Market Fit - a Fundamental re-alignment

Market Fit in Startup Ecosystem

Marketing needs innovation and some out of box thinkers. As marketers, we always invent, think and execute new things where we try to establish our products at the retail front-end. During our academic hours in management institutes, we were taught that a permanent journey plan (PJP) of a product passes through retailers or intermediaries being an important channel in the ecosystem, and when space is available to us for placing a product then we assume that we made our product-market fit. Further, we get ourselves ready for scale and expand to other areas. Things change with time, so it is happening in current market practices, Many terminologies were used which over time changed. I am sure many marketers seldom heard about following words 10 years back.

      Hyperlocal, Last-mile connectivity, Omni-Channel, Retail Ecosystem, eB2B, Social Commerce, Otif, Disruption, Angel, Bootstrap, Burning, Minimum Viable Products (MVP), Shadow WHR, Dark warehouse, Hubs, CM-1 & CM-2, Supply chain Aggregator, Many more in technology

Things are not new to us but there is a big gap now as things changed differently as an approach comparing things with ground realities.  New thoughts bring new changes in the business ecosystems but they can not change the inherent fundamental of any business. Same way when we talk about market fit, in the current scenario we should not limit it to focus on the market or territory. Now, it is all about product, team, distribution, and market. Mainly in the startup ecosystem Market fit has more relevance than a corporate or emerging corporate so there we should evolve many things simultaneously.

Supply Chain terminology like hyperlocal and last mile is also, a part of market fit today. these all words emerged from a way of doing and it is " Disruption". Disruption is business or can we placed it as market fit. Yes, it is that's why we often talk about new things, ideas and concepts then find someone who believes in it. The startup is all about innovation. Some brilliant people say it "make it start and scale it fast" but it is something different and can not be easily spelled.

Market fit is covering all major aspects of marketing i.e. Product, Market, distribution and Team, and many more things are there but in the current scenario, I am adding few things to it:

• KYM: Know your Market
• KYC: Know your customer
• KYT: Know your Team
• KYD: Know your Distributor or Distribution System

KYM: Know your Market first

For Market fit, first, we need to understand the market that's why it is called focus market. We all do this exercise, yet, we have to dig more to understand the market well that's why first know your market. It should cover complete demography, geography, and also a deep working of a competitive analysis is required so that one can project their revenue for the market share in coming months or years. Before starting a business or at the ideation stage one should do deep study otherwise chances of failures are there always. A deep understanding of the market comes from various resources, maybe you are coming from that background or your cofounder has such exposure, and if not then market survey agencies are there in the market. But I will suggest that you should visit the market areas, should meet the channels first and then should meet customers. In retail ecosystems, customers are Retailers, semi-wholesale, wholesalers, Mandi traders, cash & carry, etc. The market is the real teacher who teaches us very well that's why KYM is a must before moving with products.

“Understanding ground realities is the first foremost stage of Market Fit”

Know Your Customer - KYC

KYC is the first task before entering the market but in Market fit, I take it second after KYM. KYM is macro working for clicking a panorama view so here before we go for solving the large problems of our customers we should understand them well and within time. Before that, you need to know - Who is Your Customer? if your customer is B2B, things will go differently and if your customer is the end consumer then it will have different aspects. here I am talking about B2B aspects so that accordingly write-up go in that direction.

Knowing your customer is a behavior trait. Many things vary from market to market like Customer buying habits, demography, Regional language, size of business, Population and density, Competition, and Trade of Terms. For ease of understanding, I am taking the example of Kirana Retailers. Kirana The retailer in Rajasthan more or less selling 50% common products as customer preferences are more or less the same compare to retailer in Delhi where 80% consumers come from different-2 regions and cultures so a hyperlocal assortment of one area is different from the adjoining area. change in the ratio of hyperlocal assortment is 80 % in Delhi. Mumbai has 70%, Bangalore has 60% and so on but in the Eastern part of India we will find it more favorable as less deviation has been seen in taste and culture. for our market fit we should know our customer well then only it will help us make strong business plan and projections. The current scenario is a little bit noisy as many minds are working on disrupting the ecosystem via funding and so here one should always be vigilant on every side of strategy. This will also help you to understand that how much a customer can buy your products per month and how many customers are there in the market who are buying such category products from competitors. This is a must so that your revenue projects should not go wrong. A wrong projection can lead to a blunder in the production and distribution systems which is ultimately a financial loss. i.e. example of average per month buying from Cash & Carry or organize distributor is appx 7K. For a single brand like HUL they have more depth but other brands like Bajaj, Dabur, Reckitt has per retailer average below Rs. 5000 per month. Here competitor analysis matters.

