Seventymm versus bigflicks

Seventymm versus BigFlicks

For those who haven’t heard about them: Seventymm is the video portal from where you can rent DVDs, VCDs online and they will deliver to your door and pick up too and costing is reasonable and the convenience of ordering online makes it that much attractive and I am a member of it and seems a successful venture with a huge market space to play and is growing exponentially and it was there for a year or so and as far as I know there is a no brand behind it (No Reliance, Tata, Red Chilies, future group or any big brand).

When I see a new venture and a huge market space (decent market space is also applicable here), a question always comes up – what is entry barrier here? What prevents someone with huge load of cash to open shop and in no time kill the say pioneer in a way. For any business I feel this is the most important question and if they can’t find that answer, you will find out the consequences the hard way.

Anyway coming back to the online video rental, I was surprised saw a big flashy store (bigflicks.com) in Malleshwaram (it is growing all over Bangalore and India I heard) which not only allows store rental but also online rental, free pickup and delivery and with better plans; in Seventymm you had to wait for the delivery even if I need urgently but here in times when I need it urgently (suddenly you felt you have some time to kill and lets drive down and get that DVDs wasn’t possible with Seventymm) and all offerings looks really great and guess what, the venture is from Reliance (Anil group) group. Once I got the complete sales pitch and the expansion plan had no choice but think about the “Entry Barrier” I discussed earlier. I had no choice but being a strategy guy think what these relatively smaller guys can do (remember ICL versus IPL/BCCI).

Some of the things I can think of is, either get a HUGE VC funding so that you can compete with the Big guys tooth to tooth and these markets are big enough to hold two brands easily (Say Pepsi and Coke). If you can’t fight at that level (lack of money power) I guess you have to go back to the drawing room and think what else can be done to take the goliath by his throat. If you are in the business for a long time and if you have a huge clientele generally is not an issue as you probably have a huge cash flow and somehow can handle the goliaths but if you are small with not much “dead pile of cash” sitting there you need to move strategically and attack a part of the market space what I say a niche area. In this case I probably will cater to only Kids and have a huge collection of kids DVDs and even if the big guy has much larger collection of kids DVDs he cant fight with the perception of being only for Kids and you can make a mark easily and be profitable and slowly start including for other categories too but your marketing strategy will be “Only KIDS” always (remember McDonalds was supposed to be Kids first choice and then Adults ate there too). I guess I keep going back to marketing strategy always (Marketing Warfare) and I feel is the only way in a real capitalistic society like that of ours (India).

It is raining money in Cricket!!

I guess most of the Indians and our cricketing counterparts spent all of the week speculating and discussing/arguing the IPL rates and the "market worth" of the players including the ethics (or lack of it) of the same. If this is about the IPL, then there is the poorer cousin in the name of ICL and for me I always considered the issue more of a business issue rather than per say cricket issue. This is more of a David versus Goliath business case study.



Anyway even before I discuss the marketing/autioning of cricketers in IPL, or IPL versus ICL, let me talk about another cricket which is played on a regular basis for last 10 years. We at S7 Software started as Bristol Technology ODC exactly 10 years back (10 years and 2 months to be precise) and we being avid cricket overs and fitness freaks in a way, started playing cricket every Thu evening for couple of hours and we have, even after 10 years hardly have rarely missed a day, come rain or shine or any deadlines :-) Infact we pick/draft the teams and we play against each other and the competition is very fierce and we trade players on a similar fashion of say NFL but once a quarter. But the excitment and the fun is so much you have to experience to feel it.

This practise of playing cricket has not only made us fit, healthy but also very competitive in our IT life and added benefit of Health especially in a time when we keep hearing about lot of health issues, depression mainly among IT folks (infact recently I read an artcile on rediff about Bangalore labelled as Sucicide city with hihest sucicide rate and than too among IT people because of stress); What else do you want if we can kill that stress? :-)

Anyway coming back to Auction, I strongly believe that this is the natural course for any professional and popular sports especially with so much money flowing (see NFL, NBA, etc). One great thing of IPL is that it will remove all this region bias/quota which had to go. I feel this is just the begining and the best is yet to come.

