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..!!!

2 comments:

  1. Hi Amit ,
    Surprising just went to Postoffice yesterday to find out rates... I belive this is doable project ... trick lies in execution . following are few of my points to things stated by you :

    1. Av cost of College level books are within a range of Rs 400-600.. take av Rs 500
    2.If you buy Secondhand books it comes at close to 25% of the cost - Rs 125 (your buying cost )
    3.Rs 50 is your packging/courier cost -10% of the original cost- That makes Rs 175 -35%
    4. You sell this book at 50% of the cost - operating margin of 15%
    5. Key in this project is not 15% margin but in unlocking dead /useless books lying with student - whose volumes can be huge.
    6.I have worked with Paper & Printing industry ... paper cost are always on rise, which will make new book expensive each year.
    7. Also there are lot of online courses starting now with courseera,venturelab,udacity... they ask students to follow a book ... couse which you have done is from a book called Technology Venture from Idea to Enterprise is avilable for Rs 1600 (approx ) .. so there is potential in the idea.
    6. If you are still keen on the project and willing to risk money into this then do email me my id is brijraj123@gmail.com (8692900017) -Mumbai-Mulund

    ReplyDelete