Category Archives: Economy & Business

How to train today for tomorrow’s IT skills

Simplilearn‘s session on skilling the IT workforce was held on 2 Feb in Bangalore in association with Economic Times. There were L&D leaders, HR practitioners, and company executives in the audience. It started with Alok Goyal, who until recently was senior partner at Helion, a VC firm, making an opening note. He painted a good picture of the future of skills required for IT referring to it modestly as defining the problem rather than solving the problem. Driverless cars are coming sooner than we expected; old human jobs getting replaced by machines are happening at a quicker pace. There is a farm in Japan completely run by robots, which produces quintillions of produce. Intuitive Surgical has robots doing surgery. Re-skilling is a necessity.

Takeaways: General-purpose robots like Baxter can learn by watching humans. Boston Dynamics produces robots to take on human tasks. Briggo has no humans and can deliver personalized coffee at any chain by sharing preferences of you. Emily Howell, a computer program can produce music [Musically inclined, intrepid soul should read Computer Models of Musical Creativity written in 2005]. European Commission’s Human Brain project has a lot of research in regard to understanding brain. Quill could build out narratives from data and charts, which is the bread and butter of so many KPO’s. Just like we no longer need as many horses up until 1950’s, we will not as many humans soon! World Economic Forum’s 2016 Future of Jobs (Warning: 12-page pdf) predicts a loss of 7m jobs by 2020 and an increase of 2m resulting in a net loss of 5m. During previous industrial revolutions, it often took decades to build the training systems and labour market institutions needed to develop major new skill sets on a large scale. Given the upcoming pace and scale of disruption brought about by the Fourth Industrial Revolution led by convergence of artificial intelligence and machine learning, robotics, nanotechnology, 3D printing and genetics and biotechnology, however, this is simply not be an option. Without targeted action today to manage the near-term transition and build a workforce with futureproof skills, governments will have to cope with ever-growing unemployment and inequality, and businesses with a shrinking consumer base. IT services companies have reduced hiring in 2015 in response to increased automation – Cognizant hired only 10,200 which is 74.6% less employees in 2015 than previous years, while HCL Technologies hired 3465, which is 71% less compared to 2014.

A panel discussion around how organizations can work towards building talent pools to meet the challenges brought by the changing wave of technology trends was moderated by Vinod Mahanta, Sr. Editor, ET. Nishant Rao (Global COO, Freshdesk, ex-MD Linkedin India) weighed in with his layered approach (5 E’s), first three of which are visible parts and the last two are hidden:

  1. Classical education : Lecture driven either in-class or elearning over web/mobile
  2. Experiential : By doing things, role-playing in a contrived environment or in real-world
  3. Exposure: Different ideas and types of people
  4. Environment : Manager, mentor, buddy program
  5. Ego : Self-driven learning.

Ashutosh Vaidya, Chief Delivery & Operations Officer at Dell Services took a business approach boasting 4-times revenue generated per employee compared with other IT services organizations. He emphasized customer-driven approach to training. While Nishant opined unstructured training to spur creativity, ambiguity (which has made Freshdesk get 70k customers, 1/2B revenue with the efforts of 600 employees, Hariraj Vijayakumar, Global Head, Learning and Development, Cognizant opined about methods with neuroscience underpinnings. Adults learn better, when the training is better; though they feel that they learned more, when taught consecutively, something referred to as massing effect. It’s an evolution for training materials too. CTS took 2 years to get it right. They started with just splitting the original material in contrived chunks. Slowly, the material evolved to be more effective. I have felt that I can connect things better and retain more, when learning over a period of time. The panel then discussed about lateral hiring vs training own personnel. It’s a delicate balance to tread. Alok was of the view that we should get outside professionals at all levels. Whereas the standard practice in several organizations, notably large services companies has been to get a large number of freshers (Unrelated to this concept, Hari mentioned that 20k freshers get inducted into CTS every month).

audience

Audience

We (yes, it was an interactive, small group) discussed about failure. Nishant having spent 20 years in the US talked about a societal change needed in India, where excellence is revered, but failure scorned at. There is a need to take constructive feedback sportingly in the company culture. During first 3 months at Mckinsey, Alok got so much feedback about his dress, presence etc, that he thought everything is wrong with himself! There needs to be an emphasis on learning agility among individuals. In the end, Simplilearn’s CEO Krishna Kumar summarized the panel discussion. I will end the post with technological drivers in next decade staring at us.

