Sunday 20 May 2012

Venture Lab 2012 - Final OAP Submitted.!!!

So finally my team met the timeline of Venture Lab Opportunity Analysis Project's final deadline of 19th May. I just checked the Venture Lab website and the deadline has been extended by 1 day i.e the new deadline is now 20th May. But, my team is relieved. We have submitted the final report of our Value Proposition Hypothesis Testing. It was a tough 15 days. My work at office was very demanding all these days and then face-to-face interviews with friends, asking friends to complete the survey, compiling the survey results, making final presentation, drafting final report and updating Venture Lab Blog for our team's activities, was at times too tough to handle. Somehow everything is now updated. In all this we had to change our business model based on relevant feedback from our prospective customers and partners. Here is our updated Business Model.

Business Model after Value Proposition Hypothesis Testing

The following is what we submitted as our Final OAP Project Report:-

The team started the OAP project by brainstorming for various ideas. We shortlisted a total for 3 ideas for final consideration based on preliminary idea analysis sessions. The team used to e-meet through Google Hangout. The idea generators were given the task to make a business model of their idea. The team then discussed the various aspects of the business model for each idea. Finally it was decided that my idea of "An online portal for buying and selling old used books" shall be taken for OAP.
Idea Hypothesis: In India, there are many people out there who are fond of reading books. However, not many of them are regular in reading books because the new books are costly. People are comfortable with reading old books (the ones already read by someone else). Our idea revolves around providing all such people who would like to read their favorite titles in 2nd hand or 'old used books', an online portal where they can order books. This is because, presently, people have limited option with some very rare old book stores within a city where they live. Our platform will also provide an opportunity to people who normally buy new books but would like to sell them after they have read them.
Experiments: To validate our idea with prospective customers, the team members went out talking to people around us. Pranay being a university undergrad student got to talk to a lot of students and they were very excited about this idea as academic books are costly and it would be great if they could buy old used book. They were also excited because old books came with useful notes in them. I, Vishal and Abhay talked to our colleagues and they gave mixed responses for Non-academic used books. Some people were fond of reading new books only while the others seemed excited at the option to have their favorite Titles at much cheaper prices in old used books.
To further test our hypothesis, we conducted this online survey (powered by GoogleDocs). The objective was to quantify the usefulness of the value that we are offering to the customers.
Further, to estimate the market size and growth rate of this industry, we did market research by going through the Government reports, Business Magazines and Market Surveys.
Experiment Results: For the survey, we got a total of 61 responses as on date. 77% of the respondents would like to read old used books. 69% of the respondents would like to buy old used books through an online portal. 65% of the respondents would like to sell the books that they have previously read. So, 53% of the customers who BUY Books Online would like to read ‘Used Books’ and Buy them through an Online Portal. 67 % of consumers who would like to read ‘used books’ will also like to buy them through an online portal. The detailed survey report is uploaded on Slideshare.
Second Hand Books constitute a major portion of the book retail market. The size of the Indian book retail industry is pegged at Rs. 3000 crore of which organized book retail constitutes only 7 %. The industry is expected to grow by approximately 15 % a year. Almost 50% of the orders come from the top eight cities and the remaining come from B & C class towns.
Important Advice from Customers: Since the idea is to sell used old books, some customers might be apprehensive about the quality of books. It would be better if the website shows 3-4 snapshots of the real book from all sides (and not only the thumbnail image of the Title as given by publisher). This will lead to improved user experience. The same has been added in our key activities in the business model.
Conclusion: Proposed ‘Value Proposition’ in our Business Model is correct and hence, there is no Change of Hypothesis. Customers are willing to take the solution that we planned to solve through our idea.
The industry is very big and unexplored. The expected growth rates are handsome and hence this is a good business opportunity. The potential of growth is also expected to increase with the increasing penetration of Internet in India. The team has thus decided to pursue this idea in OEP as well.
Here is our Final OAP Presentation:

Now that our OAP assignment is completed. We are very excited to start with the next assignment of Opportunity Execution Project (OEP). The course videos for the next segment have already been posted by Prof. Chuck. There is one hard news though. Our team mate Vishal has decided to quit the team and course now. Apparently, he is preparing his applications for higher studies and it will be tough for him to balance his job and applications along with this Venture Lab course. So, we are now 4 members for the OEP. The work load will now be more on every member. Let us see where we go from here. More OEP updates in the next post. Stay Connected...