Understanding customer is one of the first work to do: Here you need to get certain data about them: Strength, Category, size, average monthly business, and the overall ratio of potential customers in the focus market. for example, you can expect a certain amount of buying from all the customers as each customer has their priorities and way of working so always take an ideal average which you can suggest to your distributors and sales team. Based on your such micro-level working your sales team can produce great results.

“Customer preferences are the foremost Important Aspect of marketing where you sit in their stomach for a shorter period but Desire go longer”

KYT: Know your Team

In the startup ecosystem, the Team is one of the main ingredients which play an important role, they ensure that execution goes smooth in the stream. It comes from top to bottom. First of all, the founder has to be aligned with the vision and should have proper synchronization of thought processes among them. The same wavelength of thought process should flow from promoters to Peon, and it should be visible in the ecosystem. Certain measurements are there to implement like corporate ethics from the very beginning. If the team is not aligned with the vision and they do not mend according to the business ecosystem then things will not move as desired. Knowing your team is the foremost task that every founder has to take care of. Few things need to be taken care of while recruiting department heads and middle management level manpower.

ü  Functional level:  Always recruit industry-specific and experienced manpower, like in Sales, Sourcing & Warehousing & Logistics always enroll from the same industry with relevant experience. At HOD level must have min 5-year experience. Remember – your organisation is not an institute so always recruit industry veterans.

ü  Business Development:  Business development in any business always has few dynamics which anyone can apt. So, here you have to recruit people who either worked in Telecom or beverages segment. They are fundamentally strong enough to drive any type of business development so they will help a better uplift in a shorter period.

ü  For supporting department like Finance & Accounts, compliance, IT, HR, marketing only academic and somehow relevant experience is required because kind of work they do need pre-defined formulas and a mix of working culture

 

Build a great team because they will do special things for you and help you built a ship in a shorter period for further sailing in the market of great opportunities.

 

“When a great team meets a Great market, something

special happens”

KYD: Know your Distributor or Distribution System

Distribution is a key driver of your overall profitability. The distribution system is the foremost and integral part of any business stream, without a perfect distribution channel no product reaches the consumers.  It is a series of businesses, sellers, and other intermediaries through your products to reach end consumers.

A good distributor is the first person who takes initiative, employed workforce and logistics, risks his financials in the market, and works day and night for brands. He is the person who connects channels and changes the mindset of retailers and ensures the placement of goods in the frontend.  Brand building journey starts from him. Without a strong and eco-friendly distribution system, we can not think about market fit.  Selection of A distribution channel is a rigid and lengthy process but the current ecosystem is making it easier, however, it remains a low-cost and owner-driven business so everyone has to struggle a little bit. Since margin is thin in the retail segment so most of the mid-level channels are driven by small entrepreneurs.  To make your product-market fit one has to work smartly.

Before we go for selecting the right distribution channel we must know good about :

• Ø  Products
• Ø  Market
• Ø  Middlemen

Being an important task you need to go smartly and should know about :

• Ø  Competitors in the market
• Ø  Evaluate Cost and Benefits
• Ø  Priorities the option
• Ø  Growth plan.

The best way to find a Distribution channel is to start your survey from retailers i.e. the last mile,  they know them very well, also area wise penetration and SWOT will help you to understand more.  No doubt, it is a time-consuming task but reliable. The second option is to enquire with existing C&F, CFA, and market leaders. If you have the right business development guy, then 50% of the task will be done by them being experienced in the ecosystem that’s why it is always recommended to enroll industry-specific manpower.

Establishing a reliable distribution network can therefore be a strong competitive advantage and help your business stay competitive. Some of the main benefits of a distribution network are reduced costs, more transparency and collaboration, wider customer reach, and faster growth  (source:  https://www.mixmove.io/blog/what-is-a-distribution-network)

Making a product-market fit is a challenging task for every organization but without it, no one can think about building a brand.  It is advisable to align first focus market, focus consumer, your team & distribution Channels. 

---Writer: Balwant Sg Rana

2020, Jaipur India

Transformation comes from within - A change from me Management

I was not from a sales background at the beginning of my career, shamelessly I can say that I was an accidental salesperson who later on understands the magic that how to influence someone to buy my products. When I came first in this stream I was thinking that sales are just a transaction in which one buys and other sells but I when I moved deep, I could know that it is really helping others to ease their decision. 

