Days in Delhi

Last week I attended the Microfinance India Summit in Delhi. It was nice to focus on microfinance for a few days, since my day-to-day work doesn’t really involve it, but more than anything it was great to catch up with the original leader of Team Awesome (the Microfinance Alliance), Mary Jo. She is working at the Grameen Foundation in D.C. and we met up at the conference. I attended their panel on social performance measurement, which was interesting. I also attended sessions on Technology and Value Chains in Livelihoods. Overall, I came away with the sense that 1) the profit-motive vs. social motive debate continues, 2) there is a need for significant regulatory reform in this realm in India, and 3) there is a lot of interesting work going on.

Outside of the conference, I didn’t get a chance for much touring. I booked a bed & breakfast online with no down-payment, so I showed up in Delhi ready for it to be awful or not reserved for me. It turns out Vandana’s B&B is just lovely. I stayed in one of the 3 guest rooms in her home in the park-filled Safdarjung Enclave. She even got worried and called one night when I hadn’t been home all day and it was rather late- very sweet. On the downside, everything you read about Delhi scams seems to be true. For instance, I never succeeded in getting to the Dilli Haat shopping area because the rikshaw drivers all wanted to take me to some place they know of, which is actually an overpriced tourist trap where they get a commission for bringing you. But that’s really the only lame thing I endured.

What I've Learned About Startups in India

I’ve spent a few weeks at GreenMango, an in Indian startup, and the first thing I noticed is that there are a lot of universals when it comes to starting a business. We manage with few resources, we are outgrowing our office space, we wear many hats (like our new hats shown here!). But there are some things that are unique to India:

• It’s hard to get good senior managers: Unlike in much of the US, it is NOT particularly glamorous to work at a startup. In addition, families are very tight-knit and it is likely your family doesn’t look too kindly on risky ventures either.
• Cultural norms affect operations: Our sales associates often recruit vendors into our database from their homes, particularly women who are tailors or beauticians. It is not very acceptable for men to enter women’s homes when they are home alone, so our sales associates work in pairs with one woman and one man (depending on the area the women may not feel comfortable going out alone).
• The office is rather hierarchical: There’s really nothing wrong with this in theory, especially if you enjoy being called “madam” all the time, but it can inhibit an open work environment. It can take some work to get employees to feel empowered to contribute their ideas.
• Lunchtime is awesome: Maybe Indians are just better at sharing, or maybe it is because the typical Indian meal has several dishes, but all of my co-workers share their lunch with me and everyone else. This is particularly good for me because the cook at my hotel is not from this area, so I don’t get local food for lunch. And many of the ladies I work with are great cooks. Plus it’s a good time to practice my Telugu.

Workin' for the Man-go

This is my third week at GreenMango and I’m loving it. I’ve had a chance to go out “in the field” and see our sales staff recruit vendors for the website. These sales associates go down every narrow street and alley in their territories. One of the biggest hurdles is gaining the trust of these vendors, as they are initially skeptical of any new model. It is also difficult for some of these vendors to understand the nature of a web search; they don’t see how customers will find them using the GreenMango platform. As the GreenMango brand becomes more recognized, this will be less of a problem.

A man poses with his new goat

I’ve recently learned about a fascinating Nepalese company that is making the most of the NRN population (Non Resident Nepalese- those living outside of Nepal). Most NRN have family back home they want to take good care of and so the company, Thamel, provides a way to send gifts and transfer money from abroad to Nepal. Some gifts are VERY local, like these gifts for the Tihar festival. You can purchase an online puja, but I’m not sure what that means (puja is a Hindu ritual showing reverence). I’m not sure if they still offer this, but originally you could purchase a gift certificate for your family to pick up a goat at the local market. Thamel had $30,000 of goat revenue the first year they offered this service. Some gifts are more universal, like holidays at resorts and flat-screen TVs. A newly added service allows you to arrange for financing of a home, a car, or an education in Nepal.

