Recently a friend of mine updated her status on one of the social media website which read “One should always work for construction, not for destruction!”. Reading this line made me think more about this topic which has always been pondering in my crazy mind. After some debate, she further went on to make a point that “When one starts constructing, should always remember that it won’t cause destruction which is menacing for human survival”. But in reality every move we make as humans is threatening the human survival in some way. Our actions are not always threat to me or you but certainly to the future generations.

As humans we have grown so selfish that we see only direct threat to us “Humans” as destruction but not to other living beings or inanimate objects. We miss to understand that, threat to other things caused by us is also destruction and at times these actions can come back to haunt us humans too.

How can there be any construction without destruction. These two terms are relative and personal. If I need to take a literal example, A building being constructed, destroys several other things like plants, trees, habitat of several birds, animals, insects and much more. Person  for whom the building is important sees the process of creating this building to be a constructive process but on the other side for a bird, so called construction  of this particular building results in the destruction of its nest and might be lives of its off-springs too.

One might say, this to be a lame example as everything constructive doesn’t result in destruction. If we analyse and observe, everything so called construction or constructive thinking of humans has resulted in several forms of destruction. In certain cases, a constructive thing for us today might later be seen by us humans only as being destructive and might result in our own destruction. The affects of those destruction are some times felt and realised very late, can be even after decades.

For example, Industrialisation has always been seen as a constructive process which has made humans to prosper and live a better life. If we see today’s climate we will realise that the acts of so called construction has resulted in the destruction of not just our own habitat but also our future existence.

Acts of so called construction has resulted in the destruction of our own habitat.

We humans are our own enemies. Destroying our own kind, our pristine environment and habitat just to satisfy our ego in the name of construction and being constructive thinkers.

The spark was started several centuries ago when we started living in communities to survive and grow. It has now turned into a fire, which cannot be put off with any amount of water available on this planet. The habitat in which we are living is going to get destroyed because of our so called constructive thinking. The two things which we can do is to either watch and burn along with it to ashes soon or delay our extinction and prolong the life of our habitat by changing our thoughts of being “Constructive”.

we can either watch and burn along with our “Constructive” thoughts to ashes soon or delay our extinction and prolong the life of our habitat by changing our thoughts of being “Constructive”

We celebrate earth day and claim to “Save the earth”, the fact is earth/nature knows to save itself which we haven’t realised yet. Earth has started fighting back to bring back the balance which has been destroyed by us. Only thing we can do is increase the duration of our stay on this planet by preserving our environment or use our so called constructive technology and thought to survive in the harsh conditions which will be throw at us in the coming decades and to explore new planets to inhabit and survive.

Even when I am typing this article in the name of being constructive, every time my fingers hits the keys on the keyboard, it has several destructive actions associated with it which would be felt by us humans sooner or later. In this post, I have just skimmed on the surface of this topic of “being constructive” so  not going in depth of how anyone typing on the keyboard can be destructive for the world we live in.

These are the physical destructions which I have been talking about till now. Apart from these there are other forms of destruction which we can’t see but feel when personally faced. Like destruction of thoughts and feeling which are psychological and emotional destruction. Even these would have adverse effects on the environment in which we live. I will save this too for some future post.

In the same conversation another friend of mine pointed out, destruction and construction are like brothers who cannot live without each other. I completely agree with him, they are inseparable. Construction for one always comes with destruction for someone else.

Being constructive in today’s world would actually means simultaneous destruction with the aim of creating brighter future only for our or few future generations.

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This question is justified, as startups are meant to be the engines driving economic growth with new ground breaking ideas. Startups are companies which have to deal with lot of uncertainties unlike other businesses and these create opportunities to learn and explore new horizons which were untouched till date. This should result in the growth of economy and market. Right!

