expect the manufacturing of the majority of goods to be done locally, buildings and electronics to be 3D printed, and the rise of a creative class empowered by digital making. India’s entrepreneurs can now use their CAD/CAM skills to design these. There are also major advances happening in Micro-Electro-Mechanical Systems (or MEMS) which make it possible to build inexpensive gyros, accelerometers, temperature, current/magnetic fields, pressure, chemical and DNA sensors. Imagine iPhone cases that act like medical assistants and detect disease, smart pills that we swallow which monitor our internals, and tattooed body sensors that monitor heart, brain, and body activity. And then there is artificial intelligence, which has advanced to the point that computers can defeat humans on the TV show Jeopardy, perform medical diagnosis, and drive autonomous cars. All of these play very well to the engineering and IT skills of Indians. Entrepreneurs in India are on a level footing with entrepreneurs in the west in these new technologies. With their strong education in mathematics and science, Indian entrepreneurs may even have an advantage over entrepreneurs in Silicon Valley. The Valley’s entrepreneurs are being told by tech moguls like Peter Thiel not to worry about college education—that it is not necessary. Indian entrepreneurs have been brought up in a society that believes that education is everything and that still cherishes its
engineers and scientists. These exponential technologies will help us solve many of humanity’s grand challenges, including energy, education, water, food and health. Indians can solve not only their own problems , but also those of the world. The tablet revolution: By designing and
sanctioning the Aakash tablet and starting the process of connecting India via fiber-optic cables, the Indian government has inadvertently started a revolution that will transform India—and shake up the world. India has lowered the expected base price of tablet technologies from $400-500—that is common in the west, to $35-50. This would not have happened on its own. For example, if you look at Apple, their new versions of technology mostly involve only minor upgrades in features—with the price being constant. Now, Acer is set to announce a $99
than 500 million within five years and a billion by the end of the decade. India is going to leap-frog the entire PC generation. Other countries have gone from desktop to laptop and now to tablets. India doesn’t need to do that. Never before has humanity been connected the way India will soon be, thanks to the Aakash project. With internet-connected devices, the poorest of the poor in India will be able gain access to the same ocean of knowledge as is available to the elite the world over. They will be able to educate themselves, learn about the latest advances in agriculture and farming, find out the real value of the goods they produce, and take advantage of e-commerce. Most importantly, they will be able to participate in discussions and exchange of ideas with the rest of us. India’s internet and e-commerce industry is struggling right now because there just
India is going to leap-frog. Other countries have gone from desktop to laptop to tablets. India doesn’t need to do that. Never before has humanity been connected the way India will soon be. tablet and Chinese vendors are competing with Aakash’s manufacturer Datawind to bring the production cost below $35. This will wreak havoc on the global PC, laptop and smartphone industries because profit margins will decimate while the number of cheap tablets in use increases exponentially. India currently has around 900 million cell phones which were typically purchased for $30 or more. With the cost of tablets reaching this price point, the replacement devices for cell phones will be tablets. The fibre-optic lines that the government is laying in hundreds of villages will provide cheap, affordable internet for the masses. India will likely have more than 100 million new internet users over the next two to three years as a result, and this number will grow to more
aren’t enough internet users to achieve critical mass—and profitability. If these start-ups can survive another 18 months and hone their business models and customer service skills, they will be positioned for greater growth than what Silicon Valley’s start-ups experienced during the last decade. The number of active internet users will go from the double digit millions to triple digits. India will have many Amazon and Google-sized internet companies. And Indian entrepreneurs will start using the new technologies and their unique experience and skills to start solving big problems. This will be good for India, and for the world. Contact Vivek Wadhwa at vivek@wadhwa.com. FEBRUARy 2013 | INC. | 2 3
Marketing
Magic Four dynamic businesses put marketing guru Philip Kotler's 4Ps into practice. Did their tricks manage to pull the crowds?
BY Ira Swasti & Shreyasi singh Design by Anil VK | IMAGING BY peterson pj
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10,000 104 is the number of bus routes of which tickets can be bought online through the redBus platform. In 2006, not a single route was "digitised"
is the number of HairXpresos the salon brand Jawed Habib has opened in 29 cities to capture the mass segment by offering hair cuts at 99
6499 98mn
is the price of Funbook, Micromax's first tablet, that was launched in April 2012. It is nearly one-fifth the price of Apple and Samsung tablets
was the cummulative reach of the Kaun Banega Crorepati, Season 6 that Aakash Educational Services was the knowledge sponsor for
INSIDE
26 | PRODUCT REDBUS
28 | PLACEMENT
JAWED HABIB HAIR & BEAUTY
29 | PRICE MICROMAX
30 | PROMOTION
AAKASH EDUCATIONAL SERVICES
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MARKETING MAGIC
Product | redBus
When the Service Speaks for Itself
M
agents did not have the complete list of all the buses ost successful entrepreneurs have built busioperating on a certain route and bus operators were nesses not on ideas that sound useful to a not in touch with all the travel agents in the city. majority but those that actually try to solve a So, Sama came up with the idea of building a problem—a real problem faced by people webpage which would list all bus operators on a ceraround us. redBus is just one such business that tain route along with the number of seats each bus was started as a solution to a problem its founder operator offered. Using their online listings, travel personally faced, and went on to build a product agents could just log onto that system and see which that was never known to the Indian market. bus had seats available and book tickets for their cliIn the fall of 2005, when Phanindra Sama made Phanindra Sama ents, instead of calling several bus operators with no plans to visit his family for Diwali, the unorganised co-founder, redBus results. Though Sama saw business potential in his bus operating system in the country played spoilidea, when he pitched it to his two batchmates from sport. He tried three travel agents to book a bus BITS Pilani—Sudhakar Paspunuri and Charan ticket from Bangalore, where he was working as a Padmaraju who were working with IBM and Honeywell at the senior designer at microchip-maker Texas Instruments, to time—he definitely found a ready audience, but they weren't as Hyderabad, where his family lived. Each one of them came back enthused as him to take the entrepreneurial plunge. They wanted with the same response: “there are no bus seats available from to thoroughly understand the potential of the market before Bangalore to Hyderabad.” doing so. After talking to several bus operators, consumers and At that time, there were about 30 buses that plyed on that VCs however, they were convinced of the novelty of an online bus route. Yet, Sama recalls he couldn’t manage to get a ticket. His ticketing service, and the impact it would have on that aspect of plans ruined, the electronics engineer set out to understand how the transport business. In August 2006, the three quit their jobs the bus operators' and travel agents' business worked. “I realised that each travel agent just called two to three bus operators to find to develop the first version of the website. “Our passion was to build something that didn’t exist. There was no system like this in a ticket, and gave up his search after that,” Sama says. Most travel
Why Red? The three co-founders of the online bus ticketing service understood that people draw strong associations with colours in a brand name or logo. Plus, being a web business, a short and simple URL was important for a greater recall value among users. Thus, the trio sought to find the colour with the shortest spelling in the dictionary, avoiding the yellows and greens (given the double l's and e’s) to choose red—the easiest colour to type on a keyboard. Sama adds that in several geographies across India, a government bus is sometimes referred to as a laal dabba (red box) so the name made perfect sense.
