Case of the transferring official

9 Sep

Recently, NextDrop went through the transition phase that every startup/social enterprise that is working with State run entities goes through. Transfer or changing of utility/government officials. All the rapport and trust you built over the past 2 years winked out in a flutter. As it so happens, while I knew this was inevitable eventually, this change of guard in Hubli caught me completely blindsighted. Here I was; happily preparing for my trip to the US, ready to recount to anyone who would listen, that working with government entities in India isn’t fraught with delays, glacial pace and reams of paperwork; content in the knowledge that I had readied everything for my absence for the next three weeks. All the while, though, something was pecking at my brain, telling me I had forgotten something. Something major. And this ‘major’ unleashed itself on me the day before my departure. The new Hubli Water Board Executive Engineer had taken charge and had summoned me to his office.

What ensued was precisely how one should not begin a partnership with the new administator of the state utility. Therefore I decided that the world must learn from my mistakes. Here are the most crucial things to consider when a new administrator assumes charge of government entity you are working with:

1) Prepare during the transition phase – My cardinal sin was to not prepare for the new arrival during the transition phase. Once you find out that your current counterpart is about to leave, there are two things one must do. First, find out what the priorities of the incoming engineer/manager are. Second, ask your current counterpart to introduce your service/work to the newcomer. A bonus would be if they introduce you as well but that is expendable as long as your services are given a proper foreword.

2) Paperwork, paperwork, paperwork – In India, you cannot easily find an exhaustive list of all the documents, permission and letters you need to have before you have an ironclad blessing to operate, especially if you’re working with the municipality or a state run utility. As a result, the paperwork we had, while sufficient for the previous administrator, was found grossly lacking  by the new incumbent.
In my experience, it is best to check with utility staff in charge of budgeting and finances what additional paperwork you need to establish your legitimate right to work with them beyond question. If ever in doubt, best is to preempt and get that paperwork in advance. If you think no one is going to ask for it, trust me, that will be the first document they’ll demand.

3) Be the host, not a supplicant – If you have received a good foreword and favorable reviews from citizens and users of your service, then you are well set for a productive first meeting. However, you should make first contact. What I should have done is to call on the new engineer and ask for a meeting. Even if he did not acknowledge it right away, I would have marked my presence in the register. When he finally gives you an appointment, invite him to see your office and learn about the work you have been doing successfully for the past x number of years. This is especially significant if you are doing anything related to technology.
Most administrators view technology as a daunting opportunity. While it sounds oxymoronic – it is anything but. Even the most ‘luddite’ utility managers see technology as the great emancipator. A pill to kill all ills. However, they may be extremely wary of it since it obscures their operations within a black box with a fancy looking User Interface. The closer they are to on the ground operations, the more wary they are. As a result, being transparent about how your technology does what it does in layman’s tongue, will go a long way in increasing their comfort level both with you and your services.

4) Get educated – first hand – By educated, I mean internalize his vision, priorities and motivations for the office. During your initial discussions, try and gauge if there is a fit between your services and his goals and mandate. That will define your focus area and further opportunities to support his targets. You can be the instrument for his and ultimately the utility’s improved performance.

5) Establish your credibility – At the beginning, any administrator will have a lot of questions about your company. What are your motivations behind doing this work, where is the funding coming from and most importantly how much money you are making. These are especially pertinent for startups/social enterprises. His skepticism is completely understandable. In countries like India, there are throngs of peddling salesmen trying to sell junk to the government. So the administrator’s first instinct is honed to be extremely skeptical. In order to establish your credibility, you must be willing to answer his questions honestly. Some of these might be beyond the boundaries of standard due diligence but that is the price of his trust. For example, I had to pretty much lay out my balance sheet and details of my marginal costs in front of him. The rewards, however, for such transparency are also commensurate. Once you have his trust, he’ll start to incorporate you in his vision. And that is the place you want to be!

My Most Memorable Day at NextDrop (yet!)

