New Technology Applications Design & Business Models

(NTADBM)

IIM NID joint course July to September 2011

Group 8
Deepankar Garg | Roli Agrawal | Simran Chopra | Vipul

Table of Contents
Company Purpose ....................................................................................................................... 3 Problem.......................................................................................................................................... 3 Solution .......................................................................................................................................... 4 User scenarios ............................................................................................................................... 4 GPS based system: Tourists..................................................................................................... 4 GPS based system: Women ..................................................................................................... 4 SMS based system..................................................................................................................... 5 Competition .................................................................................................................................. 5 Risks ............................................................................................................................................... 6 Competition: ...................................................................................................................... 6 Physical infrastructure for database ............................................................................... 6 Other business risks .......................................................................................................... 6 Product .......................................................................................................................................... 7 Navigation on a smartphone .................................................................................................. 7 Navigation on a not-a-smartphone ........................................................................................ 8 Business Model ............................................................................................................................. 9 Revenue streams ....................................................................................................................... 9 Pricing......................................................................................................................................... 9 Revenue projections ............................................................................................................... 10 Technology .............................................................................................................................. 12 Marketing ................................................................................................................................. 12 Alliances ................................................................................................................................... 12 Team............................................................................................................................................. 13 References ................................................................................................................................... 13

Company Purpose
Flush aims to provide the users with a geographical map functionality to locate the nearby loos and to choose one that can be used.

Problem
As of now, India does not have a very well developed infrastructure of public loo. When one needs to use a toilet in an unfamiliar locality, there are two problems that arise. It can sometimes be a pain to find a loo. Even if there are multiple loos in areas that are accessible, the cleanliness and hygiene of the loo can be an issue. This can render the loos unusable. In India, the problem of locating a loo is solved by asking the people who are familiar with that area; e.g. in a market place, one would tend to ask the shopkeepers. Even when in need, not everybody is comfortable posing the question Can you tell me where can I find a loo? to strangers. This is especially true for women. Due to unavailability of toilet facilities women hold their bladder for long durations which leads serious health problems. In a similar scenario, the problem of not finding a loo is worked around by holding the bladder long enough till one happens to chance upon a loo. Even if the prospective user is comfortable with asking around for a loo, and assuming there are multiple loos in the vicinity, the problem of hygiene still remains unsolved. There is no prior information available about the hygiene of the loo and its working conditions. It is only by a hit and trial method that the prospective user is able to find a loo which he/she finds good enough to be used.

Solution
We propose to start a loo-finder service in India. The service will be delivered through mobile phones. It will be a mobile application for smart phones which will use GPS technology and will be an SMS based service for not-so smart phones. The service has two salient functionalities to serve the customers Find the nearby loos based on the user location Provide ratings for the loos on parameters such as cleanliness and facilities

This solves the two problems that we had discussed earlier Having an application (SMS or GPS based) to find out a loo helps avoid the asking the uncomfortable can you tell me the nearest loo around here?to strangers. Secondly, the application provides information on how good a loo is before the prospective user gets to the loo. Therefore, it helps the user decide if the loo is good enough for the user or not.

User scenarios
GPS based system: Tourists
An american tourist Jack is visiting Delhi. He decides to take a day trip to Agra and hires a taxi for the same. 50kms out of Delhi, his stomach begins to feel uneasy and needs to use the loo. Neither he, nor the driver have a good idea about how far and where can they find a clean restroom. In such a scenario, Flush would be of great help

GPS based system: Women

A female shopper Mona has been shopping through the day in Khan Market in Delhi. She needs to use a loo and heads towards McDonalds, only to find it closed. She has never faced such a situation before and is not comfortable asking others for loos. In such a scenario, Flush would be of great help

SMS based system

Gurtej Singh, an autorockshaw driver in Delhi has dropped off a few students at Paranthe Wali Gali in Delhi, post which he went ahead and treated himself to a few paranthas too. Now he needs to use the loo. Unfortunately, he is new to the area and is not aware of available loos. In such a scenario, SMS based Flush would be of great help.