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MARKETING MAGIC
India. In fact, if there had been for themselves. Earlier, people had expert view | product one, we wouldn’t have left our jobs to rely on the whims of a few travel to do this,” Sama says. agents to book bus tickets, and to But, even though the website be prepared to shell out different was in place, the rest didn’t quite amounts each time. With redBus, work out as planned. When Sama they not only got access to a stanwent to these bus operators with dardised price, they could also their proposition of computerisbook return tickets in advance. ing their bus ticketing services, he The redBus platform enabled tickfaced stiff resistance. The operaets to be bought online, over the tors weren’t interested in changing phone or from their 30,000-plus their decade-old system of bookbrick-and-mortar outlets. ing tickets manually. “They told Much like booking movie or Vikas Gupta Harish Bijoor me that people wouldn’t buy bus plane tickets, redBus allowed cusFormer senior VP and head of Marketing consultant and CEO, tickets online and that you can tomers to view the layout of the marketing at Coca-Cola India Harish Bijoor Consults only do that with plane tickets,” bus to select their preferred seat. Sama recalls. They were comfortThe service also forced bus opera“The positive here is the “Here, the best thing is able booking tickets the traditors to share the exact time of fact that they depended that the company’s focus on a bottom-up demand was on a real consumer tional way and hesitant of going departure and arrivals. Before led approach rather than need, even if it was digital. “We were also too young that, bus operators would at best a top-down bus operator latent. Also, Phanindra to create an impression on people give indicative timings. to consumer led made sure he was creatwho were working in the business Confident as he is about his approach. When you ing real value for everyfor 20-30 years,” Sama says. product's inherent value, Sama solve consumer probone in that chain—this is lems bottom-up, you how he created a busiBaffled about what to do next, says he isn't bothered about the learn a lot because you ness model that was the trio sought refuge at TiE Banfledgling competition in the busisolve real problems and sustainable. In contrast, galore where their mentors advised ness. Clearly, he knows redBus has get rewarded with busiseveral companies end them to go directly to their conmanaged to negotiate for itself a ness. Simple problems up creating internet busisumers who were actually facing formidable first mover advantage seek out simple soluness with an objective of tions. If you face a probselling the business— the problem redBus was trying to of creating a unique, highlem, its quite likely that a their main purpose is not solve, instead of bus operators who demand product. million others face it too. to create a profitable didn’t have any direct benefit from In fact, since redBus launched, Look into the problem at business model based the service. Once consumers began several copycat businesses have hand and see if you can on the proposition of the flocking to use the website to check sprouted but they disappeared as monetise the solution." value they’re offering." out bus routes and make reservaquickly. Take, for example, Mumtions, they would be able to prod bai-based online ticketing service Ticketvala.com which was acquired by Makemytrip, or Ticketthe bus operators to come on board to sell bus tickets. Introducing a completely new product in a market may logically goose that has bus routes across India but strongly focuses on south India, or CustomerNeedz.com and TicketKaran—each of require huge budgets and a high-voltage marketing campaign but them are either too small or too restricted to a certain geography the redBus product was such a basic need in the market that easy, to be considered as possible competition for redBus. low-cost marketing methods (distributing pamphlets in buses and “In internet businesses, the winner takes all because of the a few online ads) was enough to get people to visit the website. large efficiencies of scale. There is only space for one market leader As a stream of users slowly trickled in, Sama and friends went and that leader continues to grow at the cost of other companies,” back to bus operators armed with a compelling argument—that Sama explains. Today, with almost 1,003 bus operators on board as their buses only ran with 80 per cent occupancy, they should allow them to sell the remaining 20 per cent online. The bus oper- for over 10,000 bus routes across the country, Sama claims redBus has captured 65 per cent of the online bus ticketing market in ators agreed, and the team at redBus hasn’t looked back since. India. But, it's in no hurry to diversify into other travel services. Last year was a game changer for redBus as in July 2012 the “In the next four years, we should be able to do a billion company breached the milestone of having sold one crore bus dollar turnover by just selling bus tickets in India,” Sama says. tickets online. Its revenues more than doubled from `100 crore in 2011 to `300 crore, and the team size grew from 200 to about Tall order, that! But, judging by the exciting ride they've been on 480 people. in the past few years, Sama & Co. certainly have a knack of Sama confesses that most of their business has grown through achieving what others haven't even thought of, much less made simple word-of-mouth, because the product and its features speak possible. —Ira Swasti February 2013 | INC. | 2 7
MARKETING MAGIC
Placement | Jawed Habib Hair & beauty
Cutting the Right Corner
R
enowned hairstylist Jawed Habib was always a familiar name among the elite circles of Mumbai and Delhi. Since 2009, he has also become a well-known name among the masses of these metros and several other tier 1 and tier 2 cities in the country. Thanks to the brand’s 104 quick, unisex, dry hair-cutting salons called HairXpresos that have opened across 29 cities in India, the hairstyle brand has brought a premium service to the middle-income consumer group; even as it gives itself an opportunity to enjoy the economic benefits of large volume. Interestingly, with the HairXpresos, Jawed Habib has turned on location guarantees the company brisk walk-ins, and gives target its head his flagship brand’s core positioning. So, unlike its exclusive customers an easy, quick option to pop in and get their haircut. “Typically a good mall gets around five to seven thousand footchain of 179 hair and beauty salons that promise not just a wide falls during weekdays and eight to 10 thousand during weekends. range of hair and beauty services but create “personalised services The number is good enough for us to get the desired average cuts to suit a customer’s personality and life style”, the HairXpresos are a day,” says Rohit Arora, executive director of Jawed usually 12x8x8-feet glass kiosks with three styling Habib Hair and Beauty. chairs that provide limited services ranging from a He asserts further that they were encouraged by fast and dry haircut to an express blow dry. The comthe easy adoption of the concept despite the fact that pany also claims that the quality of services across all many people thought that conservative customers its HairXpresos (whether company-owned or franmight not accept unisex, see-through glass boxes in chised) is standardised as all its hair stylists are graded and certified after they are trained at the compublic places as an ideal place for a private haircut. The Indian consumer has evolved over the years pany’s own academies. as the retail boom has made them more educated What really gets the desired visibility and voland experimental, Arora says. "Daily essentials are umes for the brand however, is the strategic placebeing shopped by men and women equally and ment of these “salon McDonalds”. Mostly located at Jawed Habib founder, Jawed Habib Hair & more frequently and hence the acceptance of men high-footfall places such as malls, high streets, bus Beauty in the marketplace [has increased]. Since our serdepots and areas near railway stations, the strategic
expert view | pLACEment “Placement is about placing your product in a way that it can be discovered by customers when they most need it. Hindustan Unilever’s ultimate placement would be for their shampoos and shower gels to be placed in their customers' bathrooms. Since they can’t do that, they have to sell it in stores. HairXpresos has done that—it’s gone to the place where people are really hanging out; and where they have the 20-odd minutes to get a haircut out of the way. Every retail business is about reach, and they've got that."
"There are many lessons out here—first, companies should stop painting themselves into the corner of a niche. Most businesses that aspire to cater to the classes ignore the masses. You need to be inclusive when you target India. Every "class" business has a "mass" possibility. Basically, everybody is the same—we have common needs and wants. The only difference is affordability. If affordability is "cracked" to suit different pockets, a business can deepen its intent and widen its appeal."