24 Jun

We had our first customer town hall yesterday at the NextDrop offices in Hubli. Completely unexpected and unplanned, it turned out to be the most memorable day in my not entirely uneventful life at NextDrop. First things first. The premise: Under the aegis of the Hubli Dharwad Water Board, NextDrop has been shortlisted for the National Urban Water Awards. A committee from the Administrative Staff College of India was slated to conduct a field visit on the 22nd of June. As it was eagerly awaited, we had prepared in all earnestness for the visit.
We thought it would be good to invite a few customers to the office. Going to the field and trying to locate houses of customers can be quite tiring despite geotags. So, I asked Anjana to call about 10 customers and organize lunch for them. As Anjana started calling – we should have realized then. It was fairly easy to get them to agree to come to the office at 1 pm on Saturday. Feeling well prepared, I left for Bangalore for a day. When I returned, QJ told me that they had sent the last 100 people, who had paid a NextDrop bill, an SMS inviting them for lunch at the office and asking them to confirm by giving us a ‘missed call’. Watch out eventbrite, that’s how future events will receive RSVPs. In the first 15 minutes of the message being sent, about 15 people confirmed.
Thus, the appointed day arrived. The plan – first a presentation at the Water Board office, then we bring the committee to the office to see operations, meet the valvemen and customers. As we entered the office, the committee and the utlity engineers in tow, we were welcomed by the sight of 6 customers already waiting for us. It was 1.05 pm. I have never seen this kind of punctuality from indian customers before.
The committee introduced themselves and explained to the group that they were here to check whether a service like NextDrop even existed, if it did, was it accurate and finally how did the customers benefit from it. Even before he finished, one of the customers spoke. “I receive messages late. Sometimes I receive water at 7 and the message at 8. That should not be, right?” My heart sank. May be they are all here to complain how they have not been receiving good service. “Do you always receive incorrect messages?” The utility engineer asked. “No No. Only sometimes. I find the service extremely useful. It is of great benefit to us.”
Meanwhile, about 5 more customers had arrived, some along with their spouses. What followed was a chorus of resounding thumbs up for the service. One customer said, “This is a very good service. I can’t believe it is only Rs. 10 a month. I would subscribe to the service even if they raised prices.” Several other customers agreed. One of them was in Bangalore when he received a message that his water supply was about to commence. He immediately called his neighbour to shut off his tap. Others said they used to the service to conserve water as well. Now, they didn’t have to leave their taps on. As the discussion started to move into high gear, more customers showed up. By 1.30 pm, we had about 17-20 customers in the office.
Enter valvemen – 3 of Hubli’s finest. They took stage and gave a detailed answer on how they receive far less number of calls inquiring about water supply since they started sending notifications to NextDrop and how they use the IVR system. Upon proding, they even introduced themselves and were rewarded with a big round of applause from the customers as well as their Water Board bosses.
After hearing just the first few remarks from customers, the committee was convinced that the service was of incredible help to citizens. I think they saw how strongly customers felt for the service. In fact, soon discussion turned to the issues of 24×7 water supply being piloted in 10% of the city. Customers debated whether the system was really required. One couple noted that if they were supplied water even for an hour reliably with a decent pressure, they wouldn’t want 24×7 supply. The committee members enumerated some benefits of continuous water supply to a rapt audience. It was incredible to see how deeply citizens thought and cared about water issues in the city. They were very well informed about the current state of affairs and wanted more information from the utility.