As far as IPL versus ICL, I feel pretty sad about ICL trying to fight against the IPL/BCCI - a huge monster with such cash reserves and this can be ideally termed as David versus Goliath. This is the usual thing that happens when a small innovative business until takes on a big business conglomerate and my the dynamics of the market it is tough for the smaller players to survive the big players onslaught. I guess someone at ICL should read the "The marketing Warfare" and ICL should be ideally lead by a shrewd business guy rather than a cricketing icon. This can be a ideal business school case study on what ICL can do to capsize the IPL, I guess try to be very innovative and patent the idea and do that so that it becomes more popular than IPL- possible but need to be very innovative. IPL/BCCI has lot of issues - ICC hates it because they dont want to give more clout to BCCI, espective boards has to agree, most players wont be available because of clashing series, everything has to be passed to ICC even though India and its business are shelling out all the money, and many more issues. None of these issues are with ICL and if somehow ICL can figure out what is the biggest weakness of ICC/BCCI and try to showcase their strengths based on that and gain popularity - they probably can kill the Goliath. Think ICL think - you might have a chance, play to your strengths!!!

This blog is getting lengthier - let me stop here :-)

Where are the good resources?

I think this is one of those confusing periods where we read about lot of layoffs starting from IBM to TCS to Yahoo to Mphasis. Thankfully we are not in that mould and a lot of cautious FY 2007-2008 helped us not only grow but our next financial year planning and forecast look great. With all the good things, people say you get good problems and S7 Software is no exception.

With so many orders and with a sales pipeline looking really great (better than any day) we are now facing a shortage of good resources. One of the good things has been that attrition rate is much much lesser than the market rate - can be attributed to many reasons - may be the open culture we have, may be the freedom and empowerment bestowed upon our employees, may be the profit sharing culture (we have open books to all employees and we share the profits during Diwali) or may be the push towards sports especially cricket which we play every Thursday evening without fail - come rain or shine (we have been following this policy for last 10 years - more on cricket in a separate blog entry) - or may be all of it. Our employees (we call S7 Family members) have consistently rated the highest as far as work culture is concerned here. Now the exercise is to showcase all of these and attract top talent to work here.

We interview around 200 people every week but out conversion ratio is very bad (about 2 out of every 100 goes to next round and final selection ratio is anybody guess). We are constantly looking for good resources and technology/skills is not an issue as being in software migration, re-engineering and porting, we are in demand for all kinds of skills but we mainly look for the intelligence and the attitude. As a company we always want the next hire to be teh smartest of all - thats the only way we can lay strong foundation for the company to grow.

Hoping for the best to attract the best talent. If you are the one, feel free to contact me immediately :-)

Manju

Recession / Slowdown ?

I hear a lot about impending US Slowdown and how it will affect the IT budget and hence the outsourcing budget but from whatever I have seen and talked to people, there might not be a huge slowdown atleast w.r.t IT budget. Infact just read that gartner also says the same but they say that the sales cycle might increase (in a way affecting the overall outsorcing spend for a given time period).

Our experience at S7 Software has been really good of lately but I am yet to ascertain the reason for it - either there is no slowdown or there is a slowdown and more companies are dumping the new development, new R&D and new IT costs but spending it on reengineering or modernizing their legacy software (which costs a fraction compared to new development) or Open Source adoption in a modular way.

Our main expertise and our focus is in Software porting, migration, re-engineering, open source adoption and modernization and of lately we are seeing a huge pipeline of these projects and my gut feeling is that IT departments across the US are slowly making the right alignment for the impending slowdown (if it happens BTW) and embracing and getting ready to tackle it by going the way of less expensive migrations, re-engineering and open source adoptions rather than new investments or new developments.

One of our Clients' CEO visting us

Last friday (Feb 15th) we had one of our clients' CEO visiting us and visit went fine but I was amazed by his visions, his future predictions and his enthusiasm about the business in general. His many predictions in the past has come true esepcially about the internet and I was ecstatic when he said that he sees a lot of great positive things going to happen to Indian economy in the coming years and he said to watch out for India in the coming years for sure. Great going as a Country for sure. Someother day I will talk about his interactions with Bill Gates and Steve Jobs - very interesting ones.



More later and as I find time