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NAVIGATING
PR professionals,
growth rate, certain sectors are likely
always on the lookout
to experience some shakeout. And
for signs that could potentially
DOWNTURN ALLEY
the services sector is clearly one of
erode the value of our clients. What
we have observed in the current them.
environment is that there is a focus Shilpa: In my own
on spending money but not on the startup (that no longer
fundamentals of business building. qualifies as one), we
We felt it was important for founders have felt the heat.
Moderator Edited excerpts from the 4th
to pause and reflect on whether they In the e-commerce
Nandita Lakshmanan Viewpoint Roundtable have all the ingredients in place to space, everyone is
Chairperson, The PRactice April 28, 2016 at Olive Beach, build a sound and solid business. trying to undercut the other person.
So, the first point of discussion today Survival belongs to the fittest. But
Participants Ashoknagar, Bangalore
is to look at what businesses are we feel we have a very tangible
Garima Varma Like TV show reruns, recessions doing well and explore what they proposition. Our raison detre is not
Former Director, GE Research appear from time to time with can they do better, with respect to based on offering sweet deals to
Harish Bijoor a familiar set of characters a stakeholder universe of markets, customers. We are offering a very
Brand expert and Founder, (governments, industries, consumers) employees, and customers. differentiated product. If the unit
Harish Bijoor Consults, Inc. and plots (politics, policies, economics of the business we are
Harish: We are a in work, then scaling is a matter of
Shilpa Sharma excesses). While the business
greedy people by time and commitment. But if the unit
Co-founder, Jaypore environment is still positive in the
nature. The whole economics dont work in our favour,
country, there are signs of trouble
world grows at 2.3% then no amount of funding can get
in this paradise. The 4th Viewpoint
Roundtable examined certain in GDP terms. We us out of the hole weve dug for
worrying aspects of the startup grow at 7.2% and ourselves. We are all very passionate
ecosystem so that founders can we term it a downturn. This is not about what we do. But passion is a
avoid being blindsided by these. necessarily a negative attitude. If we relative trait that can only take us so
have that kind of hunger in us, then far. We also have to be good at what
we can go places. Still, a downturn we do.
is clearly in the cards and Bengaluru Garima: On the
will be at its centre, along with positive side, the
Noida, Gurgaon and Pune. This city current scenario is rife
has eight startups for every square with opportunities for
kilometer of area. Its almost an brand communicators.
epidemic now, especially since the This is a good time to
startups we are seeing today are not clearly articulate the value proposition
of the product and definition of the E-commerce lies at the cusp of
brand. Companies who can get this virtual and real enterprise because it
right and are able to communicate it has warehouses, logistics, delivery
to stakeholders at the right time and systems and other physical world
through the right channels, are the issues to grapple with. The third type
ones who will survive the shakeout. of business is entirely app-based with
sustenance and fulfillment resting
IN SEARCH OF CONCRETE entirely on that solution.
STORIES I have worked with e-commerce,
Nandita: Building IoT and app-based startups and
to sell, building to believe that, of the three, IoT has the
scale and building to most solid value proposition with
last. Can these three real applications and tangible IP to
different strategies be drive value. E-commerce, however, is
reconciled? Or do they over-bloated on valuation. The money
create a gap between short-term flows into it in tranches. Valuation is
goals and long-term vision that inflated to benefit the first investor
widens over time? while the last person holding the can
Shilpa: I believe there will have to deal with the fallout. The
is no long-term outlook entire movement is hollow and unless
if you cannot take we see some solidity coming in, we
care of short-term will be in trouble.
requirements. If you Garima: Solidity
build to last, you will will have to come
automatically be building to scale from a very concrete
over a period of time. Building to sell product or service
is a very short-term orientation. In offering, If you look
my own business, I believe the only at all the players in
viable option is to build to last. You the online grocery delivery space, I
have to invest in ways and means to
am personally confused about who
acquire a customer but also ensure
I should use for what. I am guessing
that you can retain this customer long
other people have the same problem
enough for them to go out and be a
champion for your brand. with this lack of differentiation.
Harish: There are three The second piece that is not being
types of companies. addressed completely is stakeholder
The brick and mortar engagement. Most of the efforts in this
company deserves area are skewed towards the investor
respect for investing and unless there is a shift to focus on
in something that the consumer, employees, backend,
has value and that attracts footfall. delivery or the whole supply chain,
Then there are virtual entities. there is a huge shakeout coming.
