How much money should you raise?

An example of a cheque.

The best answer to this question, as you’d probably guess is “Depends!”

The most common answer I hear is, “As much as you can” – which I’m not sure is the right answer, for at least two reasons. If you raise far more than you actually require,

  • you’ll be diluting more of your company at a price lower than you need to
  • you run the risk of developing a wide range of bad habits starting with mistaking raising money with running a successful business

Entrepreneurship literature suggests too much money can be as much (or greater) a cause for business failure as not enough money. Of course the same literature suggests that under-capitalization is the primary cause of slow to no growth of startups.

Better minds than mine have grappled with this issue, in a variety of manners. However most of them are set in the context of the US of A.  I provide links to several at the end of this post.

Whether you raise money, in what manner and how much will depend on

Nature of business – is it a service business, that is better boot-strapped? Web design, IT services, most consulting businesses all fall into this category. Does it require significant capital expenditure or up front investment – multi-location courier service or restaurant, manufacturing or high tech businesses fall into this latter category. Of course a slew of businesses fall in between these two – which would put them in the sweet spot for formal fund raising.

Nature of capital – are only friends, family or fools going to fund your business – most businesses would fall into this category – particularly service businesses that are going to stay small or local.  If you are already profitable or revenue making and are looking for capital to grow, you’re likely better off with debt. Of course in the Indian context debt may be non-trivial to access, despite a pile of money being available. Or do you need equity capital – as offered by angels or venture capitalists?

Assuming that you are a fundable business, I’d suggest asking the following three questions to determine how much money you should raise in your seed, angel or a series A round.

  • How much are you likely to spend over the next 18 months for your business plan?
  • Do you intend to raise another round and If so how many rounds do you anticipate?
  • How much of your business will you be diluting in both the first round and subsequent rounds?

Fred Wilson’s advice to US startupsis largely applicable in the Indian context too with a couple of caveats. He advises

  • raise enough for 12-18 months of business – in India I’d recommend at least 18 months
  • try not to dilute more than 10-20% – in India this might have to be as high as 25% percent

Can you raise too little money? Absolutely. Two things to keep in mind are

  • Things take much longer than you anticipate – the product ship, the first customer, incoming payments  In India a rule of thumb would be
  • It easily could take six months from the time you start your fundraising to when the money hits your bank

Good hunting!

What is the right amount of money to raise at a startup – Mark Suster
How much money to raise? – Fred Wilson
How much money should you raise from an early stage investor? – Seedcamp
How much should we raise? – Venturehacks

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Valuation 101 – for startups looking to raise their first round

maths

A recurring topic in conversations with young entrepreneurs and journalists across India has been that of startup valuations. Despite all the writing that’s out there, innumerable forums and meet ups, some questions – often very basic ones – persist. The questions themselves vary in actual phrasing from

How do VCs or angels value startups?
How much should I raise?
How much should I dilute? 

And each time as I’ve attempted to answer the questions raised, I’ve found us going back to the basics of What does valuation entail – what are its components and the math behind it. 

Note: In India, when people talk of valuation, they are usually talking of post-money valuation and the dilution refers to the percentage the investor owns, after their money is invested.

At the risk of oversimplification, all fund raising and valuation – regardless of fundraising round (angel, seed, Series A) – breaks down to three variables, which from the entrepreneurs’ perspective looks like:

I believe my company is worth so much today (pre-money) pV
I intend to raise so much money-  A
You sir investor will now own D% of my company

The reality though is more like this

Amount  (how much money you absolutely need to raise?) A
Dilution (% you’re prepared to give & investor’s ready to accept for A)  D%
Valuation (what the company’s worth post the investment (post-money)) V

Math dictates that the post-money valuation is Post-money valuation

(for the curious, pre-money valuation is obviously pV = V-A)

Valuation_triangle

In this scenario, the valuation (V) is an artifact of how much money you absolutely need to raise (A) and how much ownership (D) you are prepared to give up (or how little the investor is prepared to accept). Once you fix any of  these two variables the third is automatically fixed. So it’s important to understand which of the variables are really in  your control and what degree of flexibility you have in them.