Most of their customers are Nepalese living in the US, Canada, and the UK, but there is a significant untapped diaspora population in both Hong Kong and Japan. Purchase of the items on the Thamel website usually includes delivery, which is provided by each specific vendor in their network. This allows Thamel to avoid a developing world issue of distribution with poor infrastructure and allow locals to take care of it. Thamel has become quite a local brand through marketing strategies like offering a picture of your family member receiving their gift. This helps to build trust in their service, which can be a significant hurdle for a service that is totally new. In fact, gaining the trust of potential vendors was a challenge when they were first starting. It is easier now because locals can see Thamel vendors are getting 5-10% of their revenue through the e-commerce platform – a number that rises to 50% during holidays and festivals. Thamel is profitable, with $1.3 million in revenue in 2004. The World Resources Institute/ NextBillion.Net did a case study on them, where I got a lot of this information and these fantastic pictures.






Thamel utilizes several of the characteristics of developing markets laid forth in The 86% Solution, which I’ve paraphrased here:

• Remember those who have emigrated
• Tap into regional communities to build your brand
• Build your own infrastructure
• Take the market to the people

Blog Action Day 2008: Poverty

This year’s blog action day topic is POVERTY. Since I am living in a developing country, I thought I’d participate. Here are some facts comparing the US (where I’m from) and India (where I am currently). All figures are 2007 Worldbank unless otherwise noted.

While I find these figures interesting, I also find it interesting how accustomed I’ve become to poor conditions. I’ve spent only a few days in different “slums” and seen the backside of many communities from a train. I don’t really notice the trash on the streets or the pollution/ dirt on buildings like I did when I first arrived. I was in a “slum area” today (it was really like a lower class neighborhood), and I found myself saying how nice the houses were. I don’t think they had running water or anything, but they looked new and well-kept. I am wondering, am I becoming blind to poverty because I’ve been exposed to it quite a bit lately? Or am I learning to look past the blemishes and see the good parts of these lives? I’m just not sure.

I'm Hydera-bad

I have officially moved to Hyderabad, India, and am almost settled in at GreenMango. This picture is the view from the balcony of my first hotel room. I’ve spent a couple of (really hot) days in the field getting locals to give their information to be put on our website. I also took a little time out to sightsee at Charminar and buy bangles. Hyderabad is interesting. It is considered a 1st tier city by most (on the same level with Mumbai and Delhi and Bangalore), but its growth is fairly recent and its official population at a mere 8 million. Supposedly it has overtaken Bangalore as the tech hub. Luckily for me, my suspicions that it is also the Indian social enterprise hub appear to be correct (e.g. SKS Microfinance is across the street from my guest house). I now have to find a decent furnished short term apartment, a formidable challenge in a city where most expats can afford luxury at a level I cannot, but most Indians live more modestly than I would prefer.

Green Mango

I’ve decided to spend a couple of months working with Green Mango, a for-profit Hyderabad firm seeking to connect service providers, like tailors and plumbers, with customers using their pilot web platform (see screenshot below). The co-founders, who came from Women’s World Bank, saw that access to capital was not enough to get BOP entrepreneurs off the ground. They also needed access to markets and important information (like pricing). I’ll be working on their volunteer capacity, public relations, and other projects I’ll dream up. I’m excited to dig into an interesting problem and live in an up-and-coming city. Many of my favorite organizations have offices in Hyderabad, including Acumen Fund and Vision Spring, as well as some of the larger Indian microfinance institutions. It is also located in a region known for the level of spice in their food, so we’ll see how that goes.

In preparation I’ve been thinking about similar models where a business is built to connect buyers and sellers. Some examples I could think of were ebay, Kiva, TripAdvisor, craigslist, Angie’s List, and Innocentive, What do these intermediaries provide? One thing is a marketplace, a connection that these buyers and sellers might not have otherwise found. Where else are you going to sell your used TV other than craigslist? But in addition some provide information: ebay ranks buyers and sellers, TripAdvisor presents hotel reviews, and Kiva puts a face on microloans. Green Mango seems to be heading in the right direction, with user rankings and shopper networks already built into their platform. I am very interested to see how Green Mango applies lessons from these other models in the areas of revenue models, customer experience, and network effects in their unique environment, where their “seller” segment will not likely have internet access at home.

