Data the new Oil

Any analysis team would work day and night to justify the reason for their being. There are enough articles being shared on the internet on arriving at a Return on Investment for Analytics (RoIA). However, the main service that any of these teams did was to crunch business data into A-has. This hasn’t changed over the years, and a lot of analysts derive job satisfaction through this very hunt for the A-ha! from their audiences.

The switch to being a core business

Data and business analysis was until now a support function, which needed business data in order to thrive and be effective. Aside from very few models (those that sold business critical data such as ratings, organizational data, etc), the data was never used as the primary product.

There was always a pre-activity and an analysis activity for that data to be useful. However, over the years I am seeing that has changed. Data is now being presented and sold as the main product.

Data as the product

Those of you who know Bloomberg, Hoovers, S&P or CRISIL, would know that data as a product business model works. Now that you know the pattern, let’s take a look at how this business model works.

Data collection as a ancilliary service

There is one function of the business which works with the entire industry it is catering to, to collect data. This more often than not is made available as a freemium or free service.

Some examples of this would be – Alexa Certified metrics, Google Analytics, Walnut app, Swaggerhub, etc.

You get the general idea here. If a good product or service is offering you a free plan, more often than not the data you are entering on that platform would be mused for multiple usecases. Not just for your primary use case.

Data aggregation and visualization

This is akin to the marketing function, and most probably gets a lot of early adopters talking good things about the product.

E.g a blogger singing paeans about Google Analytics, an industry benchmark visualization being shared, data report about a competitor, etc.

This way, the inherent value in the data is presented.

Data access and pricing plans

This is how the business is monetizing the data. By selling access to it. Often on a pay per use basis, or a per data point basis. Note, there might be multiple reports given to the user, however the user has to do the analysis on their own.

E.g SEMRush, SimilarWeb, Alexa, etc.

Wait, these are all old products

Yes. They have been around for quite some time. However, I am seeing that other industry are also copying this model. I recently spoke to someone in the pharma industry who was selling aggregated prescription data to pharma companies.

The credit industry has already been doing this for so many years. TransUnion is a perfect example. In India, most working professionals are familiary with their CIBIL scores. What few people realize that CIBIL is a TransUnion company. Similarily, CRIF score (which is an alternative bureau) belongs to Experian.

What gets my goat in this scenario, is that the firm which is collecting data is based out of another country! This firm now claims to own and know the data of citizens belonging to another country.

Shut up and take my data

Let’s go back 300 years or so. The British killed the Indian textile industry by mutilating the weavers who used to make cloth. Then they bought the cotton and other crops at throwaway prices, that cotton is similar to the data that is being collected. The industry grade cotton which was then imported back in India is similar to the data aggregation and reports that are being sold.

The only difference is that 300 years back, we were scared of the East India Company. This time around, we are welcoming the data traders with open arms. Should we not be a bit more aware of who and how our data is being used?

The reason why EU is taking such a harsh stance with GDPR is a bit more clear. Where is the call for privacy and better data sharing protocols?

A fortress of regulations

For the past 6 months or so, I have been involved in building up a fintech based business. You might have seen me post about real estate and how the young Indian workforce needs help to own a house. This organization is HomeCapital which provides home down payment assistance for first time home buyers. In fact, it’s India’s first home down payment program.

The product itself is pretty unique and involves a bit of financial engineering. It’s an unsecured personal loan made available to the home buyer at 0% interest. To know more feel free to drop by our office for a chat and a cuppa!

Business traction and growth

The business is doing well and therefore it has quickly attracted a good set of investors. As we are gearing up for a Series A run, one of the question that I am increasingly seeing in conversations is this –

What technology barriers to entry does your business have?

The first time I heard this question, I was stumped. It’s not as if the core product was a technology driven product. Given enough time and money, any competent person should be able to build any of the following systems –

  • Loan origination
  • Application management
  • Loan management
  • Customer Relationship Management

These are business support systems, and they will never be a technology differentiator. The simple reason being that there are too many service providers and SaaS products out there which provide alternatives for them.

Yes, I could always claim a better UX, a robust and secure system. However, these are fast becoming hygiene factors and thanks to cloud based solutions fast becoming a commodity.

How does this impact a relatively new industry?

Read on. It’s a good case of how the mayor of Paris has decided to take matters in her hands in order to stop an overcrowding of a young industry.

There are a dozen electric scooter companies operating in Paris right now. There are so many that the Mayor just announced that she will reduce that number to three with new rules for electric scooters in Paris.

via Low (No) Barriers To Entry — AVC

Artificial barriers are being constructed in order for three of the businesses to be sustainable. The young electric scooter industry is being protected in this case by Paris.

