ntadbm-group 8- flush_v3
TRANSCRIPT
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New Technology Applications
Design & Business Models
(NTADBM)
IIM NID joint course
July to September 2011
Group 8
Deepankar Garg | Roli Agrawal | Simran Chopra | Vipul
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Table of Contents
Company Purpose ....................................................................................................................... 3
Problem.......................................................................................................................................... 3
Solution .......................................................................................................................................... 4
User scenarios ............................................................................................................................... 4
GPS based system: Tourists..................................................................................................... 4
GPS based system: Women ..................................................................................................... 4
SMS based system ..................................................................................................................... 5
Competition .................................................................................................................................. 5
Risks ............................................................................................................................................... 6
Competition: ...................................................................................................................... 6
Physical infrastructure for database ............................................................................... 6
Other business risks .......................................................................................................... 6
Product .......................................................................................................................................... 7
Navigation on a smartphone .................................................................................................. 7
Navigation on a not-a-smartphone ........................................................................................ 8
Business Model ............................................................................................................................. 9
Revenue streams ....................................................................................................................... 9Pricing ......................................................................................................................................... 9
Revenue projections ............................................................................................................... 10
Technology .............................................................................................................................. 12
Marketing ................................................................................................................................. 12
Alliances ................................................................................................................................... 12
Team ............................................................................................................................................. 13
References ................................................................................................................................... 13
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Company Purpose
Flush aims to provide the users with a geographical map functionality to locate the
nearby loos and to choose one that can be used.
Problem
As of now, India does not have a very well developed infrastructure of public loo.
When one needs to use a toilet in an unfamiliar locality, there are two problems that
arise.
It can sometimes be a pain to find a loo. Even if there are multiple loos in areas that are accessible, the cleanliness and
hygiene of the loo can be an issue. This can render the loos unusable.
In India, the problem of locating a loo is solved by asking the people who are familiar
with that area; e.g. in a market place, one would tend to ask the shopkeepers. Even
when in need, not everybody is comfortable posing the question Can you tell me
where can I find a loo? to strangers. This is especially true for women.Due to
unavailability of toilet facilities women hold their bladder for long durations which
leads serious health problems. In a similar scenario, the problem of not finding a loo is
worked around by holding the bladder long enough till one happens to chance upon a
loo.
Even if the prospective user is comfortable with asking around for a loo, and assuming
there are multiple loos in the vicinity, the problem of hygiene still remains unsolved.
There is no prior information available about the hygiene of the loo and its working
conditions. It is only by a hit and trial method that the prospective user is able to finda loo which he/she finds good enough to be used.
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Solution
We propose to start a loo-finder service in India. The service will be delivered through
mobile phones. It will be a mobile application for smart phones which will use GPS
technology and will be an SMS based service for not-so smart phones.
The service has two salient functionalities to serve the customers
Find the nearby loos based on the user location Provide ratings for the loos on parameters such as cleanliness and facilities
This solves the two problems that we had discussed earlier
Having an application (SMS or GPS based) to find out a loo helps avoid theasking the uncomfortable can you tell me the nearest loo around here?to
strangers.
Secondly, the application provides information on how good a loo is before theprospective user gets to the loo. Therefore, it helps the user decide if the loo is
good enough for the user or not.
User scenarios
GPS based system: Tourists
An american tourist Jack is visiting Delhi. He decides to take a day trip to Agra and
hires a taxi for the same. 50kms out of Delhi, his stomach begins to feel uneasy and
needs to use the loo. Neither he, nor the driver have a good idea about how far and
where can they find a clean restroom. In such a scenario, Flush would be of great help
GPS based system: Women
A female shopper Mona has been shopping through the day in Khan Market in Delhi.
She needs to use a loo and heads towards McDonalds, only to find it closed. She has
never faced such a situation before and is not comfortable asking others for loos. In such
a scenario, Flush would be of great help
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SMS based system
Gurtej Singh, an autorockshaw driver in Delhi has dropped off a few students at
Paranthe Wali Gali in Delhi, post which he went ahead and treated himself to a few
paranthas too. Now he needs to use the loo. Unfortunately, he is new to the area and isnot aware of available loos. In such a scenario, SMS based Flush would be of great help.
Competition
As of now, there are no competitors in the Indian market with such an offering.
However, all entities with a location or a map based application can be a potential
competitor in future.
The key differentiator that we have in the app would be our first mover advantage
which will translate into reliability of our product over other products that may come
up in the market in future.
A first mover advantage will ensure that till the time a competitor comes in, allusers would be uploading reviews and new loo locations on our application
only. This will help us generate a good number of reviews for each loo so as to
make the user ratings reliable.