But in today’s business world, one which is booming with cash hungry startups might result in an economic crisis and markets might crash. But not all cash hungry startups are bad for the economy. It is well know that initially businesses need to acquire customers and improvise their products or services before making any money. This might takes months or even years. In doing so, the money has to be invested in small or large numbers and would solely depend on the scale of  the idea and the business model. Few ideas would require billions of dollars before making any profit and few might break even with investments of few million dollars and scale up with their own profits.

If we notice the current market, the startup companies which have been burning cash are over valued and their valuation in most of the cases is mostly dependent on the previous investments, number of customers acquired, assets and the GMV (Gross merchandise volume) in case of online retail companies. Do I find anything wrong in this kind of valuation? No I don’t. Because that is the most logical way of valuing a business which hasn’t made any profits yet.

But what is wrong is the foundation on which these companies are standing, how these numbers are generated and later sold to the future investor at a highly over valued price. This over valuing results in a company, which in reality has a very low intrinsic value and might not give any returns in the future unless sold to some other investor at higher value.

It is really interesting to understand why this might result in markets crashing and economy slowing down. I am not saying it will but there is possibility of this happening if certain greedy entrepreneurs and investors create and run businesses the way it is being run in today’s startup world. Such greedy entrepreneurs are certainly increasing their wealth at the cost of the economy. I would term these bunch of people in the business world as Greedpreneurs If they had been working on a day job for some firm, they wouldn’t have made so much wealth in the same duration which they have made by burning cash and taking hefty salaries. In several startups, the monetary discipline which has to be maintained for a business appears to be missing. My previous post “Can huge discounts & freebies in the name of customer acquisition help in creating a sustainable business” talks about the cash burning attitude and habits of these money hungry startups. The one supporting these greedpreneurs are investors who don’t want to miss the next apple or google. They are filled with greed and fear. Even such investors are taking home fat salaries from funds raised by the VC firm to invest in startups.

These influences have created a very bad environment in the startup/business world. Talking to many aspiring entrepreneurs or those who have been just funded by angel, shows the adverse affects caused by these greedpreneurs. Most of them would have started the company not to create any groundbreaking product/service, break-even and scale instead with the only vision to get few rounds of funding from VC’s with big valuations, fat salaries and en-cash whatever possible by burning the money before the idea fails or get acquired by the competition. This attitude can be noticed when talked personally with the entrepreneurs or the early employees of these companies which are built on the copied ideas without any further innovation to make them standout in the crowded market.

If I need to take an analogy. Today’s many startups being sold to investors at higher value would be similar to selling of the housing/mortgage bonds in the US during 2007-08 which had no value in the market resulting the global financial crisis. That economic crisis was a result of the housing bubble burst and the next one might be the result of the startup bubble burst.

But one might ask, if companies are having bad business models but still valued high by some investors how the hell would it affect the economy. That is certainly a valid question. The answer to this question is in seeing from a larger perspective and the investments being made. All the billion dollar investments flowing into these businesses are coming from somewhere and it is certainly not from the pockets of the VCs in majority of the cases. VCs are similar to fund managers in the stock market who invest in various businesses with the hope of making money for their clients in the days to come.

The investment money actually originates from pension funds, large corporations, insurance companies, Charitable foundations and similar financial institutions. They are the clients of VCs from whom a VC firm takes money to invest in energizing ideas and startups. It is well know that every investment won’t give a return. Ideally many investments will fail and only few will be the rock-stars of the show who will mange to recover all the losses made in the other investments and profits above that. Common thumb rule is that out of 10 startups, one or two produce substantial returns, another three or four return the original investment, three or four will completely fail. National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail.

In the current over valued startup up market, if the VC is late to sell his stake to the next investor, the cash hungry startup will get a down round funding. Worst case, no investor jumps in for funding and the business has to pull down the shutters.

As consumers, all of us are hunting for discounts to reap the benefits which are available right now through different ventures around and not bothering about what future has in stock for us. We assume that if the company keeps giving discount by making no profit it’s their loss but our gain and we are saving money. This has adverse affect to the economy which is certainly going to affect all of us on a longer run with the probable crashing of the markets.