Very similar to this, the FinTech industry in India is relatively young, and the Government of India has taken an active interest in this. One of the instances where the banking and lending industry in India was protected was where RBI drastically changed the P2P startup landscape by limiting individual investors to 10 Lakh INR.

Most developing countries are taking this approach for multiple industries. A wait and watch approach with a beady eye on the innovations and changes ensures that most policies that are being passed are in situ with the economic environment.

Protecting lush markets

What the mayor has beautifully done is protect the largest european market of electric scooters. One reason for more than a dozen startups to spring up in this market was that it was fairly easy for someone to join a business, learn the ropes and then start on their own. However, what will happen if one of these fly by night operations were to suddenly go down under? Suddenly the entire market starts stumbling. Would you as a governing body allow this to happen?

No. I would rather have 3-4 stable operators providing this service as opposed to 12-15 firms. It’s regulation, yes. It’s against the natural laws of economy, yes. However, it is being done to protect the market. Over a period of time this triopoly will try creating a seller’s economy, however the regulation will ensure that no one player can generate super normal profits. This creates a pretty strong barrier. An impregnable fortress of regulations that cannot be overcome.

India and FinTech

If you now look at the FinTech industry in India, then there are many regulations. This is not so much a concern as much as the fact that these regulations keep evolving as the industry evolves.

Take the fact that since September 2018 the Aadhar based KYC norms have come to a standstill. It is only last week that the RBI has allowed for e-KYC to be re-initiated. Now through in a recent trend such as DeepFake in their, and now you have regulators in a dizzy. What the major players in banking and lending are doing is looking up to the regulator to take decisions … these decisons are being taken over a long period of time (approximately 6 months in the case of e-KYC).

That’s two business cycles. Enough time for an upstart to start-up. India is a lare country and we haven’t really started making fintech products for the 66% of the non-english speaking Indians. There is hope of growth there, and hence the regulation barriers will be slowly built in that area.

Is a barrier needed?

A barrier to entry is needed when the market becomes small and the players have to compete for transactions. However, what is unique about billion people economies such as India and China is that the sheer volume of users is so high that there is always room for more.

Even in such a space where every month there is a new lender or two cropping up, the Indian real estate and lending space still remains under utilized. Housing for all still remains a distinct dream, and until then, instead of building barriers, perhaps we might want to think about building bridges.

Helping GenZ find their place

When do backpackers settle?

A few decades back, the only time a fresh out of college fledgling would consider buying their own house was when they contemplated marrying and even then within a joint family system they saw buying property as investment.

Over time, with escalating rents and increased self independence, the robust Gen Z is showing an inclination to own homes by the time they turn 27. The Homebuyer Insight Report shows a majority of prospective home buyers between 18 and 23 who want to buy a house in the next 5 years (this is in the developed countries). About 52% of the above numbers have already started saving for their own property.

But what about the developing nations?

The story in developing nations is completely different. With a majority of individuals going through lengthier schooling periods, and taking more time to find their way through their careers and eventual independence, the average Indian Gen Z has all the aspirations of the Gen Z, but also has all the legacies to manage.

I say aspiration because the typical Gen Z in India first rushes headlong into a job to ensure financial independence. Over time as the bare necessities are funded, then the Gen Z aspires to travel … the generation is also called as backpackers because of the affinity of unstructured experiences which are valued by this generation. For example instead of a Kesari tour (meh!), this person would want to backpack their way on a beaten down path.

So when do Gen Z finally settle?

The research done points to a couple of reasons.

When starting a Family

Starting a family is the largest motivator for settling down and buying a home. Even if that means taking a loan or financial aid for buying the home.

One of the major challenges that Indian Gen Zs face is that the down payment required for real estate is so high that it’s difficult to buy this house early. What that means, that an entire generation starts becoming more career focused so that they can finally afford their homes.

To solve this problem, HomeCapital has launched India’s First Home Down Payment Assistance Program. Wait … what?

Yes, it is a mouthful, but it’s worth it. What this program addresses, is the challenge that most first time home buyers in India face. The down payment.

Started by a team of professionals from varied fields, the program will provide up to half of your down payment requirements. The program lets you to double your down payment capability and widens your reach in terms of home affordability. It increases your home loan eligibility and makes your home buying faster and simpler.

The cool part

The best part is that this program is engineered in such a manner that the user is not charged interest for the unsecured personal loan that the user gets on this form of assistance. That’s as good as a 0% interest for the user!

Yes, you got that right. If you want a home and you are buying a home on any of HomeCapital’s listed properties, then the HomeCapital team will help you with an unsecured personal loan to pay the down payment, the stamp duty and the registration fees. At zero interest.