As the flow ebbed for a second, I took my opportunity and asked the question that has been haunting me for a while. “What would it take for you to recommend the service to your friends and family.” After such a comprehensive vote of confidence to our services, I thought this would be easy. They would tell me, we are already doing that or we would be happy to. And here is where I was laughably wrong. There was a pause and I noticed several heads shaking. Then one of them stated conclusively, “That is not our job.” “Yes, that is your job, you go door to door and tell people about the service. We are not going to do this.” another agreed. Taken aback, I wondered why not? “For 2 reasons, one, as soon as I recommend the service, people are going to wonder what is in it for me; and two, if for some reason they don’t get good service, they will bite my head off.” “However, if you send your people, or organize a similar event in my neighbourhood, I would be happy to testify about the quality and usefulness of the service”. In one fell swoop, my customers had told me that they are extremely hardnosed but they love the service.
Finally, as lunch was being served, customers asked us how many customers we had. 5000. That is not nearly enough to sustain yourself. We want the service to go on. You should raise your prices, one suggested. Another went as far as saying it should be made compulsory for everyone in the city. Have you expanded to the entire city yet? May be the Water Board should pay you for this service, one said looking more at the utility engineer than us.
The feedback of the day came from a lady (most probably a housewife) who remarked, ” Now I am free to go anywhere I like!” It took me a moment to absorb what she meant. There it was. Proof beyond an iota of doubt – we had made an impact. NOTHING, has made me happier than hearing that being said. The fact that we have been able to eliminate this uncertainty from the lives of people is the ultimate validation that what we do, matters. What other 10 rupee service would elicit such passionate feedback from you, that you would spend half your Saturday with the company, that you would brainstorm with them – ideas to stay afloat and expand! Our customers love our service and they want us to expand and improve, to succeed. Enough said. 


Bada Bing, Bada Boom: CEO Post Time

18 Jun

I bet everyone is just really excited that it’s not just me posting on this thing (finally!) right?  Yeah, our team is pretty awesome, and have really amazing insights that I thought should be shared with the world at large (or at least internet-dom for starters). I thought it was time for a post from me though, mostly because I was getting a bit nostalgic since it’s been a little over two years since I officially became CEO of NextDrop.

Good News: Company has not been run into the ground yet.

I digress though.  What did I want to talk about today?  I wanted to talk about company culture, because I think it’s probably one of the most important factors for startup success.  Why do I think this?  Greatest influences on my business life thus far: books like Good to Great, Delivering Happiness: A Path to Profits, Passion, and Purpose, and learnings/slideshares/conversations with people who have actually done stuff that I want to do, like Chamath Palihapitiya and Fred Destin.

How have they influenced NextDrop?  In a few ways.

Everyone Learns Python.  Yeah, Even You, Civil Engineer

I remember around January, Quijano approached me and Nishesh after a team meeting and basically said that we would suck as a company if we all didn’t learn Python. (Ok maybe not his actual word choice, but that was my takeaway).  Of course Nishesh and I were terrified because…well..IT’S PROGRAMMING.  I am a CIVIL ENGINEER.  That was WHY I chose civil engineering, and not..Computer Science or something.  Same with Nishesh- Water Engineer and POLICY.   Totally not what we signed up for.  We tried to push back, but Quijano was adamant.  Luckily we both secretly (but not so secretly) sort of think Quijano is a genius, so we decided to just go with it and…learn Python.  Best decision EVER.  Why?  Think about what we’re actually doing at NextDrop.  We’re using simple technology to solve complex social problems.   The hardest part is understanding what problems need to be solved, and how we can solve them.  But the other really important part is knowing what technological solutions are available in your arsenal to solve these problems.  Without an intimate understanding of your system, there is no way you can accomplish this.  Also, it saves a TON of money on development, because in this early stage, most of what is going to hold you back is programming.  So if you have all key people focusing on the biggest barrier to moving forward, then you make the most progress.  I know I know, you’ll probably argue that everyone should be focused on what they do best. Sure, in an ideal world yes.  But in that ideal world, we would also have all the technology we want developed in an instant and we would have all the data we need at our fingertips.  Without data, we have nothing.  Plain and simple.  And speaking from experience, let me tell you this is what makes or breaks you as a company.

Again, I would encourage everyone to adopt this policy.  I’m currently working on a program that more accurately breaks down/visualizes our valvemen data so that we can make more informed decisions around our valvemen incentive program.  Really stoked about it actually!

Hire People You’d Want To Hang Out With

It’s pretty simple actually.  You’re going to spend most of your waking hours with these people.  If you wouldn’t even want to be friends with them, chances are, you wouldn’t want to work with them. No matter what their resume says.  This goes even beyond work though.  I think it also self selects for people who believe in your vision and mission.  Chances are you hang out with like minded people.  At least for me, I hang out with all sorts of people, from different walks of life.  But the thing they all have in common, is that they think what I do at NextDrop is pretty neat.  They get it.  They may not want to do it themselves, but they get the vision.  The most important thing I can do is make sure I populate NextDrop with people who jive with the vision, and are working at NextDrop to build a new reality- one that doesn’t exist today.  And have a really good time along the way of course.  As long as that is your motivation, I’ll probably want to hang out with you and we can hire you at NextDrop.