Competition
As of now, there are no competitors in the Indian market with such an offering. However, all entities with a location or a map based application can be a potential competitor in future. The key differentiator that we have in the app would be our first mover advantage which will translate into reliability of our product over other products that may come up in the market in future. A first mover advantage will ensure that till the time a competitor comes in, all users would be uploading reviews and new loo locations on our application only. This will help us generate a good number of reviews for each loo so as to make the user ratings reliable. We plan to update our database through user uploads on loo locations. Again, our first mover advantage ensures that we will have a large database by the time a competitor comes in. Since the key differentiator for such an app (vs competitors) is the depth of the database and the reliability of the information, we should be way ahead of our competition. \

Risks
We do foresee that there are certain risks associated with the business. These are as follows Competition: o While our first mover advantage should provide us a good database and a huge brand recall, other services with integrated map functionalities may be able to wean away our customers. For example, if Google Maps decides to integrate loo finder functionality in an integrated app where you can find shops, parks, restraints etc; then such an app can be a one stop shop for the user and the users might prefer to use an integrated app rather than our standalone app. In such a case, we believe that our best option would be to integrate our service with the integrated application. In such a case, the various options such as integrating only the front end or selling of only the database will have to be looked at Physical infrastructure for database o For the application to be successful there needs to be a physical infrastructure of public loos for us to tap into. For example, if our app is unable to provide the location of a nearby loo because no nearby loo exists, and if such an experience is repeated couple of time for a user, then it is unlikely that the user will turn to our app the next time he/she needs a loo. As a start, we also plan to provide the users with the locations of known chains which generally have a loo facility on premises e.g. malls, food chains like Subway, McDonalds etc, but there might be intellectual property issues in providing such information. Other business risks o There are other business risks with the venture too. The price of the service might be prohibitive, the target segment may not adopt the technology, we

may not be able to advertise our product enough etc. These risks can be somewhat mitigated by undertaking consumer research before launching the service.

Product
Navigation on a smartphone
We plan to have a simplistic user interface for the smartphone. The user would activate the app and the GPS on the phone. The app would trace the location and show the loos on the area on the map on the screen. The user can then click onto any loo to get details on rating (out of 5), type (western/indian), timings, and charge (paid/free). After some time has elapsed, a pop up will ask for feedback on the loo.

Navigation on a not-a-smartphone
The user will SMS user details (Location, city, type of toilet) to a predetermined Flush number. Flush will respond with an SMS with a list of nearby loos with basic details like free/paid and timings and codes for further information. The user can then respond with the appropriate code to get more details such as ratings and descriptions ). After some time has elapsed, an SMS up will ask for feedback on the loo. This shall be a free SMS.

Business Model
Revenue streams
We are looking at three revenue streams for our application Application download fee: We plan to make this a paid application, which can be downloaded for Rs 50 per download. Advertising revenues: The very nature of the application requires the user to disclose his/her location to the service provider. Therefore, we are a very good platform for targeted, location based advertising. o We do realize that our set of target advertisers may not be huge due to brand associations and brand visibility which the marketers would want to have, but nevertheless, we think we should be able to generate revenues from this stream as well. SMS usage fee: We shall also be providing the service to non-smart phone users through a paid SMS service. The SMS would be charged at Rs 3 per SMS. This will help us two fold o Our customer base to expand dramatically which will help us generating a bigger database, and this would also help us generate more revenues. In future, if the paid loo infrastructure in India develops, Flush will look at tying up with a mobile payment system. The users will be able to pay the loo owner through the Flush application. This will save them the hassle of physical payment, and Flush will get a commission from the loo owner for directing traffic towards their loo.

Pricing
We would need to price the revenue streams here, and then cross check against the perceived value offered by our app Price for the paid app: A quick internet search reveals that the price of applications is generally around the $1 mark. The Indian users of paid apps too

visit the global stores and pay this amount. Therefore, $1 is the reference price that the users have in mind. Any higher than that, and the customers will perceive it to be too high. Anything lower than this would just be lost revenues for Flush. Converting the $1 figure into INR and rounding it off, we think Rs50 is an appropriate price for the application. Usage based SMS : Using logic similar to the download price, we observe that the paid SMS are usually at around Rs 3 to Rs 5 per SMS. Therefore, given that this is what the user expects, we have taken the lower band of Rs 3 per SMS for usage Advertising: The advertising industry is an efficient market. We shall be price takers for this revenue stream. The advertisers willingness to pay will depend upon the demographic and the usage pattern of our consumers. The results of our interactions with potential customers indicate that Rs50 sounds reasonable even from a rational perspective. For example, a female user might go out every weekend, and may need to use the application once in two months. Even if the app is used only for two years after installation (which is less than the average life of a smart phone), then we are looking at potentially twelve instances of the application use which comes out to be ~Rs 4 per use, which sounds reasonable For the SMS based service, as it is only a pay per use service, the market price of Rs 3 sounds reasonable as well.

