Start-Up Myopia

In recent weeks, I’ve been caught in the upswing of operations and business development that I’ve grossly neglected everything else – e.g., producing content for this blog. Now that we have completed our main order for Jindal Southwest and await the beginning of that trial, production has slowed and I’ve had a chance stepped back to pause and recollect my scattered responsibilities.

When we started production in May, the new stream of operations workflow brought with it a whole host of challenges, which I won’t revisit. Amongst other challenges, setting up and running productions was like a black hole that consumed all my extra time and energy that sometimes could’ve been better spent elsewhere. For the first 2.5 weeks, I sat for whole days working with the women in the workshop, at the end of which was left little time for all the business development work. Even as the workshop became independent enough to run itself, there still remained the daily check-ins on progress, productivity, quality, etc. Between these daily interruptions and the frequent fire drills of supply shortages or unexpected employee absences, the long-term workplans simmered away on the back burner, overlooked.

I realized that the myopia that occurred during our heavy production phase was just one incidence of shortsightedness amongst many. Perhaps, one of the most difficult and unexpected challenges that I’ve faced in working with a start-up has been to remain focused on the bigger picture. I expected that business school and management consulting had trained me well enough to focus on the 10,000 ft. view, and yet it was so easy to get caught by the immediate concerns – daily production reports, last minute sales meetings, networking opportunities, etc. – that I never realized that my 10,000 ft. view was really a 10 ft. view. I realize in hindsight that the trap is easy to fall into because addressing immediate concerns gives a more tangible sense of productivity than working on something with a longer timeline. Everything that we did was in line with our general objectives of getting the business going, but I doubt that we structured and used our time wisely.

In the past few weeks, my partner and I finally had time sat down to talk about the company. There are things that we should’ve done at the very beginning – broad framework exercises – which could’ve better informed some of the decisions that we made. With more time on our hands, we’ve sat down to do a detailed stakeholders’ analysis. As we talked through the various customer segments and the purchase motivations, I realized how differently he and I perceived the buyers’ motivations, which explained a few of our major disagreements. In discussing our raw materials’ suppliers, I again discovered just how differently we could’ve managed our supply chain and avoided a number of our daily stress instigators. So many of the decisions that we disagreed upon simply stemmed from the different perspectives and understanding we had of the business.

The entire time that we were working on generating more sales and manufacturing for orders, we both thought that we had fixed upon the larger vision and were aligned in our understanding of the business. The first week that we started working together, we created a workplan with short and long term goals and sales targets – this was what we thought the big picture meant. But now I realize how myopic that was. The bigger picture discussion should’ve meant objectives and targets even broader than simply sales targets that would inform a framework for how we would make business decisions. For example, should we take on an order if we don’t have the production capacity for it or if in order to produce it we would have to hire men workers? The sales targets and goals we established for ourselves were tactical and are useless in the evaluation of the option. Especially since it turns out my partner and I had different understandings of the business, we should’ve established broader values for our business so that we knew what to prioritize when a decision presented us with a conflict of objectives.

Seeing the bigger picture is hard. Certainly harder in a dynamic, changing business scenario. It’s easier when you’re looking at it as a static business case in a classroom or consulting conference room. Constant reevaluation of your understanding of the business is a must. In a start-up, you can’t stop stepping back and making sure that you’re making decisions with a 10,000 ft. perspective, because it’s so easy to think that when you’re actually about 10 ft. from the ground. I’m sure that a month from now, I’ll be feeling myopic all over again.

July 14, 2010 | Tags: | View Comments

The Women I Work For

When we first established our operations to produce Coir Atlas units a few weeks ago, we encountered an unexpected difficulty in getting a steady workforce of women. It seems like a simple equation: Decent Salary + Clean Working Environment + Lack of Employment Opportunities = Loyal Willing Workers. We had spread the word around the surrounding villages and poor colonies and expected to be flooded by eager employment seekers. We were quickly taught how wrong we were. The first day, we had one girl show up. We diligently trained her in the assembly process and taught her how to stitch and knot. She didn’t come back the next day.