Amount So how much should you raise? Any kind of serious fund raising can easily take you six months between first discussion and the money hitting your bank. So it’s a good rule of thumb to raise money for 18 months of operation, so that you can focus on running your business for at least a year without having to worry about raising money. You’d need this money to cover the operational expense of running your business over the 18 months and any capital expense or investment that you’d make in the business. For a startup that’s not raised any outside (of friends & family) money, based on your business plan this amount may vary from as little as Rs. 45-50 lakhs ($65K) to say 1.5-2 Crores ($250K). So this fixes one variable (A) in the valuation triangle. Of course if you plan to start an airline (Indigo) or overnight delivery (FedEx) or semiconductor firm, you’ll need a lot more money to start with, but most of us can start with $60-100K.

Dilution Particularly for any first round (seed or angels) the investor likely would expect to get 20-25% of the equity. Depending on where your business is at – concept, prototype, early customer traction, they may go as low as 15% or want as high as 30%. This is largely a matter of the maturity or stage of your business, the perceived de-risking done and the line of business you are in.

Comparables (what other companies in your line of business, in your geography got valued at) are relevant as is your revenue, margins, free cash flow but treat them as rough guidelines rather than definitive stakes in the ground. Sure, your market size and share, your business plan, your product or service state all matters – but usually, in the Indian context valuation is not absolute but a direct output of answering the two questions.

  1. How much money do I need to raise in this round?
  2. How much ownership am I prepared to dilute

So for instance, if you seek to raise Rs. 60 Lakhs (Rs 6 million) and desire to dilute no more than 25%, then your post-money valuation is

Valuation

Just as easily for the same money, if you have dilute more – your valuation could change without any real material change in your business. Depends how desperate you are and how greedy or generous the investor is. The table below shows the effect of A and D on valuations.

Valuation options

Reality rarely is this clean. Happy hunting.

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Why I Tell Indian Entrepreneurs “Stop reading TechCrunch!”

Every time I hear an entrepreneur in India tell me “It’s Angel List meets GitHub” I try not to grimace. Given the ardor of youth and the desire to get their elevator pitches easily understood, I can certainly understand young entrepreneurs pitching in such a manner.

TechCrunch (Alexa score 369) is more popular than livemint.com, India’s #2 biz paper (837) or nextbigwhat.com (640) and yourstory.in (802) – two popular Indian startup destinations. At one level just as the BBC (112), Huffington Post (264) and New York Times (305) are popular in India, it’s not a big surprise that TechCrunch given its brand and Silicon Valley pedigree is followed closely and devoured by the tech startup community in India. However the fact that something is understandable doesn’t make it healthy (as with my Doritos-eating habit).

Silicon Valley, even within the context of the United State is in many ways unique – and unlike anything in India. From the time Fredrick Terman first began molding young minds at Stanford, more than three-quarters of a century has passed before Instagram, Twitter and Facebook appeared on the scene. And before them came the first generation Internet folks – the networking and computing folks before them and the granddaddy semiconductor firms before them, who were themselves preceded by the likes of Hewlett-Packard and Litton. So nearly five distinct generations of companies and innovation preceded this current crop.

Alas, ​young Indian founders approach TechCrunch without any of this context. For most of them, 2005 when I sold my first tech startup, is practically the dark ages and 1999 another geological era altogether.

As an angel and mentor when I encounter entrepreneurs, I find that TechCrunch plays an inordinate role today in their thought process. This is true particularly with startups dealing with bits rather than atoms.

Many of their assumptions are not grounded in the reality of today’s India – may not even in today’s America.