FutureTechDrivers

Economic Times coverage can be seen here.

Growth Hacking Malaysia featuring EasyTaxi Regional MD

I am on a week long vacation in Kuala Lumpur, but after getting to know about Growth Hacking Malaysia event on 2 Dec, I took a break from sight seeing to see startups in action.

Universiti LRT Station

Universiti LRT Station

I was in Kampung Baru doing jalan-jalan (stroll) of this modern village. I took LRT to Universiti and tried to book a app-hail a taxi using EasyTaxi with no success. Tried it with regular MyTeksi, failed; but finally succeeded with Executive Class on MyTeksi. The app is sleek showing me minute-by-minute, as the driver approaches me. An hour later, I’d meet the Managing Director of rival taxi service!

The organizer, Anna Rehermann introduced Easytaxi Regional Managing Director, Joon Chan. He started interactively by asking us what Growth Hacking meant. He elaborated them with examples. Growth hacking means getting users through various Channels – Adwords, poster, Facebook etc. You need to measure efficacy of them by say, Market research – call n ask user of the week. Depending on ROI from them, you put marketing money.

Joo Chan shows channel chart

Channel measurement chart

EasyTaxi began its Malaysia operations in May, 2013. In the beginning, you ask your friends. He took 20 friends to TGIF, got them to install the app and try it out.
Important point here is to go on till you exhaust channel. Pick all the cherries.
Easytaxi got sales done through its rival’s drivers! It’s true. MyTeksi did 10 times more transactions per day than EasyTaxi. So, he invited 1000’s of MyTeksi drivers for a nice buffet dinner and handed 4000 handouts to each with unique code to measure referral. The drivers handed them to their passengers after the trip. Discount and commission was his cost for this campaign, but gave a large no of new clients. They continued this till MyTeksi modified their driver agreement.

EasyKitty

EasyKitty

Another nice campaign was using 4k Hellokitty toys.  40 drivers everyday would hand it to those who ask it using hashtag #easykitty. First day, they had 500 requests, next day it was 4k, and after this it skyrocketed to 16k. As soon as an office girl put it on desk. it went viral. They got 18k users with 16k investment. They conquered building after building. An example: Just HP Tower emptied a quarter of its supplies.
It’s important to do campaign again. Make this a Weekly process. They experimented with Power user program, as other channels like FB became costlier. EasyTaxi has a Data science team for voucher. While they use EDM (Electronic Digital Marketing) channels, they tried novel ideas. Instead of using mailchimp, he used his personal email, WhatsApp with Malay, Chinese, Indian girl persona. In Vietnam, app and mobile internet doesn’t work, as people mostly call. Do, he used Predictive dialing effectively. EasyTaxi continues to execute underdog strategy. Keep in touch with the company on Facebook page, EasyTaxiMy and @myEasyTaxi.

Hijab2Go pitch

Hijab2Go pitch

After this, we had 3 startup presentations, who got nuggets of advice from the expert panel comprising: Warren Tan (CEO, VLT) @warrentan, Andrew Tan (Director, VLT) Linkedin profile, Zafrul Noordin (Founder @ Code Ar.my) Linkedin profile, Daniel Cerventus (Founder @ NextUpAsia) Linkedin profile@cerventus. The first one was Hijab2Go.

Tangi Vern, Linkedin profile presented his 2 week old startup’s journey. They have competition like fashionmalay. They have followed the following path:

Acquisition
Activation
Retention
Referral
Revenue

But, Activation has been poor. While they are able to get a lot of users. He wanted help on that. The experts suggested to put stall at Putrajaya targeting Malay auntie in Govt agency, who have a lot of time!

Expert panel

Expert panel

Put photo booth in campus and get conversation going. They asked him to figure out if it was just a marketplace or a brand as well. Also, do growth hacking with social media influencers like Miss Nina (??). [Note: If any of you discerning reader could enlighten me with these, please drop a comment of email me. Being really new in KL and in Malaysia, I am not aware of these.]