So, if you haven’t been thinking of buying a home because of the insanely high prices, now think again.

Comfort Zones

In case, if you haven’t really been following my blog, I generally tend to write about tech, games, some personal thoughts, some thoughts about my work at 13 Llama and some analytics.

What I do not write about is Design … be it any design. Systems design, Visual Design, Brand Design … even solutions design. I know for certain that I have a certain unhealthy fear of engaging with the design. So much so that it has now become a mental barrier in my head. Staying away from creativity isn’t necessarily bad since we do a lot of analytical and logical work. Having said that, breaking down problems into smaller bite-sized tasks is now a child’s play and there has become a comfort zone. So much so, that over the past few months I had started to think that we should focus on driving more business in these areas.

What does one do when one doesn’t have an option?

Of late though, some of the mandates we have been getting involved us having to work with and also having to define the design specifications. Some of our new team members were pretty gung-ho about working on design specifications instead of a pure play numbers game.

To add to that, at pretty much the same time, we had a couple of our main clients request that we get involved at a higher level and help guide the marketing briefs.

We could have chosen to keep focused on the analytics niche and not step up to the mantle. However, we decided to step out of our comfort zone and things have been taking an interesting turn.

Stepping out of comfort zones

This often involves stepping into a chaotic situation, spending some time taking stock and then working on multiple fronts and more often than not in an iterative manner. From an engagement point of view, it takes a special sort of client to work with. An organization which understands that is an organization that is also in a sense working out of its comfort zone.

This also means that the team which is actively engaged in stepping out of its comfort zone is very very focused on the purpose at hand.

Instead of worrying about things such as appraisals, office times, leaves and petty office politics, the team is then focused on doing what it takes to get the job done. The line of comfort just disappears and shit gets done.

Organizations and comfort zones

For a lot of organizations, functional teams end up becoming comfort zones. An example of this is when there are functional silos in a firm and cross-functional exchanges do not happen as smoothly as expected. This is when both the functions engaging are not stepping out of their zone of comfort. Unfortunately, we have all experienced the adverse effects when customer-facing teams do not step out of their comfort zone.

This severely impacts their ability and sometimes even the intent to engage. Symptoms of this condition are cases where the customer-facing teams cite company policies, or often play the victim, or end up misinforming or lying to the customer. This builds a trust deficit within and without the system.

What can organizations do?

Foster a culture of experimentation and over-delivering value. Sometimes force teams to work outside the zone of comfort. Align teams to the grandiose scheme of things and how their mundane job is, in fact, a purpose-centric activity and not a functional silo.

As a concluding note, assuming people are willing to often step out of their comfort zones is such a positive mindset that the rewards of the mindset alone are worth the efforts of stretching one’s boundaries. Over the past few months, I have seen my fledgling teamwork outside their comfort zones, get over their initial mental barriers and come out for the better. The decision to step out of my own comfort zones has been definitely worth it!

 

Marketing for India2

As someone who has been in the area of Digital marketing for the past few years (close to a decade now), it’s interesting to note and see how it has evolved. Right from the open market economics that AdWords grew upon to the game theory dynamics of Search Engine Optimisation, the way the entire industry has been changing is fascinating.

This article on English Tax and building for the next billion Indian users by Sajith Pai makes you stop and think. At this point, all the marketers and brands are busy selling to that sliver of audience who are online and are english speaking, affluent, willing to whip out their credit cards and make a purchase.

The next Billion

However, there is a larger audience out here, 10 times as much. A billion people, who may not be comfortable with English, who may not have approved credit cards and credit lines … but who are online.

Thanks to the launch of Jio, you now have an audience who may not be affluent, but who are there online. The same audience is being targeted by brands in a language that is not native to them.

English Tax

What is the English Tax? It’s the overhead that a user has to go over to understand what is being said. English is not my mother tongue, however after just under 4 decades of being subjected to both formal and informal education, I have started to think of English as my primary language.

However, that may not be the case of the next Billion. They may not even understand English, and thanks to Google or Apple, they would still be able to browse the web online without even typing a single English letter!

To top it all off, this audience is not being targeted online, not because they do not have a foot print, but because they do not understand the language in which they are being targeted.

This is bad.

Not only would they need re-phrasing of communications, but also a lot of mis-selling and mis-communications would be currently done to them.

Responsibility in Media

Yeah, this section is a joke! However, as digital platforms evolve, can the major players like GAFA take a much more responsible stand on exposing the India2 to the internet?

It’s not as if something is wrong with them. Please note, I am not saying that. However the internet which is most relevant for India2 is in the making and a lot of players are just ignoring this huge blue ocean that needs to be made.