All they see is that a startup to sell tampons online raised $250K with just an idea on a napkin. Or Pinterest raised whatever astronomical amount of money without any real monetization strategy and Fred Wilson invested in Zemanta (who’d by then acquired a million downloads) even whilst acknowledging that none of them were clear how they’d make money.

The reality of the Indian entrepreneurial ecosystem is that we are yet to see more than one turn or “generation” of tech entrepreneurs. A large amount of money is following very few quality deals. The VCs are acting as PE players would elsewhere. Angel groups are acting like VCs would. Everyone’s looking for revenue, customers, and traction (all of which are good), but not quite the high risk/high reward perspective of early stage funders. To be fair to the funding community in India, the supply side problem of deal quality is compounded by the fact that there have been very few exits, and their LPs may be looking for medium risk/medium returns.

The needs of the Indian market and Indian consumers are quite distinct. Enterprises in India do have needs similar to those of companies elsewhere – databases, analytical tools, HR software, CRM systems – but their behavior and culture often are different. Consumers, on the other hand, can and do have very different needs. So when we talk about “building the Amazon or Zappos of India,” and unimaginatively try reproducing something done elsewhere, it serves no one well.

The good news is that oodles of young entrepreneurs are starting companies each day in India. Now if only they paid a whole lot more attention to what their customers are saying and what problems those customers face than what TechCrunch is reporting from the Valley, I’d like to think, we’d see a whole lot more innovation and business building amongst Indian entrepreneurs.

“This week” – the secret to managing your time well

to do list

“Honey, can you make the insurance payment? ” my wife would ask me.

“Sure dear, I’ll take care of it,” I’d respond.

Early in our marriage there were often fireworks due to such seemingly innocuous conversations between my wife and I. It took me a while to figure that my wife meant, “Can you get the insurance paid NOW!” And it galled her no end, that my response meant, that I’d get it done one of these days.

Fortunately for us, we arrived at a compromise that all such conversations, especially ones where I needed to get something done, meant I’ll get it done that WEEK! Twenty years on, we are still on talking terms largely due to this one agreement.

Each year, as I work on new projects and often with new team members, I learn a thing or two about managing my time better – even if it’s only what not to do. From my early Franklin planning days of the early ‘80s through the 7 Habits of Highly Successful People all the way through Getting Things Done and Wunderlist, I’ve tried my share of tools and methods to be more productive and get more of the right stuff done in less time. Truth is that it’s still a work in progress and I continue to struggle with procrastination.

As the parent of two teen girls, child of an aging, recently widowed parent, as a slightly overweight middle-aged man trying to get in shape, the operational head of a non-profit and spouse of a professional musician, my to-do list is overflowing. Even when it’s incomplete.

If you are like me, your to-do lists are ambitious – maybe more hopeful than practical. The very act of opening them is daunting. But we still put too much for a day on ‘em. It finally dawned on me to apply the lesson I’ve learned in making commitments to my wife. Seek balance over a week – and not try the impossible of trying to achieve it each day.

Plan your to-do list for a week. Yep – not just for the day. The reality is some days you’re going to get only one thing done, if that. On other days you’re going to be on fire. By keeping your to-do horizon to be a week, rather than the day—things will be a whole lot less stressful. Sure the first week you’ll over commit, but very soon you’ll get the knack of it.

Now say after me, “I’ll get it done sometime this week!” 

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Content, Cadence and Context: The 3Cs of Great Speeches

“Bear with me;
My heart is in the coffin there with Caesar,
And I must pause till it come back to me.”

As I read Julius Caesar with my fifteen year old, I wonder what it is about Mark Anthony’s speech that’s made it a keeper. Sure the Bard had a way of words and it is him speaking rather than Mark Anthony. Yet the words alone, however powerful, fail to explain their hold over us.

Each of us across nations and times, have our own favorite speeches — often cutting across generations — Winston Churchill’s “We Shall Fight on the Beaches” June 1940 speech, Martin Luther King’s “I have a dream” August 1963 speech, Steve Jobs commencement speech in May 2005 at Stanford, Randy Pausch’s Last Lecture in September 2008 and Barack Obama’s “Tuscon Memorial” speech in 2011.

