Making it For India

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A couple of months ago the streaming music service Spotify was launched in India with great fanfare. I had tried Spotify about 7 or 8 years back but then they started to block IP addresses from India so I quit using the app. At first I wasn’t planning to try it again but I did and I’m so glad I did, their recommendations are spot on…no pun intended.

What really caught my attention during the launch was their pricing matrix. Yes, the monthly price is cheaper in India Rs. 119 (USD$1.70) vs the US at Rs. 693 (USD$9.99). But they also offered daily packs at Rs. 13 (USD$0.18) and weekly packs at Rs. 39 (USD$0.56) as well, almost like the FMCGs offer sachet packs of their products. Sachets – a single-use, a simple flat pouch or stick pack for powders and other runny liquids and gels.

Spotify took that concept and turned it into a digital sachet. It’s a great way to get people to try the product. This is a great example of localization of a product.

When building an app or platform and going to other markets, there is always talk about internationalization (i18n) and localization (l10n) within the technology team. 7 or 8 years ago foreign companies would sell their products in India and only focus on internationalization. For example, if an app requires a login via a phone number then they enable +91 for Indian mobile numbers.

But the trend is to go one step further and localize the app or platform for the Indian market. And that is where Spotify just nailed it with it’s very Indian pricing matrix. I’m seeing more and more companies localize for the Indian markets because that’s where the growth is as other markets are mature and growth has slowed or stalled.

UPDATE: I’ve received many emails about the confusion about internationalization and localization. For me and the teams I work with, I break it down as:

internationalization – the backend technology to enable the use of the app or platform in another country. For example: language, phone numbers, etc…

localization – the frontend that the consumer will see and you. For example: pricing, localized content, specific features for a country, etc…

The Consumer Rating Conundrum

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Remember the first time you were able to rate your Uber driver, you felt empowered. It was the coolest damn thing and for the first 30 or so trips, I would sit there and spend a couple of minutes debating what rating I should give the driver as if I was handing out a fucking Academy Award. Did the driver deserve a 5? No not really, he was speeding like Lewis Hamilton in Monaco but than his braking skills were on point. Okay, so I’ll give him a 4 star rating. Good luck next time buddy!

Now, I have a simple rule. If I get to my destination in one piece, the driver gets a 5 star rating. However, if I feel they didn’t do a good job they get a 1 start rating. I don’t have the time to split hairs between a 2, 3 or 4 star rating. In fact, it got me thinking that Uber needs to ditch the 5 star rating and just have a thumbs up or thumbs down. If you see an Uber driver with a 3.8 or 4.5 rating, do you really give a damn? I can’t really tell the difference nor do I want to spend that time analyzing his driving habits. I took an Uber so I can get some work done or take a nap before I get to my next destination. Thank you Uber, for making it my job to improve your platform!

I started to think about this entire consumer ratings system when I recently ordered a single cafe latte from Swiggy. Half the latte split and I went on Twitter to complain. After the incident, I was presented with 2 ratings, 1 for the Swiggy service and 1 for the restaurant. Again, for the delivery either you are happy or your are not. Why make the consumer rate that on a 5 star scale.

There are a host of rating systems but the grand daddy of them all is the Net Promotor Score (NPS) which is based on a scale of 0 to 10. Leave it to a consulting company like Bain & Company to come up with this beast of a system. About a year ago I got a call from a car manufacture to rate their service experience on a 10 point scale, that experience was so painful I would have rather gotten a root canal then listen to the person explain the difference between a 5 or 6 rating. I hear people always talking about their NPS score when in reality a simple thumbs up or thumbs down would be sufficient.

The 5 star rating is pretty standard across most apps, but again what really differentiates between a 3 and 4.

I recently went to a restaurant and they had a 3 star rating, which was better but then imagine getting a 2. What does that mean as a restaurant owner…people would rather eat newspapers then come to your restaurant?

In this age of liking things and attention deficit disorder (ADD), I personally think the thumbs up or thumbs down is the best system. It’s quick and easy. If you are a business owner, you can tout the number of thumbs up (or likes) you get and if you get a thumbs down you can put a process flow in place to investigate what went wrong – easy peasy.

Getting a score of 1 or 2 is just meaningless on a scale of 1 to 10, clearly the customer is not happy. Why ask them, to rate you on a scale of 1 to 10 for services:
1 = I’m so angry I want to kill you and everyone
or
2 = I’m so angry I want to kill you only

Seems illogical to me. I wish more and more companies would simplify their ratings process and make the consumers life that much easier.

Kids, I’m Back on Twitter

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In early 2018 I switched from an iPhone to Android and in the process decided not to install some of the apps on my new phone. One of those apps was Twitter.