Fail Fast, Fail Often, Learn As Much As Possible

The Hacker mentality and the Lean Startup.  Let me tell you, another thing that really influenced my personal life greatly, and all of us at NextDrop, was the essay, How To Be A Hacker along with Eric Reis’s book, The Lean Startup.  In short, the life of your company is determined by the number of experiments you run, and the number of learnings you can acquire within the lifetime (i.e. burn rate) of your startup.  You’re probably going to be wrong, so just be nimble, and as soon as you know you are incorrect, pivot.  Putting ego aside, just look at the facts and do what needs to be done to achieve our goals.  Pivot or persevere.  It doesn’t matter, as long as we know we are headed in the right direction.

Those are the 3 major takeaways regarding culture I wanted to share/learned along the way.  Personally, it’s been an incredible journey, and in addition to just being really thankful that I get to work on solving really interesting problems, with the smartest people I know, I’d have to say I’m a pretty lucky person.

I also wanted to say thank you to everyone out there, reading this post.  It’s been two years, and with all of your support, we’re still alive and kicking.  We wouldn’t be where we are without you, and I wanted to make sure everyone knows how much we appreciate it all.

So thanks, from all of us here at NextDrop.

Whose in it for some incentives – Part II?

6 May

Sometimes I wish I were R. Daneel Olivaw, able to adjust anyone’s emotions for the greater good of mankind (Of course following the Zeroth Law). However until then, I have to rely on its poorer ancestor – behavioral economics. I have been a fan of the field ever since I heard Dan Ariely’s talk ‘predictably irrational’.

Since the last time we spoke of incentives, we have tried a few experiments- one successful, one marginal and have recently introduced some new ideas. As one who loves listening to his own voice, let me talk about the success.

Professor John List at the University of Chicago has conducted some pioneering field experiments using behavioral economics. We borrowed from his field experiment, “The Behavioralist Visits the Factory: Increasing Productivity Using Simple Framing Manipulations” in which he raised the productivity of workers in a Chinese factory by simply ‘framing’ the incentives differently.

In his study, List has used the risk averse nature of humans, i.e., we try to avoid losing much more than trying to gain something. Instead of earning an incentive as the month progresses, he provided the same incentives at the beginning of the month. He then deducted these incentives if required performance standards were not met during the month. In the former case, workers would just not earn something they could have if they didn’t hit required standards. In the latter, they now lost something they had already earned. Here, their innate risk aversion came into play and they worked harder to protect what they had already earned and hence there was a small but significant increase in productivity with no cost to the company.

Using the same principle we started giving all incentives in advance at the beginning of the month. Their instructions were simple – they would receive all their incentives in advance. However, every time they missed a supply notification,  points would be deducted from his account. At the end of the month, we would provide them a paper receipt that would show them how many points they lost out of the total they had received in advance that month.

I’ll be honest. I couldn’t contain my excitement the day we introduced this new initiative. Even before we started receiving any results, I was in self congratulatory mode. I thought how amazing I was, to apply state of the art research that would surely accomplish miracles.

So, what would you expect? Like all predictable twists, after the end of the first month – it achieved nothing. What’s more, the valvemen didn’t even notice. I’d ask my colleague, Aseem, did you explain the “Points Lost” receipt to them and he’d say yes. What was the response – they said. “Meh! Ok.”

If the initiative didn’t improve anything, may be I would have understood, but to not even create a stir amid our test group, that was inexcusable. I started to hunt for reasons. Why? Why don’t they care? It made me question the entire program itself. What was the point if they just didn’t care at all!

The next month was marginally better in that the valvemen only asked if they could spend all these newly minted advanced points, well, in advance! A tiny flicker of hope – I allowed it. But now, they used all the points at the beginning of the month so they had nothing to lose during the month. So we introduced a requirement of a minimal account balance to be able to use points in advance.
Finally, one day, by chance, I told Aseem to create the “points lost” receipt in Kannada and told him that we should keep that standard practice from now on.

