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Monday, August 31, 2015

Chp 565. Business in Mizoram


The reason why I really love hanging out with my Mizo friends is that, no matter if we are discussing about football or 90’s rock music or the latest TV shows, the topic of discussion always comes back to Mizoram. Be it about the conditions back home or prohibition or politics or business, I guess we all cannot really ignore our homeland.

"Ram dangah pawh awm mah i la, kan ram Mizoram hi chu kan vei theuh a ni", is the motto every Mizo who lives outside Mizoram lives by (which I’m sure some of you may have noticed if you have been following the recent political developments back home). And sometimes such discussions can be really funny too, you know, with everybody calling each other "bro" first in case they disagreed with the person’s view :D

And that is the topic I want to write about on my blog today - Not about the politics back home of course (dear lordie, I am not that serious a person) but rather about the many conversations I have had with friends regarding Mizoram when it comes to business and development.



Now let me clearly point out here that I am not an expert when it comes to business, and some of the things I say here may be wrong since I never got to experience them first-hand (and I welcome any corrections), but these are just observations and suggestions I’ve been having for quite some time now.

So every time my friends and I discuss about Mizoram and the lack of development or business opportunities back home, I think one of the first topics we always talk about are the non-Mizo entrepreneurs. I think it is fair enough to say that most Mizos consider non-Mizo traders who have successfully established a business empire in Mizoram as (1) Hard-working, (2) Shrewd, and (3) Business-oriented.

And that is actually a good thing because it throws up a challenge to us Mizos. But instead, some of us come up with excuses such as, "Hnam dang ho chu an taima em mai kan el phalo". Seriously? Instead of throwing in the towel so easily, we should use this as a benchmark and try to be even more productive. But therein lies the problem. Many of us are just too… lackadaisical and unambitious. We give up too easily, or we are just too easily distracted.



I think what we need to do is restore ambition into our youth of Mizoram. Maybe include a couple of inspirational "rags to riches" biographies of famous people in their syllabus and make them understand the struggles those people had to go through in order to get to where they are today. Because if we just give up and let other more "hardworking people" run the world, then this does not only affect us as an individual but causes a ripple effect across our Mizo society.

Just ask yourself this – If you want a new floor built above your existing house or a set of new furniture made, would you rather ask your local carpenter and mason contacts, say U Khuma or Pu Liana who you know are greatly talented but have a habit of skipping work because they got piss-drunk again the previous night, or would you rather go for Abdul or Majumdar who surprisingly speak fluent Mizo and know you can always rely on them even during a "ruahthimpui"?

I know I’m just nitpicking on the worst of us here and there are many Mizos who do take their work seriously. But you’ll have to understand what I’m trying to say here. There’s still a large number of us who tend to take things for granted or play the "hnam" card in case we can’t compete with those who happen to work harder than us.

Maybe in the short run, that will work in our favour. But definitely not in the long run.

As every society progresses and technology advances, you can’t hide forever from the elephant in the room demanding why we aren’t at par with so and so state. And that is another bone I have to pick with. I sometimes feel some of us focus too much on what we reap in the short run rather than the long run. Sure, when it comes to private businesses, one may not necessarily do a B.Com or an MBA to understand economics because the very essence of demand and supply is quite "common-sensical". If there is demand, there must/should be supply, simple. But beyond the demand-supply curve and its many important hypotheses, what most educational establishments also teach are the many case-studies done on actual companies, on where they went wrong or how they crumbled and failed.

As the saying goes, "A wise man learns from his mistakes, but a successful man learns from other people’s mistakes". I sometimes feel that things might be a bit different had we done them differently…

For example, I know a few merchants in Mizoram who had closed down their businesses now. The reason being, they were initially one of the first people to start selling certain goods that weren’t available anywhere else in Mizoram. And so they used to sell such items at a premium price.