An article was published few days ago on fortune.com talking about huge amount of money being raised by the Venture Capitalists to protect their unicorns. Only time will tell how long one would be able to protect an unsustainable business through external funding.

There are certain very smart entrepreneurs and investors who are revolutionising the way we live and the business world with ideas and investments. Just hoping that these people will stop the economy from getting dragged to the floor in the coming years. Currently the situation is like a tug of war happening between these people and the greedpreneurs, where the economy is tied to the rope in the centre. Time will tell which side economy will be dragged when the bubble bursts.

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Design is not just aesthetics, it is much more than what we see

To truly explain what is a good design, we first need to understand what is design and what do people mean by design.

If you search online, I am sure you will find thousands of explanations for good design and every designer has her/his own definition of design as well as for good design. Even though there are so many definitions, if a deeper thought is put in to understand those statements we will realise that most of the popular designers are trying to communicate the same message in different ways.

For me personally, creating experience through solving problems is design irrespective of the field or product. For creating any kind of experience one has to satisfy the various senses of the user. The senses which needs to be and can be satisfied at various instances are

• Visual or Sight (sense of seeing)
• Olfaction (sense of smell)
• Auditory (sense of hearing)
• Gustation (sense of taste)
• Somatosensation or Tactition (sense of Touch)
• Emotional – Emotion is usually not considered as a sense, but I personally term it as a very important sense which is influenced by other five senses. Emotions also have a component called expectation. When any of the other 5 senses are satisfied beyond expectation, the emotional sense is activated and the user feels the sensation of happiness and satisfaction.

Products/Services can be termed as good designs when they create and enhance the desired experience. So am I saying that anything we do which creates an experience is design. Certainly not. Design in some way is the well structured process of creating such enhanced experiences through problem solving.

Everything around us is designed, from products to services. A product small or big even though appears to be a single entity, when seen in an enlarged view, it is always part of an ecosystem. For example, a bigger product like aircraft when used by airlines which is a service becomes the core product of the ecosystem . A small product like pen, being used in the office of the same airline becomes an associated product in a smaller ecosystem confined to the office or certain tasks. Apart from aircraft there are several other products associated and necessary for the aviation industry which are being used by the airlines.

So while designing a product one needs to understand the services, the context in which the products are going to be used, the people who would be using those products. Similarly while designing a service one needs to understand in depth, how the different products which will be part of a system are going to be used by the users. And how the products in the system will interact with each other in both the cases.

When these above mentioned ingredients are considered and cooked to satisfy the tastes of the users, it results in a delicious product. Little less salt will make the product bland and more would spoil the taste. When this balance is achieved, the design can be termed as a good design.

In a broader sense there are two schools of deign philosophy which designer knowingly or sub-consciously follow

• one in which, it is believed that the form follows function
• the other in which aesthetics is the most important aspect of design

The ultimate aim of both the schools of design would be to create an enticing experience along with solving problems. Many times designers fail to understand the form in itself is a function. Form plays a very important function of solving our visual and emotional needs and problems.

One might ask, what experience does products like medical equipments create apart from solving the problem of treating the patient. Let me consider an example of a surgical table. It is a very essential equipment required for conducting surgeries. There would be two prime end users for this product: patient & the doctor/surgical staff. The main function of the table would be to provide a platform for the patient to lay flat for the doctor to conduct the required procedure. The ease with which the doctor/surgical staff can operate this table and associated equipments is an experience created by the table which keeps their mind calm and helps them concentrate on the task of operating the patient. The patient being operated and who is already tensed about the surgery should also feel comfortable and relaxed to lay down on this table for getting operated. This is also a form of creating experience.

Good designs are those which create experiences by solving relevant problems.

