How to get a village named after your company? – A curious case of ‘Snapdeal.com’ Nagar

It was in news yesterday that a village in India named Shivnagar, changed it’s name to ‘Snapdeal.com’-Nagar. When I read the headline, my reaction was, ‘What? How much would they have paid to sponsor the entire village? For how long?’

However, I soon realized that my hypotheses were absolutely wrong. As TechCrunch pointed out, it wasn’t a cheap marketing stunt. Truth is that the village itself changed its name as a sign of gratitude towards the company.

Shivnagar is a small impoverished village in the state of Uttarpradesh in northern India. Like many other villages in this region, Shivnagar also suffers from poverty, lack of infrastructure and lack of attention from authorities. Villagers get electricity only for a couple of hours every day and there has been an acute lack of drinking water in the village. Kunal Bahl, Founder of Snapdeal.com – India’s answer to Groupon (And the leader in Indian market) – got to know about this village from one his employees. He decided to help the villagers by installing 15 hand pumps across the village. The act didn’t cost the company more than $5000 but had a profound impact on lives of the villagers. Finally villagers, decided to change the name of the village from Shiv Nagar to ‘Snapdeal.com’ Nagar. (Nagar meaning Town/City in languages of  Sanskrit-family).

Research on Strategy for dealing with ‘Bottom of the Pyramid’ (Prahlad, 2002) has explored different sources of value creation in low-income or poor markets. (Sanchez & Ricart, 2010). One such source of value creation could actually be the business model itself. Sanchez and Ricart (2010) have shown that in low-income markets, firms may choose an interactive business model, whereby the firm would not just interact but establish strong relations with fringe stakeholders and seek long term positive impact. The philanthropic gesture of Snapdeal, despite being a truly altruistic deed, will definitely bring about positive results for the company in the long run. These positive results may not be visible in the bottomline numbers but would be in terms of positive social capital that the company would build up. Many Indian companies have in recent times, shown a greater inclination towards indulging in community initiatives and bringing in fringe stakeholders within the purview of their business models. Yes Bank, the fastest growing private sector Bank, for example has an initiative called ‘Yes-Community‘ wherein they organize ‘micro-events’ in their branches for people living in the neighborhood and try to help them about prevention of pollution, management of waste and more efficient energy management. Positive signs indeed!!

Prahalad, C. (2002). Strategies for the Bottom of the Economic Pyramid: India as a Source of Innovation Reflections: The SoL Journal, 3 (4), 6-17 DOI: 10.1162/152417302760127192

ResearchBlogging.org

Sanchez, Pablo and Ricart, Joan Enric (2010). Business model innovation and sources of value creation in low-income markets. European Management Review, 7 (3), 138-154 DOI: 10.1057/emr.2010.16

Death of Google Wave – Another Innovation Infanticide

So Google Wave is dead. Google killed it. It wasn’t as unlucky as Larrabee. It did see some light of the day. But it lost life in it’s infancy. When Wave was launched about a year ago, it received mixed reviews. It roused fear, suspicion, awe and a subtle sense of mystery. Google called it, “a new web application for real-time communication and collaboration”. Soon there were mixed reactions from different users. On one hand there were users who hailed it as a tool that would substantially hurt emails, hurt Facebook and wipe Twitter off the face of this planet. Well, nothing of these happened. Several experts and geeks slammed Wave for its apparent complexity and slowness. Martin Seilbert on TechCrunch wrote “Google Wave sucks….” mainly because of its complexity, instability and slow speed. However there were hopes that as people will start using it they will get accustomed to the tool and gradually Google Wave will be accepted. Experts also hoped that at least its collaboration feature will help it survive and win users.

However, Wave optimists, who were an obvious minority, finally accepted defeat with Google itself announcing suspension of Wave. The main reason for its suspension according to Google has been lack of user acceptance. This entire episode leaves us with two questions. One, why Wave didn’t succeed, given the user-base that Google enjoys? Two, Is Google hurrying in pulling the plug? Is it a right strategy to altogether abandon the innovation for lack of acceptance? Karim Lakhani of HBS has hailed Google’s decision saying that, “…….admitting failure and moving on is another key lesson in managing innovation.” He further adds, ” The ability to (quickly) shut down failing projects and reallocate intellectual and financial resources to other more promising endeavors is critical to innovation success as it releases individuals and budgets to take on the next big challenge.