For more than seven years in my career, I was handling Finance and Accounts where things were in a very repetitive manner and was following the three golden rules of debit and credit. I don't know how interesting work was that but I was fully convinced that I am not made for this boredom where every day I have to start things with the same routine. This does not mean that Finance & Accounts is not an interesting subject but it was not for me. I was looking for some more challenges where I can use my brain to unlimited vibrations, can represent myself at the forefront of business, something that built my career my way. 

When I was working for a good sizeable export house in Delhi, few instances also helped me to think about options. From 1998 to the year 2004 working with the company, I had encountered various searches, raids conducted by the Sales tax department, excise, FCIs, and Income tax. When they conducted the raid one person was highly searchable i.e. Accountant and the was owner of the company.  As I could remember, in the first such raid from the Sales Tax department, they approached the factory compound in the morning around 7 AM. Since it was the early morning time so there was no one from the office side who can handle them.  No one was aware of the instant as they didn't allow phone calls, anyway later on when I came to the office then came to know what was happening but for me, it was a terrifying moment because they were inquiry about the Account Manager.  I was the head accountant so a little bit confused and nervous that why they are inquiring about me.  I entered the room and pretended to be an account clerk, and sat on my chair nearby the cabin. To some extent, I succeed to misguide them about the Account Manager but later on due to an unknowingly mistake by the office assistant but I was caught and officers started interrogating treating me like a criminal or accused who did some rigorous crime.  literally, I was sweating heavily in front of them.  

I concentrated and controlled my emotions and within no time I was cool and confident that they were humble and asking questions like what we do and how was the purchase or sale process, stock status etc. This was another fear working as an Accountant that anytime Govt department people can come or conduct raid as they are free to do or it was the inspector Raj where their interest was not to find the facts but to find the way for themself. Later on, I understand that "Ye gaadi tou eisee hee chalegi" but I started frustrating with the same duplication of work. Again when I thought about career prospects, I too found that there are limitations to grow to the next level. In a private Job, there are no boundaries as far as post/position is concerned. Lala the owner of the commodity-based business can promote you to the highest position in the organization but without hiking the pay. Moral was implied that money is costly than giving a respectful position. There is no harm to promote an Account Manager to GM Accounts. but what about money. Respect can not feed the creed, only money can do this job perfectly. 

Now, I was given a chance in the company to handle the import of Pulses and export of Rice. It was something new to me but I know about export as one consignment was done in 1998.  I was really happy as it was the work of my interest. I  was handling 400 crore export of rice business right from procuring to stuffing in containers or Free on board of the vessel.   I was happy with this stream because it was related to my interest. I found the Agri Commodity business which was activities but full of ethics. There was no leakage as regards to evasion of taxes. Fairtrade practice. This has implanted a belief in me that commodity people carry moral and great ethics. Since it is fair trade so it becomes my favorite trade where I can start my career. but somehow, I had to leave the Job in mid-2008, Anyway, it was the turning point for me to think about my career seriously. When I moved to another job in 2008 I met people from the steel industry, again the same routine was there.  I was full of ethics and honestly that I will not do anything wrong in terms of evasion of taxes whether it is a concern to me as a person or company where I am working. But again it was also going in the same shit, 50% trade-in Steel and Iron business were happening unaccounted. It was a dam hit on my thoughts that Govt should ease tax procedures so that businessmen can freely accommodate into it and can pay the taxes honestly. Since the accountant is the key person who always helped such business houses that how to evade taxes but I was not that honest. If another day if any raid happened in the company and I was interrogated I might speak the truth that the owner is in evasion of taxes so for me it was not easy and fair. So again I found unfit in the Accounts & Finance. The story can go long but the precise is " my conscious will not allow me to do anything wrong where I can say no to a truth"  I quit the Job and start searching for a company where ethics works. 

My search ended another day, I got a call from my old friend that there is a vacancy in his company dealing in various products including mines, fragrances, and commodities.  I intently asked if they are doing in Agri commodity then it will be my interesting subject. He said, yes they have more than 2000 cr annual business in Agri. I jumped to a conclusion and send my CV to HR. On no ground, I was selected and asked to come down for an interview.  It was a small interaction with a one billion dollar worth owner of the company and I was selected.  In his first word, he said what is my strength and why I should be selected in the company.  Without wasting my time, I replied that my strength is in Agribusiness where I can forecast the near future for price parity and system implementation.  I am good at setting up processes and systems in the company. 