The second pitch was for a tutor software and marketplace by Sam Xiaong. He did not use a deck and enthusiastically explained his idea. Tutors incl music tutor and students find it hard to keep track of lesson missed, dues left. So, FindMytutor.com.my will provide a tool for the same. He is also looking for Copywriter, social media intern, designer, developer, so reach out to him.

Metofu pitch

Metofu pitch

The third pitch was Metofu – food for those who want to lose weight. He explained how he gets food from caterers and does lunch delivery. In the beginning, he was doing weekly, but the cost was high for customer, so he pivoted. His pitch was found ot be confusing by the experts. They asked him to develop nutrition food content in Malay. Have Facebook group of trainers.

At the end of 3 hours, we were wiser and most are looking forward to next month’s meeting.

Bangalore::Hack 2013 organized by Sequoia had Justdial sponsoring Web track

Sequoia Capital organized 24 hours’ hackathon in Bangalore to connect with developer eco-system in the following categories: mobile applications, web apps and systems and cloud infrastructure. The web apps category was sponsored by Justdial, a Sequoia portfolio company, my employer. Kadam Jeet Jain (Linkedin, @kaddyiitr), an IIT Roorkee graduate, head of engineering, mygola and Samyak Jain (Linkedin, @saammybwoy) who formed a part of team, called Seinfeldfans, won the web track. Their product is called IMDBGraph, Facebook Graph search-like interface for IMDB.

mygol engineers

Sienfiledfans hard at work

Sandipan, Justdial presenting Web track winners

Sandipan, Justdial presenting Web track winners

Sandipan Chattopadhyay, CTO Justdial presented Web track award to Seinfieldfans for their work. Many many congrats to the participants and winners!

AdChemy is helping retailers upload their entire inventory of millions of products to Google Shopping

Google Product ads got launched in India as well!

Organized foodservice industry

Foodservice includes the following formats.

  1. dhabas
  2. restaurants
  3. kiosks
  4. express counters
  5. food stalls
  6. ice-cream parlours
  7. fast-food joints
  8. casual and fine dines
  9. juice bars

The organized players are the following and their presence is shown in the table below:

Retailer No of outlets No of cities
Haldiram 20 1
Yum! Restaurants India 507 50
Barista 310+ 26
Cafe Coffee Day 1350 185
Baskin Robbins 425 55
McDonalds – North 130 32
McDonalds – West 140 13
Costa Coffee 17 7
Domino’s 500 110
Mad Over Donuts 38 4
Nirula’s 72  
Speciality Restaurants 91 24
Subway 250+ 50+
Sagar Ratna 70+ 30+
Yo! China 50 14
Lite Bite Foods 65 7
Blue Foods 120+ 6+

QSR Revolution in India

While global biggies, like McDonalds, KFC, Subway have entered India in a big way, there have been desi startups, who jumped into the bandwagon as well. Global biggies have modified western menu to accommodate Indian palette – KFC selling vegetarian products, pizzasselling tandoori variants etc. I will cover the journey of Jumboking (Vada pav), Subway, Mast Kalandar, Faasos (next post) etc and lessons one can draw from them based on their own account at Startup Saturday Bangalore and Startup Summit 2013 Mumbai edition by Franchise India.

Jumboking

Jumboking Schezwan Cheese combo

Jumboking Schezwan Cheese combo

Dheeraj Gupta is a 2nd generation entrepreneur based in Mumbai, who set out to start a vada pav chain in 1998. He was inspired by Mcdonalds: Behind the arches book, esp how they started a new price point of burger. He made a visit to UK to learn the nuances of fast food, chain business. He stayed with a Burger Chain franchise owner during his stay and even worked in a Mcdonalds for 10 days – talk about dedication! The vada pav market, mostly unorganized is Rs.20Cr per day in Mumbai and Thane alone. That translates to 7,300 Cr per annum!! He priced it at Rs.5 against street food price of Rs.2. He signed up Bharat Petroleum, HP, IRCTC in 2007 for setting these at their premises. [If any reader has spotted them at these, please provide it’s address, photo in comment or email prasoon DOT kumar AT gmail DOT com]. Jumbo King has 38 outlets in Mumbai and Thane (20 self-owned and 18 franchises). This compared to 20,000 vada pav stalls is only about 2% marketshare of the business in Mumbai.