—Vikas Gupta, former head of marketing, Coca-Cola India
— Harish Bijoor, marketing consultant
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MARKETING MAGIC
PRice | MICROMAX informatics
The Gift of Price
I
A Smart Snip The HairXpresos are a pure placement success because they don't wait for customers to come to them. They go to them instead.
vice is only a haircut, it’s okay to get it done within transparent glass walls especially since the unisex format has become common in gyms, clubs and even swimming pools today." In fact, it was Habib’s understanding of his consumers over the past two decades that triggered the idea of such hair kiosks. “Jawed realised that people’s hectic lifestyles don’t allow them much time. Getting a good quality haircut at affordable price, and to do so in a jiffy is a real winner then,” Arora says. Because HairXpresos are a value-for-money model with haircuts priced at a flat `99, their location is a prime parameter for the unique business model to make profits. In fact, the company has entered into an exclusive deal with mega retailers such as Big Bazaar and Star Bazaar for exclusive hair kiosks. It’s a win-win for both brands—HairXpresos get a captive audience, and family retailers like Big Bazaar are able to expand their repertoire of services for customers by having such facilities onsite. Such partnerships have thus enabled HairXpresos to maintain their competitive edge because it would be impossible for other salons to imitate and keep their price tag low if they had to pay high rents for these sites. “Typically, a good location commands a good rent and if your rent consumes most part of your revenue, it’s a big concern for the business,” explains Arora. The fast-haircut concept has worked well for a generation that does not have the time to pamper itself regularly and for the team at Jawed Habib hair salons, which is already scouting for more cities to open new HairXpresos.“Consumers in Tier Two and Tier Three cities emulate the metros, which means our unisex format has good chances of being successful there.” —Ira Swasti Photograph by Subhojit Paul
n popular business lexicon, Micromax Informatics, the Gurgaon-based, home-grown manufacturer of handsets, tablets, and now even LED TVs, is best known for its exciting role as a price disrupter in India’s mobile market. After all, much of Micromax’s product portfolio of more than 60 models today—ranging from the feature rich, dual-SIM phones to Rahul Sharma executive director, Micromax QWERTY, touch-enabled smart phones—come at price tags that on an average is at least up to one-third the price of equivalent phones from global majors such as Nokia, Samsung and Apple. For example, Micromax’s Canvas 2, priced at `10,299 has 80 per cent of the features that the Samsung S3 boasts of, where the Samsung S3 costs significantly more at `33,000. Yet, this image of being “price slashers” or “producers of the country’s cheapest phones” isn’t something Rahul Sharma, the company’s co-founder and executive director fully endorses. Sharma, who leads the product and sales strategies at Micromax, carefully explains that their becoming a brand that sells about 1.75 million phones every month, wasn’t based on price-slashing. “In fact, our background is R&D based. Our oxygen, our USP is innovation. Our first phone, the X1i Marathon Battery, was unique because we launched it in the rural market in 2008 with a neverbefore 30-day battery standby time. That it was priced at `1,469 was the proverbial icing.” Yet, much of the phenomenal success of the company (according to the Global Handset Vendor Market
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MARKETING MAGIC
Share Report from strategy analytics, Micromax is the 12th largest handset manufacturer in the world) is undoubtedly a direct result of the way the company consistently stormed price bastions since the launch of the X1i. Think about it—would the same innovation of a 30-day battery backup, or their consequent “many firsts” such as their Dual SIM capacity phone, or more recently, the upmarket Bling phone targeted at aspirational women in smaller urban centres (priced at an affordable `5,500) be such formidable successes if they didn’t come with that smart pricing? Sharma takes that argument further, and says that their positioning on pricing, and their success has been much more nuanced than people give them credit for. “Of course, we’ve generated huge word of mouth because of our prices. But, we never advertised on pricing. That’s not how we got consumers to come to us. Actually, our price is that last surprise that gets revealed to our customers. It’s like they get all the features they need and want, and get them at a price that they believed was unimaginable or unlikely. That’s affordability, that’s the real beauty.” Undoubtedly, their model validates the perfect spot they expert view | pRice found to enhance this value proposition. The company "Micromax's strategy of not sellunderstood that the price-proding price but the access to smart uct combination will work only features combined with the price in the right market. So, ditching makes great marketing sense. conventional wisdom, they It's always a bad idea to sell price as a core feature. And, a great deployed their tech innovation example of that is the blunder and costing strategy in the rural Coke did when it ran a campaign market. In the first 12-18 for the Rs5 bottle—in effect, it told months after they launched in people nobody should ever pay 2008, Micromax confined itself more for a bottle. Never offer price as a benefit; customers to small towns and rural areas, never go to buy a price point, they and specialised in entry-level go to buy features." and mid-segment handsets —Vikas Gupta priced between `1,800 and `2,400. They only expanded to the more competitive urban areas after gaining success in rural markets, and smartly aligning their distribution and supply chain network to go ahead. Today, the company has a distribution network of 55,000 retailers. Clearly, its urban foray and expanding its product repertoire has been successful. It also allowed them to consciously switch gears and rehaul their brand positioning. In April 2012, Micromax launched Funbook, its first tablet which was priced at `6,499—nearly one-fifth the price of other popular tablet devices such as an iPad2 or Samsung’s Galaxy Note. Today, in fact, India is the only market in the world where neither Samsung nor Apple is the market leader in tablets. Micromax occupies that coveted position. Encouraged by the response to its higher end products—Funbook tablets and its Canvas series of Android smartphones—Micromax is now working to flavour its brand with the twin advantages of cost and “coolness”. Their recent promotional campaign, Sharma asserts, is evidence of the fact that their tonality is now much more aspirational and urban cool, and in line with the new products that is now their focus. “But, of course, everything we do will always be value for money. That is our DNA. We can’t lose that charm, can’t ever leave that aspect of who we are.” 3 0 | INC. | February 2013
Promotion | Aakash Educational Services
Locked in to the Perfect Spot
J
C Chaudhary, founder, Aakash Educational Services Limited (AESL), a Delhiheadquartered medicine and engineering coaching institute, had an unlikely dream come true a few months back—a meeting with his cinematic superhero Amitabh Bachchan. That the meeting happened on the sets of his immensely popular television quiz show Kaun Banega Crorepati (KBC) was the proverbial icing on the cake. “That he would get to meet Mr Bachchan played a big part in the final decision making,” laughs Aakash Chaudhary, J C Chaudhary’s son, and the architect of this ambitious promotional coup. After all, it’s not every day that a mid-size coaching institute running 75 centres across India is able to enlist a media platform as high-voltage as KBC for its brand visibility to become the sponsoring knowledge partner for its sixth season that aired from September 2012 to January 2013. Sample the numbers. According to Television Audience Measurement (TAM) data, the sixth season of the show was watched by over 29 million viewers across the country in just its opening week. In fact, the bumper 6.1 TRP (Target Rating Point) of KBC’s first episode gave it the biggest launch for an Indian television show in 2012 (almost double the numbers of Satyamev Jayate’s opening episode in June last year). Beyond the numbers, the brand positioning was spot on for AESL since the show’s theme this season was “the power of knowledge” or more specifically, sirf gyaan hi aapko aapka haq dila sakta hai (only knowledge can get you your
MARKETING MAGIC
“We could have done a lot of print ads left, right and centre or we could hook on to a national-level media platform.” Aakash Chaudhary director, AESL
Photograph by Subhojit Paul
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MARKETING MAGIC
