Flipkart vs Amazon vs SnapDeal: Indian Retail Scene Poised to Heat Up

Flipkart vs Amazon vs Snapdeal

The last few months have been nothing short of a roller coaster ride for the e-commerce industry in India. Flipkart, India’s home grown company recently raised 1 billion dollars from global investors. Not even a day had gone by that Amazon’s Jeff Bezos announced 2 billion dollars funding support to expand Amazon India’s operations.

Flipkart needed the treasure chest in its arsenal to expand its logistics and warehousing functions in the country.  Amazon with its large investor funds and growth potential has been trying to emerge the number one player in the e-tailing sector in India. The war between Flipkart and Amazon brings further questions of viability of other online players in the industry as they lack such major funding. The only company that can compete with these giants is Snapdeal.  Snapdeal’s major strength lies in its large base of sellers and warehousing functions.

There have been some unconfirmed reports that Ratan Tata, the chairman Emeritus of the Tata conglomerate may become a minority investor in Snapdeal so as to be a part of the booming Indian ecommerce sector.  All these developments have resulted in questions about the existence and profit potential of brick and mortar retailers. 

The funding raised will mostly be deployed to expand the categories of products, increase the number of sellers and warehouses in the country. This is necessary to combat rivals companies’ tactics of one day deliveries and discount wars, that has consumers across the country rejoicing. The biggest winner in the battle yet is the online customer. From great deals, to express deliveries the companies have left no stone unturned to attract consumers to their shop.

However with this cash influx, Flipkart’s headaches are far from over. They will have to rapidly develop their supply chain, while reducing costs and build customer loyalty that jumps ship during every discount/sale event. Also, the recent push by its investors to merge with Myntra, a premium apparel e-tailing competitor seems like a good move to tackle Amazon.

Amazon has its fair share of obstacles too. It has yet to show a profit and investors at Wall Street aren’t pleased. Also, with the issues it faced in China, and the entrance of AliBaba in the US markets, has resulted in Amazon setting its sights on India. It is clearly indicated that Amazon is in this race for the long run and is ready to forgo short term profits to emerge as the largest market share holder in India.

However, both companies are hopeful that they will present growth this year in the double digits. Their top executives believe that the battle has just begun and we will have to see who will emerge on top.

 

Infographic: How To Solve The Biggest Problems With Cloud Computing

If you’re interested in the world of technology, then cloud computing will not be a foreign term to yourself.

It is arguably one of the most rapid and advanced piece of technology that we have seen in the past century that has been adapted and utilized by almost every industry on the planet.

However, not everyone is clued up on the highly diverse world of cloud computing. Especially small businesses that are looking to expand or entrepreneurs that are looking to get started with building their business empire.

For this reason, Net Technical Solutions, who are a business technology support center in Surrey, have produced this infographic to help educate and inform anyone who wishes to explore the use of cloud computing for their business.

This infographic walks you through the different types of cloud computing structures that you could use depending on the nature of your intended use. It also goes on to look at the exciting part of cloud computing technology, that is of course the future and what industry experts are predicting and forecasting for cloud computing.

We are keen to know what your thoughts are on cloud computing and the future, so make sure you comment and join in on the conversation by commenting below.

Computing In The Cloud

Created by NTSols

I could tell you, but then I’d have to kill you.

Startups numbers

Recently I was delighted to write a piece for this illustrious blog entitled Just because you build it doesn’t mean they will come and it appears to have gone down pretty well so the equally distinguished owner of the blog has asked me to have another go. He sent me an email in which he said:

“Any chance you could do me a post on 5/6 most critical numbers startups must know (or put together in Biz plan) to give investors a confidence that they really know their customers, and market.”

And it kind of got me thinking, on the face of it this was a really straightforward question which has a very clear answer, but actually this was a lot more difficult than I anticipated given the increasingly large number of business metrics, analytics and statistics available.