I felt it was too distracting and it wasn’t really adding any value. However, I would still use Twitter from the desktop but I wasn’t very active in conversations and just shared a bunch of articles I found interesting. One of the things I truly missed about being on Twitter was the vibrancy of technology talk and hearing about new technologies or use cases.

I decided it was time to revisit Twitter on the phone and make some changes to the way I would use it. First thing I did was unfollow EVERYONE and get to zero. Then I added people back that were from the technology field, all the way from deep technology people to product managers.

I made a conscious effort not to follow any news organizations or breaking news accounts. I can’t be bothered by the latest crap from Trump or what Modi is up to. This time around with Twitter, I want to learn from it and hopefully interact with people on the technology front in a constructive way.

Okay, I did cheat a little bit and added a couple of automotive related accounts. So far it’s been a couple of weeks and I’m pretty happy with how things are progressing with using Twitter on the mobile phone. Let’s hope it continues to be useful and doesn’t turn into a cesspool of useless crap.

Is Cable TV Dead?

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In a nutshell, yes. The reason is plain and simple – Jio and our addiction to video content. Over the past 6 months when friends get together and discuss what shows to watch, I hardly hear anyone mention the shows that appear on cable TV. Instead, it’s about the latest series on Netflix, Amazon Prime, ALT Balaji, Hotstar or other streaming providers which are collectively known as over-the-top (OTT) providers. The name stems from the fact you can bypass your local cable TV provider and stream the content directly from the internet.

And don’t even get me started on YouTube. This past week there was an article in the Wall Street Journal which talked about the rise of YouTube in India as a search engine. Want to learn how to make a cake? YouTube it. Want to learn the best way to sleep? YouTube it. YouTube voice search is perfect for India where illiteracy is high. Users can speak what information they want and then the search results are videos, where they can see and hear the content.

In fact, I’m finding the quality and content getting better and better even with more and more content creators on the YouTube platform. Just like a Google search you need to know the right keywords for YouTube. But, where YouTube really shines and keeps you on their platform are their algorithms to show you more content that you will like.

A recent example was when I was searching on YouTube for a good vlogging camera. Yes, there were hundreds of thousands of videos but after watching 4 or 5 I was able to decide what camera I needed. And in the process, I came across the YouTube channel called Camera Conspiracies. The guy is a mix of camera reviews and comedy. I’m no longer looking for a camera but I still watch his YouTube channel because the content is addictive.

So where does that leave the existing players? It will be very tough for the direct to home (DTH) providers like DishTV, TataSky and Airtel DTH because they have no real strategy to add more customers. Most of the people I know don’t even turn on their DTH box and are planning to cancel the service when their subscription comes up for renewal.

The cable operators like Hathway are also in a similiar situation but since they own the physical connection to the consumer they have the ability to implement newer technologies such as gigabit fiber to the home. In fact, Reliance backed Jio recently completed the acquisition of Hathway not because of all the users of its cable TV platform but because of the physical access they have to the consumers home. I live in a building which has both Hathway and Jio GigaFiber and I can tell you first hand, we have not even turned on the set-top box (STB) for Hathway in 2-3 months. And all that viewing time has switched to the OTT providers and YouTube.

The Newest 911 Launched, the 8th Generation

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The first 911 was designed by Ferdinand Porsche and launched in 1963. Over the past 55 years, the 911 has had the same basic design and each new generation is more evolutionary than revolutionary. A couple of days ago Porsche launched their latest 911, the 8th generation of the car and it’s undeniably a 911.

The 8th generation 911 is internally known as “992”. If you want to impress your friends you can refer to the 911s by their internal codenames. I have always liked the overall design of the 911 but I really feel in love with it when I moved to LA…back in 1999. That was around the time when the 5th generation of the 911 was launched.

Porsche has implemented a tick-tock refresh cycle for the 911. The term tick-tock came from Intel for the roadmap on releasing new processors. In Intel’s world, the “tick” is a smaller chip/die size and the “tock” is a new processor microarchitecture. For Porsche, the “tick” is a minor refresh which is usually a small engine bump and enhanced styling and the “tock” is a major generational release. Below, I’ll go through all the tick-tock cycles from 1998 to their recent announcement.

5th Generation
Years: 1999 to 2001
Internal codename: 996.1
Launched: Frankfurt Auto Show
Changes: all-new body and water-cooled engines, 3.4L, 296 hp

996.1
996.1

Years: 2002 to 2004
Internal codename: 996.2
Launched: Frankfurt Auto Show
Changes: 3.6L engine, 320 hp

996.2
996.2

6th Generation
Years: 2005 to 2008
Internal codename: 997.1
Launched: Paris Auto Show
Changes: all-new body, 3.6L, 325 hp. S models come with 3.8L, 355 hp

997.1
997.1

Years: 2009 to 2010
Internal codename: 997.2
Launched: Paris Auto Show
Changes: PDK, 3.6L, 345 hp. S models come with 3.8L, 385 hp

997.2
997.2

7th Generation
Years: 2011 to 2015
Internal codename: 991.1
Launched: Frankfurt Auto Show
Changes: all new design, 3.4L, 350 hp. 3.8L, 400 hp

991.1
991.1

Years: 2016 to 2018
Internal codename: 991.2
Launched: Frankfurt Auto Show
Changes: 3.4L, 370 hp. 3.8L, 420 hp. Turbocharged and not naturally aspirated engines.

