Startups should take this advice from RBI’s Raghuram Rajan very seriously

As startups are struggling with funding and the cash burn rate is also spiralling up in the e-commerce sector, RBI Governor Raghuram Rajan has some advice for the greenhorns.

As per Rajan, startups should understand deep discounting models will not benefit the e-commerce sector and it is not a viable model for business.

"If the only reason you are getting revenues, not profit, is because you are selling based on 50 per cent discount, it can't be viable in the long run. All these businesses are trying to establish viability, some are still being financed in a big way. It is natural for some of them not to work which will lead to shutting down the business," said Rajan while delivering the YB Chavan memorial lecture in Mumbai.

The investors are also not opening up their purse strings and amid this, many of the startups are depending on the capital injections from venture capital funds and some have also closed down.

"I think this (shut down) is a natural process and we should not stand in the way and lament too much," Rajan said, making a strong case for policies which will make it easier for startups to exit so that resources can be used productively. Given the competitive nature of things, it is also essential to have safety covers including health insurance, unemployment insurance and pensions, he said, adding that such nets can ensure "social peace".

Also, Rajan said the conditions for starting up are improving by the day on the back of interventions by the government and regulators which have upped the infrastructure and logistics support.

However, there is a lot which needs to be done, he said, flagging skilled talent as a key prerequisite for the country.

There are many other soon to be introduced aspects which will help the startup ecosystem, Rajan said, pointing out to Bankruptcy Code which he expects to be introduced in the current session of the Parliament, and also the introduction of the Small Finance Banks.

He also said that the bankers while dealing with stressed loans with small businesses should also understand that the smaller firms do not have the same mettle to take every case to a court as a big business does.

"I said easy exit (for startups) but it should not be unfair exit. With respect to small firms, creditors often have draconian powers which large firms can limit in courts. Something like Sarfaesi. A large firm has a better way of dealing with it in the court than a small firm has. "The banker may have much more power over the small firm with Sarfaesi than it has over large firms. Because we want to get the money back from the large firms, we continue to make the power harder. So, we have to be a little careful. Balance it out. The small firm should not be put out of business too fast while large firms stay in business too long simply because the large firm has easier access to good lawyers.

Source : businessinsider.in

How Rolex became the king of watches?

 

Play a simple word association game with anyone - say "watches" and the reply you get will most likely be "Rolex."

The Rolex brand is so ingrained in the minds of much of the world, it's hard to believe watches even existed before Austrian national Hans Wilsdorf started the company in the early 1900s.
It now stands as the most powerful watchmaker in the world, consistently ranking at the top of lists of the globe's most reputable companies.
Rolex does not actually release sales numbers, but experts estimate that it makes roughly 1 million watches a year, presumably more than any other luxury watchmaker.
How did Rolex become this indisputable master of horology? According to Ben Clymer, the founder and executive editor of premiere watch enthusiast site Hodinkee, Rolex has built its brand on the back of incredible innovation, a name for rock-solid quality, and one of the most notable celebrity endorsements of the 20th century.
Basically: "Rolex is Rolex for a reason," Clymer told us.

Innovation after innovation

Rolex

A current Rolex movement.

Rolex's status is no accident.
"Actual innovation in the watchmaking field is what propels Rolex to where they are now," Clymer said.
To cement its status, Rolex invented: the first waterproof case, the first self-winding watch, the first watch with a date, and (arguably) one of the first driving chronographs.
Before watches became the luxury item they are known as today, they were tools, Clymer says. These innovations have made these watches much more usable.
A self-winding mechanism enables the wearer to avoid having to wind the watch every night, a waterproof case allows a diver to take the watch down with them and time their dives, and a driving chronograph allows race car drivers to time their laps with precision.
These innovations also make it easier to wear the watch every day. "You wouldn't be able to wash your hands with a watch [without a waterproof case]," Clymer said.