As a result I pondered the question over the weekend by the beach in Greece (I know it’s a hard life), I had a few extra cold coffees, got a bit of a tan and decided on the following 5 key numbers that early stage investors look for.

Now, before you continue I would like to point out that the key numbers I have highlighted below are by no means the only numbers an entrepreneur should know and this list is no a one-size-fits-all prescriptive list. Further, as you will see I am not really focussing on digital metrics per se, as you can tell from the above blog post I think the digital world somewhat deludes itself that it operates in a separate space from other traditional businesses. In my mind it doesn’t, it might have number of web based statistics rather than footfall through a shop door but actually in my mind these numbers are simply a means to an end rather than an end in itself.

So with that in mind here are my suggestions for the key numbers an entrepreneur should know in order to give investors confidence:

1. Cash, Cash and once again CASH!

Cash is king!This is the mantra within the exciting world of accountancy (no really, accountancy is all sex, drugs and rock and roll…honest), as it has become almost universal truth that early stage businesses fail because they run out of cash not because they aren’t profitable or their business concept is flawed.

Therefore we look firstly at your cash flow predictions to see how far the money you are looking for will take you. Ever watched Dragons Den? Often the Dragon(s) like a business but don’t think the money being asked for is enough to do what the entrepreneur wants to achieve and so they decline.

This is the reason. So know what your cash flows look like. What is your worse month in terms of cash balance? How many months “headroom” does that give you? What will your cash balance be if your sales forecast comes 2/3 months later than planed? How long with the investment sought last for? What can you do to manage costs? All of these questions are in the mind of the early stage investor as he wants to get the maximum time for the money being invested as, from bitter experience, they know that the optimistic plans that entrepreneurs present are far from conservative and will take a lot longer than anyone anticipates.

2. Proof of concept

Early stage investors largely want to see some proof that there is a business before they will invest. This is often the Catch-22 situation that entrepreneurs find themselves in as they have a great idea but that doesn’t interest the professional investors, be they angels or funds, unless there has been some start-up capital used to prove there is actually a product or market there. Entrepreneurs will usually have to source some initial proof of concept funding internally (recently I heard it described as Friends, Family or Fools which I thought rather uncharitable even if true).

If you have managed to raise that early capital to prove a concept then make sure you know the numbers inside and out. After watching over 100 presentations in the last year I can tell you that nothing ruins an entrepreneur or management team’s credibility faster than not knowing the detail of their initial results. So study them, learn them, inside and out, back to front. Understand what was good, what was bad and what the opportunities are to develop from this. And be honest, we have usually seen it all before and we are usually pretty good at spotting mistakes so tread carefully when we ask questions (and try to be nice…one entrepreneur decided to lecture 4 accountants about why we were wrong…only we weren’t, he was….didn’t go well).

3. Words = numbers, Numbers = words

The final tip I would give you is make sure your forecasts, or as we would call it a financial model, match the business plan and vice versa. And make sure, particularly if it is prepared by an accountant or advisor, that you spend time to get to know it and understand what is going on. You don’t have to become an accountant overnight but you do need to really know what is going on in your business (or in management jargon speak what are your Key Performance Indicators). Traditionally entrepreneurs spend hours pouring all over their words and presentations with barely a backward glance at their forecasts, which is odd when professional investors usually do the opposite.

To help you along I have previously written a piece on the art of financial forecasting which might offer some assistance when preparing forecasts but the key things that investors look for are:

Sensible revenue assumptions based on the proof of concept which show that the numbers look reasonable. e.g. for an online retailer key metrics such as number of page views, number of sales, cost per customer acquisition etc. are all vital so that they can judge whether the forecast scalability is achievable.

Understanding of cost base and the ability to match costs with scaling revenues (which is controllable) rather than costs dictating revenue requirements (which is not controllable). e.g. Sensible wages and infrastructure costs (such as offices and equipment) which grow as revenue grows, and hence can be restricted if revenue fails to grow as expected.