Now from the seller’s point of view, it kinda made sense to jack up the price because the general public had no other option but to buy from them. But that is exactly why people hate Monopoly or Cartels. And back then in Mizoram, I'm assuming many of the sellers did not care because they were making good profit right at that moment (I probably would have done the same too back then).



I was just thinking, what if those merchants back then had instead never sold their goods at such a ridiculous cost? What if they had minimized their profit by selling their goods at almost the same cost that they bought them (after deducting other necessary overhead expenses like logistics etc)? Had they done that, I think their business would still be up and running today.

Of course reducing their cost would affect their initial profit margin, but that is where the difference between a short-term vision and long-term vision lies - Yes, profits would be small initially, but by establishing a low cost predatory pricing, that would mean setting up a high entry barrier from other prospective competitors as well. I mean, who would dare compete with you when you had lowered your selling price so low that there was no room for profits for new players? And by maintaining a predatory pricing, you still get to maintain a monopoly but at least that does not affect us, the consumers, at a micro level.

We are all driven by costs and it would be foolish to start a new business selling similar items others are already selling, that too at a higher cost. Hence by keeping your costs down, you may earn less profit in the short run, but it guarantees that you keep maintaining that profit margin for a very long time in the future. A short pain for a long gain. But since they never did that, it became a golden opportunity for competitors to move in. And suddenly, the pioneers who had the "first-mover's advantage" had no other option but to sell out or struggle to keep up with the market by lower their selling price in order to compete with the new players. Had they done that in the first place a long time ago, all this would have probably not happen.

And even in this day and age of an open free market, we still see some people trying to take advantage of the system. How many times have we walked into a local roadside shop in Aizawl and asked for, say a bottle of Mazaa, and the shopkeeper bluntly said, "30 bucks" even though the MRP clearly said "25"? Or if the shopkeeper did give us back our change, she did so in the form of sweets or chocolates rather than money? And if we tried to bring this point up, she would just shrug it off and nonchalantly tell us to go somewhere else if we have a problem with it, especially if she knows the nearest shop selling that same item is quite far away (again I’m not demonizing all shopkeepers here but we know there are many such people like that).

See how we are all driven by quick profit? The attitude in which we treat our customers says a lot about our shortcomings as business entrepreneurs.



It wasn’t like this before. Even if you look at some of the reputed Mizo business families who have established a strong business empire in Mizoram, some of us may not be aware of the struggle the person who started that empire had to go through in the beginning. Sure today, some of those business empires are managed by their third or fourth generation offsprings, and some of them screwed up while others are doing really well. But we have a lot to learn from the ones who started them all.

Ask your elders around, and you’ll hear tales of how hardworking they used to be. There are stories about how they never used to forget a face or a request, and how they would make sure they satisfied the demands of all their customers. They built a "brand loyalty" just by sheer hard work alone, and today, their offsprings have the option of either reaping the fruits of their labour or continuing their legacy.

But as everything changes, it is also of vital importance to keep up with technology as well. Today, the mantra is not just about working hard but also about working smart. Don’t be that guy who follows the herd just because everybody’s heading in that direction. Be the game changer, the one who differentiates from the current trend. How many times have we seen this happen in our state? Somebody opened up a computer hardware store, everybody started doing it. Somebody opened up a mobile phone shop, everybody started doing it. Somebody opened up a garment shop with clothes purchased from the South-East Asian market, everybody followed suit. That is why if you walk into MC or any other malls, you’ll find most of the shops selling almost identical items. Where is the differentiating factor?

And believe me, I’ve heard many of my friends say this many times, "Ti khan an in tih hmuh a nga, an ti leh sup sup mai ang". It’s kinda like the Californian Gold Rush – John Sutter discovered gold and suddenly everybody followed suit, leading to the largest ever mass migration in America’s history, all trying their luck at finding gold to turn their fortunes around. But do you know who ended up being the most successful? It wasn’t the prospectors or gold miners but rather the few merchants who decided not to join in the hunt for gold and instead set up shops selling mining tools and supplies to cater to those people. Smart move indeed. Levi’s denim jeans by Strauss is one such example.

