Is there a need to differentiate in the e-commerce market?
I am not sure how many of our beloved readers managed to attend “Esparks – 2011” held in Bangalore on 17th December 2011, but I sure did. A wonderful event that was attended by many promising e-commerce start-ups. Clearly underlining the fact that there exists a significant opportunity in this space.Amongst the many interesting questions that arose during the day there was one that really caught my attention - “Given that Flipkart has grown so big, is there room for smaller players to prosper?” I found this question laced with insecurity – insecurity about survival. It’s funny because most start-ups are anyways barely surviving at the start. Now whatever may have been the undertone of this question, the thought behind such a question is extremely crucial.
Beyond doubt Flipkart has emerged as the face of e-commerce in India. But it still has a very long way to go. Its “rising-sun” syndrome is likely to cause a lot of flutters. But I really do not see the growth of Flipkart as a threat to other ecommerce start-ups. It’s easy for anybody to be consumed by the opportunity in the growth of internet (and its lack of it at many places in the country). But it really doesn’t mean that just because there is this lacuna anybody and everybody is likely to find a place in that space. At same time it is not difficult to fathom the spawning of numerous “me-toos” in the e-commerce market trying to emulate Flipkart. But the question remains – Will you succeed if you mimic?
It’s beyond doubt that all of us find Raju Srivastav’s mimicry of Amitabh extremely amusing. But at the end of the day we all know that he is NOT Amitabh. Where Raju Srivastav has made a name for himself is by improvising. He mimics many bollywood heroes, puts them into different situations, draws comparisons from their debacles in public life and causes a laugh riot. Doesn’t he? And we all enjoy it. But is he really as great an actor as Amitabh is? We all know the answer.
Now who am I to comment on start-ups? Who am I to comment on differentiation for start-ups? And most of all you would like to ask – Who am I to comment on differentiation for start-ups in e-commerce? Full marks to all those who think that I know nothing about it…and frankly I am not even claiming to be an expert on the subject. I do wish to be one someday. But I do have the liberty to draw parallel from my life..right?
Investment Banking is definitely not as difficult as running a start-up. But it is not very easy either. But here is a tip that will go a long way in making you business successful - Always look for differentiating yourself. Having worked with 2 Investment Banks, it’s always a difficult proposition trying to convince companies in giving us mandates for raising capital for them. Common question – “So, how are you better than X investment bank?”… or … “Y investment bank has done x number of deals, what makes you different?” Every single time that I have been posed this question I have always had 3 to 4 reasons up my sleeve that convinces that why hiring us is better. (Confession: Many times I have been shown the door as well…but those embarrassing moment I will keep for another time)
The point I am trying to make is that rather than being afraid of the rise of the likes of Flipkart, why not differentiate yourself at the beginning itself? The foundation of this fear lies from the fact that every start-up aspires to be a Flipkart by emulating the visible business practices of Flipkart and the market that it operates in. Flipkart’s success today is built on a solid foundation of well defined processes that they have perfected overtime. It is working for them today, but that does not necessarily mean that it will work you today. More importantly it will definitely not work for Flipkart tomorrow.
Very soon most of you will be reaching out to investors for funding. Even though investors find this space attractive they will soon start cherry picking opportunity. A lot of them rue the fact that they may have missed the Flipkart bus. But that does not mean that in a state of melancholy they will jump on any e-commerce proposal that is presented to them. And when that judgment day arrives you better be ready with your answer on “How are you different from Flipkart?”
I wish I could write about differentiating strategies from good old Kotler. But I cannot and I will not. I feel that every business is unique and must find its own differentiating factor. It need not necessarily be from a book or from a management consultant (please do not do this disservice to yourself by hiring a consultant at the stage of start-up). It could merely be perfecting one single process in the whole business.
If I have not bored you enough then here is an interesting anecdote that I would like to share with you. I was performing a stand-up comedy act at one of the college functions. On popular demand I started mimicking my economics professor. It was dark and I could only hear the audience cheering for me. With the crowd behind me I went on and on. I was overjoyed at my ability to embarrass my economics professor in front of the whole college with my mimicry. When I said, “thank you” and the lights came on … I saw my economics professor in the front row…clapping with a sarcastic smile. I failed my economics paper that semester. I realized that day – Mimicking never helps.
I also take this opportunity in wishing all the readers of “Yourstory.in” and all the exciting startups a very happy and prosperous new year. May this year be the year of reckoning and the year where you leapfrog from a start-up to a well established business.
