WHAT ARE UNICORNS MADE OF ?

Dedicated to all founders and investors who have made this world so dynamic, interesting and wonderful.

Unicorn evokes intrigue!

Word "Unicorn" was coined By Aileen Lee in 2013, when she thought it was a Unique phenomenon to have 39 startups with valuation more than 1 billion. She would not have imagined that world may have 1000 plus of them, 7 years later. 

As on today, March 2022, there are 1032 Unicorns in the world. With the cumulative Valuation of 3400b$. This is 1.5 times of India’s GDP.

Isn’t this incredible?

US has 487 unicorns, and China has 301 Unicorns, and India 95.  In 2021, India added 44 Unicorns in year 2021. 

Pareto principle works here too…..Highest valued 3 startups, ByteDance  Space-x,  Stripe ; accounts for 10% of the total valuation. 

Wow ! This is called real success!

India has lots of ground to cover. However, we are doing rather well.

India’s highest valued startup Biju’s at 21b$ is the 13^th In the world rank. It is 1/10^th the size of the most valued startup worldwide. 

I was so glad and proud to land in Udaan. A 3b$ company. Later I was humbled by the fact, that there are 248 startups worldwide which are larger than Udaan today. Inspirational and depressing...at the same time.

While India is catapulted into an entrepreneurial spree. 2016-17. India registered 733 startups. In five years the no has reached to 62000 in Jan 2022.

Which means that probability of a start up to become a unicorn in India is 0.00002% !! Which is so very low !!

Such intelligence, such grind, such commitment, and so low outcome. Disheartening.

I attempted a startup 3 years back and failed ! And fortunately, I got the chance to be a CXO in Udaan, which is a large, very successful Unicorn. Had a chance to learn as what ingredients are required to make a Unicorn. And what should I have done differently. 

Created a hypothesis of it. Please add or critique it.

Journey of being a Unicorn

1. Qualifying

2. Clearing Choices Paradox

3. Building Ecosystem 

 

First Qualifying  on following aspects:

Startups should check for following 5 eligibility Criterion by asking hard questions to themselves.

     Disruptive: Without and exception, all Unicorns have brought disruption in their own field. 

They have chosen large canvas, large problem to solve and solved it radically. Snapchat, Dream 11, Ola cabs, cred, Meesho… Long list. Are you solving for small idea like college friends to come together or you are altering the way a specific function is done at a national level. And in today's economy there are significant no of things which needs to be addressed. Pick a large problem.

 

2.       Tech focused: A recent study suggested that 87% of Unicorns are built on the tech., 7% are hardware and rest 6% are services and products.

  Funding is also easy in tech space. Hence, quick check, if tech is going to play a large part in scaling up your startup ?.  Razorpay, Zerodha, Urban company, policy Bazaar, Pine labs, Groww, billdesk… and so on... had advantage of tech helping in business transformation.

  

3.       The firsts : There is clear advantage of being first in the segment.

  However Unicorns also need to be on toes and keep on innovating to remain first as competition build up.  Nykaa, Coindx, Udaan, Fractal analytics, curefit, InMobi etc. 

Lots of time, FIRST CAN BE LARGEST.

4.       Consumer focused : 62% if the unicorns so far are in B2C space. 

They change the way individuals operate. Eg, Spotify, Swiggy, Zomato, Byjus, Makemytrip, Bigbasket, Grofers, rivigo, licious, Spinny, mamaearth..etc. Even if you are in B2B, consumer centricity is at the core.

5.       Efficient : MPV ( Minimum viable product) comes from the need of being Lean. 

It shall have must haves and yet very efficient. In cost and in it’s outcomes. Also a pertinent is how much shall one invest in head count ahead of revenue curve. Hence efficiency is very important.

 

Clearing 6 Choice Paradoxes :

1.       Intent paradox : In my interactions with the founders of Unicorns, I have observed that they are strongly driven by urge to solve a large problem. Some of them end up being Unicorns. On the other hand, people who are driven by need of being a serial entrepreneurs and make quick money, don’t end up being that…. It’s a paradox perhaps.