We plan to update our database through user uploads on loo locations. Again,our first mover advantage ensures that we will have a large database by the time
a competitor comes in. Since the key differentiator for such an app (vs
competitors) is the depth of the database and the reliability of the information,
we should be way ahead of our competition. \
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Risks
We do foresee that there are certain risks associated with the business. These are as
follows
Competition:o While our first mover advantage should provide us a good database and a
huge brand recall, other services with integrated map functionalities may be
able to wean away our customers. For example, if Google Maps decides to
integrate loo finder functionality in an integrated app where you can find
shops, parks, restraints etc; then such an app can be a one stop shop for the
user and the users might prefer to use an integrated app rather than our
standalone app.
In such a case, we believe that our best option would be to integrateour service with the integrated application. In such a case, the various
options such as integrating only the front end or selling of only the
database will have to be looked at
Physical infrastructure for databaseo For the application to be successful there needs to be a physical infrastructure
of public loos for us to tap into. For example, if our app is unable to provide
the location of a nearby loo because no nearby loo exists, and if such an
experience is repeated couple of time for a user, then it is unlikely that the
user will turn to our app the next time he/she needs a loo.
As a start, we also plan to provide the users with the locations ofknown chains which generally have a loo facility on premises e.g.
malls, food chains like Subway, McDonalds etc, but there might beintellectual property issues in providing such information.
Other business riskso There are other business risks with the venture too. The price of the service
might be prohibitive, the target segment may not adopt the technology, we
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may not be able to advertise our product enough etc. These risks can be
somewhat mitigated by undertaking consumer research before launching the
service.
Product
Navigation on a smartphone
We plan to have a simplistic user interface for the smartphone. The user would activate
the app and the GPS on the phone. The app would trace the location and show the loos
on the area on the map on the screen. The user can then click onto any loo to get details
on rating (out of 5), type (western/indian), timings, and charge (paid/free). After some
time has elapsed, a pop up will ask for feedback on the loo.
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Navigation on a not-a-smartphone
The user will SMS user details (Location, city, type of toilet) to a predetermined Flush
number. Flush will respond with an SMS with a list of nearby loos with basic details
like free/paid and timings and codes for further information. The user can thenrespond with the appropriate code to get more details such as ratings and descriptions ).
After some time has elapsed, an SMS up will ask for feedback on the loo. This shall be a
free SMS.
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Business Model
Revenue streams
We are looking at three revenue streams for our application
Application download fee: We plan to make this a paid application, which can bedownloaded for Rs 50 per download.
Advertising revenues: The very nature of the application requires the user todisclose his/her location to the service provider. Therefore, we are a very good
platform for targeted, location based advertising.
o We do realize that our set of target advertisers may not be huge due tobrand associations and brand visibility which the marketers would want
to have, but nevertheless, we think we should be able to generate
revenues from this stream as well.
SMS usage fee: We shall also be providing the service to non-smart phone usersthrough a paid SMS service. The SMS would be charged at Rs 3 per SMS. This
will help us two fold
o Our customer base to expand dramatically which will help us generatinga bigger database, and this would also help us generate more revenues.
In future, if the paid loo infrastructure in India develops, Flush will look at tying up
with a mobile payment system. The users will be able to pay the loo owner through the
Flush application. This will save them the hassle of physical payment, and Flush will
get a commission from the loo owner for directing traffic towards their loo.
Pricing
We would need to price the revenue streams here, and then cross check against the
perceived value offered by our app
Price for the paid app: A quick internet search reveals that the price ofapplications is generally around the $1 mark. The Indian users of paid apps too
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visit the global stores and pay this amount. Therefore, $1 is the reference price
that the users have in mind. Any higher than that, and the customers will
perceive it to be too high. Anything lower than this would just be lost revenues
for Flush. Converting the $1 figure into INR and rounding it off, we think Rs50 isan appropriate price for the application.
Usage based SMS : Using logic similar to the download price, we observe thatthe paid SMS are usually at around Rs 3 to Rs 5 per SMS. Therefore, given that
this is what the user expects, we have taken the lower band of Rs 3 per SMS for
usage
Advertising: The advertising industry is an efficient market. We shall be pricetakers for this revenue stream. The advertisers willingness to pay will depend
upon the demographic and the usage pattern of our consumers.
The results of our interactions with potential customers indicate that Rs50 sounds
reasonable even from a rational perspective. For example, a female user might go out
every weekend, and may need to use the application once in two months. Even if the
app is used only for two years after installation (which is less than the average life of a
smart phone), then we are looking at potentially twelve instances of the application use
which comes out to be ~Rs 4 per use, which sounds reasonable
For the SMS based service, as it is only a pay per use service, the market price of Rs 3
sounds reasonable as well.