The reaction was immediate. No sooner that the first of these Kannada receipts were distributed, valvemen started inquiring why they had so many points deducted. When we would show them each instance of a missed notification in the performance reports they would resort to haggling and bargaining. Eventually, they started to comprehend their cost of each missed notification. Talk about importance of using local language!

Even so, this framing of incentives has not been the raging success I had hoped it to be. However, it has certainly played a part in improving valvemen performance. One of the major gains from the initiative has been establishing the action and consequence loop for performance. If you miss notifications you will lose points. This simple rule has been established in their minds and no one now tries to question or bargain for points.

The program commenced in February and we started receiving reactions from the valvemen in March. At the beginning of March we had 28 consistent valvemen providing correct notifications to 115 areas o the city. This number increased to 35 and 158 respectively at the beginning of May (See chart).


During this period the only other new incentive introduced was a “Valveman of the Quarter” contest which rewarded the best 2 valvemen from each tank with a one time cash award. Significantly, the winners of the contest were performing well since January. While I have not done any rigorous testing yet (I intend to write a paper with David Argente, who suggested using List’s research ) the program seems to have been successful in raising the threshold of performance across all tanks.

Finally, it has primed the valvemen for my next ace ‘in the hole’. We have just introduced what we like to call the “Smiley System”. But I am not going to reveal what it is just yet. For that you will have to “watch this space”. (Hint: SMS, emoticons and behavioral econ).

Dream World

9 Apr

What’s been going on since my last broadcast?

The monsoon season has long past and the dry season is upon us. The reservoir is low and water supply timings have changed from once every 3 days to once every 4 days. Scheduled power outages and the number of tankers on the street have increased.

Our team has been tinkering away developing minor innovation improvements and executing them as soon as we can.

A few weeks ago there were local city elections. A large flux of people. An opportunity for us to market. We had recently developed some new tech to allow text messages to update our database. It gave us more control and visibility over our operations. And it was cool, this hack was updating our database so Melwyn didn’t have to do data entry anymore, this was in real time. The format was something like this:

“nd bill 9095242885 30”

Three days before the election we sat down and were interested to know how many people would reach out and tell us they want the NextDrop service. Initially, our experiment was to see how many people would text into our number something like, “nd new”. At this point we believed that people would tell us they wanted the service. They were telling us in other ways, referrals from other NextDrop users, catching our representatives while they were billing in their neighborhood. They just didn’t have an easy way to communicate with us.

The day before the election, I remember getting a call from Nishesh.

     “Hey man, so we were discussing what’s going on tomorrow. Instead of the customers sending a text message, Anjana suggests we give a missed call.”

     “That sounds great, let’s do it.”

     “Do you want to talk to Devin about the tech?”

     “No, he can handle it.”

Within 24 hours we had a missed call number and if you’ve never called the number before it would log you into our system and then send you a demo SMS immediately. The demo looks something like this:

“Demo: Water will arrive in your area in 30 to 60 minutes.”

We pushed marketing hard for those two days. Fliers, people on the field, and we were persistent when they told us we couldn’t be on the streets. The first positive feedbacks were people taking the fliers home and calling from their landlines. On those two days we had 14 people on the field pushing out this phone number and 80 people called in. Over the weekend, we had no one on the field. Five people called into our missed call number.

Major Innovation.

With additional marketing, this number has grown. Around 8 to 10 people call into the number daily, and we see spikes over the weekend, around 30 to 40. It completely changed how we acquire customers. Not everyone who calls in signs up for the service, they’ll say things like “What, I didn’t give a missed call? My children must have.” Some will not be interested after they find out it costs 10 Rs per month, but almost half provide their address information without hesitation.

This actually helped us out a lot, we were able to focus all of our time on delivery good content to people that would pay for the service.

