Archive for 'Business Models'
By Rajesh Setty on Mon 03 Dec 2007, 2:14 PM - 3 Comments
When I was a working as a consultant (about ten years ago), I used to travel a LOT. Sometimes it would make me feel that I was living in the airports.
My business travel has picked up in the last two months (within and outside the country) but not to the extent of what it was during the consulting days. In these two months, I have noticed that we throw away a lot of food on the planes. Today morning, Southwest folks gave me a packet of food. I didn’t know what was inside. When I opened it, there were three things:
1. Some biscuit sticks with cheese (which I gladly ate)
2. Some thin crisps (I don’t eat chips that much so I didn’t open the packet)
3. A Salami stick (I am a vegetarian so skipped that)
Of course, the stewardess threw away two of the unopened items into trash. It hurts me as I know that there are millions of people out there without proper food and we are throwing away food like nobody’s business.
Here is an idea (hopefully somebody in the airline industry is reading this):
How about taking a recycling bag just before you take the trash bag and request people to deposit food items that they have not opened for recycling. The airlines can then determine whether to recycle those food packets are treat this as a donation and send it to people that need it most.
What do you all think?
Posted under Business Models.
By Rajesh Setty on Mon 03 Dec 2007, 2:11 PM - 2 Comments
Sounds like an oxymoron but it’s not.
Southwest Airlines may have bee the first airline to do away with seat numbers. So they operated like a bus. You were assigned a group (A, B or C) depending on when you checked in. If you wanted good seats, you check-in early so t Ouhat you are in group A. It was that simple.
Recently, they made one more change. Within the group, you are now assigned a number 1-30 or 1-60 and that indicates your standing position in the queue to get into the airplane. It is a big and interesting change.
My first experience on this new scheme was a few weeks ago. I guess it was the first experience for many people. So there was some chaos in the Southwest counter at the Chicago airport. We were chatting about the new scheme with a Southwest person and he calmly responded “It is a big change and we know that it will take a few months before people get used to it. We are OK with that”
My $.02:
1. Changing the rules of the game: Hat’s off to Southwest for changing the rules of the game – not once but twice. One is to change the rules and other is to show brilliance in executing on that change. They are good at doing both.
2. Understanding that change takes time: From the response of the Southwest person on the counter, it was clear that Southwest knows this. Most people don’t. Just because they think something is a good idea, they have a tendency to believe that everyone will think so.
3. To keep costs low, push the costs somewhere else: Today morning, I was boarding a Southwest plane coming to Chicago again. My flight was at 6.50am and we started boarding at 6.34am. The flight took off at 6.50am. One of the reasons (I think) this was possible was because the cost of maintaining the discipline was moved to the passengers.
4. Creating bigger barriers to entry: This was an example of a move where Southwest is changing the way they do business with their customers. They are doing this in the way customers feel that is “for their benefit”. Those that want to get in early in the plane HAVE to check-in earlier than others in the same plane. This means that more people will check-in online. Checking-in online is no longer a convenience. It’s a game. If you want to win, you go first. What is interesting is, whether someone wins or not, Southwest will win as more people will check-in online. Think about it, you can check-in online most other carriers but you do that for convenience. Here you do it for more than convenience. If other carriers have to catch up, they have to do more than just advertise it, they have to change their business model. Southwest is simply creating bigger barriers for other carriers to get in.
Question for you:
At your work, what rules are you taking for granted? Which of those rules are you willing to re-define in the marketplace to gain a superior competitive advantage?
Posted under Business Models.
By Rajesh Setty on Tue 13 Nov 2007, 10:56 PM - 2 Comments
Yesterday, I had to go to Los Angeles for a day trip. I parked my car at Fast Track Airport Parking near Oakland Airport. This was a private parking lot where there were two options to park (covered at $12.20 and uncovered at $11.20 per day). I picked the covered spot and as I was getting down my car, I saw that one of the airport shuttles parked right behind me. The driver asked me to hop in and gave me a card where my parking lot # (E-40) was printed.
All I could say was “Great Service”
When I returned that evening, the shuttle driver asked me for that parking card and took me exactly to the spot where I had parked.