There are content oriented players like BhaDiPa (Bharatiya Digital Party) and  TVF (The Viral Fever) who are making content in regional languages, pretty sure there are many more as well. However, one look at the keyword search volumes in Hindi and Marathi, and I know that we have still miles to go.

This audience for instance may not be doing a lot of searches, however, they definitely are there on Facebook, on WhatsApp, etc.

What can we do to engage as brands and marketers with this audience?

Going Regional

One step is always to speak the same language. I always loved the devnagri script, it just looks graceful when in comparison to the English script. Call me biased. However, as a marketer I would love to see some really good creatives, copy and content being pushed out there in regional formats.

I have seen this being done by some organisations, and just going by their data consumption numbers makes one re-think the language in which they are publishing! Similarly, the concepts of marketing wont change, but since the language is changing, so would therefore the format and forms. Just taking a Facebook update and translating it to Marathi won’t do. It has to be not just re-phrased but even re-thought … some of the memes and mental models that one language/culture has may pretty much ensure that the whole line of messaging be irrelevant.

I think as an industry based in a country that’s slowly emerging online, we are barely scratching the surface on these things.

What’s the real price for free?

I loved this quote by Tristan Harris in the New York Magazine article The Internet Apologizes … “We cannot afford the advertising business model. The price of free is actually too high. It is literally destroying our society, because it incentivizes automated systems that have these inherent flaws. Cambridge Analytica is the easiest way of explaining…

via The Price of Free is Actually Too High — Feld Thoughts

Brad Feld, the author of the above piece is a VC at the Foundry Group. He is also a regular blogger, and when you do find the time, do read through his thoughts on entrepreneurship and start-ups.

One of the discussions that I keep having with founders of different start-ups is how the free now, pay later model is slowly making users devalue the product.

The price of free

So what is the price of free?

Think about the product which is being offered for free. If you are using the product, and you have paid a cent, then, there is a good chance that the product might be using you!

Hence the reference to Cambridge Analytica and Facebook in the article. We use this social media platform so routinely, similar to Google … it has permeated into our very lives itself.

The amount of data that the free product therefore has to gather goes up. The data is then churned, and out of that valuable insights are generated.

Or else, they could simply sell the data!!

Really? Isn’t this illegal? Who does that?

Take places in this world where privacy laws are so draconian, or take countries where the common man is discovering the beauty of the internet (and its dark sides as well), or take areas where the sheer size and volume of the nation makes it difficult to really control … well anything and everything!

Does that ring a bell?

In India, the IT Act of 2000 has been reigning supreme for the past 18 years. Even then, the average joe out here barely even knows what kind of activity makes him liable for a case under the IT Act. Where the laws are not understood, how do you think the population is going to work react?

They are going to react as per their own personal code of ethics and morality. For some, it would be inline with the IT Act, for some it would be a far cry. Sending corporate data over email to a friend … sure! Email spamming a bunch of email-ids … why not!

A lot of times, since the target (or to use a nobler word – purpose) is known to people, the code of ethics is often kept aside. Let the purpose be achieved, no matter what.

In such a “purpose” driven environment, do you think that cyber crimes and leakage of data is going to be noticed?

Think about the product’s purpose

Now, think about the product.

and it’s purpose.

The initial purpose was to solve a problem. However, now we are giving it for free. The purpose shifts to getting these free users to convert. The problem changes. So does the product.

Remarketing campaigns are launched, I already spoke about this. Conversion Rate optimization is taken up … not to solve the users problem, but to get the user to pay.

I am not saying this should not be done. However, if that’s what’s kept at the center of the product, then the product’s very nature changes. That’s the real price of free.

LinkedIn starts Career Advice and Mentorship services

As far as visiting Social Media sites is concerned, I have slowly veered off Facebook and Twitter and gravitated towards LinkedIn and Medium. One of the interesting features that I noticed LinkedIn launch, is its Career Advice services. I am attaching a screenshot of what I saw, this was a promoted post that I saw in my feed.

LinkedIn Career Advice

Curious to see where this rabbit hole leads to, I signed up for the service. Interestingly enough, the link led me to a place where I had to sign up as a mentor and choose the areas on which I could help others out.

This seems like a me-too of Clarity.fm and similar other services. What LinkedIn definitely has is the wide professional network (and thus the social credibility of the influencers). It’d be interesting to see how Microsoft and the LinkedIn team build this further.

One of the major problems in corporate India is the lack of coaches available in the middle management tiers. Perhaps, if played properly, LinkedIn can address this huge coaching and leadership gap.