Yesterday evening, I had the opportunity to accompany Selvan to shop #2 of Essmart’s 17, which is located maybe 20 minutes outside of Pollachi. Around 5:30 pm, Selvan and I set up a little solar lantern demonstration center in front of this store. We propped the lanterns atop plastic stools that were provided by the shop owner, and we (or rather Selvan, in Tamil) began striking up conversations interested customers.

We’re experimenting with different forms of marketing, and we’ve found that in-person demonstrations at these local shops are very effective. Granted, not every shop is the same – the effectiveness of live demonstrations depends on a number of factors, such as the distance of the shop from the city and foot traffic. At least for more rural shops, we’ve found that our assumptions about Essmart-led in-front-of-store demonstrations are true. Not only do they generate demand among end users, but they are also useful for getting buy-in from shop owners – the lynchpin to our entire operations.

Take, for example, the store we visited last night. Originally, the shop owner was hesitant about our products. He wasn’t sure about demand, and he wasn’t sure if Essmart’s solar lanterns and water filters would sell. However, he did let us set up demonstrations in front of his shop. By the third demonstration or so, the shop owner was encouraging on-the-fence, potential buyers to take the leap and make a purchase! And, just as we assumed, the end result demonstrated how much rural customers trust their shop owners.

After the evening’s demonstration, we could also see how one of our mentors was completely on the money. Professor Rangan of the Harvard Business School had actually recommended this marketing exercise, which he determined would be effective from his research on companies selling in the Bottom of the Pyramid (BOP). It’s so true. A lot of companies have tried to sell new products to the BOP through the traditional retail network. For the most part, they’ve failed. Much of the failure boils down to a lack of awareness and marketing. This is one of the first problems that Essmart is trying to address, hopefully to more future success.

By the time we finished our demonstration, it was very dark out. The dearth of proper lighting actually highlighted a need for us.

Hi! This is Selvan, writing my first blog for Essmart about my day-to-day field experiences running the ground operations. It’s been almost 15 days since we got to Pollachi, and we have made significant progress from our hotel room in Sakthi to a moderately furnished home cum office, where we’ve using the products from our catalogue for filtering our drinking water and solar lanterns to light our apartment during power cuts. On the operations side, we have established contacts with a variety of retail shops who’ve showed a lot of interest in putting our catalog in their shops and some even introduced us to other interested shops. Adding new shops to our list hasn’t seemed to be a very daunting task, but getting a sale from the shop is the real challenge. Our priority for now is to make that happen.

As Jackie mentioned in her previous post, we rely on 1) user research, 2) personal experience and 3) market feedback to select products for our catalogue. Living and working in Pollachi helps me relate some of my own personal experiences to the issues faced by people here. For instance, power cuts in Pollachi have increased from two hours a day to more than 12 hours, and they’re even worse in the night. Thanks to our solar lanterns, I can now do work, cook and charge my mobile phone using the same lantern. For a low-income family living on a farm, this is an ideal product that solves their lighting and other basic needs.

­­We are learning a lot in this process about our end users, retails shops, product companies, and everything else connecting these points. Stay tuned for more updates from the field and how Essmart is taking essential technologies to your local shops.

Happy Independence Day! Since today was a national holiday, we spent most of it working from our Pollachi office/warehouse. Our sixth Essmart team member has arrived, and watching our complementary skills come together to move Essmart forward has been a rewarding experience. Everyone has been occupied, since there is a lot to do.

Last night we had a first long team meeting. It came after a day of shop visits by motorbike with Selvan and the sales agent who had worked with us in January. We visited the stores that Jackie and Selvan had stopped by and left a catalogue with a few days prior. These five shops resulted in a variety of outcomes: we completed one sale’s transactions (our first rupees!), saw catalogues removed from windows (because households wanted to take them home — note taken), talked with end users who wanted different types of technologies, and learned from shop owners about why they wanted or did not want to work with Essmart.

From the visits that we went on, we saw three recurrent themes: value proposition for shop owners, local training, and warranties.