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If you are not paying for the product, then you are the product being sold

This is certainly true in today’s startup era. So what does this really mean in the world of today’s tech startups. If a company is offering something for free, then it would be acquiring customers through their signups on their apps/websites. The interest shown by the customer by signing up for these services or using it in turn is used to raise funding from investors to grow the business. People are bombarded with advertisements through which many of the companies earn money and grow. This is one of the greatest business models which results in a win win situation for all the stake holders and the product too when the product makes enough money to break-even.

But does giving freebies and huge discounts really help in creating a sustainable business is a bigger question. This actually depends on the product being given as free and the business model on whose foundation the company is standing.

Whether the company would be profitable or not, the founders are certainly getting rich and benefiting from the inflow of cash from investors who are just seeing the number of customers acquired.

Facebook & Google are the two companies which offer their core products for free for the end users and have been very successful. One of the reason for their success is their business model to make revenue, which is totally different from the other companies/startups which are giving away products for free or giving huge discounts. The another important strong reason is that their products are really unique and have been executed and implemented in unique ways.

A company which has to survive and grow by selling products made by others (including services being provided by others) will certainly not self sustain on a longer run if they are acquiring customers by giving huge discounts and freebies by burning cash. Investors with deep pockets who have made a bet on these companies might help them to be in business for certain number of years. Examples of such companies are those operating in the field of e-commerce, transport service and hyper-local startups. Currently many of them appear to be doing very well as they are being judged only based on their valuation. Which is mostly over valued just on the basis of the number of customers they have and the daily transactions that are happening just because the products are offered with huge discounts.

Businesses are meant to make money, break-even after few years, self sustain and add value to the market and to the society. Good businesses are certainly not meant to eat up money to give freebies without making a single penny profit for years. On a longer run, giving and taking these freebies would affect the market adversely. It would hurt the investor, company, its employees, customers, business ecosystem and the market as a whole.

One of Silicon Valley’s Most Esteemed VCs Chamath Palihapitiya states that “Time will tell whether any of those can become a real business. If a shoe costs $20, Nike doesn’t sell it for $14. They sell it for $400. We have to get back to this world of having pretty reasonable discipline on business models and understanding that many of these gross-margin businesses will never, never break even or become profitable.” [ref]

This is mostly happening when the ideas on which the businesses are being built are not relatively original and people are just replicating the products which have been successful in other markets in terms of profit or have got huge valuations.

Investors have been pouring money to e-commerce companies like Flipkart, Snapdeal & Shopclues to make them highly valued startups in terms of valuation and with no profit till date.These are replicas of Amazon which became profitable after several years of operations but if seen in depth they had a totally different business model which evolved with time. Jeff Bezos, the person who created Amazon had a bigger vision to revolutionise the business and he gave importance to product design and created the Kindle. It has changed the way people buy and read books. Also providing a platform for independent writers to become publishers. In a way by creating a new segment, Amazon has become the leaders in this category. This created a whole new market segment and Amazon has become a true tech company by creating AWS (Amazon Web Services) which provides cloud computing services.

But in the case of the other e-commerce companies mentioned above, they are just platforms for sellers to sell their products and don’t have any highly innovative product as such which can keep the engine running if the external funding stops and the reserves are drained.

It is commendable that Flipkart was the company which made e-commerce popular in India by introducing Cash on Delivery system when people were skeptical to buy products online. But the way they have been running business in not very promising as Flipkart has become a monster hungry for cash to sustain. It is in news that Flipkart is in talks to raise $1 Billion likely in a down round where company would be valued at a lesser valuation compared to the previous valuation.

To succeed or to just survive and try to grow, they are now left with no other much option and resort into any one of the below options which is visible in the market

• If a company has cash reserves to burn, then providing huge discounts to keep the customers coming back to them and not to go to the competition
• Next step is to buy out the small and budding competitors in the name of aqui-hiring who are having less capital and who will certainly pose a threat with their better solutions in the coming days. One example is acquisition of Taxi for Sure by Ola cabs in India
• Start betting on new product startups either to diversify the company portfolio or to integrate the tech or innovative products of the new startup in their product or system.