SOUND, ECHO & CLUTTER from four or five players. These
entities form a brand cluster that
Nandita: In this
then gets decimated to a commodity
environment, are we
cluster. At the end of the day the
confusing image with
reputation? So much commodity wins. Since they are all
of what is viewed as perceived to be equal in their ability
being essential to to deliver, there is no differentiation.
reputation has become superficial The same pattern is playing out with
or ostentatious. It includes the kind hyperlocal services. Its clear from all
of office space you can afford, the this that while image is hollow and
salaries you can pay out to attract reputation is solid, we are just not
talent, and the number and kinds of investing enough in the latter. The
front-page ads you can put out. But skew needs to change.
is this just noise that is distracting us
from more important areas? Shilpa: I think the
only way for us to
Garima: I would
survive at Jaypore
say yes. Most
is through building a
of us, including
solid reputation. After
communicators, use
all, we are offering
communication-centric
products that people want but dont
words such as image,
need. People are buying into our
reputation and perception loosely and
promise because of the reputation
interchangeably. We need to be able
we have built over time. It shows
to differentiate one from the other.
in our commitment to quality, our
Harish: We are approach to geography, our liberal
besotted with image return policies and in the way we
but not as concerned obsess about customer experience.
about reputation. If We invest heavily in improving that
you peek into the customer experience. It doesnt take
budgets of some of that much to shift perceptions about
the newer companies, less than a brand through image building
2% of these is devoted to building campaigns. But the fact that we
reputation. In the e-commerce space, have been able to keep our sales
for instance, theres one global entity returns at a fraction of the industry
with a global reputation -- Amazon. standard or boost our average deal
Then we have Flipkart, Snapdeal, size to four times the norm is entirely
Jabong and several others. A survey based on reputation. Without that, we
of 21,000 people to study their online dont have a leg to stand on. Image
buying patterns revealed a form of can be built through a number of
community shopping under which exercises but reputation building is an
they look for the best possible deals opportunity to truly walk the talk.
LOOKING BEHIND FOR HELP Garima: In my view,
the young people
Nandita: What were who are running the
we doing differently unicorns of today dont
in the past? Can we
understand what a
absorb some of these
lessons to build more brand is. Front-page
resilience for the covers and image matter more to
journey ahead? them. The question is can we use
this kind of introspection to weather
Harish: In the old
the downturn that is likely to hit us? I
days, a company
think the answer is yes and no. Yes,
would seek to be
chosen on the basis if we can ponder on the significance
of its brand name or of some of these issues. And no, if
reputation. Freebies, we continue to go along the path
discounts and relentless price-cutting we are now on. People are in a
boost the commodity side of the fast-paced twitter mode. I have had
business and spell the death of multiple conversations with young
the brand. And that is what we see founders on how they can do x, y
happening in e-commerce. and z to push their valuation up and
that seems to be the end game.
The brand is an experience and if you Personally, I am a little pessimistic
are building that experience, then about changing this mindset.
you are doing the right thing. But
who has the time for that anymore? STAYING FIGHTING FIT
Companies today are not being FOR A NEW ERA
driven by the motivation of the brand Nandita: We are
manager but by the imperatives of dealing with a younger
the investor who seeks eyeballs, hits generation today
and first conversions over strategies not just at the helm
to boost retention and loyalty. But of companies but as
new customer acquisition comes customers. Does what
with a cost and we are ignoring that we are discussing matter to them?
aspect. Are we over-rating the relevance of a
long-term orientation for a generation
However, we cant transfer the that is used to immediacy and instant
lessons from one recession to the gratification? The other big factor in
next decade and movement. Each all this is social media, and the wealth
of these lessons has to be learnt in of information we now have access
the decade in which the recession to. This was not available to us in the
happens. From 2010 to 2020 - the past. At one level, it seems messier
and more complex but we cant
decade of startups - founders will
ignore the power of technology or the
imbibe the lessons that emerge and need to adapt our strategies to this
then move on. changing base.
Harish: We certainly regular customers who can serve
have a scratch card as evangelists for the brand, only
generation influencing time will tell. But there is no room
the way we do for complacency when it comes to
business. But thats finding ways to connect with the
not new. We saw a customer.
similar movement in this city and in
Garima: I personally
Gurgaon with the BPO generation.
feel that technology
We have moved from BPO to voice
can be a maze. If we
to data to KPO but the scratch card
generation still holds sway. There are
can understand it A spike in graffiti around
flimsy reasons to shift and loyalty is better and deploy it, us could mean we are in a
not an abiding characteristic of this we can reach wider
audiences as well as engage in one to downturn. Or it could mean
generation. But my only problem with
whats happening currently is that one conversations. But I do think that something completely different.
it is turning out to be something of technology is growing faster than we
a ponzi scheme with a lot of money are able to keep pace with. So, we
going in. Somebody in the middle resist it to some extent because we
will end up paying for it. If investors are not able to get our hands around
are not going to push back against it. I find that most communicators
this, then we need other evangelists are just scratching the surface when
in this space. it comes to understanding and using
technology. Its not a problem with
Shilpa: Until I the tool but with us.