We don’t know what are the internal investment criteria at Google.  But the signal that this decision gives is that Google is both ambitious and ruthless with itself at the same time. On one hand, it doesn’t hesitate in launching highly ambitious tools like Wave and on the other doesn’t hesitate in abandoning it if it doesn’t perform well enough. The only mystery here is, what is that ‘performance criteria’ in a tool as radically innovative as Wave. Or, is it simply the performance of Wave, or is it a change in the product portfolio strategy? Shall we soon see features of Wave being integrated into other Google products? Well, only time will tell. As of now, as Google Wave and the Users’ manual to Google Wave both, are history. But as the author of its Users’ manual, Gina Trapani said, we can also say, “…I respect any product that shoots as high as Wave did, even if it misses in the market.”

For some academic work on a similar question, have a look at Agarwal, Rajshree; Bayus, Berry & Tripsas, Mary. 2005. ‘Abandoning Innovation in an Emerging Industry. ‘ Working Paper and also the paper that I am citing below.

ResearchBlogging.org

Sanjay Jain, & Kamalini Ramdas (2005). Up or out—or stay put? Product positioning in an evolving technology environment Production and Operations Management, 14 (3), 362-376 : 10.1111/j.1937-5956.2005.tb00030.x

Intel’s Larrabee – Another Innovation Abandoned

Larrabee is dead! Intel has announced one of the most ambitious graphics ventures’ demise on a blog post by Bill Kircos, Intel’s Director of product and technology . Intel didn’t announce it explicitly though, but fFortunately, Ryan Smith at Anandtech has deciphered it for us.

Four years ago rumours surfaced that ‘a shadowy organization called Larrabee Development Group‘ had launched itself to do the unthinkable in the High-end graphics chip industry. It had decided to take head on the two big crocodiles of the pond, namely NVidia and AMD. However, Job vacancy postings on Intel’s website did little to hide that Larrabee was an Intel venture. After a few months Intel proudly announced launch of Larrabee, a multi-core processor design which was supposed to compete with other GPGPU based (General Purpose Graphic Processing Unit) future products from competitors NVIDIA and AMD. Larrabee was supposed to be something like a combination of GPU/CPU. A chip that would have a full programmability of a CPU and throughput computing feature of a GPU. (see image below)

However, Intel’s foray into producing a Multi-core GPGPU Chip didn’t bother Nvidia and AMD much. On the contrary their strategies were not at all affected by Intel’s apparent plans. Both of them rather steadily went ahead with their strategy of Integrated Graphics.

After missing their initial product launch deadlines, last December Intel delayed the Graphic Processor launch and decided to downsize Larrabee to Software Development Platform. The product was now slated to arrive sometime in 2010. However Bill Kircos in his blog at Intel’s website has discretely written, “We will not bring a discrete graphics product to market, at least in the short-term.”

This means, Larrabee – the product is not coming to shelf. This case brings us back to the issue of abandoning innovation that was discussed here at Creatologue in the light of Microsoft’s abandonment of Courier. However, Larrabee’s case is quite peculiar. Larrabee, if it would have been launched would have been quite a radically innovative product. As is shown in the  image below.

What Intel has done by abandoning Larrabee is effectively imitating its competitors by focusing on Integrated Graphics rather than thinking about a CPU/GPU hybrid.

It would really be interesting to explore when a company might abandon a radical innovation project? One obvious reason was that it wasn’t giving expected results. But then, in an uncharted technology category, it will always be difficult to estimate performance. On the other hand, while its competitors in the graphics processing segment, have a strong presence, especially NVIDIA being stronger in gaming segment, overall Intel is incomparably bigger than these competitors. Given it’s size Intel shouldn’t worry about economies of scale or scope. The only other probable expectation is shift in strategic importance of the innovation (Agarwal, Barry and Tripsas, 2005). Why such a touted innovation lost its importance before it could see the light of the day, only time will tell.

Reference

Agarwal, Rajshree; Bayus, Berry & Tripsas, Mary. 2005. ‘Abandoning Innovation in an Emerging Industry. ‘ Working Paper.


‘Isn’t it Romantic?’ – ‘Tipping Point’ Musical

In 2000 Malcolm Gladwell, a New Yorker journalist,  published Tipping Point. Sold almost 2 million copies of the book and since then has been subjected to extreme jealousy and imitation by all more qualified, more rigorous academicians.

