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Forget quality, focus on customer

Brick and mortar start-ups don't sound as exciting as e-start-ups and, therefore, get less attention from vcs.

H. Bijoor | Print Edition: November 16, 2006

Businesses have metamorphosed over the years from the physical to the electronic. While the physical still goes by the sobriquet of brick and mortar, the business that is electronic is best described as virtual. Both these businesses, however, enjoy one common spirit. The spirit of entrepreneurship. Both sets of businesses go through a cycle of unpredictability that brings all the excitement to the party. Most entrepreneurs love this excitement.

Brick and mortar start-ups do not possibly sound as exciting as e-start-ups and, therefore, get less attention from venture capitalists (VCs). This is essentially so because manufacturing in most categories is considered something that can be easily replicated. If, for one, it can be demonstrated that the specific manufacturing competence and talent is unique, the funds will come chasing. The manufacturing business will also have to demonstrate the ability to look after presales, sales and aftersales abilities.

Nevertheless, the relevance and business potential of any business in the brick and mortar space is as sound as the need, want, desire and demand for food, clothing and shelter. These are basic demands that never wane.

The manufacturing sector, small-scale or largescale, was all this while besotted with quality. My advice — forget quality. Every product manufactured in the category has to be a quality product. Your quality is meant to be good. Quality does not sell anymore. I know this sounds bizarre. It is meant to be. The more manufacturers focus on quality, the more they focus on the language that is unique to the manufacturer. Manufacturers should now sit up and talk consumer language. The cutting edge of the day is consumer-centricity. Adopt the language of the brand aggressively. This is a category that looks generic from the outside, but in reality it is not. The brand is as important in this category as in canned baby food. You need to rise above the functionality of your product category and look keenly at the consumer and create solutions based on learning.

The role of market research of the holistic kind is very important in this category. Understand your consumer, primary (the one who stocks), secondary (the one who uses it as an installation) and the tertiary consumer (who is actually at the receiving end of the solution). Understand the consumer with the depth and passion that a maker of a beauty soap does. Ingredient branding of what goes into a solution is getting more and more important today. Focus on it. Break out as well from the business to business (B2B) mindset of just selling and marketing. At the end of it all, however, you are a business to consumer (B2C) solution-provider as well. The B2C model has greater chances of succeeding in today’s scenario where the consumer is king. Focus, therefore, on the cost or re-emphasising on the consumer, and thus redefine your consumer all over again.

One key thing: a business of this kind needs to watch out for speculation. Watch out to ensure that you do not get engulfed in the game of the commodity. You might look like a commodity, you might feel like a commodity most of the time when prices collapse and competition hots up, but never ever play the commodity game yourself. The brand is it.

(By Harish Bijoor, CEO, Harish Bijoor Consults Inc.)

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