The Lootmaar Blog

I got to this book through the 37Signal blog. So word of mouth, err, blog, actually works. But I didn’t quite get the crashing insight I expected when I saw 37Signal’s high recommendation. In fact, at this time, beyond a cursory impression, the book left no lasting imprint.

The author, doing the contrarian thing, started a Word-of-mouth network. Yes, apparently, they have networks to pimp products. So most of this book is dedicated to why the author’s business makes complete sense, and why you’re stupid for believing that when people have incentives like freebies to talk about products, the value of their “word” goes down. While, I need no convincing on the effectiveness of word of mouth, I’m more wary of formal(incentivised) networks to milk the phenomena.

Having said that, I can’t completely disregard the book. It does have some little nuggets that hold particular relevance for Lootmaar.

Effort of Payment

At one time, Noman and I were seriously considering a monetary incentive to stimulate user registration, however, we decided to put the plan on hold because money didn’t seem like sufficient incentive to attract passionate users, and of course, the evil mentor poked too many holes into the plan.

Influencers vs. Passionate Users

Finding passionate users trumps getting Reema to be your spokeswoman.

Viral Marketing vs. Worm-of-mouth

Also, I’ve always used the terms word-of-mouth and viral marketing interchangeably. Below is a useful contrast:

-Adnan

ps. For a book on word-of-mouth, it’s quite instructive to have a locked PDF to prevent any possibly citations :P.

On the features front, we’ve been in stealth-mode for some time. We’ve made several changes over the past few weeks that our regular users have noticed. For instance, users can now see unread messages in MyAccount in addition to the usual email notification. Also, we now have reminders going out to buyers and sellers to help them close the transactions and provide feedback. As a result, we’re seeing feedback ratings accumulating for active users.

The bulk of the work, however, has been behind the scenes. For instance, we had to integrate with the SMS provider to track SMS delivery status at user registration. SMS delivery still remains a pain, but it has been alleviated by the integration, because now we can knowledgeably get back to the user and tell him why the SMS did not reach him/her.

Also, we’ve completely redone transaction monitoring, giving our customer service agent a single view for each transaction. Previously the poor CSA had to scan through 4 pages to get the relevant transaction information. It was a difficult decision to prioritize this development. My take was that we can suffer and all our development should be customer facing. Nomi disagreed. When we analyzed the issue objectively, we found that the amount of time it took our CSA to monitor one transaction cost almost as much as the Lootmaar commission for the transaction. That sealed it.

While the online marketplace model is premised on very high volumes with very little manual intervention, at this stage, we believe hand-holding is important and we personally follow-up on almost 70% of the transactions. So while our development has not been customer facing, it’s been customer focused.

-Adnan

So, Dr. King said, “Not everybody can be famous. But everybody can be great, because greatness is determined by service.” Those of you who are history scholars may know the rest of that passage. He said, “You don’t have to have a college degree to serve. You don’t have to make your subject and verb agree to serve. You don’t have to know about Plato or Aristotle to serve. You don’t have to know Einstein’s theory of relativity to serve. You don’t have to know the second theory of thermodynamics in physics to serve. You only need a heart full of grace and a soul generated by love.”

-Oprah Winfrey at Stanford Commencement ‘08

Spent the evening reading The Word of Mouth Manual. Insights to follow soon.

-Adnan

I’ve always been a big fan of serendipity in the design / conception stages of a project. A tiny spark somewhere can lead the whole project going in another direction. Just a quick note today about a fun example I found regarding the music video for “Nine in the Afternoon” made by the band Panic at the Disco:

“Originally, some of the scenes were supposed to be filmed in a ‘desert wasteland,’ but in the writing process, the director made a typo and spelled out ‘dessert wasteland.’”

It’s quite a catchy tune and a fun video reminiscent of the Beatles.

Q: What does a high-tech startup in silicon valley have in common with a fashion label in Pakistan?

A: Funding.

Don’t get me wrong; its easy enough to raise money. The similarity is the heartburn caused by financiers.

Last year my Munizah Farrukh founded a fashion label for bridals and formal party-wear. After getting a degree in textiles, and designing for who’s who at Amir Adnan, she felt she was ready to step out on her on. Since her launch last year, she’s had photoshoots published in SHE, Womens Own, and Libas. She has done the wardrobe for Zeba Bakhtiar’s dramas and has had Iraj model for her. So it would be safe to say she’s made good progress. so what’s the problem?

Heartburn!

She started out by taking seed funding from a very close family friend, who became an equal partner. Both of them were talented fashion designers, neither of them had business experience, and they were geographically dispersed. It seemed like a great idea at first, Munizah would produce very sophisticated bridals, and her partner would sell them through designer outlets and personal contacts in Dubai. A partnership agreement was not drawn, and responsibilities where not inked. Given the 3 generation relationship, it wasn’t necessary.

Today, the business is on its way to becoming cash flow positive, however, it will take another year to be fully self sustaining. Munizah’s expectation was that the business would take 3 years to be profitable, and that injections of cash would be made by the financier up to that point. In mid 2007, when she started, these were the terms in her mind, but they were never written down. Towards the end of 2007, the cash started to dry and Munizah was a wreck. Ten odd workers had to be fed. Orders had to be fulfilled, and after just 6 odd months of funding, the financier was concerned that they weren’t getting returns. Munizah continued by taking loans from family, and producing exceptional clothes that generated repeat sales.