A reputation for quality

Getty Images/Levent Kulu

On top of these innovations in watchmaking in the first half of the 1900s, Rolex developed a reputation for reliability.
In order for all of these innovations to function, and for the watches to operate as the tools they were intended to be, the watches had to be the best. It's important to remember that these were not simply luxury items as they are viewed today, Clymer says.
"If you were a navy diver and you wanted something that would simply last forever and was a tool, and would survive going to 100 meters, [you bought a Rolex]," Clymer said. "Because it just works."

Swimmer tested, swimmer approved

AP

British swimmer and first Rolex Brand Ambassador Mercedes Gleitze.

Innovation and quality is great - but it does you no good unless potential customers are aware of it.
In 1927, Wilsdorf approached Mercedes Gleitze, the first woman to swim the English Channel (and the first person to swim the Strait of Gibraltar), and asked her to wear the new Rolex Oyster watch, complete with waterproof case.
The swimmer agreed and wore it around her neck during an attempt to swim the channel.
"This woman, who was then being photographed on the front page of the newspaper every day, was wearing a Rolex around her neck," Clymer said.
Though she didn't actually complete the swim on that attempt, Gleitze's celebrity status catapulted Rolex's name into the public consciousness, and Rolex was able to talk up the fact that the watch kept time even after being submerged in cold water for hours. This greatly increased brand awareness and the public's opinion of Rolex's quality.
Rolex has since used images of women swimming while wearing their watches in its advertising, even as recently as 2010.

Source: businessinsider.in

6 ways to Finance Your New Startup?

Source : letscomply.com

9 Distracting Thoughts That Stop Sales People From Hitting Goals

Sales professionals endure the pressure to hit revenue goals on a daily basis. There are 9 thinking patterns that cause troubles for sales reps and distract them from hitting their goals. A little training can make the difference.

• People Pleasing: This is a problem if you are ‘shoulding all over yourself”. You know this is an issue if you are constantly using the word ‘Should’ when you talk to yourself and others. Chances are you viewing yourself in a very rigid and shameful manner.
For example you may say, “I should have won that sale” or “I should make sure that I speak up more often.” Odds are you will get further and be more creative if instead you say to yourself, “I prefer to have won that sale” and “I will choose to speak up.”
• Always Feel that You Must to Be Nice: The likelihood is that since you are in sales, people feel you are a nice person. During negotiations, however, there will come a time when you will have to draw a line in the sand and stay firmly behind your offer. In doing so, you can be firm, but not as nice as normal. It is necessary to be able to draw the line in the stand to obtain the best price possible for your product.
• Putting Others First: Sales people constantly have the petal to the metal. It’s critical to take time to take care of yourself so that you can take care of your family and your job. Without you, there is no job. You will deliver more sales if you first take care of yourself.
• You Are Your Numbers: Let’s face it, sales goals are meant to be aggressive and challenging. You are more than the job and a number on a page. You are a multifaceted human being. Don’t let the numbers define you. You will stay in a creative mindset if you are able to separate your perception of yourself from your numbers.
• Addicted to Approval: Don’t go for the impossible. Not everyone is going to love you all the time so don’t knock yourself out trying to obtain everyone’s approval all the time. Make sure you validate yourself as a human being. You will be able to listen to your clients if you are not too busy obtaining approval.
• Afraid of Conflict: There are going to be times when conflict enters the negotiation process. Don’t be afraid of conflict, as it is a healthy sign that you and your client are pursuing a win/win scenario.
• Worried About Saying No: Sales reps have tons of different time traps. If you can’t say “No” then chances are you will lose control of your time and energy. You have to say no some of the time.
• Don’t Trust Your Own Opinion: Some sales reps don’t trust their own instinct. Learn to trust your gut… and if you happen to make a mistake that is okay. It’s more data for the next sale.
• Don’t think They Can Make the Difference: If you don’t think you can make the difference in the sale, then you will not hit your full potential. Learn to dream big and decide that you can make the difference.
  Source : businesstimezoneglobal.info