As more and more people called in, some of them were calling from areas we didn’t provide service to. For the first time in Hubli, there was one single phone number residents could call into and consistently find out when they would receive clean drinking water. Each phone call questioned how well do we understand water in this specific area. We can tell you this this and this or we can’t tell you that. The market has spoken and we need to know water so well that we can tell you an hour before it’ll arrive and we need to know every time it comes. This is the future.

It’s an interesting exercise to think about if there was one phone number in the world to call if you needed to know when you’d get water. It’d be revealing to find out where people would call from. Now imagine a place where no one needs to call into this number. This is easy. Most suburbs and major cities in the United States, no one would call into this number. But for every place else, you’d probably get at least a few phone calls.

How did this all happen? How do you manage innovation? If its a process, then can it be observed, studied, stimulated and replicated? I don’t have a concise answer to these questions, I wish I did, and there isn’t a whole lot of documentation on the topic. But here is what we’ve found helpful so far.

  • Focus on the largest opportunity at hand.
  • Develop a culture engaged in knowledge work.
  • Use the Customer Development Methodology.
  • Learn Python.
  • Read a lot.
  • Exchange problems and solutions with other people doing similar work.
  • Share your knowledge.

NextDrop In Bangalore

7 Apr

It’s a bit difficult to keep this blog updated on everything interesting we’re doing, but we’re trying our best!  Today we have our newest employee, Bindu, who is running operations in Bangalore (yes, we’re actually working in Bangalore now), writing about her experiences/our progress thus far.

Where do I start?
For someone who had spent 9 years enjoying the centralized AC, freq cafeteria visits, chit-chats (most frequently discussed were traffic jams, where is our country heading? kind of interesting topics..;))
The pilot in bangalore has made me go through ‘A hell of an experience’ (of course in good sense ;))
Right from searching for the water tank in the area we first visited (I remember how me and Anu were asking every other person on the street if he knows where the water tank is.. no one seems to know and they gave strange expressions.. like why are these two girls so desperately looking for a water tank after all!) to sitting across the table with top BWSSB (Bangalore Water Supply and Sewerage Board) officials explaining the outcomes of our pilot and astonishing them

We got the necessary permissions from BWSSB to carry out the pilot in Bandappa Garden NE1 sub-division and Bhoopasandra NE3 sub-division (Of course it was as simple as that! :D).  We trained the valveman, enrolled people for our service and started monitoring the notifications.  4 weeks down the line, taking feedback from customers was so much fun – they totally loved us! :))

Our observations in Bandappa Garden after 3 months pilot – 2 Skipped supply, 6 Unscheduled supply timings.  Not trying to point out any inefficiencies here but, the goal is to make sure people know about it so that they plan their tasks accordingly.  The delays in the supply or the skips may be genuine (lot of times) due to shortage of water supply to the reservoirs or power cuts/pipe damages etc.  If they are made aware of it in advance, I am sure most of them would understand and co-operate.  Thats exactly where we are pitching in.
This is how the supply graph looks like.. Do you see the streamlined supply timings?  Don’t want to take away all the credit.. But yes, our monitoring has definitely made a difference (I see a steady trend continuing since)

Bhoopasandra was even more interesting.  To bring in a seriousness in the valveman to notify us of every supply was a challenge (he thought it was OK if he forgot to let us know?!)  Other than 11 Unscheduled supplies, it was fascinating to see that he was supplying water to the area every day continuously for 15 days!!  And no one seem to know about it.  When our reports reached the Engineers, initially they denied that was true and when we confirmed it was actually true, they gave us a ‘oh’ look. I know for sure that they have inquired into it, the valveman got back on track following supply schedules (took so much to convince them that a lot happens under their nose!)

Then the question came up.. why did he give water to a specific area for 15 days at a stretch???
We have not been able to arrive at a conclusion but here are some speculations at a high level..
a. Could be political pressure.. since the elections are round the corner?
b. Someone from the area pays him to open the valves for them?
c. He lives there? (actually No, he doesn’t)
d. He might simply be trying to impress us? Wants to show he is doing a good job?Well end of this luxurious supply period, on one end we have the Engineers with surprised expressions and on the other hand residents complaining that the supply was great and now its gone bad (No no! trust me! they mean that its only alternate days now!)Summarizing the study:  The board faces a challenge in coordinating within its various levels and effectively communicating with its consumers.  This gives us a great opportunity to make a difference.  With due respect to the enormous task the board has, to supply water to the monstrously growing city, we think that slightest of the change in the way the supplies are currently administered can bring in a drastic improvement in the system.  And we want to help them and be the instrument for change and move india forward!