right). More than even that though, it’s the perfect alignment with the company’s current business objectives that made this mega campaign such a master stroke of brand promotion. Founded in 1998 by J C Chaudhary, a botany teacher, the `240-crore coaching company has around 60,000 students enrolled in its classroom programmes, and another 15,000 in its distant learning programmes. Over the past five years, the company has been on a high-growth trajectory (growing 40-50 per cent year on year, the management claims) as it expands both the number of centres and its offerings. For instance, in July 2012, they launched iTutor, a specially-designed tablet that comes pre-loaded with AESL’s entire curricuIn The Spotlight With 29 lum. Plus, priced at `15,000-`25,000, it costs million viewers watching the sixth season of Kaun less than a third of the classroom programme. Banega Crorepati, “We want to reach the masses, go to the tier Aakash has got the pefect 2, 3 and 4 centres, and give people access to the promotion platform. content we have managed to develop in these years. We can’t be everywhere where there is demand for people to be engineers and doctors. More than 19 lakh students are still out of the reach of the quality we’re offering,” says Aakash Chaudhary, who since he joined the company in 2006 has been the driving force behind many such initiatives. Also, starting from 2013, there will be a common National Eligibility-cum-Entrance Test (NEET) for 100 per cent seats of almost all medical colleges in the country. Unlike last year, when different states held their own medical exams, there would now be a uniform pattern and syllabus for pre-medical exams the approaches in front of us—we could have done lots of print ads country over. The move has thrown up new markets for a player like AESL. Because the NEET will be largely based on the curric- left, right and centre, or we could hook on to a national level media platform. We opted for a media platform where we could ulum of the Central Board of Secondary Education (CBSE), get a lot of brand recognition and recall.” AESL which has grown out of Delhi where the CBSE system has He hopes the campaign will give them the immediate fillip their been prevalent, has a clear advantage over regional coaching current expansion demands and supplement their on-ground sales institutes, say in Karnataka or Tamil Nadu, that earlier followed the state syllabus. force of more than 200 people who frequent schools and attend career counselling seminars to talk directly with students. As it is, a “A key reason we went ahead with KBC this year was because bulk of AESL’s new centres is being set up primarily in the south, and the medical entrance exam has become a single exam. With the in areas where they haven’t been present before. In 2012, for example, uniform medical exam, our expansion makes sense. We needed to begin reaching the south and west of India where we aren’t very the company opened three centres in Kerala, three in Bangalore, two in Hyderabad, and one each in Ahmedabad and Vadodara. strong,” Aakash Chaudhury elaborates. “We had a couple of
expert view | promotion “AESL could’ve spent the same money on a cricket series, and got into a clutter but it got on board a show that shared its brand value. It didn’t let its brand ethos get lost or diluted by attaching itself to another property. Also, they didn’t do a promotion for the heck of it or to feel grand about being a well-known brand, the campaign had a very clear business focus, and the timing was thought through perfectly."
"Promotions need to be specific, targeted and focused on the target audience. Here, KBC was a very valuable and timely tool with many pluses. Firstly, it is about knowledge which fits in nicely with the profile of the brand. Also, KBC has an incredible reach in semi-urban Tier 2, 3, and 4 towns. While big city audiences don't have the time for KBC, small town audiences actually wait for the programme. So, Aakash did the right thing by the right time."
— Vikas Gupta, former head of marketing, Coca Cola India
—Harish Bijoor, marketing consultant
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MARKETING MAGIC
GUEST EDITORIAL | VIKAS GUPTA
Although he doesn’t disclose how much they had to fork out for the sponsorship, Chaudhary concedes it did “shake up” their marketing budget. Happily for AESL, the impact was already tangible and definite before the last episode of the season aired on January 26 this year. “The campaign has given us a lot of brand visibility. Also, the schedules matched perfectly because the admission season begins in December for us, and the show ran from September to January.” He cites the example of Aakash National Talent Hunt, an annual examination they launched in 2010, to select deserving students for free coaching. In the first year, 12,000 Class X students appeared for the scholarship exam. That number exploded to 44,000 students in 2011. On December 1, 2012, 80,000 students, 90 per cent of whom are from remote areas of the country, appeared for the 800 scholarship seats available. Chaudhary says KBC’s reach most likely played a part in the swell of numbers. “Best of all, it’s left our competitors shocked—yeh kya hua, they are wondering I’m sure,” he jokes. —Shreyasi Singh
Don’t Post-facto Marketing Too often, marketing gets reduced to “trinkets and trash” as Sergio Zyman, the CMO of Coca-Cola Company, and the author of The End of Marketing As We Know It used to always say. Zyman believed most companies viewed and approached marketing as being a tactical game. But, as each of these examples illustrate, when you really start thinking about the elements of marketing, they are actually the reasons—price, product, promotion, placement—behind a company’s success, or failure. So, marketing is a very crucial tool; it’s not about a cute piece of advertising or jazzy marketing collaterals. At the very core of marketing lies the ethos of adding value. Many people confuse marketing to be something they get into after everything has been decided. Actually, that’s the biggest blunder—people shouldn’t think of marketing as an afterthought. It can’t be a post-facto activity Also, too often branding gets confused for marketing. But, branding is one aspect of marketing; it’s one of the levers a company deploys to get their message across. The real USP of a company does not lie in getting the message across—it lies in the ethos of what they do. The case studies we have picked for this special story demonstrate that. Each of them had a clear plan of how it needed to be positioned and marketed. That “pull” of marketing was embedded in the very service or product they are involved in creating. These companies validate the business canny of Indian entrepreneurs. Many mid-sized Indian companies have done a brilliant job of intuitively crafting smart marketing strategies. Hopefully, these stories serve as a good guide to some of those best practices and wise insights. February 2013 | INC. | 3 3
HOW I DID IT
TheRice Baron Vijay Kumar Arora LT Foods
From a small family concern, Vijay Kumar Arora has grown LT Foods into a leading processor and exporter of packaged basmati rice. Like Daawat, their immensely popular basmati rice brand, LT Foods today has several premium rice brands in its portfolio. Plus, business continues to grow healthily for the company which now plans to move into nutritious rice-based snacks. Even as new plans are being sowed, the 1,100-people strong company is expecting to end this fiscal with a bountiful harvest of `2,000 crore. As told to sonal khetarpal / Photographs by Subhojit Paul
I wanted to be a doctor. I had got admission
in a medical college in south India, but my family did not want me to leave home and venture out for studies. So, I settled for a Bachelors in Biology from Punjab University. But as I finished my graduation, I had no aspirations of building a career in science. Being the elder son, I joined my father’s business of rice trading in Khalra, a small district in Amritsar in 1978.
I worked under him for six years and learnt
the basics of business—he taught me how to work systematically. Unfortunately, we lost him in the terrorist attacks in Mumbai in 1986, after which we moved our house and business to Sonipat, Haryana. The responsibility of the family and business came on to me. For the next few years, I learnt to manage 3 4 | INC. | february 2013
the business and only took some conservative risks to expand it. But, the one plan I did conceive and wanted to execute was to export rice. Hence, it was in October 1990 that LT Foods, formerly known as LT Overseas, was incorporated. I named the firm after one of my forefathers, Lal Chand Tirath Ram Rice Mills but shortened it for better recall in the international market. We started as one company but now we have six subsidiaries—Daawat Foods, Nature Bio Foods, and Staple Distributions Company in India; LT International and LTO Kusha Inc. in USA, and Sona Global Limited and Nice International in Dubai. Each concentrates on distribution of our different brands of rice and rice products to international markets. Our flagship product is the Daawat range of
Lessons of the land Picking up the basics of entrepreneurship from his businessman father, Vijay Kumar Arora’s journey of building Daawat, the popular basmati rice brand, has been one of endless learning.