7 Revenue Killers For African E-Commerce Businesses

E-commerce still remains the most viable tech startup model foreign investors are willing to take a bet on in Africa. Many other internet startup models have failed woefully, but some e-commerce businesses have shown high prospects through their growth.
While most of the African e-commerce businesses that have so far achieved a high national and even continental growth status have mostly been funnelled by a huge influx of foreign investment, a few smaller online stores are making some progress in their small communities.
As online stores spring up daily and strive to scale, a major problem they face is growing their revenues. Many e-commerce businesses search the internet far and wide for information on how to grow their online sales in Africa, especially Nigeria. What many haven’t realised is, instead of exclusively focusing on growing their revenues, they most especially need to identify ways to cut-off potential lost sales.
Before you race to build the structures of a house, it’s important the foundation is solid. Else, everything could eventually come crashing down. The same applies to e-commerce businesses. Before you chase sales in the competitive space, first ensure any visitor who lands on your website would not only trust what they’ve probably never heard of, but might be tempted to consider a sample purchase.

 1) Poor Website Design:

The first point of contact between new and existing visitors to your online store, is your website. People tend to trust websites that look clean and good to a far greater extent, than websites of online stores that look terrible.
In a continent like Africa for instance, trust is a major issue. So websites that kind of look good, but not really good, still make people run for the fear of been scammed. Africans generally believe that the real online stores put in a lot of money to have a professional website. But that fraudsters put up anything to get a quick jab at people’s money.
To build the first layer of trust with your online store visitors, make sure the look and feel of your online store is the next best thing out there.


2) High Product Costs:

Most Africans are low-end spenders. But most especially, people generally only want to be able to try small sums on their first purchase. If your target audience are high-end spenders, you probably wouldn’t make enough to eventually turn cash-flow positive because, most Africans who shop online are looking for good items at reasonable prices.
While the luxury or high-end e-commerce model might be big in America with the likes of Net-A-Porter, in Africa it’s still far off.
If you’re serious about making any real sales online, ensure you’re selling items many people can afford.
   
3) Not Enabling Guest Checkout:
People hate the pain of having to sign up just before they place an order. The stress of having to put in too much information turns a lot of people off before they get to even complete their transactions.
Along with the option to sign up, enable an option for guest checkout. This primarily requires the users to provide their email addresses only. When people consciously know they’re not going through a hectic sign up process, the chances of them placing an order increases.
Enable guest checkout to maximise your checkout rate.

4) No Option For Pay On Delivery:
While people in the western world do not have the opportunity to select a pay on delivery option during checkout, in Africa, pay on delivery is the most important option. If an e-commerce website doesn’t have it enabled, they’d experience a tremendously low amount of orders coming in.
Over 80% of Nigerians for instance pay on delivery. Many would argue they’d never pay online. To an extent, they can’t be blamed because of the terrible conditions the items they order usually arrive in (if they arrive at all), unlike in countries outside Africa when things are better regulated.

 
5) High Shipping Costs:

After selecting all the items you want to purchase, you then realise you have to pay a ridiculous shipping cost. Would you walk away from the website or not? Most people always choose the former.
This is a problem many e-commerce businesses are experiencing. For African e-commerce businesses especially, the excuse that the logistics companies charge a lot makes them push huge shipping costs to their customer.
A better approach would be to push half of the shipping cost to the customer, and the other half to the prices of the items. This way, you’re assured the customers wouldn’t exactly freak out upon seeing the shipping cost displayed to them.

6) Poor Mobile Experience:
It would be foolish for an e-commerce company to only have a desktop site in a continent where over 80% of the inhabitants only place orders from their mobile phones.
In summary, if your e-commerce business doesn’t have a good mobile website in Africa, you’re packing up weigh sooner than you expect.
   