Using my digital camera to make friends

Yesterday I went to Maria’s house for lunch. Maria is the cook for the family who’s apartment I stay in and I’ll admit I was a little scared to have lunch at her house. Here’s why: a few days earlier we were at her sister’s three-room home in Bandra, which doubles as a general store/ shop. The three rooms are a kitchen, dining room, and bedroom/ tv room; it was probably 500 sq. ft. or less and opened in the back onto a garbage-ridden waterfront. What scared me was when Maria described herself as “poor” and her sister as “rich”. If this was “rich”, what was Maria’s place like? It turns out that Maria’s home is about the same, just not in such a convenient and central location; it’s at least 1 hour away from anywhere in Mumbai no matter what transportation you use. There’s no running water (there was a well right outside) and the electricity only worked about half the time I was there, but it was clean, well-kept, and reasonably spacious.

I was a celebrity in the neighborhood; everyone came out to meet me, the white foreigner. Since my Hindi is quite bad and I can’t carry on conversations, I passed time before lunch entertaining the neighborhood kids by making videos of them on my digital camera and then showing them the videos. Even though the videos were rather simple, this was endless entertainment for both the kids and me. They, of course, became shy when the tape was rolling, unwilling to dance around anymore, even though Sabina (the short-haired girl in red) was a totally hilarious spaz the rest of the time. She also got the biggest kick out of the videos.The parents of the kids came to watch the videos as well, and quickly asked me “kitne paisa?”- how much money- for the camera. At $200 it’s a little out of their price range, but it made me think maybe there’s business opportunity for low/ medium quality video transferred to DVDs. Most people in this neighborhood had TVs and many had DVD players.

Innovation for the Subcontinent

Here’s a quick list of technologies and companies in India that serve the average Indian:

• A Little World/ Zero Foundation: This company and its foundation intend to use technology to bring low-cost solutions to the bottom of the pyramid. Their most recent success is Go Mumbai, a system they developed (and subsequently sold off) which uses smart cards to replace paper tickets for Mumbai trains and buses.
• Solar-powered Routers: A 31-year old Texan came up with the winning design in a recent Innocentive challenge sponsored by ASSET India, a non-profit using technology for children of sex workers to connect them to better opportunities. Zacary Brown’s Linux-based solution met all the challenge requirements, including using low-cost readily-available hardware. (I learned about this through the ThinkChangeIndia blog.)
• Drishtee Kiosks: Drishtree has been providing kiosks in rural India for 8 years. Current services provided include access to government records, spoken English training, youth education, certificate filing, banking, and reports of commodity prices at different markets, but I believe this is just the beginning of what could be offered through this platform. As for a business model, Drishtree has a fixed revenue sharing agreement with each kiosk owner and a variable revenue agreement with the service providers.

Proving You Exist

I’ve been spending some time at Aaramph, a non-profit focusing on education in slum areas. They are located in Navi Mumbai (or New Bombay), which is home to many different migrant populations who have come to the city seeking work. Aaramph provides education to children who, for many different reasons, are not using the formal education system provided for free by the government of India. One main reason why these kids aren’t enrolled is that many of them were born at home and don’t have a birth record. Mothers try to fix this by going through school or government officials to navigate the bureaucracy, but sadly this is often fraught with corruption and ends up costing upwards of Rs. 400 ($10 or a week of salary), with no guaranteed result. Aaramph has worked for years to set up a system, advised by trusted lawyers and recognized by local schools, that results in a birth record being obtained in a single day for only Rs. 40.

That’s just one example of the many things I learned while speaking with Shobha Murthy, Aaramph’s founder. I had never heard of this problem of birth records before, but it is a great example of both the trouble with informal systems and the disconnect between policies (like free education) and their implementation.

I found Aaramph through an Indian volunteer-matching website. In an odd coincidence, her brother works for a company in Minneapolis where I worked for 4 years, so she’s actually spent time in the town where I live. I’ve had a chance to tour Aaramph’s facilities and will be working on a donor’s report for them in the coming weeks.