We kept getting new women each day who would stay for one day of training never to return again.  “Why?” we asked. We found that there wasn’t enough traction and the women were hesitant about working in a newly established organization with no track record and no steady employees. It would seem shady to me too if I showed up to a workshop and I was the only girl working. Finally, when we managed to get three women to show up together, they all bunked the next day. They complained about the compensation structure, which was Rs. 50 during training days (the first week). Given our payment incentive of Rs. 15 per unit after training, the women who produced more than 3 units during training felt that we were cheating them out of their rightful earnings. So we changed our payment structure to whichever was higher, either Rs. 50 per training day or Rs. 15 per unit made, and also shortened training to 4 days instead of 7. We introduced a Friends & Family policy, where anyone who introduced a new worker who stayed received a Rs.50 bonus.

To assuage their fears of this unknown workshop, I used my physical presence as a female and someone they could relate to. For the entire first week, I sat with the women, teaching them the assembly process and making units alongside them for encouragement. Believe me, this is far from glamorous nor instantly gratifying. Training was difficult given my limited Hindi, ergo it became more of show than tell, which frustrated all parties involved. In the afternoons, our public electricity would often experience load shedding and the fans would come to a dead halt. Together, we sat in sweaty solidarity, sewing jute.

I find that people, particularly in the developed world, like to romanticize the poor and the notion of poverty – emphasizing the generosity which the poor show each other or relating how they instantly felt akin to a poor woman they worked with.  The reality is gray. While our women helped each other out, teaching someone who was new, or lending a hand to finish a unit, they were also competitive and possessive of limited supplies because they were paid by the units they made. Similarly, the women and I didn’t start out fond of each other; some of them were in fact quite difficult to work with and they viewed me as their boss who was not thinking on their behalf. They were also hesitant of each other, as everyone was competing for their own interests. Generosity and mutual understanding can’t come if it’s at the direct cost of potential income.

Camaraderie only developed over the course of our days working side-by-side. While our hands tied knots, we talked and learned about each other. Standard topics of conversations included: marital status, number of kids, age of their kids and what kind of food they cooked. I learned that Ratna, one of our best workers, is Tamilian but raised in Jamshedpur, so she likes to make South Indian dosas for her 2 sons on Sundays, her day off, because dosas are only good when they’re hot. Other days, she cooks a day’s supply of rice and daal before coming to work so that her husband and kids have meals during the day. Asha was someone I initially had difficulty teaching, but who has developed into a solid Coir Atlas maker; she is Bengali and so likes to make Bengali curries for her husband and two daughters. The women also developed friendships amongst themselves, joking with each other, and walking home with each other at the end of each day. But none of this happened overnight; it took time to build this mutual respect.

It was from the friend groups that formed that we decided to implement a group production model. We divided our 12 women into four groups of three. Each group is given a common supply of jute fabric, bamboo, thread, etc. and would be compensated for their total production rather than their individual production. Without our direction, the groups developed division of labor on their own. E.g., a particular member who was better at the finishing process took over that task while the other two women prepared the structural parts for her. It was incredible to watch them help each other within their group, but also develop a friendly competition with other groups. In the first three days of individual production, four women produced 14 units in total, which was frustrating when I could produce 8 units on my own in a day. Now, the groups are making 100+ units per day and they proudly and eagerly tell me how many units they’ve made each day.

***

Saturday was our first official payday, and the women were excited to find out how much they had earned. Our payment model is simple, Rs.15 per unit produced or Rs.100 per day, whichever works out in their favor. All of the women who were making units earned more than Rs.100 per day, which is often1.5x what they were previously earning. Four of our women workers come from Bagbera, a slum near the railway station. They used to earn daily wages of Rs. 60 rolling agarbatti (incense sticks), a common trade for poor women. Heera, our top performer, was an agarbatti roller who now earns an average of Rs. 130 per day, which supplements the income that our husband, a construction site worker makes. For Puja, another worker, this is her first job and the income she earns helps her family of 6 siblings to make ends meet because her father isn’t around anymore. It was eye opening for me to hear the story that each of our women had to tell for why she was here earning what equates to ~$3 a day.

As each woman was paid her salary, she was asked to sign her name in the ledger and it was then that I discovered that a number of our women were illiterate. Several of our top performers, who are deft in stitching and bright learners, were unable to sign even their own names, providing their thumbprints in place of a signature. Even many of those who could write their own names, did so laboriously in the handwriting of a child. Manju, who was a fast learner and made 6 units on her first day, couldn’t write the 3 letters that form her name in Hindi. She also wasn’t interested when I tried to teach her to write her name, because there was no income generation value in knowing it. It was hard for me to grasp how these smart and competent women, whom I respect, could not know how to sign their names.