7) Complicated Checkout Process:

Life itself is complicated enough. Making it worse by building a long complicated checkout process on your e-commerce website is a complete no-brainer. People want a simple and swift method of placing orders online. Making the process long and tedious because you want to gather so much information before a successful checkout would make you lose a lot of prospects.
You have to consider three factors before you make that African online shopping site’s checkout process complicated:

• The internet connection is mostly slow. So, making a checkout process run through multiple pages would turn people off before they finish
• Some people are simply trying out test purchases. If the process gets a bit long, you can be assured you just gave them enough time to change their minds
• People don’t like giving out too much information

Before you make your checkout process the longest thing ever since the great wall of China, make sure you’re ready to lose out on a lot of potential sales

Source : startuptipsdaily.com

Getting To Closed – How To Close More Sales

According to a study conducted by Dr Herb True, a marketing specialist at Notre Dame University, nearly 46% of the salesmen ask for the order only once before quitting. Moreover, 24% of the sales professionals ask twice, 14% ask thrice and 12% make the fourth attempt before giving up. A total of 96% salesmen give up after making only four attempts. However, the same research suggests that 60% of the sales occur after the fifth attempt.

Closing the sales is one of the most important challenges faced by sales professionals. However, handling objections effectively, positively persuading clients and communicating the benefits of your products or services to them can help you to make more sales.

Tips for Closing More Sales
Here are few to useful tips that will help you to close more sales:
Create More Sales Opportunities: Keep in touch with your past customers and try to retain them. Call them up to just say a casual “Hi” or send them thank you cards. Attract new customers. Do not miss a single opportunity of getting in touch with your prospects. This will enable you to generate more leads, increase sales opportunities and enjoy a lot more closures.
Build Trust: Earning the trust of the customer is an essential element of a successful sale. People usually prefer to purchase from a store or person whom they trust. You may win the trust of the customer by making him believe that you totally understand his requirements. Also, following some trust-building actions, such as reaching on time, returning calls, addressing concerns, following up and keeping to your commitments can help you win the trust of your clients and enjoy high closure rates.
Handle Objections: Think of every possible objection that your client might have and prepare in advance to handle them. Most of the times, objections are not an absolute “No”, they are simple doubts and questions asked by the prospect before making a purchase. Going well-prepared will enable you to provide convincing responses for the objections. This will create a positive impression on the prospect and improve your chances of closing the sale.
Give a Good Reason to Buy: Give a really good reason to the prospect for buying your product. Help him focus on the benefits of the product. Explain to him how your product can provide a solution for overcoming his problems.
To know more about sales closing techniques, visit salescoach.us. The Sales Coaching Institute is a renowned sales training institute that offers customized training programs to improve the performance of sales professionals.
 
Source : businessfinanceplanet.info

Grocery startup PepperTap shut down after a year and a half in business

 

Here's the founder's view on what went wrong...