Oratory seems to be a skill that politicians and lawyers (many of whom end up as politicians) have cornered the market on. Starting from Cicero, a lawyer turned politician from Julius Caesar’s time to Barack Obama, yet another lawyer politician in our own, the power of a well rendered speech have moved nations. Actors and clergymen, who’ve relied on the gift of their gabs to succeed have just as assiduously cultivated their oratory. In trying to understand what it is that makes their speeches memorable, worth transcribing, passing on through word of mouth from the dawn of time through the age of YouTube, three things stand out.

Content, Context and Cadence.

Content What is said in a speech is clearly the biggest contributor to its success. No amount of skill or theatrics can salvage an empty speech. The content needs to be clearconcise and compelling. Like poetry it needs to be able to stand alone — complete in itself. Try reading the transcript of any speech you feel is well done and you’ll see why it works. Mark Antony’s speech is an excellent example as is any good tale, be it To Kill a Mockingbird or Cannery Row, content still trumps all. But you knew this.

Context When your spouse (or in my case my teen) wakes you up and say’s “I had a dream,” or when an interview candidate tells you “I have a dream” it doesn’t evoke the same sense of Dr. King’s words at the Lincoln Memorial.Context is important. When four men carrying a funeral bier in India, utter “Ram, Ram” or as Gandhi calls out “Hey Ram” when he was shot or in the epic Ramayana, when Rama’s father calls out after his exiled son “Rama, Rama, Rama” — the same words mean very different things. So context is what takes what’s ordinary and makes it extraordinary. The words “a more perfect union” when used by Barack Obama yesterday in the context of the Trayvon Martin case takes on a whole new level of poignancy than in his original speech titled “A More Perfect Union” in 2008.

For Brutus is an honorable man;
So are they all, all honorable men

Mark Antony’s words taken out of context lose their power.

Cadence makes the difference between a good speech and a great speech. The pauses and silences of a speech often can and do say more than the words themselves.

When English teacher Taylor Mali narrates his poem, “What teachers make?

“I decide to bite my tongue……..instead of his” his pause adds emphasis.

When Jesse Jackson in his speech at the Democratic convention in Atlanta in 1988, says “With so many guided missiles ……… and so much misguided leadership, the stakes are exceedingly high” his pause serves to highlight the irony not unlike Mark Antony’s literal “And I must pause till it come back to me.”

Repetition is the other not-so-secret weapon of powerful orators.

Here’s Dr. Martin Luther King speaking at the Lincoln Memorial:

But one hundred years later, the Negro still is not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languishing in the corners of American society and finds himself an exile in his own land.

Later in the same speech, the phrase I have a dream is used ten, yep ten times in consecutive sentences as is Let freedom ring nine times in his closing words. Cadence.

Content, Context and Cadence.

Make sure your next speech covers the 3 Cs.

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Occam’s Razor – Keeping it handy

William of Ockham, from stained glass window a...“The VCR is not turning on!” says my wife over the phone. We often have short phone calls along these lines. At other times it’s the laser printer or the washing machine not working or turning on. My first question usually is “Honey, is it plugged in the wall?” followed by “Is the switch on the wall socket turned on?” Sometimes we find that the kids have used the electrical socket for something else and just unplugged our device. At other times they left the outlet turned off or forgotten to turn the UPS back on, after switching it off when it last squealed.

While I’m sure your spouse (or room mate or sibling) and you never have such conversations, we certainly have to thank William of Occam (also Ockham) who lived eight hundred years ago. His eponymous maxim (aka Occam’s razor) states “in explaining a thing no more assumptions should be made than are necessary.”

In other words the simplest explanation for any observed phenomenon is likely the right one. This is the reason when we show up with chest pains, they check for heartburn or gas first rather than rush you into surgery. As entrepreneurs, managers and leaders, we are often faced with issues that seem to baffle us.