Revenue projections
In Jun 2011, India had 600 mobile phone users, out of this 9M were 3G subscribers. The
number of 3G subscribers is expected to go up to 100M by 2015. At 5% market share
and Rs 50 per download, this revenue stream alone should get us revenue of Rs 22.5M
in the first year itself with the revenues growing up to Rs 113 M by 2015.
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This is a conservative estimate because
We have only taken into account the 3G customers while making the revenueprojections. However, we are targeting all smartphones which is a much bigger
number than the 3G subscribers. The number of mobile internet users in India in
2011 is pegged to be ~30M
We have not taken into account the revenues that we shall be earning from SMSbased services. We plan to launch pay per use services for SMS, this should give
us a constant user fee.
We have not taken into account the ad revenues that we can generate. Targeted,location based advertising is expected to be a huge business going forward, and
w should be able to augment our revenues from this source.
2011 2012E 2013E 2014E 2015E CAGR
3G users [Millions] 9.00 16.43 30.00 54.77 100.00 82%
Net additions [Millions] 7.43 13.57 24.77 45.23
5% market share of net
additions [Millions]0.45 0.37 0.68 1.24 2.26
Revenues @Rs 50 per
download [ INR Million]22.50 18.58 33.92 61.93 113.07 50%
0
20
4060
80
100
120
2011 2012 2013 2014 2015
Flush projected revenues (INR million)
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Technology
For smart phone, we shall be developing the application for the android operating
system. Apart from being a fast growing platform, we think that the open source
platform will also reduce our developmental cost.
Location determination
For smartphones, we shall be using GPS to locate the users For non-smartphones, the first phase will involve the user manually imputing
their location to send as SMS. Going forward, if there is sufficient demand; we
can use the wireless triangulation method for such phones to get an accurate
location description.
Marketing
Our main target segment would be tourists and women, as we believe these two
segments are most concerned about the loo facilities. In either case, we plan do not plan
to use traditional media to target our users. The primary media method would be social
media and viral marketing. However, there are two instances where traditional media
makes sense
Advertise with tour operators: This will target incoming tourists Advertising near existing hygienic loos: This should ensure a high user recall
when the user needs to use a loo again.
Alliances
Apart from a physical infrastructure of loos, there are no complimentary assets critical
to our business. Or put another way, for all the other assets that we requires, there is a
competitive market a number of vendors are available. Below is the list of major
vendors/partners that we would seek out for the required assets
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Database server providers: We will need a vendor to provide us with reliableand secure data server which can handle large amounts of data and provide
quick retrieval of information.
Geographical maps : Our application would be built upon the map service.Though this is a competitive market, it would be necessary to choose a vendor
with large detailed coverage
Sulabh International/other such chains: This should give us a head start to buildour database. Sulabh is known to have a large network of reasonably clean loos
Third party SMS service provider: Similar to the database server vendor, wewould need this vendor to be quick with information retrieval and be able to
handle multiple simultaneous data queries.
Mobile networks: For future, if we decide to launch mobile tower triangulationtechnology to ascertain location of non-smartphone users, we shall have to
partner with network operators to access this information.
Team
The founding team comprises of two students from IIM Ahmedabad and two students
from NID. All the founding members have two to three years of work experience and
hence are quite comfortable with the idea of taking this application forward. Moreover,
the mix of design and business background of the founders provides an ideal
combination to be able to provide a good user experience with a sound business model.
References
http://ideaengineers.sapient.com/technology/the-future-rise-of-smartphones-in-india/ http://thenextweb.com/in/2011/05/20/india-has-9m-3g-users-adds-11-1m-gsm-users-in-april/ http://trak.in/tags/business/2010/12/16/smartphone-market-india-huge-potential/
http://ideaengineers.sapient.com/technology/the-future-rise-of-smartphones-in-india/http://ideaengineers.sapient.com/technology/the-future-rise-of-smartphones-in-india/http://thenextweb.com/in/2011/05/20/india-has-9m-3g-users-adds-11-1m-gsm-users-in-april/http://thenextweb.com/in/2011/05/20/india-has-9m-3g-users-adds-11-1m-gsm-users-in-april/http://trak.in/tags/business/2010/12/16/smartphone-market-india-huge-potential/http://trak.in/tags/business/2010/12/16/smartphone-market-india-huge-potential/http://trak.in/tags/business/2010/12/16/smartphone-market-india-huge-potential/http://thenextweb.com/in/2011/05/20/india-has-9m-3g-users-adds-11-1m-gsm-users-in-april/http://ideaengineers.sapient.com/technology/the-future-rise-of-smartphones-in-india/