Tipping Point talks about sudden widespread diffusion of ideas. In sociology there have been several attempts to study the phenomenon of diffusion of new ideas across people.

However, I came across something quite interesting while watching an extremely entertaining musical comedy, ‘Love me Tonight‘ (1932), directed by Rouben Mamoulian, one of the most innovative Movie Directors ever. The video embedded below is a wonderful example of ‘Diffusion’. It shows wonderfully how a song that was born in a conversation ends up reaching the army, and eventually the princess.

And the song is great! If you don’t start humming the tune after watching the video, I’ll pay your money back. So enjoy the video, while I go back to envying Gladwell.

Microsoft Courier – Just a Dream! or Logic of Abandoning an Innovation

Microsoft Courier (courtsey : http://www.engadget.com)

Last Thursday several Gadget lovers mourned with deep pain when Engadget wrote about sad premature demise of Microsoft Courier. It kind of made almost every Microsoft Fan (Who are an absolute minority now) a bit sad. Rumours about Microsot developing a dual-screen tablet started last September, and soon it’s images and even videos were leaked out. Microsoft however never confirmed it officially, until it decided to scrap the project.

The question however is, why would Microsoft abandon such an interesting product? Before Apple launched iPad nobody was sure of utility or commercial appeal of a Tablet PC. However, Apple’s iPad is one of the most successful début products in our recent memory. In the very first month of it’s launch it has sold 1 Mn units. Vladislav Savov at Engadget writes, Steve (Jobs) told us it’d be revolutionary, and if sales are the measure of a device’s success, then the iPad seems to be well on track to validating its creator’s bold claims.” Now when future of Tablet Computing was looking so rosy, why Microsoft abandoned something, that was already creating some excitement among Techies?

Microsoft Courier is an interesting case of a proactive exit. There is lot of academic work on Innovation and Innovation system however there is not sufficient research available on abandonment of innovations. As it’s important for companies to know, how and when to commit to an innovation, it’s equally important to know, when to abandon an innovation.  Research suggests that a company might abandon to pursue a new product, in case (i) the market doesn’t move according to its expectations or (ii) the planned innovation is not strategically important for the company.  I found another interesting explanation in an article by Sanjay Jain and Kamalini Ramdas (2005). Using examples from Videogame industry they elaborate on what they have termed as a pace keeping approach to product development. In Videogame consoles, the development cycle ranges from two to five years, whereas the development cycle for graphics processing unit (GPU), which is a core underlying technology, takes about six months. In an industry like this, where core technology evolves much faster than the product, at times it makes sense to abandon a new product development, just because it’s neither easy nor profitable to keep pace with rapidly advancing technology.

Going back to the Microsoft Courier, do we really believe that this was a reason? In this case, it seems more the problem of ‘Apps’ rather than core technology. After successful launch of iPad, most of the applications developers have strongly invested their efforts, energy and creativity in developing killer Apps for iPad. Any new Tablet, with a different platform than iPad, could face a temporary ‘Apps-Drought’. In an article in March, Fastcompany had predicted a similar outcome based on the same logic.

We don’t know, and probably would never know why Courier was shelved. Maybe Bill, The Gates has some other surprises up his sleeve. Maybe Microsoft just lost interest in Courier. Maybe it was just pure bureaucratic problem of ‘cost overruns’ etc etc. The bottomline is Courier will never be a reality. A dream, that never came true!

So here is a video of a wonder product, you never had!


References

(1) Agarwal, Rajshree; Bayus, Berry & Tripsas, Mary. 2005. ‘Abandoning Innovation in an Emerging Industry. ‘ Working Paper.

(2) Jain, S., K. Ramdas. 2005. Up or out—or stay put? Product positioning in an evolving technology environment. Production and Operations Management 14(3) 362–376.



Jugaad – Indian style of Innovation?

A Jugaad Vehicle (Courtsey - Wikipedia)

I was surprised to see this article in Businessweek. The article introduces ‘Jugaad’ (pronounced as joo-gaa-rh) as the next management buzzword in making. Translating ‘Jugaad’ is rather difficult. It rather means ‘getting something done by any means’. In this article Jugaad has been presented as a new Innovation philosophy. As per the article, the term has already entered MBA classrooms and in-company training sessions.