  • Why can’t I seem to hire anyone?
  • Why didn’t that VC call us back – the meeting went so well, we thought?
  • Why is the customer not prepared to commit?
  • Why is the network slow?
  • Why does our product crash often?

For most of theses instances, Occam’s razor is worth keeping in mind. Before you explore more complex reasons, look for the simplest ones first and those are the most likely ones.

Of course it’s worth keeping Einstein’s caveat in mind

Everything should be made as simple as possible, but not simpler.”

If you’ve come this far, you might as well read what physicists have to say about Occam’s razor here.

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3 Steps to Find Those First Customers

CustomersA question posted in the HeadStart Forum once again reminded me of how easy many of us find it to build the product first before figuring out how best to get customers. Having bootstrapped two startups and mentored several more, here are three tips on bagging the first (new) customer.

Your ex-employer if you’ve worked before you started up on your own, your ex-employer & ex-colleagues are the best place to start. They know you, hopefully don’t dislike you & you know how much money they have. They also likely can give you honest, even if not favorable, feedback on your product or service. Other than your mother, this is likely the most friendly reception you might get from a prospective customer.

Your ex-employer’s customers This is how I got my first break – when my employer turned down a customer who was deemed too small. I approached them with a request to be able to address their requirement and was given the go-ahead. This let me take the PO, a 30% advance and then start my first company, with a customer and cash in hand. Don’t hesitate to ask and don’t be surprised if your ex-employer and their customers are amenable to such an arrangement – as everyone prefers to deal with a known quantity.

Reference customer Visualize who’d be your ideal customer and more importantly the customer for whom your solution would be ideal. Strike a deal – such as a free trial or finite number of units or one [week | month | year] of free product or service – whichever make sense depending on what your offering is – in return for a strong endorsement or further references. So if Amazon India or Procter & Gamble or some other name brand or market/channel leader is prepared to endorse your product or service, it can open the flood gates to more customers. This requires you to be able to articulate your value clearly to your prospective customer and explicitly asking them for a reference.

Of course as with looking for a job or in the Indian context, looking to get married, it’s a good idea to let everyone you know, that you are looking for customers. So trade shows, your website, entrepreneur community forums, family weddings are all fair game to chase customers. While this is more likely to result in business cards and contacts, it will be ripe for the picking once you have that first customer. Happy hunting!

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5 Simple Tips for Successful Negotiations

Negotiation Cartoons: Positions Vs. InterestsAs an entrepreneur, you’ll find yourself having to negotiate almost as much as you have to sell. From landlords, to suppliers, prospective employees, partners and of course customers – you’ll negotiate often without even recognizing that’s what you are doing. While there are entire books written on the subject of negotiation, a few simple rules have served me well over the years.

Be clear about what you want Simple as it sounds, often we get carried away or worse yet upset and take a position or ask for something, which is really not what we want. Sometimes it’s as simple as that we were not clear going into a negotiation as to what it is we want. So when we actually get what we demanded and find that we are not happy, it’s not a good place to be – especially if you’ve burned bridges or needlessly cheesed off folks you’d have to work with. So don’t go into any negotiations without clarity on what you want – be it bringing on board a new employee, signing a new customer, re-working the terms of a loan or selling your company.

Know you walk-away price Be clear when you would not do a deal – this has to be black and white to yourself and can’t have any ifs or buts. And this need not be just about money, could easily be about the other terms. For instance, if you are selling your company and the buyer is not prepared to give the terms that you want for your team (for instance, employment guarantees or restricted stock) — a situation I’ve faced —you need to know are you prepared to walk away. Being clear about this makes the entire negotiation far less stressful.

