A new firm selling a new integrated HR tool was asked “who is your competition”? They said “no one”. What they really meant was – there’s no equivalent tool in the market that has the features we are offering. They have impressive credentials and admirable track record, but probably they do not understand what competition means. Contrast this to the Coke CEO’s statement that they view Nokia as competition. Why Nokia? Because Coke is fighting for a share of the teenager’s wallet, and Nokia is their biggest threat, fighting for a large piece of the same wallet.
Such thinking as Coke’s leads to innovation. This becomes a completely new way to think. So my first rule on thinking is:
1. Think customer and think of the whole customer, not just as a consumer of your product.
And when we do this, understand your customer is a human being – this means your customer has moods and emotions, has aspirations, and is of course, not always rational! It also means your customer’s needs change with time.
IT professionals in Bangalore may have heard of Career Net. They are a bunch of youngsters who do focused recruitment for young technical people. How did they begin? First they focused only on campus recruitment – they used to give free career advice to final year students in the best colleges in the country. So their recommendations on which job to choose carried a lot of weight, and trust was established.
They kept in touch with the students, and five years later, as you can imagine, these young graduates had five years’ experience. At this moment, if they look for a job change, who do they go to? Career Net, of course. Career Net, thus built and possessed the most impressive and coveted engineers in the land in their contacts list. And it was a qualified list, one built on years of trust.
That leads us to our second rule on thinking:
2. Thinking in Time and Space – imagine what happens to your customer, or your system, in the future.
When you think in time, you understand that your customer grows in time, and needs change, too!
The “free” advice that Career Net provided led to interesting possibilities. That leads us our next rule:
3. Think Ideality – Ideally, what does any customer want? Any customer ideally wants “free, perfect, and now”. Now this sounds impossible? That’s why it is called ideal. But it’s not impossible. Imagine the free or almost for free services you enjoy. Google of course comes to mind, but they are not the only example. The newspaper you enjoy every morning comes for a pittance of its real cost, so do the 150 channels on your TV – thus you do have almost for free examples from the non-internet world also. How do they achieve giving something free? They changed the perspective of who is the customer. You think you are their customer, but they are being paid by someone else. Are you important? Yes, of course you are important – without you reading the newspaper, or using Google, they will not make money. Similarly, Career Net, made their money from the companies they helped recruit from campus, and not from the campus students.
There is another example from a different sector. At Mysore, 140km from Bangalore, you will find an organization called Rudsat. They teach self-entrepreneurship to unemployed youth in the age group 18 to 45. The students receive free lessons, free boarding and lodging for upto 45 days, and then they are ready to start their own business. This model is in existence now for almost 2 decades, and they have 23 institutions now, in 14 states. They have trained more than a 100,000 youth, with 69% success rate. It is funded 20% by the Dharmasthala Trust, but the other 80% comes from Syndicate Bank and Canara Bank. Now is it all charity? Of course not. Where do you think the trained youth will take the loans from, after the training? So these banks have created a new market that did not exist! And you’d believe this when you hear from them their repayment default rates are marginal, compared to the normal segment that did not have this relationship with Rudsat. “Free” does make sense! This leads us to our next rule:
4. Think “who else” – that thinking creates new market segments that did not exist.
In creating such new markets, ITC probably is the most innovative. Typically, when thinking of market for consumer products, you’d ignore the rural Indian base, specially poor farmers who toil hard with no savings. ITC reached out to these farmers directly, and gave them fairer prices for their produce. Thus farmers made more money. With the resultant savings, they could now buy consumer goods. Guess where they buy it from? Of course, ITC is there to sell it to them. Notice how ITC created a market where none seemed possible.
5. Think “what else” – How many of you have not bought a Moser Baer movie for just Rs. 39? Notice how Moser Baer has so comprehensively driven the pirates out of business. Why did they do it? Of course, they have an asset – they are in the storage business and they want to sell more discs – so they created a new market at attractive prices – Again a model of win-win-win, where the seller, the buyer, and the content providers – all benefit. The only losers are the pirates!
There are free under-leveraged “resources” available all around us – the question is: do we think of utilizing these? Take Rail Net – the railway communication network – it existed before we used mobile phones, and it has access to anywhere our railways have reach – that means almost every village in the country. Won’t they have free bandwidth for other stuff? NPTEL figured that out. NPTEL is a government project creating free learning content for anyone to access, and Rail Net bandwidth helps in giving universal access. You’d think these are examples in hindsight, so let’s think what else is freely available?
Well, now think of post offices, or State Bank of India (SBI). They have reach in almost every village and small town in the country. Today, they are even connected! Are they under-leveraged? Of course they are. How can someone leverage on them?
The post offices, already squeezed by private courier companies on one side and threatened by mobile and SMS culture on the other, are probably looking out anyway to redefine their purpose.
Are you thinking these are not technical examples? OK, let me suggest one example from Samsung. BOM cost reduction is a key element in the consumer electronics industry. One technique they use is to just remove a component, and then tell the designers to manage without it. Usually, there’s available redundant power in the remaining processors or components, so the same functionality can be achieved with less.
Again in “what else” thinking, see what Infosys has done. First they built the best infrastructure for an Indian company, and their office became a destination for every visiting Head of State or Prime Minister. Now they have an excellent training campus in Mysore, and see what happens. It hosts all kinds of meetings including Ted.com and ones involving Sonia Gandhi, and even hosts Ranji Trophy. Imagine the kind of branding leverage it generates.
A beautiful example of “what else” is how Apple gives you location information on the iPhone, without the GPS. See how they have done more with less. There’s still opportunity to innovate further. When we are lost and call someone for directions, usually we don’t know where we are. Imagine how easy it gets if the directing party knew the exact location of the lost guy!
What else can the television do? We know it can be used to access the internet, but does it? BSNL provides both internet as well TV access. Why can’t the TV reach the internet? We know there are challenges, but that’s what you need to figure. The key in these is to think consumer, and think applications. Imagine a rail or flight booking application straight from the TV, and paid for through the mobile? And all being achieved using the mobile as your remote control to the TV. Thinking of TV+internet now gives other ideas – We surf the internet based on content, not on IP address. Why can’t we search the TV based on content? I want to watch a Jo Lo movie, give me a choice of channels running such movies, and of course, with ratings and feedback downloaded from the internet. If none is running right now, let me know when one will run, or download one for me, at a price, of course. Or just download clips from youtube. We are no longer captives to the programming strategies of our TV channels.
This leads us to the next rule: “Think Connections” – which I will discuss in the next blog as I continue this post forward.