There is no shortcuts to success. And there has to be a strong reason for one to bear the pain of kicked around, not getting paid, suffer through years of misery, with no certainty of success for about 4.5 years, which is world average to get to unicorn.  Only one thing can keep founders going…. Hope ! that someday people’s life would be changed for good.

 

2.       Knowing paradox : If you know what to do, chances are others know it too. And It’s unlikely to be disruptive. Hence lots of unicorn founders start with not knowing exactly. They have some sense of opportunities and risks, rest keeps on coming up. Funding, market situations, regulations, etc are all very dynamic. Innovation is the only sustainable competitive advantage a company can have.

 

3.       Scale Paradox : Scale first or Shape first is a continuous debate. Assumption is that scale gives cost efficiency which gives shape. Not always in my view. There are numerous example of unicorns still losing tons of money. Hence, prudent thing should be to set up a threshold of scale, where business should become profitable. And then again push the scale. Nykaa has proved it without doubt for all of us. Harshil Mathur, Founder Razor pay stated “The idea is to prove a scaleable business model first and grow from there”.

4.       Efficiency Paradox : Efficiency or Agility is another Paradox which comes when business becomes large and is lead by professional teams, instead of the founder. Systems and processes creates strength at the cost of speed. What is a good way out ? Perhaps get into cumbersome systems slowly. Give priority to speed. As there is still lots to be learnt and systems  are best fluid. This has been a great learning for me.

5.       People paradox : There are very very few people who are good problem solver and also good institution builder. Hence there is a fine balance of talent mix required. And also it’s a subtle art of allocating responsibilities so that best of both is available. I think that a Mentor can add lots of value here.

6.       Love paradox : Lot of the times, founders are not the best people to take org beyond a certain level. And that is the time, when they should be willing to let control go, of the child which they love more than their lives. The maddening affinity which helped business come to certain level, has to be given up. Painful but necessary. Letting YOUR unicorn go.... For Good.

 

Ecosystem buildup stage :

I learnt term GLASS WALL. It’s the term used to get the consumer into the ecosystem and not let them go out. This leads to concepts like Alibaba and super apps.

Here is the story of Alibaba group, which blew me out of my Mind… And which made it a whooping 650b$ co. in 2020.

It’s know that Alibaba started with the B2B business in 1999. Got into local markets through 1688.com, then into B2C through Aliexpress, extended into C2C through Taobao in 2003, Payment was enabled through Alipay. They didn’t stop there, branded mall was launched in 2008 as Tmall, and premium international business through Lazada. Wow…

It does not stop here....The Unicorns rides further in the rain of money..

They further created supporting business like Taobao data cube for insight into data of aggregated demand and helped sellers, Got into live commerce through Taobao live, Created a search engine etao in 2010 for online shopping, Youku was launched as a combination of youtube and Netflix which helped consumer stay with Alibaba world, and best of it is when they launched Wasu Media internet limited as the digital entertainment company.

You thought it was end of it… Now hold on…

Alibaba has presence in Cloud computing ( Alibaba cloud), Innovative initiatives are lead by Dingtalk, amop.com, Health business – Alihealth, Local consumer service – ele.me , koubel, Logistics service – Cainiao, Deals business – Taobao deals, ticktok equivalent – Taobao short video, Grocery delivery – Taobao Grocery…. There are other also… idlefish, Fliggy, Juhuasuan.com, Alimama……..

Jackma would have thought in this mind in Mandarin… “ Chodunga Nahin !!”.

Indian Unicorns would also go in the same direction. Where one business would start to feed into another to create a GLASS WALL.

These are some of the Bitter sweet truths of getting on a journey of Unicorn.

I hope and pray that given the talent in India, we see more Unicorns, the just being 0.00002% so far. These are the soon to be Unicorns, we all are watching intently.

4 MYTHS OF VALUE FASHION

 

 

 

There are 4 common myths about value fashion. Which got busted for me, as I got the chance to look at this incredible world  of value fashion closely in last 2 years. Let's put the context upfront.

Context of Market ?

We all know that Value fashion market is very big. 

Yes, of the total Lifestyle market in India of about 90b$ ( 7 lac crore), 25% comes from Metros, 12% sales comes from Tier -1 and 65% comes from Tier-2,3,4. For our conversation today, we would focus on the Tier – 2,3,4.