Fast forward to today; she has nailed her target market, how to reach them, what photoshoots to arrange, which models to choose-all with clever positioning and a shoe-string budget. She needs capital to make it happen, and has two investors standing in line. Her partner, however, is resisting. The partner is concerned that it would dilute her ownership, and while she is unwilling to fund beyond two months of frugal cash-flow, she is not allowing external investors either. Quite a dilemma, eh?

Luckily, they’re figuring a way out, which we’ll keep for another post. The takeaway here is: prepare a detailed partnership agreement with precise responsibilities. Objectively discuss the contribution of each partner at specific checkpoints to avoid any unpleasant surprises. This is important in any business, but its exceptionally important when doing business with friends or family.

-Adnan

Below are the receipts for the charity auctions. It took some time to post them up, because there was a delay in the payment processing for the t-shirts. So here’s the tally:

Emad Irfani’s T-shirt bought by a user in Karachi for Rs. 1000
Ahmed Ali Butt’s T-shirt bought be a user in Lahore for Rs. 1000

And, now, for the real thing:

An entrepreneur from Lahore, who happens to be running a wildly successful tech company, was the highest bidder for lunch with Jawwad. He donated Rs. 100,000 for The Book Group.

Below are the three receipts.

• Rs. 100,000 for The Book Group
• Rs. 1000 for Shaukat Khanum
• Rs. 1000 for Edhi Foundation

Lootmaar does not have a direct relationship with any of these orgainzations. The donations have been made based on the preferences of the patron of each auction.

-Adnan

There is hope in this world.

BBC News

The state department has reinstated Fulbright grants for seven Palestinians in Gaza to study in the US.

This reverses a decision to withdraw the scholarships because Israel has not provided exit permits to the students.

Israel tightened its blockade of Gaza after Hamas seized power there a year ago, largely cutting off the territory from the outside world.

The US consulate in Jerusalem has told the students that it is working to get them out of the territory.

“We are working very closely with the government of Israel in order to secure its co-operation in this matter,” an e-mail message to the students read.

More

The tagline competition results are out. We got over 200 taglines, ranging from “The best damn website for selling and buying online, b*tches” to “Shopping is not so far, try Lootmaar”. So you can imagine we had our work cut out for us. Now just to show off our fancy consulting-style method to determine the winner let me tell you what we did.

We put together a panel of:

1 geek

1 high-flying exective

1 higher-flying CEO

1 marketing consultant

So, we gave each panelist 5 points that they could allocate to the 6 taglines which we had short-listed. They could allocate all 5 points to one tagline, or they could distribute the points based on how much they like a particular tagline. The 6 finalists were:

Bid It, Win It, Love It.

Where the product sells itself

Grab It If You Can!

Dhandaa aasan

Wish it, Click it, Get it.

Tech buys made simple

And the winner is…*drum roll*

Dhanda Asaan

Up to this point, the selection process has been blinded, i.e. I still don’t know who suggested the above taglines. After this post, I’ll look it up, and contact the users. The “Dhanda Asaan” guy gets an iPod Shuffle delivered to his doorstep, and the other finalists will get an uber cool Lootmaar t-shirt (as soon as they are printed).

Thanks guys, this was fun!

One of the most valuable things my parents taught me was to be open minded in order to make connections across a broad strata. Now, more than ever, forming cross-boundary relationships is the key to success. These boundaries can be social, religious, cultural, disciplines of study, etc. In a globalized economy driven by ideas (please listen to the Killer Innovations podcasts by Bill McKinney, a CTO at HP), competitive advantage comes from ideas, and bringing together elements which would not normally be found together.

So I’m reading this great book by Alain De Botton titled “The Architecture of Happiness“. No, I’m not horribly depressed, it’s a book about architecture. I found the chapter that discusses what we find beautiful particularly interesting. Artists have captured the essence of that which attracts us to a ‘product’ in this case, a building or a painting, long before the industrialists of the 20th century. Simply put, as the eras and trends change, what we fundamentally find beautiful is that which is lacking within ourselves or that which we wish to reinforce about ourselves.

Take for example a painting of a mother holding a baby. Hanging on the wall, that reminds the viewer of the virtues of care and compassion. We are all fallible, but what great artists do is to capture in a concrete, lasting form that which we aspire to. The artist anchors that which is deficient or transitory in our lives or society. This is what drives to admire a great minimalist artist such as Dan Flavin (to counter the chaotic life we lead) or to seek refuge in a minimalist home.

How does this relate to business? This very concept is what we should keep in the back our minds when designing products to give them soul. Design the product so that it not only fills a materialist need, but also an emotional one. It is easy to put a price on the utilitarian aspect of something. But if it starts to speak to the consumer emotionally, then you have a product that people are willing pay a premium for because it represents something they aspire towards. Owning or using the product brings them closer to that emotional aspiration; something priceless.

For me right now it is a Nokia N78, the Canon G9, and the Nokia N810 whenever WiMax comes to Vegas. One of these would be nice in the future also.

-Wynn