HOW I DID IT
basmati rice targeted at the premium segment of the market, while the Devaaya, Rozana and Heritage range of basmati rice caters to mid-segment customers. We have got many multi-million dollar export orders as we grew but I distinctly remember our first big order from Continental Grain Company, a US trading company and I did not know how to manage a `30 crore order then, so I partnered with Bishan Saroop Ram Kishan Agro, a successful export house in India to execute the job and learn from them. Thankfully, we received great recognition for our high quality of rice. After that, we got a lot more orders, and in the first year itself, our turnover grew from `1 crore to `100 crore. I was keen on growing the company and
the Basmati rice business in the international market seemed to be a lucrative avenue. I independently liaised a lot more with farmers and engaged contract farmers to meet our growing orders. But, being from a small town, going abroad to look for clients and business wasn’t easy for me. I did not even know how to get a visa. Plus, one needs to understand different regulations and laws before you can start exporting. The one thing I did know was how to be determined. Every morning, I’d tell myself, I had to do this.
The export business was challenging to set
up. For example, in 1995, I had a contract to export a $6 million order to Syria. But, the Central Laboratory of Syria that examined our samples rejected our container on the pretext that “it did not meet the required specifications”. I flew to Syria for three days. But, it took 15 days of running around to get the clearance for our order. In fact, every new contract we took on posed a new set of problems for us—new laws, buyers backing out at the last minute, or other myriad problems. Of course, each of these problems served us well. We learnt a huge lot from each of these experiences.
I was also intent on learning from others. I had started growing my social circle to network with people from successful business
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“I was intent on learning from others. I had started growing my social circle to network with people from successful businesses.” families. I wanted to understand how they conducted their business. If someone would give me an idea or advice, I would note it down and implement it from the very next day. I have been carrying a small diary in my wallet for the past 20 years. I use it to quickly jot down ideas and notes as and when I come across them. It was at a social gatherings in Panipat that
I chanced upon meeting V. K. Kapoor, who had recently retired from his family’s rubber business. He became my mentor and an advisor in the company. I relied on his wisdom on not only how to grow my business, but also how to manage family and social relationships. He really helped in my journey of getting more and more international exposure as well. He would travel around the world with me, attending food exhibitions, trade fairs and other seminars.
By 1995, we had become a `250 crore company, and were growing rapidly. We even set up a milling facility (paddy to rice) of 4 MTPH in the same year at Sonepat. Even though my three younger brothers had joined the business by then, I was doing everything on my own. Mr Kapoor was extremely valuable in teaching me how to be a leader and work along with family members. In fact, it was on his insistence that I went to Administrative Staff College, Hyderabad for a two week leadership course in 1995. Initially, it was tough to leave the business and be a student but I have gotten used to it now. I have gone back there several times for different courses on HR and finance. I am going this year too for a programme in familyrun organisations. Our next big milestone as a company came
in the year 2000 when we launched a pro-
cessing facility at Bahalgarh, Haryana. Soon, we became a `400-crore company. This growth led to a drastic transformation for me because I had to hire a lot of experienced professionals from the industry. Initially, in spite of their experience, I could not trust them. As a result, I was not getting their best performance. I had to convince myself that the truism, only those who have invested money in the business feel the pinch, is not really true. Companies that run professionally, with no promoters, can be successful as well. Once I changed that mindset and understood that employees can be as passionate about work, I could see a dramatic rise in their efficiency. To be honest, I don’t think I handled the
company’s growth spurt very well. We were becoming somewhat like an unsettled ship. I thought I’d put pressure on myself to steer it back to control. “Pressure techniques” have always worked for me—they spur me to give my best. So, I decided to go public although my family, friends and advisors were against this decision. To me, the rationale was clear. I was losing grasp of the company’s reins, and I needed somebody to help control me, in this case, the shareholders. Fortunately this worked for us. Since we registered the company in 2006 at the Bombay Stock Exchange and the National Stock Exchange, we have been growing at almost 20 per cent every year.
HOW I DID IT
become reality. And, a successful one at that—since buying it in December 2007, we have nearly doubled Kusha’s turnover. With this acquisition, our market share in the US market has grown from 7 per cent to 52 per cent. It gives me great pride that we are now in 50 locations throughout the world with five factories in India and two manufacturing units in the US and Dubai. The 2000s have been frenetically paced for
us. And, we’ve continually maintained pressure on ourselves. In 2009, three years after we went public, we also brought in private equity investment into LT Foods. Rabo Equity Advisors, the private equity arm of Rabobank, showed confidence in our organisation and invested `50 crore (`25 crore in LT Foods and `25 crore in Daawat Foods, our subsidiary company). Of course, Rabo isn’t involved in the operational aspects of the business but they do provide us a lot of guidance. I’m glad we got PE investment. It’s important to have somebody from the outside guide you.
Peer Power Vijay Arora has realised the benefits of learning from successful peers since he partnered with a leading export house to execute his first order.
Going public also brought a revolution in
the organisational structure. Initially, the whole business was one big entity, controlled by a strong centre. After going public, in addition to bringing in professionals in all key departments, each of the six subsidiary companies were headed by a professional CEO. Gradually, the company became a professional organisation where decisions were taken as a group. Different teams were involved in the decision making process from the conceptual stage. Of course, to make sure we were able to attract the best talent, we paid salaries much over the industry benchmark. I’m glad we took that chance because over the past few years, we’ve been able to get some great people to be associated with LT Foods. The greatest part of running a company is
totting up these memorable milestones. For example, one of the greatest moments for me was when we acquired Kusha, an American rice trading company. Its Royal
brand had a 40 per cent market share in the basmati rice segment in the US. When I had first met the owner of the company, he’d refused to negotiate the deal with me saying I did not have sufficient funds to buy his company. But, I was determined to acquire them. I approached investment bankers to help me out, even though frankly, I didn’t even know then what exactly investment bankers did! In fact, the first few investment bankers I approached refused to take this on. I gradually persuaded Avendus, the leading PE firm to accompany me to Los Angeles, where the company was based, to meet the owner. That set the process rolling, and in December 2007, we took over the company. This was a big dream-come-true moment. I had first travelled to Los Angeles in 2001, and had absolutely loved the city. My dream from then on was to be able to own a company there. I know now that dreams, however fantastical they may seem, do
Post the PE infusion, the most signifi-
cant move was that we made much greater investments in R&D. As a result, we diversified our product portfolio and launched six new variants in the basmati rice segment in January 2011 under our flagship brand Daawat. We also forayed into the healthy snack category with the brand MYMY (My Taste My Health) which offers rice-based chips and snacks. The same year, we also entered in public-private partnership with PUNGRAIN (the nodal agency on behalf of Punjab government) and ventured in grain storage and developed silos with 50,000 metric tonnes capacity in Amritsar.
All our initiatives are small steps for our long term plan—to transform LT Foods from a leading basmati rice company to a global speciality food company with a comprehensive range of products and services of the agricultural value chain—a straight from the farm to the kitchen approach. februar 2013 | INC. | 3 7
Tactics. Trends. Best Practices.
strategy
Game Changer Feedback from Kickstarter supporters helped Stoic improve its Viking-themed video game.
Marketing The wisdom of crowds The money is great, but the insight crowdfunding provides can be just as valuable
courtesy stoic
The co-founders of the computer-game studio Stoic had a feeling
they were onto a good thing with the new fantasy game they were designing, but it took a Kickstarter campaign before they realised exactly how good it was. The Austin-based company—co-founded by industry vets Alex Thomas, Arnie Jorgensen, and John Watson—turned to the crowdfunding platform in March to fund its idea for a Vikingthemed online game called The Banner Saga. The response was overwhelming. Having set a goal of $100,000, the company wound up with pledges for more than $700,000 from 20,000 gaming enthusiasts in less than a month. Not only did the Kickstarter campaign give Stoic validation that it was on the right track (along with more funding than it ever expected), it also gave the co-founders tons of usable advice and information.