Again, all I could say was “Great Service”
When I had to pay to the cashier, I got a bill for $16.20. The extra money was various taxes and surcharges. About a 30% markup on the published prices.
All I could say was “I wish I had read the fine print…”
It’s really not about four dollars or the 30% markup. The parking lot had superior customer service and I would have gladly paid a few dollars more for that service. Paying the bill is the FINAL thing a customer will do and a negative surprise (because of the fine print) there will ruin all the goodwill you have built with great customer service.
Posted under Business Models.
By Rajesh Setty on Sun 14 Oct 2007, 7:08 PM - 5 Comments
Disclaimer: I am not involved in selling scented candles nor do I know anyone that is involved in that business. I picked this example so that we can brainstorm the concept of “walking the extra-mile”
Scenario: Lisa is an entrepreneur who has just set-up a business of manufacturing and selling scented candles. She approaches you for some help with strategy. Specifically, she wanted to get a website for her business as many of her friends told her that she needed a website.
Your project: Walk the extra mile and provide value WAY greater than what Lisa is expecting
How can you participate: First, while contributions are welcome on the blog, you don’t HAVE to contribute to participate in this project. You can work on this exercise all by yourself or team up with a few friends or colleagues.
Second, if you are kind enough to contribute, please do so by including your ideas in the comments section. Please include your website or some contact information.
Third, assume that offering to design a REALLY good website is a commodity offering and does not constitute walking the extra mile.
Opening Thoughts or Points to Ponder
Here are some initial ideas for you to consider
1. Extending the Value Chain
One reason why people buy scented candles is to give them as gifts. Knowing this, you can do one or more of the following:
1.1 Sell custom-designed greeting cards that will go along with the candles
1.2 Sell wooden candle stands
1.3 Sell beautifully designed glass candle holders
1.4 How about providing a service where Lisa could gift-wrap and ship candles along with a greeting card as a package?
2. Expand Distribution Outlets
2.1 Could Lisa sell these candles on eBay?
2.2 How about other outlets – Yahoo! Store, Amazon etc.?
2.3 What other retail outlets can Lisa target (May beTarget, Macys, Michaels, Ross)?
3. Co-marketing arrangements
Who else can sell these candles along with their products? Here are some of them:
3.1 Gift shops
3.2 Stores selling aromatherapy products
4. Explore marketing options
4.1 Newsletter?
4.2 Blog?
4.3 Participate in newsgroups or start one?
4.4 Use Ning to create social networking for candle lovers
4.5 Create a candle-lover group in Facebook?
Rest is up to you. Have a great week ahead!
Posted under Business Models.
By Rajesh Setty on Mon 08 Oct 2007, 9:42 PM - Leave Comment
Today we celebrate Columbus Day in the US.
Now what has All About Steak got to do with Columbus?
On a lighter note, both are about discovery.
Columbus set out to find something but really found something else. In fact, he found something WAY bigger than what he originally set out to find. The point he had no idea that there was something like America that existed on this planet – so in his imagination there was no way he could have mapped out a path to find America.
If he knew that America existed and he was looking for a path to find it, it would have been a SEARCH problem.
Since he didn’t know that America existed, he was really on a DISCOVERY path.
One of my portfolio companies Suggestica acquired an Isreali company called RawSugar that had an interesting technology in the search (rather discovery) space. With that acquisition, we started creating “vertical discovery engines” in a number of verticals (follow the Suggestica story in an article published in the latest issue of Business Development Outlook)
You can see an example of a discovery engine at http://www.allaboutsteak.com. This is a discovery engine for steak related content. In this case, as the content in the site increases, the power of the site increases. Please try searching for “recipes” and you will see about 1000 search results. On the left column, you will see choices to help you refine the search. You can pick one – let’s say “flank steak” and the search results are narrowed – now they are all related to “flank steak recipes”. The left column now dynamically changed to suggest more choices. You will see choices like “asparagus” and “pineapple juice” – this is the discovery part – you may not have known that there are recipes that have flank steak and asparagus. Search engines cannot do this (well) – only discovery engines can. We have file for three patents internationally in the “faceted search” space.
We at Suggestica believe that many a times people act like Columbus on the web. They are on an exploration and they love to discover new things. We want to provide them the tools to explore. We started with steaks and we plan to launch a few more verticals before the end of the year.