The last year and a half have been nothing short of a thrilling rollercoaster ride, with ups and downs in equal measure for us at PepperTap.
Rewind to sunny September 2014, in Galleria market in Gurgaon. The coffee shops here were the conference rooms in which I pitched what was just an idea then, to potential team members. And what an idea we thought it was, simple as it comes – we were going to revolutionize grocery shopping. No more queues, no more parking hassles, no more bickering with sabzi-wallahs. We would bring the existing inventory of local stores online to our app and then deliver customer orders through our super-optimal, well-trained delivery fleet for a minimal charge.
Fast forward one year, our diverse team of highly intelligent and ambitious individuals was racking up the orders in 17 cities all over the country – by October 2015, PepperTap was one of the top 3 grocery delivery services in India with an average of 20,000 orders delivered daily. We were the only business in town to be operating on a 100% inventory-less model.
Customers seemed to be loving it – the app was easy to use and we had great introductory discounts and sales. Local stores that were live on our platform were thrilled – we were improving their sales by an average of 30-40%. With our mobile-first approach, geographic expansion was fairly easy – we could go wherever the smartphone went.
The momentum at the top was intoxicating.
There was just one problem. The integration of our app with our partner stores was not great. In the race to pepper the whole country with PepperTap, we had brought too many stores online far too quickly. Our customers were, at times, unable to see the entire selection of items from a store and sometimes even essential items were missing from the catalogue visible to them. This was not an impossible problem and we set out to fix it right away. We had to convince the smaller of these stores to adopt electronic inventory management and billing systems. For the bigger chains and hypermarkets, we needed to take the data generated by their systems and plug it into ours. To give our customers up-to-date prices and availability, this needed to happen, at the very least, thrice a day.
And then, there came another problem. To keep enticing customers to buy from our platform, we were spending a lot of time and energy to devise clever sales and discount schemes. In a world where everything for sale through an app (think electronics, taxis, food) is synonymous with vastly cheaper prices than physical stores, this exercise often simply resulted in higher outright discounts with every passing week. This was not hugely problematic in itself – we had money in the bank and investors were on board with this plan. After all, we were in it for the long-haul and this was the way to build a loyal customer base by showcasing the quality of our service, and getting them to adopt it as a way of life. We told ourselves that the convenience we would bring to PepperTap loyalists would become of such great value eventually, that these discounts were simply a cost of doing business while we perfected our processes.
And then a third problem started to rear it’s head. We were in it for the “long-haul”. This meant we needed to constantly build buffer capacity in our logistics and operations teams. If we were going to stick to our 2 hour delivery promise (which was rapidly becoming a key differentiator in the markets for us), we needed to build spare capacity in every one of the 17 cities in which we were present. Compounded with the necessity for discounts, this meant that the cash we were burning on every single order was increasing rather quickly with no immediate end in sight. To us, this too was not insurmountable. PepperTap was born to be a logistics company – the one thing we could call our core competency was optimisation of delivery fleets, routes and general logistics. We just needed to revisit some of the basics of the business, this time with a stronger technology lens, and set the wheels in motion.
The most logical thing to do to solve all three of these problems simultaneously, was to halt operations in some cities. We decided on this list by looking at the size of our customer base in each city, and the pain we would cause to all stakeholders by shutting them down. Relatively new cities with a small customer base were selected for closure.
The impact of this move on the business, was profound. With some focussed work and really solid initiatives, we managed to increase the value of our average sale twice over and our retention rate (how often the same customer transacts on the app in a given period of time) soared 400%. We were finally beginning to build value and loyalty – the cornerstones of a sustainable business. We were still financing orders and discounts with capital but now this was a more concentrated burn with a clear goal, timeline and geography in mind. However the timeline and the path to profitability was looking long (very long in fact) and arduous.
The harshness of a pessimistic funding environment globally also started creeping in; and as the increasingly inclement investment climate began to become obvious, we found ourselves at the toughest node in the decision tree yet. Losing cash on every order (no matter how small or how controlled or how goal-oriented the burn) meant one day we will run out of cash – perhaps we could slow down the process but mathematically speaking, this was a certainty. We couldn’t shake off the feeling that we were walking (not racing like some other companies) towards the edge of a cliff hoping that things will get better before we reach the abyss.
At this point, we were forced to ask ourselves whether our continuing to operate in the grocery delivery space was not, in fact, doing a massive disservice to our current investors and employees. Because the unique challenges of this business are not solvable in the short term and certainly not solvable without massive injections of capital, we would have to confront this issue sooner or later.
We decided that sooner (read while preserving a large amount of the capital we had raised) was better than later (on the way down to the bottom of that abyss we talked about earlier). If anything, having a large chunk of equity capital from our last round still sitting in the bank made this decision infinitely harder. Had we tried everything? Were we convinced that this was not the space for us? Was hyper-local commerce finished as a sector? The answer to all these questions was a resounding “No.”. But let us be clear about one thing, we haven’t taken the task we set out to do in the late summer of 2014 to its rightful culmination in the limited time that we have had. And that’s the simple truth.
There are many lessons we have learnt from this journey but one that I would like to focus on in particular. Because our training and background was in running point-to-point logistics, it was clear to us from our expansion days at PepperTap that as we forayed into smaller cities, delivery networks got more fragmented and lethargic. This needed to be researched more and understood better. We found that while tiers 2 and 3 of Indian cities are being served to some extent by new-world logistics providers doing cool things like one-day shipping, there was a whole slew of tier 3.5+ cities which are connected to the world of ecommerce but, in simple terms, have to sometimes wait up to 30 days to receive their orders.
This was exciting – with our expertise in running logistics at Nuvo Ex, we knew how to get ecommerce orders to the closest hub quite easily. Having spent the last year at PepperTap developing and testing technology to efficiently run last-mile delivery networks, we realised we already have the tools to cut these delivery times significantly. We began to test some of these ideas at Nuvo earlier this year and the results were exciting enough for us to pitch to our existing investors as an alternative way to use the capital we have already raised. Could this be a new focus worthy of all the things we have accomplished at PepperTap? The answer to this question for us was a clear “Yes.”.
The journey so far has left us deeply humbled. But before we take our faculties in this new but related direction, I want to take some time to say our thank yous. I want to thank our investors for giving us the opportunity to create and run PepperTap and for their continued support in these new times. I want to thank our competitors – you have been more than worthy adversaries-in-commerce and I will eagerly follow your progress in the grocery consumer business. Most of all, I want to thank the PepperTap family. The family that stuck together through thick and thin to make 37,000 orders a day possible in less than nine months since inception; the family that shared my vision from those sunny Galleria afternoons and didn’t hesitate to chastise me when I was out of order.  
There is one apology that I must make before I conclude this piece, and this is to the customers of PepperTap. It is you who made this journey possible and I’m sorry for not being able to see this through to the end. You made it clear that the service we provided was valuable, perhaps a little before it’s time, but valuable nonetheless. We will miss the reviews and criticisms – some that emboldened us, some that made us laugh and some that made us cry.
And so we transition to this new project at hand. The PepperTap family marches on with learnings from our mistakes and from the successes that we have had, to work on a new problem – which we believe we have all the necessary tools to solve for good. To ourselves, to the friends whom we have to leave behind, and to all other stakeholders, we make this commitment: we will work tirelessly, without rest, shedding our sweat and tears if we must, until we have cracked this new problem that we have chosen.