Every business needs both idea and money to start and grow. The bigger the idea, bigger the amount required initially to build the product, infrastructure and resources even before the product hits the market. Once the product hits the market, customer acquisition is an important aspect.

Cost of customer acquisition usually involves

• Advertising
• Referrals
• Providing discounts with either lower margins or by taking a loss initially

Apart from the acquisition cost, there is also the cost of retaining the customer which would mostly involve

• Customer service after sales
• Discounts (Certainly by not making losses. Mostly the profit margins are kept low for customer retention while giving discounts)

Even in traditional businesses companies provide discounts to retain the customers. These discounts are reasonable where they would be making profit with lower margins and these companies mostly do it to clear their inventory of old stock.

In most of the companies but not all related to e-commerce and hyper local, the cost of customer retention to make the customer get back to either buy the product or use the service is equal to the cost of customer acquisition. It is like the same old customer is being acquired once again.

If this is how the things go then it is not just the customer acquisition cost which needs to be considered. The main factor which needs to be kept in mind would be the customer retention cost. Which involves cost for customer care and also the huge discounts being offered to the already existing customers. Expenditure on customer retention cost is well justified if any business is spending amount to maintain the already built relation during the acquisition without taking a loss. This shouldn’t involve huge discounts and freebies even after several years.

These startups have certainly created convenience for the customers. But to sustain in the market and to beat the competition, they have been burning huge amount of cash. What we need to see is whether these startups will be able to really self sustain and break-even in the coming years.

When one is providing discounts to reach the customer, they need to understand what if they stop giving discounts, will the customer get back to them? Today’s startups appear to have failed to understand the psychology of their customers who are on a constant look out for discounts. Mint had reported recently that one of the India’s largest e-commerce giant Snapdeal’s monthly revenues have declined since November, partly because the company has been forced to cut spending on discounts and advertising since then. This clearly indicates that just discounts will never help a business to sustain unless they create and experiment with products/services which generate value for the customers.

Few of these companies might become successful but for sure it won’t be because of the products they created. Instead it would be because they had cash to burn from investors to buyout companies which had better products.

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On July 15 2013, the new Datsun was revealed in India with their 1st car Datsun GO, a hatchback. Datsun models will be sold in emerging markets. Currently India,Indonesia, Russia and South Africa in 2014. The vehicles would be manufactured at the Renault Nissan plant in Oragadam, Chennai.It can be clearly seen that Nissan has big plans for the reborn brand Datsun. Apart from the GO they have a minivan (MPV) called GO+. Recently at the Auto Expo 2014 held in Delhi they unveiled a concept crossover Redi-Go. A bright green sculpted, glossy attractive piece of art in the form of a vehicle, was one of the star attractions of the show and would have certainly grabbed the attention of all visitors.

Redi-Go looks like a hatchback with the stance of an SUV. Its sports elongated headlamps with the same grille found on GO and Go+ which is the DNA grille of the brand. Has a very expressive fascia which says that it is ready at any point of time to jump into action. Redi-Go is a very apt name for this design. Equipped with a 15 inch alloy wheels and higher ground clearance indicates its off-road capabilities. Thin strip LED fog lamps are beautifully placed in the bumper.

For a reincarnated brand Redi-Go is an awesome concept. A little more refinement on the side surfaces would have made the vehicle look much better.

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This year’s Auto Expo 2014 – The Motor Show, can be termed as the best in the history of Auto Expo’s on Indian Soil with better organization by the organizers and an array of concept vehicles being unveiled by the OEMs. SIAM and CII made the right decision by organizing the Motor Show and the component expo at different places. Only draw back was that the location of the Motor Show was very far from the center of the city. In-spite of this, there was an overwhelming response in the number of people who visited the Show.