Here’s a clich├ęd line I’ve heard many times in investor pitch rounds – "Don’t reinvent the wheel". Suppose you have this brilliant idea of creating a platform just like Facebook that does everything Facebook does, you may be really proud of what you have created, but believe me, not a single investor will fund you. To investors, it is very important for them to know where their money is going - they need to know what your USP (unique selling point) is, and how much can you scale. Starting a business that others have already done first of all limits your scalability, and secondly it shows that more players can enter that market (if you can do it, then what's there to stop others?). Their vision is all about the future, the long run. Where will you be in the next 10 years (hehe the typical interview question we all hated but it actually is a very relevant question). Trust me, if you approach a well-seasoned investor and tell him you’re going to break even only after 3 years, he’ll still fund you if your business model satisfies the above mentioned criteria (and a few more which need not be mentioned here to avoid making this post any longer).

And I truly believe that is what we all need to do today - to work smart. To start looking for smarter ways to make things better for us back home.



For example, what do we really hate in our state? I mean there are quite a lot of things we hate :D (along with a lot of things we love) but I think what most of us really hate are the taxis there right? They charge SO much just to travel a few freaking distance. I think without doubt Aizawl has the most expensive taxi rate in India. And hailing a cab is also difficult especially during odd hours. So imagine my excitement during my trip back home when I noticed a new private taxi service! The pamphlet read: "Call us anytime, anywhere". I was like "Wow, finally". And so I was having a late dinner at Octangle restaurant with friends, and after we were done, I called this taxi service. They kept to their word - they picked me up in no time. But the only problem was, the fare was almost DOUBLE the cost of an already expensive taxi rate!

That really irked me. Here is a golden opportunity for you to start a new business so many people would love and become loyal customers to because most of them were fed up of the expensive taxi rates, but you blew it all for a quick profit. The next time I went back to Mizoram, that taxi service was no longer around. I wasn't surprised. Now as I said in the very beginning of this post, I may not know the detailed business structure and the various costs and implementations involved in running a private taxi business, but I’m sure the cost could be much lower. And if I’m mistaken, then I’d gladly apologize, but you see what I’m trying to say here. There are so many opportunities like this but we tend to screw up because of our linear profit-oriented mentality.

What do people need? What can you offer to them that they don’t have yet? Everywhere there are opportunities, tons of them. You just have to keep an open mind about it. Many of us are still stuck up on traditional occupations that are deemed respectable in our society. Some of us waste years trying to get into the MCS. I’m definitely not saying that is bad thing, it is indeed a respectable profession and many of my close friends are in the MCS, but I’m just saying, hey, if you can’t make it in, then maybe it’s time you try something else? Same thing goes for the medical field. If you can’t make it to becoming a doctor or nurse, then why don’t you look for something else related to medicines that others have not done yet? Like for example, many people in Aizawl complain about the long waiting hours during an appointment with their doctor. Can you make that more simple by coming up with a service that offers an efficient reservation logic where people spend minimal time waiting for their respective doctor’s appointment? Or how about offering a service that lets your errand boys pick up prescription drugs for patients? I’m sure that would make life a lot easier for those who visit hospitals and need to buy such medicines. You can extend that same service to collecting X-Ray or blood test results from private labs, to delivering stool samples or picking up prescription glasses. And from there you can slowly move to developing an app where people can easily contact available doctors who have signed up with your service for consultancy via their smartphones, charging them a small amount of royalty fees. The possibility is endless.

And if you think such ideas are too radical or that we are not ready for them, do take a look around. People are slowly starting to move into new businesses around you. Just a couple of years ago, weddings were conducted by the family members of the bride or groom, sometimes along with the assistance of their neighbours or the local YMA. Today, most of the food preparations are done by private caterers, and we now even have actual wedding planners who handle everything and are very efficient in their job. Likewise, Aizawl has the highest per capita ownership of smartphones in India, and probably one of the highest number of mobile phone subscribers in terms of percentage. Surely, that creates a whole room of opportunity, don’t you think?