We must, as we owe it to the people who have supported us throughout our journey.

Source : peppertap.com

What factors considered while doing Online Prepaid Mobile Recharge Services in India

While using many online recharge services found that following functionality should be provided. So that user experience should get easier.

1. Do not ask me for operator and circle details. Get it from my mobile no.
2. By default take me to details page of my home state. Track my IP address to get my home state. A lot of travel sites are doing this very well.
3. Do not ask me to register. You have my mobile no. and you can always send me a validation code through SMS as a password. Even travel sites give an “i am in a hurry” option for one time users. You should provide me some value add on to register.
4. Keep all the details and information of every recharge available. You must realise that people in India normally use internet for information and research. Mobile recharge is a standard product like Railway tickets and stock trading so the more info you give the better community you will be able to develop around it. You need to develop a value differentiator and the user must be able to notice it.
5. And also i don’t think it is good to charge anything extra above the MRP when you are already earning good commission. In fact, how about discounts as a differentiator?
6. Our govt. is offering open API of AdharCard(UID) details it should be use for user validation instead of using the registration of user individually 

Of course not to mention that if telecom operators start maintaining their sites for proper recharge facility then users would never have to look anywhere else. Also the telecom operators would be saving a lot in the commission they pay to resellers even after discounting the payment gateway commission.
I have tried Vodafone, Airtel, Reliance and Idea’s website for Online prepaid recharge and must admit, only Idea lived upto my expectations. Idea has tied up with Billdesk.com for billing.
Airtel only allows Credit Card payments that too through Mchek and the Interface is the same as the one they provide on Mobile. The interface is too small (visually) for web (that too is facing some problem and is down for now).
Reliance provides link to some outdated pages of some banks. They still refer Axis Bank as UTI Bank. My personal experience says Reliance ADAG is the lamest company in terms of web technology whether it is Reliance Money or Reliance Communication.
Also the telecom operators should tie up with all banks and allow debit card payments. The no. of internet using prepaid customers who own a debit card is really huge, almost all the college students in India and by giving even a 1% discount to such audience one can easily attract a huge user base as these users are very value conscious.
What’s your opinion? please mention in comment section.