Have a great week ahead!
–
PS: The PDF version of the Suggestica Story is here:
Suggestica Story in BDO Magazine (PDF download)
Posted under Business Models.
By Rajesh Setty on Sun 07 Oct 2007, 8:33 PM - 1 Comment
iPolipo is one the twelve companies presenting in the SIIA OnDemand event this November. Here is the link:
iPolipo presenting at SIIA OnDemand – Nov 2007
iPolipo helps making scheduling simpler. In simple terms, if you are a subscriber of iPolipo, you can selectively and securely publish your available time slots in the form of a URL. The URL can be sent via email or posted on an extranet or simply it can become part of your email signature. You have your phone number, email address and now (if you want) you can provide access to your available time slots right there.
We have more exciting news to share by the end of this month.
Have a great week ahead.
Posted under Announcement, Business Models.
By Rajesh Setty on Sun 07 Oct 2007, 8:20 PM - 1 Comment
This issue of Business Development Outlook magazine features a story of Suggestica. This is behind-the-scenes story covering what really happened until now in the life of Suggestica.
You will see how it all began and watch the journey as we morphed our strategy based on market feedback (actually, we were forced to morph our strategy) and where we are headed now.
Business Development Outlook: Discovering Trusted and Relevant Content on the Web – The Story of Suggestica
BTW, I have also included some lessons learnt (so far)
Have a great week ahead.
Posted under Announcement, Business Models.
By Rajesh Setty on Sat 01 Sep 2007, 3:43 PM - 1 Comment
Last week I was at Kansas City and I stayed at Hamptons Inn. The stay was great. The next day morning I had an early morning meeting and I checked out of the hotel. Right at the check out counter was a set of “breakfast bags to go”. Each bag had a muffin, cereal bar, an apple and a bottle of water.
I saw at least two other people before me picking up a bag for the road. I picked up one breakfast too. I was happy that I didn’t have to skip breakfast.
Sometimes, you really don’t have to work very hard to walk the extra mile. A small act of thoughtfulness will do.
Posted under Business Models.
By Rajesh Setty on Tue 07 Aug 2007, 1:20 AM - 2 Comments
This is the story of Bob.
Bob is a prisoner at a maximum security prison. He does not like it there. He will do anything and everything to get back his freedom. He has spent a number of years in this prison and he is sick of it.
One fine day, Bob gets his freedom. He is out of the maximum security prison. On that night, Bob slept well. He finally had his freedom.
Next day, when he woke up, he found something was different. Bob was in a small room. It seemed like a prison cell. He could not believe it. The room was locked. He pinched himself and found that it was not fiction. He really was in prison. He saw that the prison had his own name “Bob’s Prison”.
It was really scary. Bob has moved from a maximum security prison into his own prison.
The above was a fictional story. However, I see that it is easy for a first-time entrepreneur to fall into a similar trap. This can happen especially when the first-time entrepreneur thinks about starting a company JUST BECAUSE he wants “freedom”. If not done right, the first-time entrepreneur can escape from a “prison” to get captured by himself in his “own prison”.
Posted under Business Models, Main Page.
By Rajesh Setty on Thu 19 Jul 2007, 6:27 PM - 4 Comments
Here is a quote from the article in Silicon India
“According to the sources, there is a move among
the BPO and IT companies to get their onsite and offshore employee to
work for 50 hours a week, instead of 40 now”
Background: Most Indian software companies depend on offshore projects. So the billing is dollars. The pay is in Rupees. When the rupee starts appreciating like crazy, the companies are caught off guard as the margins start eroding. They can’t reduce the salaries of employees without risking mass exodus. So they have to think of “innovative”ideas.
My point: This is a tough problem to handle. There needs to be fundamental shift in the way work is viewed. A shift from “hourly” rate to “value” rate. For God’s sake, we are supposed to be “knowledge workers” so isn’t the measure really the “value we pack in an hour” that counts?
What more “value” can a disgruntled employee add in the additional 10 hours per week.
On a lighter note, are companies thinking that techies are not even working 50 hours per week?
Posted under Business Models, Main Page.
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