Value proposition: Why should shop owners work with Essmart? Why can’t they just work with the suppliers directly? Why would they want to sell more durable products instead of what they’re currently selling? When I heard shop owners asking these questions, I was reminded of the questions that we were asked by our business plan competition judges. Our answers then still hold, and I believe that they carry even more weight since we’ve confirmed again from Pollachi. We provide a diversity technologies that would be difficult for a single store to acquire. We know the technologies and vet them before attempting to sell them, ensuring that people actually continue benefiting from them. We support shops through marketing and through facilitating after sales service. We provide generous margins compared with fast moving consumer goods. After speaking with an array of different types of shops, we’re getting to the point where we can profile which stores would be interested in working with us based on this value proposition.

Local training: We need to make the user education process as easy as possible. This is more difficult than it sounds. Many of the training manuals do not come in Tamil, which is the local language. Understandably, this makes user education very difficult. It also prevents shop owners from wanting to sell our technologies, since they need to feel comfortable answering customer questions about them. We’re seeing that this knowledge gap is crucial to fill, and we have a few ideas in mind to address this in a way that is 1) cost-effective for Essmart and 2) time-effective for shop owners, who are busy typically busy attending to other customers.

Warranties: Facilitating manufacturers’ warranties is something we’re strategizing about. The current process involves shop owners filling out warranty cards with customers on purchase, which can be a bit time-consuming and easily forgotten for both parties. When a product breaks, the customer needs to find the warranty card. We’re still learning about peri-urban households’ attitudes toward warranty cards (whether or not they keep them safe and handy), and we’re trying to streamline the entire warranty process.

Of course, there are many more issues to consider as we work through the kinks in Essmart’s model. No one said that distribution of these technologies was easy — that is, of course, the reason why Essmart exists. Although we’ll experience trial and error from the field, I think that progress has happened and will continue to happen as we learn by doing.

Sunday and Monday were relatively relaxing days for us. A few more home furnishings were needed, such as nonstick pots and pans, a drying rack, and an immersive water heater (Jackie and Selvan have been taking cold showers). It felt great to walk around Pollachi and gradually understand the city’s layout and rhythm. Pollachi is still new to me, since I didn’t get much of a chance to explore the city during the jam-packed month of January when we were doing surveys.

Urban retail within Pollachi actually has a lot to offer. There are a surprising number of department stores, along with the smaller specialty stores and the fresh fruits and vegetable markets. There’s even a “supermarket” that has imported foods.

Flashlight and torch selection at a Pollachi department store. These stores are common in the city but not at all common just outside.

However, we also know that even just outside of Pollachi, having a variety in retail is a rarity. The novelty, diversity, quality, and social mission of Essmart’s catalogue are valuable to both shop owners and households. During a visit to one of January’s pilot shops, this point was hammered home. The shop owner we worked with was quite keen on our social mission (he actually plays an active role in the local Lions Club chapter and has invited us to their meetings to talk about Essmart), and he wants to continue working with us and selling our new technology catalogue. He even showed us window space for the catalogue and a place where he would put an Essmart banner.

That store was just one of six that we’ve been talking to. We also have leads on several stores from our January surveys, as some of them had indicated that they want are willing to take the catalogue and demonstration products. It doesn’t seem too difficult to persuade a shop owner to take a catalogue and put it in his window; what’s difficult is ensuring that they actually attempt to sell the technologies. Essmart is different from other distributors because we address this problem.

On a final note: We made our first sale on Monday! We finished up the transaction today, Tuesday. Going through this entire process is a learning experience for us, and we’re working out the kinks in our order placement and delivery system through it.

Testing technologies in our office. The lanterns are also useful when the electricity is cut throughout the day.

On Saturday afternoon, Selvan and I went on a motorbike ride through a few villages within a 15 km radius of Pollachi. We visited five shops, where Selvan got to test his skills as a salesman and we got to see how these new shop owners reacted to the prospects of being an Essmart retailer.

At each shop, Selvan introduced Essmart, gave them a brochure, and showed them our initial, very limited catalogue. We also brought a few demonstration products along, which is always more helpful than a photo. As a non-Tamil speaker, it was my job to assemble and show off the demo products. Aside from that, Selvan did all the hard work.

Overall, the visits felt pretty good. All shop owners said they were interested and took copies of our catalogue. There was one shop owner in particular who seemed to quickly understand our business proposal, and seemed convinced that his customers would buy the products as long as they’re of a good quality. The rest of the shop owners showed varying degrees of engagement, but this could also have been become some of them were pretty busy with customers during our visit. Maybe we’ll get a different vibe from them when we return.