Mast Kalandar

Another great promising QSR is North Indian food serving joint, Mast Kalandar. Pallavi Gupta is co-founder and COO of the company. She worked in IT company as business analyst in Bangalore and abroad with long hours and would live on pizza. Her husband, Gaurav Jain was in sales function at IT company as well. They came up with an idea that even hot and piping paratha should come in a box. They started their first outlet in Bennarghatta Rd in 2004. Next outlet was started in Indiranagar. By 2008, they had 8 outlets and VC started showing interest. Post 1st round of funding chaos ensued and things did not go as planned. They were able to grow from 7 to 11 from that instead of the target of 30. By 2011, they had 25 branches, growing to 40 in 2012. As of July 2014, they have 47 branches in Bangalore, 7 branches in Chennai, 2 in Hyderabad and 5 in Pune.

Conclusion

Within the Rs 8000-crore organised eating out market in India, QSRs are witnessing the fastest growth of nearly 25% annually. Key reasons for this growth include a high number of nuclear families and urban migrant population, a growing preference for vegetarian food, especially, North Indian and a spike in the number of people “eating out”. We have seen Ammi’s biryani and Box8 (earlier Poncho) getting funded as well.

Rise of rural India

Rise of rural India

Neelkanth Mishra, a classmate of mine from DPS Bokaro and IIT, Kanpur opines on India’s rural growth story, provides some recipe for betterment as well in an Indian Express article – Rethinking Rural.

Rural roads, cellphones and electrification lead to better
productivity, phone penetration, electricity usage and vehicle ownership

He currently serves as India Equity Strategist for Credit Suisse. I have seen him being quoted in newspapers, TV channels many times earlier, but a great full article.

Offline Product Search Engine into Junglee

Amazon had forayed into India as online product comparison avatar, Junglee. Online shops had listed the product prices over there. Now, it has started showing offline shops for mobile and TV products in the following cities: Bangalore, Kolkata, New Delhi, Mumbai, Chennai, Hyderabad, Gurgaon. It just lists store addresses and phone number, but doesn’t show the availability or price.

Shops selling Samsung Phone in Mumbai

Shops selling Samsung Phone in Mumbai

It is an interesting route for world’s biggest marketplace Amazon and a different model as well. Amazon USA, UK etc have 2 models:

  1. An inventory-based model, where they sell, what they have in their warehouses.
  2. Additionally, it has a marketplace model, where they allow sellers to list their products in the marketplace and the website visitors can buy on the platform.

The latter is very successful in emerging markets esp BRICS (Brzil, Russia, India, China) as well as Korea, Indonesia etc.

The 3rd model, wherein a location-based price comparison sites show prices from offline stores near you is interesting one in country like India. As a first cut, Junglee Nerby aims to drive web users to make a call to the stores and drive footfalls. I can not find any monetization built into the product as yet.

Comparison of services

Portal Launch Year Products Cities Shops USP
Junglee by Amazon Feb 2012 (site launch). May 2013 Nearby Launch 2 categories, mobile and TV Bangalore, Kolkata, New Delhi, Mumbai, Chennai, Hyderabad, Gurgaon Handful Coming from Amazon
PriceBaba 2012 Electronic Items Mumbai, Thane, Navi Mumbai, New Delhi, Pune, Gurgaon, Noida 400 Stores are listed post personal visit by verification team
Wicfy 2011 Multiple Pune, Mumbai, Delhi, Bangalore and Kolkata Lots Patented iso-pricing technology and interesting retailer-crowdsourcing model

Competitive Landscape

500 Startups recently funded Pricebaba.Another player is Pune-based Wicfy, which takes crowd-sourcing model to find cheapest price for a product and had raised money from Eco System Ventures. Naaptol have an Android app listing prices of product from stores, which never expanded beyond Mumbai. MySmartPrice also lists products from e-retailers. A yet-to-be launched portal, IndiaOrders will launch with 60 stores of Mumbai showing their wares for online buying. It takes slightly different route of enabling a buyer to get the products delivered to their homes. Interesting twist here is that a buyer can go to the store for queries, refunds, exchanges as well. It is an interesting segment with increasing middle class of India, but getting constantly updated price from retailers is a challenge. IPO-bound Justdial had a portal called Quick Quotes in works, which they had announced in Feb, 2012. That got coverage from Medianama in Sep and other portals as well. But, that page has been taken off Justdial website since.