There were several show stoppers. One of the main attraction was Renault KWID, a concept car which is Renault’s first ever concept car to be unveiled out side of Europe. There was beauty all around. One can term it as a heaven for motoring enthusiasts with beautiful trucks, cars, bikes and babes. With India becoming one of the major market for all the major brands around the world, OEMs are also showing more interest in displaying their production and concept vehicles to their prospective and existing customers. Apart from concept cars being unveiled, there were few new production vehicle launches along with the face lifts of the existing models.

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One among the several aims for setting up this institute was to promote design in India and to create awareness and show the importance of design to Indians. But still the awareness/exposure to the field of Design and Design Education is very limited or we can say totally absent among the common Indians.

If one asks a common person in India, “What is Design?”. Answer would be either Engineering or Fashion. Earlier it was only engineering which people thought that design is all about, but now fashion has come into picture along with graphics and web.

In companies operating on the Indian soil, engineers dominate and are termed as designers and make products just based on the engineering constraints and the holistic multidisciplinary approach towards the design of the product/service would be missing. Even in most of the companies which have design studios, very less importance is given to the designers, their actual work and would be limited to selecting colors or polishing. This is primarily because, out of 10 people in the higher management, only one or two would understand the actual importance of design and would have setup the studio and rest ignore the studio.

Indians are subconsciously aware of the importance of aesthetics, function and innovation. It can be noticed in their buying decisions which are based on these factors and value for money but they don’t know what exactly design is and how it can be used to their benefit in making products.

After NID, in 1969 Industrial Design Centre (IDC), IIT Bombay was setup and this resulted in setting up few more design schools in other IITs. All together are doing a pretty good job in creating awareness about design among Indians, but in someway is very limited to bigger cities or reach limited number of people. Even though these schools are helping the small scale and crafts industry to see things differently and have made a difference in their living, awareness of design is very less among the Indian population.

On 8th of February 2007, the Union Cabinet of Government of India approved theNational Design Policy. I strongly believe that even after 6 years, we still haven’t achieved even 10% of the goals in the Policy. Because creating Design awareness among the public hasn’t happened much which is the key to making all the eleven visions of this Policy successful.

In the 9th CII-NID Design Summit which happened in December 2009, CII released the 1st India Design Report. It is clearly mentioned in the same that “The design industry lags behind other professional services domains in numerical terms when looked at in terms of turnover and number of employees”. I would say one of the prime reason for this is lack of awareness about design.

Most of the companies with studios are mainly divided into two groups, Engineers or Designers. Engineers feel, it is the engineering which is important for selling the product and a designer feels that it is the aesthetics which will sell the product. Even designers are failing at some point as we are not taking a holistic approach in our work. Both engineering and design schools are not functioning properly to some extent and calls for certain tweaking in our education system including the primary education so that the country can produce the best products, services and nurture the talent to be more productive and profitable to the country.

With the IT boom in the country, certain things have changed and to some extent people in the IT field are respecting design and understand its value. To make this happen across all domains, would call for some serious introspection and collaboration between designers, engineers, educators, companies and government to create awareness about design and not create curriculum which are named as Industrial Design and would be mostly engineering with analysis and equations.

Until and unless common people are familiar with design the way they relate with engineering/medical science, we as designers and design schools are failing at some level.

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In this he discusses about the award winning and appreciated PMV concept In-Rapido, highlighting its features, the scope of improvement, flaws in the concepts which can be rectified in the actual vehicle during the engineering phase if the vehicle is made.

When asked about the far fetched future of transportation, it is mentioned that if the global warming keeps increasing at this rate resulting in meltdown of ice and with increasing population, at some point we would need to move into waters. Build structures in water for living. Then there will be need for amphibious vehicles.

Food for thought: Design and use vehicles which eliminate harm to our current environment or start designing vehicles which help the existence of humans in the challenging environments of coming harsh futures.

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