co-founded Jaypore, I
had been in the brick SUMMING UP
and mortar business
Nandita: The D-word
for years. And the
(downturn) doesnt
challenges of that
have to be a bad one.
space are very different. We cracked
Its just an inescapable
that in FabIndia by first figuring out
fact of business. But
what strategies and store formats
the bigger question
would work for different geographies.
is how true one stays to ones core
If you have built a brand and a legacy,
business purpose through it all. We
you have to realize there is no one all work under different conditions
size fits all. I am now part of a brand and circumstances but ultimately,
that just happens to be in the online sustaining that focus and sense of
space. For every thousand customers mission will be the key to navigating
who visit our website, only one or Downturn Alley.
two may end up buying something.
In order to get that customer, we
have to talk to them in a space that
they are comfortable in. Whether
that involves physical stores or
ancient Rome when political or resurgence. In Berlin, vibrant art on
social messages were scrawled whats still standing of the Berlin wall
wherever the space presented provides a colorful and symbolic
counter-punch to cold war era
TIMES
have to remember that these walls Indian motifs on bridges and flyovers
were less hallowed then and worked deter even die-hard bill posters and
perfectly well as a medium for crude advertisers.
expression. Beyond these sanctioned works,
From those ancient origins, graffiti graffiti in India does not have
It is hard to predict a recession. It is inverse relationship with the quantity has had a mixed record leading up the storied past or sociological
sometimes even hard to know if we of graffiti in the area. to modern times. It is sometimes implications that it has in other parts
are already in the middle of one. Just In Athens, a city always known for its dismissed as vandalism while, of the world. There are the usual
ask any economist who has struggled at other times, it is upheld as an bathroom variety messages on walls
street art, graffiti skyrocketed in the
with reading the tea leaves of market important form of free speech. but the more evolved ones tend to
wake of Greeces economic crisis.
indicators and indices. Given how be commercials for political parties,
complex it all is, economists tend As unemployment rose, disgruntled City governments around the
or city-sponsored appeals for civic
to be overly cautious in calling a groups vented their ire against the world cannot decide if it should be
responsibility. Scattered in between
recession. government by planting less than viewed as a problem, let alone find are bad likenesses of popular
flattering commentary on the citys ways to tackle it. Sociologists who Bollywood figures. But with so much
They could get past this opinion buildings. study urban patterns believe that a else huge billboards, business
paralysis by looking up from their
More clandestine work popped up piece of graffiti on a wall can lead signs, and posters - competing for
economic models and around them.
in Egypt following the Arab Spring of to an explosion of similar graphic our attention, graffiti tends to fade
One way to detect a downturn at
2011 when Cairos political activists messages in the vicinity. This is into the background in the Indian city.
least in many parts of the globe -
hit the streets, spray cans in hand, based on the premise that when a We are more likely to notice if the
might be to study the literal writing given space is already defaced, it
to speak out against current kabab joint down the road puts up a
on the wall. Graffiti has a close lures others to add to the clutter. So,
developments. Where traditional brand new sign with all the old typos
association with economic distress cities may be justified in stepping
media is restricted, graffiti can be fixed. Now thats a sign of economic
and social unrest even if many forms in to curb this trend. And where vitality.
a hard-hitting visual medium for
are now accepted as street art. Along graffiti is directed at private spaces,
dissent.
with broken windows and litter, spray its clearly a no-no. As someone is
painted messages on walls and This may be why the street artist said to have rightly observed: Your
buildings have long served as stark is often viewed as a rebel and self-expression ends where my
underground activist - someone who References:
symbols of urban decline. property begins.
works under the cover of darkness 1) The Greek Debt Crisis Through
It has other more menacing variants. Still, it can be an effective way Graffiti. <http://observer.com/2015/07/
(as many of them do) to avoid being
For example, organized street gangs to revitalize cityscapes, clear the-greek-debt-crisis-through-graffiti/>
caught and penalized. historical baggage, or edge out
have been known to use special 2) What can we learn from Roman graffiti?
codes and symbols to mark their Although it is largely associated with other unattractive public notices and <http://www.telegraph.co.uk/history/10336768/
turf and keep out other gangs. For contemporary cityscapes, graffiti advertisements. What-can-we-learn-from-Roman-graffiti.html>
anyone walking or driving through is not a modern phenomenon. For example, the city of Philadelphia 3) Egypts murals are more than just art
has commissioned large-scale murals <http://www.smithsonianmag.com/arts-culture/
an American inner city, the perceived The earliest forms of such public egypts-murals-are-more-than-just-art-they-
degree of personal safety has an expression can be traced to to signal its economic and cultural are-a-form-of-revolution-36377865/?no-ist>
Viewpoint is a quarterly thought publication produced by The PRactice.
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