***

Setting up operations was and is challenging and taxing. There are constant setbacks and disappointments in the production performance. And when all the women appear each day, clad in brightly colored saris, with gold earrings and nose rings, I often wondered if these were truly women in need. I doubted the social impact that our operations had. For me, these uncertainties have been laid to rest. Even though our impact is small right now, the employment that we are providing is giving our small group of women a meaningful amount of extra income. Over the last weeks of working with and getting to know them, I came to develop a sense of kinship with and responsibility for them. My only worry now is on the business side of how to keep sales coming so that we can keep them employed. Because now that I know them, I don’t want to disappoint them and have them return to rolling agarbatti for $1.50 a day.

June 2, 2010 | Tags: , , , , , | View Comments

The Importance of Being Branded – Part II

One of the more practical sessions at the Sankalp Forum last week was on developing the brand of an enterprise, sponsored by the brand consulting firm Center of Gravity. Unlike many of the theoretical, overarching discussion panels of the state of the social entrepreneurship sector, this session provided concrete advice for start-ups on how to begin thinking about their branding strategy. Appropriate brand management is often undervalued by start-ups who have enough capital expenditures to worry about without also needing to hire a brand consultancy firm. Yet, it is an important consideration that can aid in gaining traction. The session provided a few simple guidelines for start-ups, which albeit obvious can still be useful points to begin with:

1. Understand the profile of your customers

Center of Gravity begins the branding process with a market segmentation analysis to understand the demographics and motivations of the customers. Enterprises often approach the market potential as one homogenous mass of consumers, whereas the customers are a diverse group with different motivations for making the purchase. For example, organic food consumers are not all driven to purchase for health reasons – some people go organic because it’s a perceived indicator of social status , and others buy organic because it’s more sustainable and eco-friendly.

2. Make your cause and message relevant

After understanding the consumption drivers of the primary customer segments, it’s important to create targeted brand messages relevant to each segment. People respond to messages with which they identify. The healthy eater would not respond in the same way to Whole Food’s upscale organic brand, whereas the status seeker would. It’s important to make sure that your brand message is aligned with your growth strategy if you need to target certain customer segments.

3. Provide a “So-What?” statement that connects your social impact to the customer’s choice

Consumers are lazy, so don’t leave it for them to make the connection between the product and the social impact. Demonstrate a clear link between the purchase decision and the environmental / social impact. For example, if your organic produce company directly helps small local farmers, have a story of that farmer on your package.

4. Do more with less by leveraging high profile endorsers

This piece of advice is a no-brainer. Every start-up would love to do more with less, and if there happens to be an influential person who is sympathetic to your cause, all the better. Center of Gravity gave an example of how they engaged famous Indian stars for a democratic campaign in Bangalore, but hardly every start-up has the good fortune of such endorsers. A better corollary to this particular advice would be to engage everyone and anyone who is willing to speak for your company. A particular CSR person may not have the power to make the purchasing decision, but they can influence and convince others in that position of power to make that decision.

5. Simplify the complexities of your enterprise

Every entrepreneur is very excited about their start-up and can talk about their company until the room runs out of oxygen. This isn’t an intelligent way to sell your company. It may seem that every detail is important, but the more you complicate the story, the less the audience and potential customer will retain. Condense those complications into a simple, memorable story that will stay with them after your conversation. Remember that the average attention span is <1 minute, which is why the pithier, the better.

For the most part, the advice given above is more easily applied to consumer facing products and services, whereas niche market companies have a harder time developing a strong brand equity that contributes significant value. I continue to struggle with creating a brand identity for my company, Coir Atlas, which operates in a niche market within the greater steel industry, but I think the lessons learned from this session are general enough to be applied. The key as with all marketing advice is in understanding how to adapt it to fit to your enterprise’s needs. Don’t just blindly apply all branding strategies and go chasing Bollywood stars to be the face of your product. Adapt these strategies and then apply them.

May 10, 2010 | Tags: , , , , | View Comments