About all things unimportant

Checked my Blog statistics tool and figured out that i get visitors from following countries

USA, India , UK , Czech republic ,  Denmark , Canada

Interesting - I guess i know a few people who would be counting towards hits in US, India and UK .. but Czech republic and Denmark.

My hypothesis is that the hits coming in from Czech republic , Denmark and Canada are probably from prospective applicants ( most probably India born software engineers ) who are reading up  information that they can get about ISB. 

I dont have a way of validating this hypothesis till people actually came back and tell me that this hypothesis is correct.

If you have looked at the previous two posts , then you would have figured out that it is next to impossible to differentiate a potential successful idea from a failure ( atleast at initial stages ).

So how do VC’s make the call  - They dont make a call on the idea, they make a call on the people behind the idea. My personal take is that no idea in this world is a waste ( in absolute value terms ). Its just that the intrinsic value of the idea would decide if the people behind the idea would be willing to put their efforts behind it.

Failed ventures arise when companies ( people behind these ventures ) are unable to correctly estimate the potential returns from a venture and do a comparison of this return with their expectations on a rate of return they expect.

Calculating the expected rate of return is not easy and at times is made up of not so easily measurable attributes like "happiness, pride et al". If you had an option of working for a firm doing perl scripting at monthly salary of 80 K rupees and running your own magazine that got you only 40 K per month.  On a simple rate of return , you might immediately discard the Magazine idea, but in terms of valuing the pride associated with running something on your own versus SSH’ing into a unix box to run a few perl scripts for the next few years. Whats your take ..

This blog post has been all over the place .. so dont know if you have got the gist of what i have tried to say .. may be i should take blogging lessons

Parting question - Do you LIVE your life or Do your RATIONALIZE your life ?  

Ragu had posted a few comments and you can read them here

Decided to work the numbers for this idea also and figure out if and Upscale movie magazine idea makes sense

Target Audience

1) Film fraternity - Anyone who has to do anything remotely connected to the Business of movie making

2) Film buffs - People like me who would love to figure out Mani ratnam visualized a scene and how Ram gopal varma does research for gangster flicks ( his better one’s of course ).

3) Any amateur videgraphers - right from the guy who does the visual fx for your marriage DVD to your cousing who posts his holiday videos on youtube or better still on Y! Video 

4) Any person who is interested in performing arts ( say theatre, television ) 

 It might be easy to research numbers for 1, but how do we measure the potential customer from those who would fall under 2,3 and 4 ?

Boils down again to the "Bias for analysis / Bias for action" discussion from the previous post. Can we build the most thorough mathematical model and state for sure that we are looking at a market of 10 lakhs.

Revenue streams

1) Subscription revenue from the magazine

2) Content syndication revenue - assuming that you generate fairly compelling content, it should be possible to build content syndication partnerships with general magazines like India Today, Outlook and so on and with online partners like Y! India and Rediff.

3) Advertisement revenue from our own online presence - Given the decreasing costs of having an online presence, could we monetize the hits on our web page by shown advetisements ( say for Subhash Ghai’s actor training school or for the local animation tranining school in bangalore).  

Arguments for the Idea

1) If we use the american magazine market as a surrogate for how Indian market will shape up in a few years, then things look promising since the first place is by a TV guide ( assuming that in theme this magazine is close enough to our end product ).

Argument against the Idea  

1) It is a paradox , but the contents of the proposed magazine would actually try to distinguish itself from magazines that dished out content high on gossip value.  So in this case, the fact that you dont have a "Movie" magazine in the top 20 is disappoiting.

    To do a flip flop again, what worked well for America may not necessarily make sense for India, so may be there is still hope for an upscale Movie magazine. 

I could go on and on jumping both sides of the fence .. but my gut feel tells me that this idea in the right hands could be a potential success. It definitely wont be a 1000 crore idea but with good execution it could easily become a 25 crore idea in 2-3 years.
 

Ragu had posted a comment about the Elevator adveritsing, added my 2 cents on why it might work and why it may not

Why it will not work 

It is difficult to crunch numbers for captive audience

1)  Lets assume that the average height of an indian commercial/residential building is about 5 floors and there are 5000 such buildings in Bangalore. Assuming that we start operations only in Bangalore and that the captive audience from ground floor to average floor ( 5 in this case ) and the journey time from the ground floor to the average floor would be 15 seconds and the average stoppage time at each of the floors ( people getting off at particular floors ) is about another 10 seconds ( accounting for non peak hours ). Another assumption is that on an average , the elevator makes about 50 trips from ground floor to top most floor and back and that on an average you have 2 people per trip.

You would have realized by now that a lot of assumptions have to be made to even arrive at a rough estimate of potential captive audience. For a more serious analysis you might need to read something like this to get started. We can make some simplifying assumptions by stating that we will look only at Commercial complexes which are more than 10 storeys tall. Who knows, this might just make the business model viable. In fact, there is every chance that viability of this business model depends on following

a) Selecting buildings which are beyond some threshold height ( say 10 storeys )

b) Ensuring that targetting advertisements are  dished out intelligently ( say a short 5 second promo ) if the doors closed and the only storey pressed was 3 ( out of 15 storeys ) and dishing out a longer advertisement of 20 seconds if the storeys that were selected were say beyond a threshold length ( 2 seconds per floor * optimum storey count ( say 7 in this case ) ).

 
Why it may work  

In short we can create the most amazing mathematical models and will still not be able to say convincingly if the business idea would be successful or not. This boils down to an issue of "Bias for action, Bias for analysis" that we learnt in our Enterpreneurship elective. When do you draw a line and say that any more analysis would just make minor refinements in our understanding .. and that the best way of validating this idea is to just jump in and "Just do it".

In this particular case, people who jump in to implement this idea might just figure out a way of making this a viable business.

As for me , my bias for Analysis tells me that "In Elevator advertising" may not work in India because of the shorter buildings and the fact that "Building density" in India is not as good enough to make this business model successful.

We have two teams from ISB in the Top 10 teams in the Innovation Challenge ( Finals being conducted from Nov 16-18 in Virginia, US). Wishing them all the best .. Would have loved them to see more teams from ISB ( I must be a jerk .. Only one other college has two teams in the TOP 10) . We had two teams last year also but couldnt convert that into a podium finish. Hope that Class of 2007 converts this position into podium finishes.

ISB has come of age ..

An ISB student has won the First place in the Wharton Business Plan competition held in Mumbai .. way to go ISB(ians). Last year i noticed a pattern that one person’s achievement then became a big catalyst for people winning all sorts of competitions later in the year. I think this is first big win and i am looking forward to at least half a dozen more wins of this standard in the coming months. In case any Class of 2007 folks are reading this, please convey my congratulations to Subramanian Viswanathan. Way to go folks ..

Meanwhile Raju posted some interesting comments and will try to put forth my views on his views in next post.