Interestingly Jugaad also reminds us of ‘Jugaad vehicles’ we normally find in rural parts of northern India. These vehicles are made by using a diesel engine and a wooden cart. But, how different is Jugaad from improvisation, ingeunity or creativity? Well, only time will tell, how the term evolves within management lexicon.

Hudsucker Proxy : Worth using in your Innovation class

I am attaching a video from New York Times, where A.O.Scott reviews Coen brothers’ Hudsucker Proxy. The movie is one of the funniest by Coen Brothers and we often recommend it to students to understand better (and with some humour) the dynamics of organizational change and innovation.  It’s an interesting story about how an idea, no matter how dumb it appears to be, could turn out to be a huge fad.  If you happen to teach Change Management, Innovation or something similar, I recommend to use this movie in your classroom.

This movie presents one of the best performances by Paul Newman and Jennifer Jason Leigh. In fact Paul Newman’s performance is especially interesting as he potrays a completely de-glamourized character where he neither uses his signature smile or charisma. A highly recommended watch!!

Marketing during Crisis : Negotiate the Un-negotiable

In Harvard Law School’s newsletter ‘Negotiation’ I came across an interesting piece about David Burke Townhouse, an upmarket restaurant in New York City.  The newsletter cites an article by Katy McLaughlin in NY Times (which I can’t locate on its website). In the month of May, David Burke Townhouse adopted a creative strategy to navigate economic downturn.

The article states

“…Imagine you’re celebrating a special occasion with friends at an upscale restaurant. Soon after you take your seats, the wine director introduces himself and hands you a list of high-end bottles of wine. You notice that the prices – all in the $200 to $600 range – have been slashed through with a red pen.

“The prices on our reserve list are negotiable tonight”, the wine director says. “Would you care to make an offer on a bottle?”……….”

Wine director of the restaurant reported that at least on five bottles per night the restaurant earned more than the reservation price (the minimum that the restaurant expected).  It’s always been said that customer is always ready to pay a huge premium for additional prestige.  Possibility of quoting a high price at a posh restaurant earns you get prestige. Well, the result was that while other upmarket restaurants in Manhattan experienced about 15% decline in revenues, David Burke Townhouse’s sales was down by only about 8%.

An interesting strategy indeed!!

Source : Negotiation; Vol. 12 No.8; August 2009. Harvard Law School.

The most creative man in Business – Jonathan Ive

Jonathan Ive - The most creative individual in business

Jonathan Ive - The most creative individual in business

Recently Fastcompany has come up with the list of 100 most creative people in business. It’s an interesting list and over next few posts we will talks about some interesting individuals featuring in there.  Apparantly there is no common criteria for selection. The introduction to the text states that they “……looked for dazzling new thinkers, rising stars, and boldface names who couldn’t be ignored.” Inclusion and exclusion of several names from this list, could be debated. However, one name that can’t be questioned, neither for its inclusion in the list nor it being at the top: Jonathan Ive, Senior Vice President of Industrial Design at Apple.

Jonathan Ive is one of those who are responsible for the design revolution that Apple brought about a decade ago. He has been the chief designer for iMac, Apple Powerbook, MacBook, iPod and iPhone. Creativity scholars define creativity as “Useful novelty” and in that sense Aple’s products are a great example of creativity in business. The fusion between art, technology and customer focus has been the strongest driving force behind Apple’s success in last decade. Last year, Daily Telegraph named him the most influential Briton in America. Celebraing his influence the article mentions, “If this is the age of the media gadget, Ive is its multi-platform deity figure.”

When a problem leads to Invention – The Invention of Credit Cards

Slate has run an interesting slide show presenting virtual history of credit cards. The merchant specific cards came in use as early as 1930s, when companies started offering, what they used to call “charge-plates” to their customers. However, the individual who is credited with introduction of the current credit card system is Frank McNamara. Frank McNamara was one of the founders of Diners’ Club.

However he got the idea of a Credit card system from an embarassing situation. He was having dinner at a restaurant and when the cheque arrived he realised that he had forgotten the wallet. That’s where he got the idea of having a system where one can “buy now and pay later, any time, anywhere”. The first card which was essentially for eating out at restaurants was a simple wallet-sized card made of paper. However, the concept behind it was revolutionary and within 60 years it has revolutionized shopping habits of people world over.