We plan on re-visiting all of these shops tomorrow to check in with them. Some of the shop owners also had some good technical questions for us, and we’ll be able to provide them with more detailed product specifications tomorrow. Our goal is to build strong relationships with 10-15 shop owners and verify all the different parts of our model over the next couple months before we begin to scale. These visits were the first step!

Thursday, we finally moved into our new space in Pollachi. It ended up taking us a bit more time to get the key than expected.  We basically had to pitch Essmart to our landlord to get him to support us, given we’re young and new to the city. In the end, we gave a reference for him to contact, and I think that’s what helped us secure the key. We’re very thankful to our new friends (and references) in Pollachi that helped make this happen for us. Overall, I think we got really lucky with our place.

Thursday morning, our place was empty. Thursday evening, we started to make it more of an office and a home.

This morning, we started to make it more of a warehouse. We got in touch with Javid, whom we worked with for our January pilot. In May, we had ordered a bunch of products to run a second pilot. However, we decided it would be too difficult without someone here full time, so we postponed the pilot until now. Javid has been kind enough to store all the products at his place since then. We finally picked them up today, unpacked them, and stored them in the small closet/room in our flat that has become our warehouse.

We also took one of each type of product out the box so we can test it out. It’s important that we play with all the products in our catalogue as much as possible. Many of us have used these products before, but we will understand them even better with constant use, and we will be able to convey our learnings to our customers and end users. We plan on having many of these products in use around the office.

For the past couple days, Selvan and I have been hunting for a combined apartment / office / warehouse space in Pollachi. We need space for Selvan to live and work, space for Diana to stay in when she spends time in Pollachi, and space to store products until we feel ready to upgrade to a proper warehouse. We looked at several places on the first day, but most were less than ideal. They were either too far from town, or didn’t have enough space.

There was one place that caught our attention. It was centrally located and had huge, open rooms. When renting space here, you have to put down a deposit that you don’t get back until you leave. The deposit for this place was 10 months’ worth of rent. That’s a lot of capital for a start-up to have tied up.

Then yesterday, we looked at a place in a brand new building. The flat had just been finished, and the set up and location were perfect. The deposit was only five months’ worth of rent, which is much better for us. So we spoke to the owner of the building to talk about moving in. We wanted to make sure he was OK with us not being a family (some owners don’t like to rent to bachelors), and he was OK with a bunch of foreigners visiting in a week. All was fine, thankfully. He typically rents to people on two year contracts, which is a bit much for us to commit to as we’re getting started. But when we told him about our social mission, he said he could make an exception for us. Overall, I got a good feeling from the building owner.

Today we move out of a hotel and into our new space! The place is really perfect and is somewhere we can grow into. Selvan and I are excited, and are headed out to furniture shop right now.

Last night, Essmart teammate Selvan and I left the large Indian cities (specifically, Chennai) for the smaller town of Pollachi, surrounded by more rural areas. The overnight sleeper bus that we took to get here was very comfortable, and has made a big difference in my ability to function today (I normally don’t do well sleeping upright).

Pollachi will be the base for Essmart’s operations, and our task over the next week is to get things up and running. Today, we’ve got a bunch of administrative tasks to take care of. We’re going to look at a few houses that will become Selvan’s home and Essmart’s office/warehouse. We’re going to print copies of Essmart’s preliminary catalogue. We’re going to call Javed, who we worked with in January, and check in with our pilot stores.

There’s a lot to do, but I’m excited to finally be here! Time to get the day started.

Thus far, I’ve mostly been getting over jet lag from the long flight, and getting acquainted with Bangalore. It’s a sprawling city, and there’s a lot going on. Today I met up with a friend from my Masters program who’s working at the Microsoft Research Center, where he’s studying how programs like EdX could be applicable and/or effective in India. Tomorrow I have a meeting with a potential supplier and a partner, both of whom are based in Bangalore.

Saturday I’ll be heading to Chennai to meet up with Essmart teammates Prashanth and Selvan. Selvan and I will then be traveling down to Pollachi to start getting our operations set up. We have a long to do list for when we arrive in Pollachi, and I’m eager to get started.

No pictures yet, but I will hopefully get some up soon. We will also try hard to blog regularly about our progress, lessons learned, and just overall experience in getting Essmart up and running. We have our work cut out for us, but we’re feeling ready and excited.