Bharat : The Rural India, Tier 2+  accounts for about 5 lac crore worth of lifestyle sales. That’s massive. It's more than National GDP of 60% of 216 countries in the world.

Also, It’s very large and complicated supply chain system, which sells about 2 crore garments and shoes every day !! If we put all the fabric use together in straight line it would go over the boundary of India 10 times. Every day ! Yes !

Lifestyle system is an age old, mature system. It has attained high level of efficiency over it’s evolution through 500+ centuries in India.

These garments are sold in very small stores. Which can accommodate only 2-3 customers at any point in time. These 8+ lac stores, does average business of 2.5 lac a month.

What is the average selling price ? 

A Men’s garment is sold at about 500 rs, women at 200 Rs and Kids at 100 rs. MRP could be anything, nobody cares. What matters is selling price.

I have never imagined that we would end up selling a garment as low as 39 Rs a piece… ( Kids Garment)…with profits, logistics cost etc built into it…

Men shirt takes up 30% of the men’s world. But nothing can beat Sarees, which accounts for half of the women wear sales.

Shall we talk about the Myths now ?    

 

Myth 1 : Value is Low price and low quality.

Indian apparel customer perhaps is the most knowledgeable customer on this planet. For ages, they have lived in the community of weavers, spinners, dyers, sellers in their families. They have very good eye for quality & Value for Money. While they are oblivious of the technology, but they have good sense of how much to pay for a garment.

It’s easier to sell a value induced garment, which is higher priced, rather than a cheap garment. Indian customer would be willing to pay a little higher for the value addition in the garment, but not go after poor quality.

Hence the route to enter this market is to find out ways of fabric techniques and garmenting styles which looks value induced but are not expensive.

 

Myth 2 : Latest fashion is available in Italy.

Upcountry customers does not have degrees and visiting card to display their identity. However, they have Garments ! And hence their willingness to experiment. 

Look at the colors and weaves in sarees, colors and motifs in the kalamkaris and bandhanis, cut and sew techniques in Men's shirts, Appliques in kids garments… An Italian designer may drown in awe of how this value segment leans on garish yet fast changing fashion.

Fashion originates in this segment from blatant copying the international fashion shows. And lots of the times, the garment presented in the fashion show hits the stores of Milan later than the village in Punjab. India is possibly quickest in interpreting the international fashion. Couple of weeks and its there for you to pick up at 5$.

We know ladies need to buy a saree which nobody has worn / seen earlier in the history of mankind! And Indian weavers, printers have capability to deliver on this audacious ask. It can happen only in India! Surat's ability to mix the differing concepts into a new one is just amazing and ever evolving.

The only way for organized players to win this race is to partner with the system and create scaling capability.

 

Myth 3: Small retail stores does not use the visual merchandising techniques.

Such a small store…. It hardly has any space to keep merchandise and for people to stand…. Retailer has no option but to be creative to do visual merchandising to push sales. 

They use hollow plastic mannequins tops for displays of best sellers, posters on the walls and in front of the counter, danglers hanging from the roof, folding beds with garments outside of store, 9” shelves on top to display of left feet shoe.. endless.…Low cost! But certainly innovative!

However because of lack of exposure, they are not best in aesthetic. Hence prevents them to match organized retail experience. Hence a player who can help small retailer display better would become a preferred partner for them.

 

Myth 4 : Value fashion system does not use Data.

Is data only numerical? Small manufacturers establish their own way of knowing what sells in domestic market. What they see moving out, what they hear from distributors, what they see others producing, helps them develop an unexplained, non-replicable intuition. Data is less numerical, more intuitional. For small business, it works well !

If a demand / sales partner like a B2B portal , generates and offers more insights to these manufacturers, he would be loved beyond comprehension.

There are more myths to be busted. I have just scratched the surface. It would probably need lifetimes to know it all. My respect for the small retailers and cottage manufacturers and the existing supply chain increased multifold, as I explored ways to enable and partner with them.

Bharat is large, complex, efficient and magnificent. Wonders can happen through technology advancement which would help Bharat to win in these turbulent times. I am fortunate to be the part of the digital revolution of Value Fashion of Bharat.