He was a gentleman possessing a high-end academic degree in Mechanical Engineering (BE) and Chartered Accountancy (CA). A silly question was fired by him. That here in my company all system and processes are in place and we don't need those and in Agri, we have experienced traders who can prepare a book of even 2000 cr, so where you find yourself. again without wasting a minute I said, Sir, can you give me six months to showcase my strength in MIS which will let you know that how strong the systems and processes company has and where are the Gaps.  I was not expecting that my call will be heard but suddenly he said okay, now you have to show us our shortcomings in the system and process. I started working on digging lengthy data from Mines, Agri, and other businesses and after giving a systematic shape things start appearing like ghosts.  

When I prepared my first MIS for their Mining business there were some unexpected results that were totally undigestable at that moment. I have to again go through to cross-check the data but found the same result again. Gaps were there in forecasting, procurements, inventory, costing, sales pricing, and realizations, unbelievable figures went to crores and almost 8% of the Sales which were not acceptable as per the industry practice against the thin margin business. 

When I went deep again in data mining  I found that costing was done like a layman, such things were there despite recruiting professional chartered accountants and experience cost accountants and Accounts people again there was no control from the management side.  Internal audits were there but only filing the papers as a complete formality.  I thought how a company that has millions of dollar turnover can do such bullshit working.   After taking a breath of one week, I prepared my final MIS report and presented it to MD.   I was surprised that he didn't through an awful expression as I was expecting after reviewing the data he will.  Actually, he was expecting this. 

I saw some glow in his eyes which were about to say some good words or expressing a great sense of thankfulness.  He said Rana'  I am happy to see you working,  figures were in my mind but I want to reconcile with some working on a paper which you did. Now I can say where my money was leaking in the past years.  With gratitude for my work, he appreciated it but asked me not to disclose this with others as he doesn't want to create a panic in the system.  Just contrary to my expectation (As I was expecting that he will continue my working in MIS) he said now you will do this kind of working in Agribusiness, and after that, I will be promoted to Trader where I will be responsible for quite a big volume business ( Fig. not mentioning here due to confidentiality). 

It was a chill moment for me as my dream work is going to be assigned in the near month to me and I will be known as Trader- Agribusiness.

 A change (Turning point) in terms of profession, career, business sometimes happen this way and sometimes happened unexpectedly, the same was happening with me.  I started working sincerely in the Agri and was getting a good amount in terms of salary and sales commission.  

When I was in my early job,  I committed to myself that one day professionals will work under my leadership and  I will meet with millionaire/ Billionaires.  I started exploring Agri deep from my heart. It was a line of my interest. Soon, started ground-level working in Rice exports.  In 2011 started publishing my Rice research reports from all origins of India (Rbliverice Index) and was doing offshore trading from other countries like Thailand, Vietnam, and Pakistan.  I did fantastic work in International trade and within no time I was among the top traders in Rice trade.  During the period 2010 to 2014 did thousands of ton of Rice, wheat, and other commodities directly and indirectly. 

Things change with time, so tuning is a must. Tune yourself for the change and do whatever you like most. Enjoy it from the heart but feel from the brain after all it is a matter of career.  

Transformation and self-empowerment is the change but if you really want to succeed you have to face it, adapt it, and inhale completely if you want to elevate yourself to the next level.  I  did the same for my interest and in return got lots of opportunities, knowledge, and finally experience.  

 Life lessons are there to write so that someone can learn from you. 

As a Salesperson, I learned this transformation by applying few important things in my daily routine. Few are mentioned below for ready reference:

1. Mind Set  is a belief 
2. Self Discipline  by way of self-management
3. Positive mental attitude and behavior
4. Desire and Burning to help others and to be the best
5. Resourcefulness
6. Timely Initiatives
7. Persistence for the thoughts
8. Listening and connecting with the client as an effective communication
9. Accountability towards customers and company in full heartily
10. Fulfilling Commitments and building relationship with the client
11. Creating and Sharing Vision 
12. Diagnosing, the desire to understand the real problem faced by customers
13. Creating Win-win deals
14. Understanding Business and creating Value
15. Democratic Leadership tyle

There are lots of skills that a salesperson can develop within him,  they will be benefited and accordingly can build a glorious career path of their interest. 

I will quote  a relevant saying for a great salesperson: " All Things being equal, people will do business with, and refer business to, those people they know, like and trust (Bob Burg, Author of The Go-Giver)

Something never changes. Certain universal truths remains, regardless of changes in the economy, technology, and society. One is that clients still buy from those they know, like, and trust. and they tend to like and trust those who care about them. Genuinely Care about them  (by Anthony Iannarino from his book The Only Sales Guide you will ever need)

Stay tuned for getting knowledge but convert it to experience for growth. 

Written by :  Balwant Singh Rana

Date: 17.05.2018, Jaipur, India

Publish on 14.5.21 10pm.