Detail which indicates planning and forethought. My biggest bugbear is entrepreneurs that simply state that they will spend £50,000 on “marketing”. What type? Where? Internal (i.e. recruitment) or external (i.e. via an agency)? And a million questions like this and whilst we don’t expect you to know every single detail we do expect you to have had some discussions so that you know that the costs you have included are achievable and that you know where you will start as soon as the investment is secured. My favourite presentation, by way of an example was the entrepreneur that was going to grow a market leading consumer brand spending £500 per month on PR (and for those of you that haven’t worked in PR…well lets just say this is unlikely to go a long way) albeit the entrepreneur confessed after questioning that he hadn’t bothered to speak with the PR agency in question to check if this was reasonable.

So there you have it. My top 3 tips when it comes to the numbers investors look for and I am 100% certain that this is not what was expected when the initial blog was requested a couple of weeks ago. I am sure the question was more concerned with click through rates, cost of acquisition, individual page views and the like. But here’s the thing, whilst all of those are very interesting and help build the picture an investor is only interested in one metric, ROI (Return on Investment) and so what they really care about is if their investment has a chance of making it to the next level (risk), whatever that might be, and what are their potential profits at that point (return). Everything else is just there to help them assess and justify the final decision.

Martin Spiller is on Twitter @MartinRSpiller

Agile product development for Startups (Part two) – Getting the initial Product Backlog

Agile startups

In the first part of this article, I provided some high level steps to get you from an idea to a user-centred Product Vision supported by personas.

In this final part, I’ll touch on one of the tools you can use to build on those artefacts and get an initial version of the Product Backlog.

Now, irrespective of how you are going to deliver this product or service, you will need two vital foundation elements to make sure you build the right thing, and build the thing in the right way.

The first is a business value model. What are the goals you are trying to achieve from this product or service? You should have a pretty good idea of these from the work you did in defining the Product Vision.

The second element is a list of the critical success factors that will determine if you have met those goals. In short, how are you going to measure if you are delivering the value you want, and how are you going to ensure that you are not wasting time and money over-engineering this to a point beyond what is actually needed. Agile organisations and teams are focused on delivering “just good enough, for now”, and no more.

A simplistic example might be to have a goal for the next car you are going to buy of “carrying my immediate family”. Initially, that might be just you and your partner. You only need two seats. But over time, your family may well grow, and you’ll need more seats. But you don’t need them right now.

The element of time, and the order in which the product or service may evolve over time is missing from the Product Vision. So we move to use the next Product definition tool in our toolbox – The Product Roadmap.

Again, I’ll refer you to the excellent resources made available by Roman Pichler. His Go Product Roadmap is an excellent tool, although of course other roadmap formats are available. The Go Product Roadmap was published late in 2013 by Roman, and I have recommended it to clients ever since.

I won’t go into the details of how to work with the roadmap, as Roman does an excellent job of that.

So I’ll skip forward in time to a point when you have completed your roadmap. I suggest you read through the presentation and explanatory material on Roman’s site before going further.

Now with your roadmap completed, you have versions of your product or service identified, each with a target completion date, goals, a high level list of features and the metrics you will use to track if you have met the goal for that version. It will look something like this

Product Roadmap Example

Now if you look at the features, goals and metrics across the different versions of the roadmap, and rotate them by 90 degrees, you might end up with something like this.

product backlog example

Let’s review what we expect to see in a Product Backlog, at a very basic level.

1.A Prioritised list of features.
2. Each feature should have an associated business value that aligns with
the overall business value model.
3.Each feature should have measurable success factors associated with it to
ensure we deliver to the right levels of quality – “Just good enough for
now, and no more”.

You have created a very high level Product Backlog!

Going through the steps in part one and two of this article will give you a simple framework to get you to this initial Product Backlog. It can be considered the Launchpad for the project.

Be aware though, that there will be a lot more work that will be done on reviewing and refining the backlog throughout the life of your project to make this brilliant idea into a successful product or service.

I wish you all the luck in the world.