 

16 TYPES OF ECOM CUSTOMERS, AND INSIGHT TO CONVERT THEM 

Customer acquisition cost, conversion percentage, organic ( repeat) business are and have been the governing metrices of the ecom business.

As that became clear to us (the founding team of abof.com )in 2015, Significant experiments were conducted around types of customer and how to deal with them, lead by the CEO Prashant Gupta, CMO Ashim etc. My interest in consumer psychology kept me experimenting further even in the B2B world.

As per the Inmoment’s US Retail CX Trends Report , about half of the customers leave you for better experiences with competition. In the world where acquiring customer is a large cost, this indeed is a massive no.

Solve, different type of customer has to be dealt in different ways !

People come with different belief systems, which determines their buying Behavior. Anthropology a stream of design thinking clearly establishes the impact of cultures, linguist, Human biology, age, gender, upbringing in guiding their need from shopping. 

1/3rd of the customers leave the Brand/ site after one bad experience, and today they have options, which is available to them on a click.

There are three broad classification and 16 detailed classification, which seems to attract different marketing, product, discounts, delivery strategies.

Source : Revechat.com

Evaluating Customers :

So your focus for such customers should primarily be to make them aware of your services, win their trust, and lead them towards their first purchase with you.

1. The Lookers 

Lookers are the customers who are just browsing through your services and probably looking through your competitors as well. They’ve shown some interest, but they are yet to decide on anything.

How to deal with them?

• Make your website look attractive and engaging. More-so for lifestyle categories.  Make sure that you drive the onlooker’s attention to the right places by planning the right website engagement strategies, Like new season launch, Top 10, visually attractive stuff.
• Remove any obstacles or objections on this initial stage and focus on good customer experience. Even small elements such as intrusive pop-ups, disturbing ads, difficulty navigating, or lack of quick customer support can turn them away.

2. Discount Customers

Discount customers are interested in your product only because you are offering it at a discounted price !! There’s no way that discount customers are going to buy it at the usual price.... They get delight in shopping at discount. % plays larger role for them, rather the landed price. Notion of money saved is large on them.

How to deal with them?

• Make them understand the value you are adding even at the discounted price. This will make the customer feel that they did get a good deal. Thus they will value your product more and will stick around for longer. Like coupons, freebees, free quick delivery etc.
• Tele-callers , bots, notifications can help retain these customers, by offering them great discounts, and then cross selling them.

3. Researchers 

These types of customers have done their research, compared you with your competitors, and are looking for the best possible option. For researchers, just attractive websites or good discounts won’t work. Features comparison, establishing your offering as better would entice them. Best is if recommendation engine is third party. They trust it more.

How to deal with them?

• You can change researchers’ decisions by adding social proof like testimonials, ratings, reviews, influencer comments, repeat buys count, gold status etc. They will look into every detail. So it is best to go all out and provide details as extensive as possible.
• Add wireframes, white papers, and feature comparisons to your website to help them understand your services better.
• Focus on your value proposition. Make them realize that you’re offering something that no else is going to provide them, product content, benefits, branding around it, like stretch, Supima cottons, Merino wools etc.

4. Impulse Customers

Impulse customers have not really planned on purchasing your products, or any products for that matter. They make purchase decisions at the spur of the moment.

How to deal with them?

• Provide them with a seamless experience throughout the funnel. Remove even the slightest obstacles and make the whole purchase journey a slippery slide eg, site glitch, speed of loading, undue deviation, Auto answering the questions. Copy should be crisp.
• Time-sensitive offers work best with these kinds of customers. So offer them time-bound deals that create urgency.

5. Unsure Customers 

These types of customers are similar to lookers but are more confused and unsure about which direction to move forward.

How to deal with them?

• Make all your contact channels such as Bot, live chat, telecallers, Sales representative ( FOS) etc options easily available. This step can turn their decision in your favor.
• Focus heavily on your USP and value proposition in the navigation path or the MLPs being shared to them on whatsapp. Propose unique solutions,  and guide them through every step.Once they make up their mind, they are likely to stay with you longer.