For example, after supporters were given access to an early version of the game, they told the developers that the time between turns in the multiplayer version of the game was too short. That was changed. Stoic was also able to review geographic information and found that a lot of interest came from Scandinavia, Russia, and Poland. The company now has plans to distribute the game through web portals that reach those regions. “People who are excited about our project have ideas and want to talk about it,” says Thomas. Thanks to advanced analytics tools, crowdfunding sites such as Kickstarter and Indiegogo have made it easier than ever to gather market insight into your company’s products and services. In addition to direct feedback from funders, most crowdfunding sites now offer dashboards that track investor feedback and demoFEBRUARY 2013 | INC. | 3 9
strategy
graphics and the ability to launch surveys on things such as potential features or design. Entrepreneurs can also track their search-engine rankings and the impact
Thanks to advanced analytics tools, crowdfunding sites have made it easier than ever to gather market insight into your company’s products and services.
4 0 | INC. | FEBRUARY 2013
Managing Point, click, cough The benefits of virtual doctor visits— for employers and employees alike Anna Keyes, an employee at Mustang CAT, a Houston-based
Caterpillar dealer, couldn’t manage to shake the nagging congestion in her chest last August. So she walked down her office hallway to a room where she saw a doctor—on a video screen. Keyes sat on a table as a clinical paramedic took her blood pressure and temperature and then assisted Dr Barry Diner while he examined her remotely, from his office 20 miles away. The doctor listened to her chest with an internet-connected stethoscope and examined her throat using a laryngoscope equipped with a handheld video camera. Twenty minutes later, Keyes walked back to her desk with a diagnosis of an allergy and a prescription for prednisone and an inhaler. “It was just so easy,” she says.
PHOTOS.COM
their social-media presence has on attracting crowdfunding. Ministry of Supply, a men’s clothier created by four students at the Massachusetts Institute of Technology, has taken advantage of just about all of those features. The company, which is developing a line of business shirts made from high-performance material, had 3,000 backers chip in nearly $500,000 in the course of a month. Using Kickstarter’s analytics tools, it learnt that about a third of its funders came from France. “Customers in France were very excited about the product, and we had to figure out how to export,” says co-founder Kit Hickey. About 1,500 people also left comments, giving the co-founders valuable information about what sort of shirts customers wanted. They had originally planned to launch with white and blue shirts only, but they now plan to add grey, lavender, pink, and blue-and-white-striped shirts, given the feedback. Similarly, the company changed its sizing: Instead of simply offering small, medium, and large, as it had planned, Ministry of Supply will size shirts by neck size and sleeve length. “We got a lot of e-mail that said, ‘I can’t fit into off-theshelf sizing,’ ” says Hickey. “So we changed our business plan. It was good to have people telling us exactly what they would buy when they got their chance to order.” Every company should be so lucky. —Jeremy Quittner
strategy
Telemedicine isn’t a new concept, but it has traditionally been reserved for people living in secluded areas of the country where physicians are not readily available. Employers, however, are now providing the technology to employees to help control health care costs, keep workers healthier, and boost productivity. A number of services, such as MeMD, Teladoc, MDlive, Consult A Doctor, NuPhysicia, and American Well, offer programs to employers that allow their workers to visit doctors (most of whom work on a contract basis) via computer, rather than leaving the office for an appointment. For Keyes, the visit was free. In addition to providing traditional health insurance, Mustang CAT pays $22 per month for each of the 350 employees in its Houston headquarters to access a virtual clinic provided by NuPhysicia, a Houston-based medical-services company. The payoff for the company has been significant. When Mustang CAT renewed its health insurance plan last year, its premiums were initially set to increase 26 per cent, but they instead rose just 15 per cent. “The insurers were so pleased that we were taking steps for wellness that they dropped our premiums,” says Doug Fisk, vice chairman of Mustang CAT. Cost savings aren’t the only benefit. Because the appointments are on-site and don’t require hours of travelling and waiting in a doctor’s office, employees are more likely to visit the doctor for what most assume are relatively minor health problems. But some Mustang CAT workers have discovered serious issues through a virtual doctor visit—including cardiac disease, high blood pressure, and heart murmurs. “A lot of us don’t go to the doctor because of the aggravation,” says Fisk. “With this, the aggravation is zero.” Not all telehealth services require companies to keep a health care worker on-site, as NuPhysicia does. Scottsdale, Arizona–based MeMD, for instance, allows workers to make appointments online and see a doctor via any computer’s webcam—at home or at work. Payroll Experts, a provider of outsourced payroll services, also based in Scottsdale, pays $40 per visit for MeMD’s virtual appointments for its 18 employees and their dependents. It passes $25 of those costs on to employees through a payroll deduction. Those costs are on top of what the company pays for traditional health insurance, which is about $335 a month per employee. CEO Jason Roth engaged Payroll Experts in an attempt to reduce health care premiums, which have climbed about 20 pe cent a year. He estimates MeMD saved the company about $750 per employee in 2012, because workers weren’t going to urgent-care clinics or general practitioners for relatively minor complaints. Payroll Experts’s employees were initially skeptical about MeMD, voicing concerns about privacy and the quality of care available over the internet. “I thought it was crazy,” says Janice Wyss, the company’s director of operations. “I mean, who sees a doctor online?”
The (Virtual) Doctor Will See You Now Remote doctor services work in different ways and have varying fee structures. Here is how some of them are set up. MeMD Cost: Employers pay $1–$2 per employee each month, plus an average of $35 per visit. How it works: Employees complete an online medical-history form and can then visit with an online doctor from any computer. NuPhysicia’s Medicine at Work Cost: Employers pay an average of $25 per employee, per month. How it works: A paramedic is stationed at your office to assist a remote doctor in completing online exams. MDlive Cost: Employers pay 75 cents to $1.50 per employee, per month, plus $38 per visit. How it works: After completing a medicalhistory form online, employees connect to local doctors via phone or computer. Teladoc Cost: Up to $38 per consultation. How it works: Employees complete an online medical-history form and then request a consultation via phone or computer. A doctor responds within an average of 22 minutes.
Wyss changed her mind after using the service to successfully diagnose and treat an upper-respiratory infection. Since then, she has used the virtual clinic to address an allergic reaction to prescription medicines and, in the case of her 18-year-old son, a case of mononucleosis. “To me, the savings personally are phenomenal,” Wyss says. “And as an employer, I love that our people can get more done.” —Jennifer Alsever FEBRUARY 2013 | INC. | 41
strategy
Leadership How to think globally Business smarts are not enough. The best global leaders are also political gurus and experts in dealing with the nonrational CEOs are naturally students of the big picture. Bhaskar Chakravorti, senior associate dean at the Fletcher School at Tufts University and executive director of Tufts’s Institute for Business in the Global Context, wants them to think even bigger. As more businesses become global in scope, leaders must become experts in geopolitics as well as economics and must be conversant in topics as diverse as the domestic agendas of foreign markets and the ways those countries use natural resources and resolve regional disputes. Chakravorti spoke to Inc. editor-at-large Leigh Buchanan about the imperative to follow world events. In what sense is the worldview of US business leaders too narrow?
Business leaders traditionally focus on market forces, such as customers, competitors, and suppliers. But potential crises—and potential opportunities—often can be found when imbalances or gaps occur in nonmarket forces. By that I mean the forces that surround the market. So business leaders also should pay attention to developments in countries’ political, legal, and regulatory systems. Also to things that might affect those countries’ business ecosystems, by which I mean supply chains, basic infrastructure, their capital markets, their natural resources, and the productivity and quality of their human capital. You’ve said business leaders are too focused on “rational” frameworks of business and economics. Is the wider world less rational?