Never negotiate against yourself This is by far the most common error all of us commit. We’ve all experienced it. Like when you see a jacket you like at a store – you ask for the price and find it too high. So you walk away – the shopkeeper calls after you – saying he’ll knock of 20% – he’s just negotiated against himself (of course he may have marked it up 40% 🙂 Particularly when negotiating a contract with a prospective customer, the temptation is great to lower our price or improve our terms when the customer feels we are not offering a good deal. Instead, it’s always best to ask the customer to counter your offer – let them quote a price that’s agreeable to them or terms that are more palatable. Now you have something to negotiate about – maybe you get nearer their price, but take something off the table (support, warranty, options) or you can counter with a different price for better payment terms. The important thing is that there’s got to be give and take and until the party puts a stake in the ground, don’t move yours.

Bring something to the table that you can concede All of us like a good deal – especially one that is done in a spirit of give and take. Just as we expect the other guy or gal to make concessions be prepared to make some of your own. This requires you not only to know what you want and what your walk away is, but what is NOT important to you. For instance, if you’re trying to close a large deal and having money up front is not critical for you, be prepared to give that up – the important thing is to ask for a thing or two, that you know you are prepared to concede and be clear which those are and which ones are non-negotiable. If everything is non-negotiable you are not going to get too far. And it makes the whole negotiation less than pleasant.

Save your best for the last Despite much advice against it, some folks and entire cultures conduct negotiations on a piecemeal basis – that is one item at a time. You discuss one point, make concessions and then they make their next demand. Refuse to do this politely. And the best way I’ve found to do this is what I term, saving your best for the last. In essence, establish what’s the critical care about for the other party (and yourself). Ask them, if we close on this item (whichever one it is) is there anything else that’s holding the deal back. If the answer is no, close on the other times. If they answer is yes, get down to negotiating to a close. If they pop something else up after this they are not dealing in good faith. Be prepared to walk.

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3 Lessons I’ve Learned As a Mentor

Mentoring a Demography trainee

Over the last three years, I’ve had the pleasure of working with entrepreneurs addressing a wide variety of markets – from those going after Tier 2 markets in India (music to consumers) to those selling tickets to an urban audience. One selling certificate courses on the internet to others changing how people consume online video or how local advertising is done. Still others running a real world adventure company to one that’s changing how power electronics will make solar energy more practical. Some have a single technical founder, others three or more – most had revenue and some were still figuring out revenue models. And luckily for me all had very motivated, smart and energetic founders.

As an advisor and in some cases as a mentor I’ve worked with these and other companies to help them navigate the shoals of early growth. The truth of the matter is that whether I’ve helped these companies are not, I’ve learned a great deal – besides having a whale of a time working with smart people. Here are three lessons I’ve learned as mentor. As with most lessons they are quite useful in most circumstances.

Do your homework – Most entrepreneurs learn about the markets that they operate in very rapidly, even when they are new to it. Often they dive deep and sometimes they learn just enough to get. So as a mentor before I’m ready to even discuss matters with them, I’ve found that I really need to do my homework, if I’m to engage in an intelligent conversation with them. Also this saves the entrepreneur a whole lot of time, having to educate their mentors first.

Ask questions – the best way to contribute is to ask lots of questions. Not in an interrogatory way nor because asking questions is easy. Asking questions is the best way to unearth assumptions that companies and entrepreneurs have made and often they may not be unaware that they’d made. Asking questions of course is a great way to both learn and identify issues and challenges. Often asking questions about what the entrepreneur wants and their motivations are is more critical than confining the conversation to the business alone.

Listen more – this seems self evident, especially if you are asking questions. However, many mentors having been entrepreneurs and particularly those who were trained as engineers are greatly tempted to jump right into seeking or offering solutions. This is a big mistake, one that I’ve made frequently. Asking questions without listening actively is a great disservice and a lost opportunity to contribute meaningfully. Listening actively is learned behavior which can become second nature with practice. Luckily this is a trait that serves you well whether with your spouse or as in my case, teenaged children.