Look at how closely connected many of us currently are via Facebook and WhatsApp. We have various Facebook groups dedicated to different groups and localities where people immediately share the latest news or information about anything. And believe me, this close-knitted society that we have is something we can use to our advantage because others don’t have it. You have no idea how jealous some of my Mumbaikar friends are of our Mizo society. They wanted to start small-time start-up businesses like, a dog walker agency or a tiffin delivery system at places where dabbawallas weren't active, or a locality based funeral service that would take care of everything. But yeah, they went through hell just trying to tie up with the residents of any locality as people weren't comfortable opening up to their neighboring societies or coming together on the same platform. Whereas all those ideas could very well work in Mizoram because the social barrier is almost nonexistent in our community.

How about starting a designated driver service? That can work out too, especially now that prohibition has been lifted in Mizoram. We regularly go to various "picnic spots" with friends or family, and people usually drink at such places. I'm sure if you offer them designated drivers charging a nominal fee (cheaper than hiring taxis), a lot of them would agree to hire your agency rather than risk causing an accident due to DUI or being caught by the cops. Or how about starting a logistic service that will pick up groceries for those families who are too busy to do their Saturday morning shopping, pretty much like what the app "Grofers" does (some people laughed at Grofers when they initially started but after they raised $46.5 Million, look who’s having the last laugh now). I’m sure some families would be more than happy to hire somebody who will regularly pick up their gas cylinders for them or pay their water/electric bills etc.

But of course as you venture into new businesses, do remember you may face a roadblock too. Sometimes things may not always work out, so always be prepared to pivot, changing your business strategy or product, or sometimes a simple relaunch can help too. Do remember that Airbnb, currently at a $20 billion valuation, had to relaunch three times before finally gaining traction :D I’m in the mobile gaming industry, and when Rovio suddenly became hugely successful with their Angry Birds game, everybody wanted to become the next Rovio, without realizing that Angry Birds was actually their 52nd game and before that nobody knew them or the fact that they were almost on the brink of bankruptcy before they hit jackpot.

We really must stop trying to focus on reaping immediate high returns. Instead, plan for the future. Even if you are going to take a long time to break even because of your low cost business structure, remember that is something that will guarantee success in the future. As long as you believe in your idea, even if you can’t afford that much capital, do not hesitate to approach others for investment. There are ample amount of rich people in Mizoram who wouldn’t mind investing in a new business venture, for example, Pu Rohmingthanga :)

After my friends and I started our own company three years ago, I was back in Mizoram for my vacation when Pu Rohmingthanga who was a good friend of dad came over and we had a long talk about how we started the company and what our vision was. After our conversation, he immediately offered to buy shares into our company! I wasn’t even pitching but that was the outcome of our conversation. Of course long story short, I called up our board of directors, and even though that was a great thing, we were in the middle of an acquisition right then, so it never took place. But believe me, there are many others like Pu Rohmingthanga who will not hesitate to invest in your idea as long as you can convince them about your product and the opportunity at hand.



And last but not the least, it is very important to remember that, just as how we must always keep up with technology, we must also be reasonable and not do something that is ahead of our time. Look at the demographics change in Aizawl. As I mentioned earlier, we now have wedding planners in Aizawl who are indeed very competent. But that job would make no sense at a slightly lower-tiered town. Likewise, creating an app to enhance your business may work out at places with great connectivity, but it becomes useless at places where mobile data network is scarce. You have to take all those into consideration as well.

I hope I really didn't rant too much! I surely wasn't planning to write 3500+ words, but I guess it is hard to stop when one is really in the flow :) If you are still reading this, then I thank you for taking the time to read my post, and hope some of the things I've said made sense. Cheers everyone.