When I say nonrational, I mean that people 4 2 | INC. | FEBRUARY 2013
doing business outside the United States have to deal with multiple actors—political actors, regulators, labor unions. They may all have different objectives from one another. Individually, each and every one of those objectives is rational. Taken together, you’re in an extrarational, not an irrational, setting. For example?
Take China. The Chinese government wants to incubate an internal supply chain that is up to world standards. The way it goes about that is to require Western companies to source from Chinese suppliers and local entrepreneurs; that is one of the requirements of doing business there, even though rational business logic would suggest that companies source from the best available suppliers. In India, allowing foreign retailers to operate without a local partner is, from a purely rational standpoint, in the best interests of everybody. And yet after the government
announced it was going to let retailers act in a relatively unrestricted way, it went back and reversed that decision. Because there are constituencies that argued that it was not in the best interests of local farmers or shopkeepers to have these foreign businesses come in. So leaders need to monitor events within countries.
If you look at large countries such as China, India, Brazil, Russia, and even to some extent South Africa, there’s a lot of excitement among Western companies about these markets, because they are growing fast. But within these countries are internal politics that most businesses are not fully aware of. There is often resentment among certain groups, and in order to keep that resentment down, certain political entities need to be appeased. Or the government must be able to guarantee a particular growth rate to keep people employed and revolutions at bay. Business travellers often visit just large cities, where clearly a lot of transformation is taking place. They are less aware of what’s happening in the Tier Two, Tier Three towns, or even in the rural countryside. The reality is so different when you go away from the large cities. Are there ways to monitor these things, beyond just reading the news every day? illustration by jon han
strategy
One thing leaders don’t do enough is read publications from other parts of the world. Among other things, that’s an excellent way to understand how other countries perceive us, which can influence how companies behave when they approach new markets. When we use Google News, typically we open up the page for the United States. But there’s a place where you can choose editions for other countries. Just a quick look at what stories are rising to the top in Zimbabwe or India can tell you a lot about what people there are thinking.
Intuitively, one would think that small companies would be less interested in global issues than, say, a Unilever or an IBM. However, this logic will be turned on its head in the future. This Millennial generation is turning toward problem solving and entrepreneurship, and creative problem solvers want genuine problems to solve. These kids have been raised with the knowledge that some of the hardest problems to solve are in places like the Kibera slum in Nairobi. Some of the most interesting tech questions have to do with leveraging ubiquitous wireless phones to enable banking, payments, education, commerce, and serving the booming middle class— or even those who live on less than $2 a day—in economies very different from that in Boston or Palo Alto. But to play in these markets, you have to learn new skills.
“One thing leaders don’t do enough is read publications from other parts of the world.”
Is understanding of global context something that the business leader can delegate?
I think the CEO needs to do it, because so many of the broad, creative, and difficult decisions have to be made at the top. And I think as much as possible, CEOs need to see things for themselves. I know that’s expensive and time-consuming. The world is a large and complicated place. But otherwise, it becomes too easy to choose not to focus on these things until it becomes a necessity of doing business. So I was glad to see Apple’s Tim Cook actually visited Foxconn. I don’t think Steve Jobs ever went there. It’s easy to see how this would apply to large multinational corporations, with major investments overseas and risk managers to oversee them. But how does this sort of thinking apply to smaller outfits?
Do you see students gravitating toward these issues?
Our classes on emerging market entrepreneurship, impact investing, and inclusive finance ventures are filling up. Mediating political and social issues through entrepreneurial ventures is hot. Ten years from now, Inc.’s hottest companies are going to look very different than they do now. And, frankly, the five billion people whose lives are, hopefully, going to be transformed by some of these companies will thank us all for it.
“I have a switch-on switch-off mode. I focus onone thing at one time.” The Way I Work | Anand Shah, Enaltec Labs
Anand Shah first joined Glenmark, a leading pharmaceutical brand, in 2001, to unravel the world of marketing. What he gained most though from the experience was a profitable chemistry with his colleagues, Dr Sivakumar and Susheel Koul. Soon, the trio developed the formulation of a new business—Enaltec Labs—which they co-founded in Mumbai in 2006 to develop and produce complex, technologically challenging APIs (the substance used in manufacturing a drug). For Shah, the most rewarding aspect of building the `70-crore plus business has been forging personal ties with customers and employees. He also credits his success to his ability to focus on the present, and always having a notebook to jot ideas on. As told to Sonal Khetarpal | Photographs by Jiten Gandhi 4 4 | INC. | FEBRUARY 2013
strategy
Volleying Well For Anand Shah, playing tennis with his colleagues in the office is a good way to connect with them.
I get up at 6am every day. It has become a habit now. Three days a week, I play tennis for an hour and a half in my building compound with a regular group of tennis players. On other days, I go out for biking instead. Some days, I don’t work out at all in the morning, and go to the gym in the evening for weight training. On these days, I utilise my morning to read newspapers leisurely. As I get ready and have my breakfast, I find time to glance through my Inbox. It gives me a gist of what has been happening at our customer’s end. Whatever it is that I do—at home or in office—my “switch on-switch off” philoshopy permeates it. I always focus on the activity in hand and switch off my mind from the rest of the world. Imaging by peterson p.j
FEBRUARY 2013 | INC. | 4 5
strategy
We don’t judge people by time spent in office; we’re good at easily recognising hard work. Just as I split my exercise regime into tennis, gym and biking, I also divide my work week between our corporate office, factory and the R&D centre. I spend three days in the corporate office and the rest in the factory or the R&D centre. Both places are less than half-an-hour- drives from my home. I aim to reach whichever workplace I’m going to that day by 9.30am. The offices start filling up only by 10am so I usually keep the first hour for myself— mainly, to reply to e-mails as I drink my morning cup of coffee. It’s good to get this hour to myself because the rest of the day is lined up with meetings with different departments. We have 15 people in the core decision-making committee of the company, and everybody in this group is equally involved in setting the strategic long term direction, not just promoters. I am involved in every activity even though we have some very competent department heads. Most of my work is to give targets to each department, motivate them to achieve the set objectives, and provide feedback thereafter. I do not get engaged with the operational aspects and leave it to the respective managers. It is the skill of following up that helps me play this role with ease. For better recall, I use the Reminder App in my MacBook that is also synced with my phone. After every meeting or discussion, I duly update the calendar. I also have the habit of jotting down notes. In fact, I think it’s my most effective habit as a manager. There is always a notepad on my table which I refer to frequently. I never tear out pages from it so that I can flip back and refer to my notes from previous days. One cannot rely on his or her memory. It is impossible. These notes help me follow up and I encourage my team members to bring a notepad even when we’re having a casual discussion. You never know when a great idea may strike. Apart from being the MD and CEO, I am also the marketing head for international markets. We cater to more than 30 countries across the globe. We target easy entry markets like India, Bangladesh and Pakistan; 4 6 | INC. | FEBRUARY 2013
semi-regulated markets like Argentina, Brazil, Turkey, South Korea and regulated markets like Europe and the US. I handle clients from the US, Europe and South America myself. We are also foraying into Russia and France now. We have general managers (International Marketing) to handle different countries. Almost 80 per cent of our turnover comes from our exports. We set aside eight per cent of the company turnover for research and development of new products and processes. When a brand gets approved after undergoing clinical trials, Enaltec starts working on these products and creates intellectual property (IP) rights on them. We have two state-of-the-art manufacturing facilities in Ambernath and Nashik in Maharashtra. So far, we have developed and commercialised 30 products in various therapeutic segments like ophthalmology, cardiovascular disease, dermatology and CNS (central nervous system) and filed for more than 75 patents. The focus is to introduce new products in our existing markets, and also to add newer markets to help the company realise better value for its existing products. We are also looking at collaborating with finished dosage form companies to develop products up to the final stage. After all, our next three year agenda aims to have a 50 per cent growth rate by the year 2016. or getting new customers and get-