Do your homework, ask questions and listen more. Seems as simple as that great formula – eat less, exercise more. Much easier said than done. So let’s get started today.

 

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Marketing Your Services – Lessons from a Journey to Bhimavaram

Vijayawada Junction

Recently I had to travel to Bhimavaram in West Godavari district of Andhra Pradesh. Of course I had to look it up on Google Maps to figure out where it was. It’s about a 120km north northeast of Vijayawada. As my  daughter had to be there at 9am on a Saturday morning and had forgotten to tell me but five days before, I had to scramble to make the arrangements. Now that I’m back in Bangalore I realize somewhat belatedly how everything we needed was handled almost a 100% online.

The Economist in its latest issue talks of Indian technology firms and where they may be headed. While I didn’t agree with everything they asserted, my own experience of making it to Bhimavaram and back resonates very well with their core premise that technology, the web and mobile have already changed Indian businesses irrevocably. Here’s what I found and learned.

Google – of course this is where it began – with Google Maps figuring out where Bhimavaram was and the nearest airport – Vijayawada in this case. Cleartrip was my next stop to check out airline tickets. Once I found Jet Konnect had the best connections checked out their website as well and bought the tickets there directly. Usually when travelling to a new city, I’d call friends, to see if they had any recommendations for hotels. Given I was travelling with my daughter, I checked TripAdvisor for reviews and everyone seemed to suggest the Taj Gateway awas the way to go. So off I went to TajHotels website. Then I had the bright idea to check hotels right next to them – as in centrally located by not as expensive.  I decided to check out Stayzilla who’s ads I’d seen in Bangalore – and they got me a good deal at the Taj Gateway. Then off it was to find a rental car. I called the Taj up and asked them to refer a cab company. Once again I felt the cab rates were quite high and so a quick Google search revealed a service called Saavari.com that fit the bill – they could get you a cab (including rates, ratings, the works) in practically any city – most importantly in Vijayawada in this instance. However, I couldn’t figure out a few things re quoted price online, so I called them on their toll free number. They said they’d get back to me and never did. So in the meantime I kept searching and here’s where Google Local came in real handy. Several cab companies in Vijayawada had excellent reviews ratings on Google and I reached out to one of them over the phone after checking out rates on their website (which I’m finding hard locate just now). So here we were four days before our travel, with flight tickets, hotel bookings, local taxi rental all done over a couple of hours online and on the phone – to a city we’d never been to, whose language we did not speak and with some measure of perceived safety for my teen traveller.

Lessons learned

  • Online reviews matter – the hotel we ended up staying in had good reviews on TripAdvisor. The cab we used had good reviews on Google local. These were instances of a local supplier beating out a larger national “professional” supplier. Social and community word-of-mouth is getting better, even it’s not from someone personally known to us.
  • Websites matter – Even after locating the cab company via a review, the fact that their website had clear rates, reviews and contact info is what tipped us over. Good websites matter – Savaari.com and Stayzilla I had to look up in my mail trial as I couldn’t recall their names – and in the formers’ case I couldn’t figure out the pricing and latter’s case I had to resort to the phone to resolve issues.
  • Customer service matters – Saavari.com said they’d get back to me and they never did. They had a beautiful website – clean and while my use case was not a clear fit to their standard offerings, phone calls were not returned. Similarly Stayzilla called me back to say that the Taj Gateway room was no longer available – that they’d put me in an another hotel on the same street. To give full credit to them, they constantly followed up but were caught scrambling. The place they finally got me I passed on due to poor reviews on Trip Adivsor. Jet Konnect won over ClearTrip as it was easier to cancel or make changes with them.

This was the first time that I travelled to a new city – let alone a Tier 2/3 town – without seeking direct personal inputs from friends or family and did so at short notice and had a uniformly pleasant experience – despite not speaking a word of Telugu in this instance and carrying minimal cash. Whether web and broadband penetration is where we’d like it to be or not, for businesses the web and mobile have changed how they do business forever.

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