Revenue projections
In Jun 2011, India had 600 mobile phone users, out of this 9M were 3G subscribers. The number of 3G subscribers is expected to go up to 100M by 2015. At 5% market share and Rs 50 per download, this revenue stream alone should get us revenue of Rs 22.5M in the first year itself with the revenues growing up to Rs 113 M by 2015.

This is a conservative estimate because We have only taken into account the 3G customers while making the revenue projections. However, we are targeting all smartphones which is a much bigger number than the 3G subscribers. The number of mobile internet users in India in 2011 is pegged to be ~30M We have not taken into account the revenues that we shall be earning from SMS based services. We plan to launch pay per use services for SMS, this should give us a constant user fee. We have not taken into account the ad revenues that we can generate. Targeted, location based advertising is expected to be a huge business going forward, and w should be able to augment our revenues from this source. 2011 3G users [Millions] Net additions [Millions] 5% market share of net additions [Millions] Revenues @Rs 50 per download [ INR Million] 0.45 9.00 2012E 16.43 7.43 0.37 2013E 30.00 13.57 0.68 2014E 54.77 24.77 1.24 2015E 100.00 45.23 2.26 CAGR 82%

22.50

18.58

33.92

61.93

113.07

50%

Flush projected revenues (INR million)

120 100 80 60 40 20 0
2011 2012 2013 2014 2015

Technology
For smart phone, we shall be developing the application for the android operating system. Apart from being a fast growing platform, we think that the open source platform will also reduce our developmental cost. Location determination For smartphones, we shall be using GPS to locate the users For non-smartphones, the first phase will involve the user manually imputing their location to send as SMS. Going forward, if there is sufficient demand; we can use the wireless triangulation method for such phones to get an accurate location description.

Marketing
Our main target segment would be tourists and women, as we believe these two segments are most concerned about the loo facilities. In either case, we plan do not plan to use traditional media to target our users. The primary media method would be social media and viral marketing. However, there are two instances where traditional media makes sense Advertise with tour operators: This will target incoming tourists Advertising near existing hygienic loos: This should ensure a high user recall when the user needs to use a loo again.

Alliances
Apart from a physical infrastructure of loos, there are no complimentary assets critical to our business. Or put another way, for all the other assets that we requires, there is a competitive market a number of vendors are available. Below is the list of major vendors/partners that we would seek out for the required assets

Database server providers: We will need a vendor to provide us with reliable and secure data server which can handle large amounts of data and provide quick retrieval of information.

Geographical maps : Our application would be built upon the map service. Though this is a competitive market, it would be necessary to choose a vendor with large detailed coverage

Sulabh International/other such chains: This should give us a head start to build our database. Sulabh is known to have a large network of reasonably clean loos

Third party SMS service provider: Similar to the database server vendor, we would need this vendor to be quick with information retrieval and be able to handle multiple simultaneous data queries.

Mobile networks: For future, if we decide to launch mobile tower triangulation technology to ascertain location of non-smartphone users, we shall have to partner with network operators to access this information.

Team
The founding team comprises of two students from IIM Ahmedabad and two students from NID. All the founding members have two to three years of work experience and hence are quite comfortable with the idea of taking this application forward. Moreover, the mix of design and business background of the founders provides an ideal combination to be able to provide a good user experience with a sound business model.

References
http://ideaengineers.sapient.com/technology/the-future-rise-of-smartphones-in-india/ http://thenextweb.com/in/2011/05/20/india-has-9m-3g-users-adds-11-1m-gsm-users-in-april/ http://trak.in/tags/business/2010/12/16/smartphone-market-india-huge-potential/