Monday 14 May 2012

Venture Lab OAP: Value Proposition Hypothesis Testing

In the last post, I had written that my idea was finally selected for OAP. However, the idea did not seem to resonate well with my team-mate Vishal. He insisted that data collection for his idea will not be a problem as Prof. Chuck and his team could help us in gathering data from US markets. The team then decided that Vishal should contact Prof. Chuck and inquire if Prof. and his team could help us in gathering the data. Prof. Chuck in his response advised us that our team must consider moving to another idea if data collection is an issue in the business idea. With this, all the apprehensions were killed and the team finally unanimously agreed to pursue my Books idea as the project for OAP.
In the mean time when the above was happening, I created an Online Survey (powered by Google Docs) to test the Value Proposition Hypothesis in our Business Model. The aim was to collect as many as real user data for our survey. We wanted to see if the solution that we are offering was really valuable to our customers. Are they really facing the problem that we think we have a solution of..? The survey form is as shown below. (Please find some time to fill it :-)



Now, the huge task was to ask people to fill the survey. My team decided that each one of us will get at-least 10 of our friends to complete the survey. This is when I so much realized the power of Social Networks. I shared the form on my Facebook, Linkedin, Twitter, Google+ and now on this blog. Moreover, I requested (via chat on Google Talk) each of my friends who were online for the past 1 week to complete the survey. My efforts paid off. We compiled a preliminary results for posting on Venture Lab . On 12th May, when I was compiling the survey results after 4 days since the Survey went Live, we had received a total of 55 responses and out of the 55, a whooping 35 were my friends. I was so much happy and sent a Thank You note to all my friends for co-operating.
Our survey results were very satisfying. We found that people were indeed interested in the solution that we were offering. I compiled all the survey results and made a presentation. The presentation is given below.




The OAP final submission is due on 19th May. We now have only a week left and have to test our all other aspects of the Business Model. One important aspect in our business model is that of Key Partners. Yesterday (13th May), I went to Avenue Road in Bangalore (the Hub of Second Hand Books Markets) to talk to some Second hand book stores and get to know from them about the business. More on that in the next post. Stay Connected....

Tuesday 8 May 2012

Venture Lab: OAP Idea Finalized..!!!

My team finally decided on the OAP Idea that we are going to work on. We had 3 different ideas to choose from. One each from Me, Abhay and Vishal. For the sake of confidentiality of the ideas of my team mates, I shall not discuss them here but overall, there were some amazing brainstorming sessions that we went through discussing those ideas. Everyone contributed to the brainstorming session. Various challenges were thought through and it almost felt like no idea was realizable. As an example, I am writing the discussions that happened for my idea.
My idea was to "An Online portal where users can buy and sell old used books".
The team pointed out that there was a similar  concept already functional in the US called chegg.com and also there is an Indian Start-up called www.justbooksclc.com. We then discussed about having an Indian version of Chegg. The team felt that the reason Chegg was successful in US was because books are super expensive in US whereas in India, books are relatively much cheaper. Moreover, there are places like Nayi Sadak in Delhi and other major Metros where people get to buy used old books directly from Street Vendors. These sort of things are non-existent in the US. Also, the cost of delivering books over courier is more than the cost of books across metros. In US, courier is cheap and books are really expensive. They have excellent logistics in US. I then suggested a solution to the logistics problem in the form of Indian Post. However, since there was no concrete information available on Indian Post, the team asked me to research more and get back to the group again for further discussions.
I did further research on Indian Post and its services and came across this Express Parcel Post from Indian Post www.indiapost.gov.in/ExpressParcel.aspx. They deliver (up to 2 Kg of Parcel) in Rs. 25 (locally) and in Rs. 40 (within a distance of 500 Km), in Rs. 50 (for 501 to 1000 Km). This seemed to be a reasonable choice for our delivery mechanism. Pranay however pointed out that this will almost be 25% of the purchase cost if book price is Rs. 100. I suggested that we can modify the model so that we sell the book at say 50-60% of MRP and add delivery charges separately. Even if the total charges payable by the customer comes out to be 75%, he will still be interested to go for it. In the worst case, he would like to buy a new book instead, we can offer this service too on our portal. Users, if they don't like the old used books, can buy same brand new Title from our website. Obviously, these were my hypothesis and hence they needed to be tested by doing market research and talking to prospective customers. Pranay also pointed out a similar website called friendsofbooks.com. They are also doing the same thing so there will be huge competition.
The discussions went on similarly for other ideas and we were finally not able to decide on which idea to go ahead with in OAP. One thing was however more or less clear. Abhay's idea needed a huge technical research so it was kind of not feasible enough in such a short span of time. It was also felt that the time was not ripe enough in India now to start that project. Vishal's idea was for US market. This was a major challenge for all of us. Neither of us knew the dynamics of US market and about the people in US. The team felt that although the idea was wonderful, but researching it was very difficult sitting here in India. My idea was too simple and posed huge challenges to overcome. So, the team decided to vote on the idea individually. The most voted idea shall be taken for OAP. One last chance was given to respective idea generators to defend their ideas by writing a mail and explaining their case to the group. We decided to vote before 9 PM (IST) on 7th May (yesterday). Here is my line of defense that I wrote to the group to defend my idea.
" At this point of time, none of us is interested in establishing a successful venture at the end of this course. The primary objective is to take an idea and work on all aspects of it as is done for a real start-up idea. We learn the process of "Idea to Opportunity to Start-up" through our idea and then pursue our own dreams with the idea that we really feel about. In this context, it is not important now to take a really great start-up idea worth really pursuing it but to take a simple idea where the various aspects of business model are easy to study and research. This way we will learn the Entrepreneurship in a real good way. I agree that my idea might not be the best idea for a start-up, but considering the fact that we are here to learn the Entrepreneurship process, this is a fairly simple idea to pursue in terms of ease of Opportunity Analysis. Market research will be easy. We may have a lot of friends who are regular book readers and they may prove to be a good source in our market research. If at all at the end of OAP we feel that all out hypothesis about the idea are wrong, we can scrap this idea off. At least, we would have learnt how to analyze and idea and when to discard an idea. That's the whole purpose of taking this course, right?"
Every team member gave his vote and guess what.??
It was my idea that got the most votes. My idea got 3 votes out of 5 and hence it was formally selected to be the idea for OAP.  The idea has been announced on Venture Lab. I have completed the draft Business Model Canvas on Venture Lab. We are now in process of Hypothesis Testing of our Business Model. More on that in the next post..!!!