ting more business, the art of relationship building plays a very crucial role. Nowadays, a lot of marketing executives prefer to communicate with customers through technology—via e-mails or videoconferencing. I believe in meeting them personally. Even if I do not have any definite agenda, I will drop in to an existing or potential client’s office. It is important to educate a client with product information, its advantages over previous molecules in the same category and formulation knowhow. Due to this, I travel a lot. I am
strategy
usually on the move five to 15 days in a month. To potential customers, showing up regularly builds familiarity which might eventually lead to their trying out our APIs (active pharmaceutical ingredient). In the beginning, I try to get a small order from a new client. Only as they gain more confidence in our product do I try to pull off larger orders from them. For our current customers, the physical presence of a company’s representative gives them a sense of assurance and a chance to provide timely feedback which they might not have conveyed otherwise. This not only helps in getting repeat business but also results in new orders. However, meeting customers is not enough. There are always challenges or difficult situations in any relationship. There is no way to avoid them. One has to live with it. A lot of these clients have come to our manufacturing unit for inspection and checking our resources. In the initial years, we were often treated with suspicion. They would push us around and ask a lot of questions. You just have to believe in your business model and be patient. In such cases, I try to build up their trust not only in myself but also in our team. It is the right approach that makes a lot of difference. In fact, honesty in professional relationships plays a far greater role. I always tell my team—we are not the most perfect people in the world and let us not pretend to be so. It is better to accept that something is wrong. There have been several cases of material rejection, sometimes even when it was not our fault. My experience has taught me that the customer is always right. In such cases, I try to find the mutual ground, if possible. This approach has worked for us. Even though we are a young company, we supply to some of the big pharmaceutical companies of the world like Sun Pharma, Cipla, Micro labs and Mankind Pharma (in India); Chemwerth (in the US); Ache, EMS, Geolab and Eurofarma (in Brazil); Neutec and Abdi Ibrahim (in Turkey); and Roemmers and Gador (in Argentina). This shows their confidence in us and the onus is on us to always maintain their trust. Developing camaraderie not only with customers but with one’s own employees is essential too. We are a small, young company. We have made sure to avoid strict hierarchical structures. The table tennis room in our office and the volleyball court in our R&D centre is a great socialising place. I often play there too. It is a good way to connect with colleagues. Often, taking a formal problem and discussing it in an informal setting makes great sense. So, we’ve consciously tried to keep a very casual work environment in the office. I have an open door policy and people can come in my office and talk to me any time. In fact, the way I work and deal with my employees has been greatly influenced by Mr Glenn Saldanha, chairman and MD of Glenmark. Though I wish I had more patience like him when I teach my employees. I always
The Notetaker Anand Shah always has a notepad at hand. In fact, he says jotting down notes as and when an idea strikes you is his most effective habit as a manager.
expect a reasonable skill set in the other person. This is a habit I’d like to change in myself. We do not judge people by the time they spend in office but on the basis of their performance. As ours is a small company, we are easily able to recognise and acknowledge the hard work. We have a very organised system for short-term and long-term reviews for each department, whether it is HR, production, purchase or marketing, that evaluates each process and person thoroughly. As we have put the review system in place, we have realised our attrition rate has gone down tremendously. Initially, it was very difficult to get the right talent pool in the organisation and retain it. It is different now. I am proud that we have some very experienced people from the established pharmaceutical companies like Dr. Reddy’s Laboratories, Macleods and Ranbaxy. I might be the face of the company, but ultimately the company is formed by the people who work in it. What disheartens me is when I see employees more concerned about their salary increment or the next promotion. These are short-term goals. An individual should work towards his or her life goals. My father always said that if you want to become successful, ask your boss to put more pressure on your head. That is when you will grow. This is how I started my career with marketing—with an ambition to get exposure to the world market. I don’t see success in monetary terms. Success is when your co-workers and the people in the industry start believing, recognising and respecting you. FEBRUARY 2013 | INC. | 47
I wish I knew then...
K. Vaitheeswaran, founder and CEO, Indiaplaza Hailed as the father of e-commerce in India, K. Vaitheeswaran founded the country’s first online retail company Fabmart.com that sold apparels, electronics, home and lifestyle products in 1999. From founding an online business in a country with fewer than three million internet users, to fighting the dotcom bust and eventually selling out to a big industrial house, his journey has been a roller coaster ride. Yet, these excitements weren’t enough for Vaitheeswaran who acquired Indiaplaza, a US-based gift portal targeted at NRIs to take another shot at the online retail scene in 2007. Here, the entrepreneur talks about the many lessons he’s learnt en route. I knew that Fabmart was a business well ahead of its time but sometimes you have to take decisions based on what your heart, not your mind, tells you. It’s not like we didn’t do market research before starting the business. Of course we did, but we simply went against what we found. The results of the market survey clearly indicated that online shopping was not a viable business in 1999, but when you’re pioneering a new industry, you cannot rely on research. We plunged right into it with a big dose of faith. Unfortunately, only a year later, we were hit by the dotcom bust and had to extend our online retail model to include an offline presence in a bid to survive. We started a chain of grocery stores called Fabmall which gradually grew into a significant business with over 35 stores in Bangalore. In 2006, the Aditya Birla Group acquired it, after which it was rebranded to More in 2008. When the Birlas first made us the offer, we realised this was a “big boys” game. To grow the offline business would mean huge infusions of capital. I wasn’t sure if we’d be able to raise that kind of capital. Plus, the offline space would mean entering into competition against large industrial houses like Reliance, Birlas and the Tatas who were all showing a keen interest in the
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tal for your business. For Indiaplaza, we first started scouting for investors in 2007 although we were in no great hurry to sign term sheets then. In early 2008, we had some good interest from investors but we continued to wait for the deal to get sweeter. Of course, by mid-2008, just as we were about to close a deal, the global markets and with it, our plans collapsed. Unfortunately, from early 2009 to 2011, we were forced to let the business starve of capital. We had to cut down on growth plans and move to a low-cost survival mode. That we had to pace back at a time when Good Timing Don’t wait for the ‘‘right time’’ to raise the market was beginning to capital for your business. Do it now, says Vaitheeswaran explode made matters worse. I wish I knew then what I know retail space. Both those possibilities didn’t now—a business requires capital to be seem encouraging so I decided it made best infused into it at specific moments in the sense to sell out. Yet even as we sold our history of the company. Yet, it might not be offline business, we retained the online retail available to you just when you need it. My website Fabmart.com and also acquired learning, and my advice to other entrepreIndiaplaza, the US-based e-commerce web- neurs is if you get an opportunity to raise site, in 2007 to reinvent ourselves as an capital, do it without thinking too much. online shopping destination for Indians Don’t worry about being ahead of business across the globe. But, the next few years were requirement. —As told to Ira Swasti challenging for Indiaplaza. In fact, the biggest lesson I’ve learnt from those days is that it’s impossible to perfectly time raising capi-
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