991.2
991.2

8th Generation
Years: 2019 to
Internal codename: 992
Launched: Los Angeles Auto Show
Changes: all new design, 3.0L twin-turbocharged Flat-6, 443 hp.

992.1
992.1

The Podcast is dead, the Vlog emerges

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youtube-cover

If you have been following my blog you know I started a podcast about 6 months ago. Even before I started the Performalux podcast I secretly knew it wasn’t going to last. Podcasting is a great medium for many topics like financial information, news, and talk shows. But a podcast about cars is not one of them. All the cool kids are vlogging because people want to hear the exhaust, see the inside of the car and see how fast objects go by while speeding on a street.

One of the biggest stumbling blocks with podcasts is the distribution of the content, people just don’t know how to listen to podcasts. 5-year-olds know how to use YouTube and skip the intro commercials but listening to podcasts required a Ph.D. Spotify and the other streaming audio providers are trying to change that by having better discovery mechanisms in their app. Will it reach mass adoption is yet to be determined. So long to the podcast format…enter the vlog.

The vlog is hosted on my YouTube channel. I don’t really have a name yet, I’m toying with “The Garage Guy” or my username “mrjain”. I have some time to think about the name, in the meantime I’ll be focusing on getting some great content on the channel. I will not be reviewing Maruti’s and Hyundai’s as there are already a ton of those YouTube channels. The channel will focus on cars I really like and would love to buy. And also talk to the owners of these cars and get their take on what drives them…yes, a horrible pun gone wrong. I’ll stop now.

 

Taxes, Tariffs, and Testarossas

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Ferrari Testarossa

A couple of days ago there was an article in the DNA newspaper, an Indian daily, discussing how the high import tariffs/duties on luxury vehicles are killing the growth of high-end car sales. Well, I can’t argue with that!

But, that’s not the point of this blog post, it’s to review why there are tariffs/duties on certain products/markets and the thinking behind it. The basic idea of a tariff on imported goods is to protect the local market and give them an edge. Some may call this protectionist or nationalist but, pretty much every country does this to protect certain industries in that country. India is no different in that regard.

India has import duties on mobile phones so that local brands like Micromax have a price competitive edge over Chinese brands like Oppo and Vivo. To be price competitive, the next logical step would be for a foreign company like Oppo or Vivo to set up a manufacturing facility on the ground in India and avoid the import duties on fully assembled phones. The premise is that even if Oppo or Vivo send a large chunk of their profits back to their mother country of China, at least Indian workers have jobs. Not only are jobs created but all the other ancillary businesses would benefit from a manufacturing facility such as retail stores, restaurants, logistics companies, construction companies, etc.

Another market that India puts heavy import duties on is the automotive industry. Again the idea is to have the local companies like Maruti Suzuki, Tata Motors and other local players benefit. My issue is that I don’t see Maruti Suzuki competing in the same space as Mercedes, Ferrari or a Lamborghini.

This is where the Indian government’s logic is flawed. Imagine you bring down the import duty to 50% then the sales of these high-end cars will increase. Again, consumers that are buying a Mercedes-AMG G63 are definitely NOT looking at a Maruti Vitara Brezza as a viable option. So there is no chance of Mercedes cannibalizing the sales of Maruti. In fact, you will be creating a larger ecosystem for these brands which will mean more salespeople, more mechanics, more spare parts, more locations, etc.

car-import

The import duties are around 240% of the cost of the car. As you can see from the above example, if the cost of the car is imported at $100,000 then you will pay $240,400 in duties. For a total of $340,400 not including registration, transportation, insurance costs and the customary flower garland that is put on new cars! And of course, don’t forget about the manufacturer and dealer margin as well.

According to the article, Lamborghini sold 26 new cars last year across India…that is pathetic for a country with a population of 1.3 billion people. I’m guessing if the duties were cut to 50%, they would sell 10x more cars and would need more infrastructure to handle it. Which would generate more jobs and taxes for the Indian government. Looking at the raw revenue numbers from the import duties is misleading since you miss out on the entire ecosystem that is created in the process.

A big thanks to Gautam Madnani of Lamborghini Mumbai who patiently answered my 754 questions on pricing! He also was the first guest on the Performalux Podcast.