6. Looking-to-Switch Customers 

The looking-to-switch customers who have subscribed to a similar product or service from competition, but are unsatisfied with them. This is why they are looking at you as an alternative. The good news is that these customers are ready to spend. All you got to do it to nudge them in your direction.

How to deal with them?

• The first thing is you must do is research your competitors. Find out what they are missing or where they are lagging. Try to cover these gaps with your services. Eg, speed of delivery, Easy return process, Single day delivery of Multiple orders, Target linked schemes, Secondary sales push inside the retail store( B2B), Redemption of credits/ gold coins etc.
• Speak to customers and find their anguish or objections, and offer instant solution to them, even if its costly to you. Once again, focus on your USP and value proposition. Let them know what makes you a better choice. 

Experiencing, Onboarded Customer:

The next category of customers you need to look for is the customers who are already on board and are new acquaintances to your brand. They have already made the purchase, so now you have to focus on retaining them by adding the utmost value to them.

7. New Customers 

New customers have just made their first purchase. They are still trying to understand your product and need guidance. This is the stage where you make a lasting first impression.

How to deal with them?

• Have a smooth, onboarding process. Guide them through each step and provide them with comprehensive guidance. Through the brief popups, navigation guidance, good visuals, minimum text, thumb friendly, highlight of the benefits like delivery in 2 hours, highest discount etc.
• Did you know that the #1 reason customers switch to your competitors is that they feel unappreciated? Hence, you should try and make the extra effort by providing options such as live chat, video chat, and co browsing.

8. Active Customers 

Active customers are the ones who are actively using your products or services. But they’re not your loyal customers yet. This means, if offered a better deal by your competitors, active customers are likely to switch. 

How to deal with them?

• Delivering best in class customer service is the key here. Continuous engagement and interactions will let your new customers attach to your brand more. If you guide such new customers throughout their journey, through help of feet on street, chats, notifications with links etc. 
• High quality supply. Lots of MP companies lack the focus on supplies in pursuit of the demand. However quality supply which can landup quickly is highly valued over the period of time and by the sticky customer. High quality supply should be top priority for sustaining repeat business.

9. Lapsed Customers 

Things went wrong, and these customers have left you already. But don’t lose hope yet. There’s still time to fix things and earn your lapsed customers back. Again, being quick and proactive is the key here. You need to identify these lapsed customers as soon as possible. If grievance of these customers are addressed, they shift to loyal category. Also, remember that you have an advantage over your competitors here. Your lapsed customers are familiar with you. And switching would mean that they need to go through the onboarding process all over again. This is why you must proactively take steps to convince them to purchase from you again.

How to deal with them?

• After segmenting these lapsed customers, your first step should be to find out why they left you. Did they have any customer service complaints? Did they get any better deals with your customers? Credit issues, return issues, poor quality, delayed delivery, delayed querry response, fit issues, usage issues, setting up issue etc....
• Next, fix these issues ASAP. Then let your lapsed customers know that you’ve fixed them. Reach out to them, apologize, and let them know that you’ve resolved all their pain points. By doing this, you have a fair chance of getting them back.

10. Unhappy Customers 

Unhappy clients are the most delicate ones to handle. Such customers have made purchases from you but are unsatisfied with your brand or your services. You can find them through different signals like customer service complaints, stopping auto-renewals for subscriptions, downgrading their plans, or negative reviews/comments on social media. They are not yet gone. Not tending to unhappy customers at the right time can lead to increased churn rates or even negative backlash and bad publicity. 

How to deal with them?

• Monitor your customer service channels and social media for complaints or negative comments. Using this, you can identify unhappy customers before it is too late.
• Then you can actively follow up with your customers. You can follow up through different support channels like live chat, asking for feedback, outward calling agents. By doing this, you’re nipping the problem in the bud and stopping some mildly unhappy customers from turning into outright angry customers.
• Once you’ve identified these customers, talk to them, understand their complaints and objections. Then start fixing them ASAP. This step can turn your unhappy customers into loyal customers. And reduce more unhappy customers and also improve on product or service.