Tuesday 1 May 2012

Venture Lab OAP: Brainstorming Session # 1

This Sunday (29th April, 2012), my team decided to brainstorm ideas for the Opportunity Analysis Project (OAP). Since our team is geographically distributed, we decided on an e-brainstorming session where all team members came online and we had a discussion. Earlier, we decided to have a Voice chat but then felt that it will be difficult to take notes of the outcomes and perspectives. The chat was considered a better option as the transcript of the chat will be available for reference at a later point of time too. So, we started a Google Group Chat through Gmail (Thanks Google..!!!).
Some 3 days before we planned this brainstorming session, I had sent a list of Probable ideas that we could think of working on for OAP. I had compiled a list of 'Good' ideas from my team's First Assignment Submission and also added two new ideas of my own. Vishal added one more idea to the list subsequently. Our aim of this brainstorming session was to move forward on these ideas and see if anyone of these was a good option to go ahead with in OAP. My highly motivated team turned up on time and we started with analyzing Abhay's idea.
To begin with, everybody started pouring their thoughts on the idea, what they felt was good and bad about the idea, the challenges and so on. The discussion was not structured and it was going randomly. Mid-way in the discussion, Vishal suggested that the discussions shall be in a more structured way rather than randomly bringing out points about the idea. The Team then decided that we follow the following rule. The Originator of the idea shall defend his idea and all other team mates can raise whatever points they want about the feasibility of the idea. If anybody else felt that he had a reply or solution to the problem raised, he could pitch in for the idea with his solution. This proved to be a good breakthrough in moving to a structured discussion from a random one. However, this way of discussion required a lot of thought and research on part of the idea originator to answer the queries of fellow team mates. The team felt that we have not given enough thought to our ideas and needed deeper insights to yield fruitful results from these sessions. We needed a way to get around this. And again, Vishal to the rescue.!! Vishal proposed that each one of us write a Business Model (as used in Round 1 submissions) of our idea. This way, rather than just an idea, a member will be able to propose all the relevant components of the business to the team. The team can then brainstorm the ideas to discuss the challenges and other intricacies. I offered a solution to this that I will create a Google Docs Form where each member will fill all the aspects of his  idea. The results of the survey form shall be shared with each team member before the next session. With this, we concluded the session with a decision to e-meet again at 2 PM on 1st May to discuss the ideas. After the meeting concluded, I designed this form and asked each team member to give their responses. The response sheet has been shared with all team members. By yesterday evening, all team members had filled in their responses. Looking forward to the discussion session today. Updates from Today's session to follow in the next post.
Here is the form that I designed to collect ideas:-