TastyKhana receives strategic investment from DeliveryHero

TastyKhanaDeliverHero

[Updated on 13 June] So, Tastykhana has announced on their blog about receiving 5m reportedly valued at 15-18m.

TastyKhana (website) is a food home delivery company having a presence in 6 cities across India. According to reliable sources, it has received strategic investment from either Global Founders Capital or directly from DeliveryHero, a European company having presence in 13 countries across 4 continents. DeliveryHero had raised 50m last year for global domination [Techcrunch news]. India will be their 14th country. Global Founders Capital is a joint VC fund by Samwer Brothers and ex-CEO of DeliveryHero Fabian Siegel having $194M in its warchest right now. As I pointed in the rear end of my blog post earlier, food home delivery is an increasing revenue generator for not just mom and pop food joints, but also fine dining like Speciality Group’s Mainland China, Mezzuna etc.

DeliveryHero

The journey of TastyKhana has been a long story of patience, conviction, determination, customer-focus, and pivoting like any start-ups. I had heard Shachin Bhardwaj speak at Startup Saturday Pune in Sep 2011. He had started TastyKhana during his tenure at Synygy in Aug, 2007. He quit his IT job within 3 months to focus on his start-up fulltime. For a year, they were experimenting before finding focus. So, in real sense TastyKhana started in Oct 2008. They had delivered food worth Rs. 3.5 Cr by Aug 2011 (8 Cr now) to more than 50,000 customers (now in 1.5 years it has doubled to 100,000). They had only 200 restaurants in Mumbai and Pune on-board at that time, which has swelled over 500 (348 in Pune, 108 in Mumbai) in Aug 2012 and then to 1000 in Pune, Mumbai, NCR (Delhi, Noida, Gurgaon) and Bangalore now Apr 2013 [Source: Restaurant Owner page]. They were receiving 5000 orders a month of an average ticket size Rs.700-800 in 2012. Shachin was able to get angel funding from one of his previous colleague, Chetan Shah to scale up. One of the learning he shared is to take funding in Lacs, not in Crores, so that you learn fiscal responsibility. Interestingly, TastyKhana was just 20 days away from bankruptcy during first 6 months’ of their existence, which is one of themes covered in an earlier blog post.They acquired Food On Wheels to get on-board 3-4 delivery boys, so that they could use own technology solutions to improve the operations. They focussed on solving the following problems of customer:

  1. Serve as aggregator of menus. No more do you need to keep paper menus stuffed in fridges, but have it online, when doing food order.
  2. A customer could use online payment options instead of just COD (Cash on Delivery).
  3. 3 channels to order available are: Online, mobile (using site at that time, now also mobile app) and phone (by calling TastyKhana helpline).
  4. Another convenience factor for a customer was increasing the radius of home delivery of a restaurant by paying a delivery fee, which the restaurant would normally not deliver. TastyKhana was able to achieve this because of its own delivery boys’ network in the city. The customer incurs cost according to delivery distance and order amount, e.g. if order is a small ticket-size and the location is far from restaurant, the charges are more.

For a restaurant owner, they had the following proposition:

  1. Zero overhead with great margins.
  2. Keep the bottom line low, as logistics is taken care of by TastyKhana. They only pay for orders, not for idle delivery boys’ entire time [I call it Operations as a Service, OAAS ala SAAS (Software as a Service)]
  3. Get alternate sales channel on TastyKhana website, phone line and also Facebook app for food ordering and reservation.
  4. In addition, there is valuable data, they get free statistics, feedback from customer on switching, churn ratio and spending capacity of the area’s customers.
  5. While dropping food orders of a restaurant, they are able to drop TastyKhana branded menu of other restaurants.

The technology differentiator has been built by CTO, Sheldon D’Souza and Senior Software Architect Pradeep Singh (First employee of the company).

  1. Focus on automation and scale
  2. Acceptance notification of food order from restaurant
  3. SMS to delivery boy

Once TastyKhana reached scale, they are able to deliver invaluable analytics like “Chinese food eating customers are spending more than Rs.1000/-“. This insight can help someone looking to start a restaurant.