11. At-Risk Customers 

At-risk customers are similar to unhappy customers, but unlike them, they are not unhappy. Rather, at-risk customers may have stopped using your services because they lost interest, opted for your competitors, or got busy with something else. In Indian ecom, this is a large issue as competition is trying to woo away your customer by better price or costly service. Lack of continuous improvement of services and product are highly essential to hold customer who can move away at a click.You can identify these customers again through specific signals. For example, if it’s been a long time since they logged in or used your services indicates that they are going to churn. 

How to deal with them?

• You should try to get in touch with these customers personally to check why they haven’t been using your services lately. But you should ensure that you’re not bothering them this way.
• Some customers may have already made up their minds, but a few might change their decision based on your interaction with them. So this is definitely worth a try. Again, understand their pain points and go out of your way to fix them. 
• Smaller companies do this well. And Bigger companies get stuck with the complicated process and arrogance. This should be watched.

12. Referral Customers 

Referral customers are those who have been referred to your brand by one of your loyal customers. So it’s highly likely that they know very little about your services. Also, your loyal customers have convinced these customers to go with you. So their hopes may be really high with you. It’s also possible that they are completely lost and clueless about which direction to move towards. This happens more in B2B space, which is deeply driven by word of mouth between retailers. And retailers are prompt to experiment to increase their sales / profit.

How to deal with them?

• Referral customers may be here because they are interested in some specific products or services like lower credit, price advantage, running promotion like free shipping, referral coupon schemes etc. that your loyal customer told them about. So, it’s best to interact with such customers and figure out their expectations from you.

Loyal, Promoting customers

There are some other kinds of customer personalities that you might have to segment and handle differently.

 13. Loyal Customers 

Loyal customers are the best kind of customers to have for your business. Repeat customers types keep coming back to you for different products and services and they seem to be impressed with your brand. In Indian context, this is THE LARGEST lever to potentially make profit. By no Consumer acquision cost and higher value of purchase, low default, low returns etc. Apart from keeping them with you for a longer time, you should understand what factors made them loyal in the first place.

How to deal with them?

• Feature your loyal customers on your case studies or get their testimonials. This will make them feel more valuable, and you get more social proof to add to your website.
• Connect with them and understand their success story. Understand what they like about your brand/ site and what made them your loyal customers in the first place. Use their experiences and try to replicate the same for all your other customers. At abof.com there were about more than 1/3rd of customer who became organic soon and became the lever to improve financials.

14. Lifetime Customers 

Lifetime customers are your loyal customers, but even better! They have opted for the lifetime subscription of your product or service. While this is a rrare species in online world.

How to deal with them?

• Since they are already your lifetime customers, it’s easy to forget about them and focus on other customers. But remember that these customers types are going to bring you tons of new customers and good PR. Hence, creating value for them and making them a part of your community will make your lifetime customers feel special.
• Another good thing to do is educate your lifetime customers about your referral programs and provide them with some incentives for referring you to other people.

15. Referring Customers 

Referring customers are the types of customers who are happy with your products or services and are willing to refer you to new customers.

How to deal with them?

• Referring customers types are rarely going to refer new customers themselves. This is why you should take the first step by identifying all the willing-to-refer customers. You can do that by asking for feedback from your active customers. If you receive any glowing positive feedback, ask them if they would be willing to refer your services to other people.
• You can also provide referring customers with some incentives for referring to some new customers to you. This will again motivate them to refer more people to your brand.

16. Advocate Customers 

Advocates are the types of customers who are, by far, the most profitable clients of yours. Apart from being loyal or lifetime customers, they are also your brand’s loyal advocates. Belief is that multi touch point org would have more advocate customers. Like super apps etc. They talk about your company and your services at every chance they get. And they’ve already referred a bunch of customers to you. They cross buys themselves.

How to deal with them?

• Put your advocate customers on the limelight at every chance possible. Use them for your case studies, put up their testimonials on your home page. This will encourage them to advocate for your brand even more.
• Make sure that you never disappoint your advocate customers with any bugs or customer service issues. Always be there for them throughout their journey. And strive to lead them towards customer success.

SUMMARY :

Every customer needs to be treated differently, here is the summary in one sheet.

Customer in ecommerce space would keep on changing. And it would be interesting to see as what customer servicing models emerge in times to come.