Competition

It’s a crowded market for sure with Europe based Justeat (Jan 2011 investment into Hugryzone. Raised 41M afterwards), Foodpanda (launched June 2012 in India) and home-grown players like titbit, Deliverychef, Delivery, Bigbite etc. Some of these power local search engine like burrp (powered by JustEat) , while India’s leading local search engine forayed into food home delivery on its own. Most restaurants have a phone line for home delivery, while many take orders online and in mobile apps as well.

Deciphering restaurant bill post budget

[Update: 24/Apr/2013] Restaurants and hotels across India will remain shut on April 29 in response to a call by the Hotels and Restaurants Association of India (HRAI) to protest against the new service tax by the central government.

Eating at AC restaurants like Speciality Group‘s Mainland China etc got dearer – [ref: Dine and While], as they are increasing prices by 5-10%. The ‘Indian Restaurant Report 2012′ released by Franchise India last month estimated the current market of Indian restaurant industry at Rs 75,000 crore and forecast it to reach Rs 1,37,000 crore in 2015, growing 17 per cent a year. But the last two quarters have seen growth slowing down on account of cautious consumer sentiment, with brands such as Jubilant FoodWorks’ Domino’s Pizza and McDonald’s reporting lower same-store sales than last year.

Further to Revenue Department’s bringing such restaurant under Service Tax as of CBEC circular 2 years ago in Feb, 2011, the service tax was increased. According to new fare, the calculation needs to be done as follows:

Charges Final Cost
MEAL Rs. 5,000 Rs. 5,000.00
SERVICE CHARGE 10% on food bill Rs. 500.00
SERVICE TAX 4.95% on food cost + service charge Rs. 272.25
VAT 12.5% on food cost + service charge Rs. 687.50
Total Rs. 6,459.75
You pay a maximum tax of 29.19%

Service Charge

The levy is usually 5-10%, although there is no minimum or maximum. The restaurant can decide the rate as per a February 28, 2011 circular. The amount raised is to be shared among staff. For instance, Sea Lounge at the Taj Mahal Palace doesn’t levy a service charge. If Service Charge is included, you need not include tip. Many patrons overlook this and end up paying twice. So, it is nice of Barbeque Nation Andheri West to put up this notice.

No tip at BBQ Nation

BBQ Nation Service Charge, so no tip

Service Tax

All restaurants don’t necessarily show it on t he bill.

VAT, Cess and Charity

These are other components.

I am reproducing 2011 circular as it relates to restaurant:

1. Services provided by a restaurant

1.1

Restaurants provide a number of services normally in combination with the meal and/or beverage for a consolidated charge. These services relate to the use of restaurant space and furniture, air conditioning, well-trained waiters, linen, cutlery and crockery, music, live or otherwise, or a dance floor. The customer also has the benefit of personalized service by indicating his preference for certain ingredients e.g. salt, chilies, onion, garlic or oil. The extent and quality of services available in a restaurant is directly reflected in the margin charged over the direct costs. It is thus not uncommon to notice even packaged products being sold at prices far in excess of the MRP.

1.2

In certain restaurants the owners get into revenue-sharing arrangements with another person, who takes the responsibility of preparation of food, with his own materials and ingredients, while the owner takes responsibility for making the space available, its decoration, furniture, cutlery, crockery and music etc. The total bill, which is composite, is shared between the two parties in terms of the contract. Here the consideration for services provided by the restaurants is more clearly demarcated.

1.3

Another arrangement is whereby the restaurant separates a certain portion of the bill as service charge. This amount is meant to be shared amongst the staff who attend the customers. Though this amount is exclusively for the services it does not represent the full of value of all services rendered by the restaurants.

1.4

The new levy is directed at services provided by high-end restaurants that are air-conditioned and have license to serve liquor. Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations. It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided.

1.5

It is not necessary that the facility of air-conditioning is available round the year. If the facility is available at any time during the financial year the conditions for the levy shall be met.

1.6

The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or home delivery, as also goods sold at MRP.

Finance Minister has announced in his budget speech 70% abatement on this service, which is, inter-alia, meant to separate such portion of the bill as relates to the deemed sale of meals and beverages. The relevant notification will be issued when the levy is operationalized after the enactment of the Finance Bill.