Throughout the pilot the experiences I have had dealing with super-fast auto-rickshaw drivers, amazingly slow BTS buses, naive valve men, surprised looks on arrogant officials, encouragement from knowledgeable officers, long waits before the meetings, walking down lanes of North Bangalore which I never had, friendly slum residents, curious people who are amused to hear their phone ring a while before the supply was simply amazing and I thoroughly enjoyed it.
Do you want to see what the residents of the pilot areas has to say about us?  Do watch this video
My sincere thanks to the officials of the water board especially Mr. Amruthesh, Executive Engineer North East division for being so supportive and letting us into his fort.  Also, MSSS for helping us choose these areas and introduce us to the pilot area residents.

Who Is In It For Some Incentives – Part I

6 Mar

Today, we have our Vice President of Product Development, Nishesh Mehta, talking about what he’s learned about Incentives since he’s been here thus far.  Really fascinating topic, with implications across many sectors.  Why do people do what they do? Why do valvemen give us information?  I’ll let Nishesh take it from here

NextDrop was featured as one of the practioners at the ACM Dev 2013. At the conference, we witnessed some of the most innovative ideas in action that married crowd-sourcing, ICT with the mobile platform. One of the questions I was asked most often was, “So why do the valvemen work with you? How have you crafted your incentive program to get them to give you accurate information?”

To answer the question, we have to go back to September 2012. I had recently moved back to India to join NextDrop. My charge was to set up an incentive program that would convert each valvemen into human sensors – accurate, timely and most importantly consistent. Over the last 6 months, we have been able to devise a program that has achieved good results. About 70% of the valvemen working with NextDrop in Hubli report water supply timings accurately.

The incentive program that we designed works like a frequent flier program. For each correct notification, valvemen accrue a certain number of points which can be redeemed at the end of the month in the form of rewards such as jackets, T-shirts, petrol, ration etc. Essentially, they can get anything except cash.

What have I learnt in the process of designing this incentive program? I am going to summarize these in a multi-part series. Here goes Part I.

1)     The signalling effect is much stronger than actual incentives – When valvemen can see the rewards being given to other valvemen for good performance while they are left out, it creates a huge “I also want it” effect. In economics, it is called the signalling. What we learnt is this signalling effect has a disproportionately larger impact on valvemen performance than the actual incentive. It is also a powerful attraction to get new valvemen into the fold. Consequently, all incentives are given in a group setting. It not only enables the signalling effect but also gives you credibility that you will deliver on your promise of the incentives.

2)     They must decide on the methodology to score points – This is crucial for any system to work. If they perceive the points system to be biased, they will never buy into the incentive program.

3)     You want them to fight over points – Once they trust the points system, however, you want them to fight over points. You will be at the receiving end of a lot of flak, a few disparaging remarks even. The questions may sound accusatory such as – “How did I get so few points?” or “Why did he get so many and I received so few?”. When you start to hear those – you know you have traction. You have their ear. Now is the time to fill them with the sweet music of rewards! The worst thing for an incentive program would be if everyone ignored it.

4)     Who is afraid of unions – One of the first meetings I had when I started was with the union leader of the valvemen in the city. What a meeting it was! If I said, I came out with a bloody nose that would be putting it mildly. However, we have learnt that having a union can be really helpful. A union is a great way of organizing the valvemen and it provides a readymade chosen few who could then influence all the valvemen to work with you. Once we convinced the union leader on the incentive program it has been a lot easier to function with the valvemen. It also provides you a new voice when there is any sort of disgruntlement on the other side.

5)     You need institutional backing at least in name – In our case the valvemen are contracted by the city water board. Being the primary employer, they hold sway with the valvemen and are consequently cast in the main villain’s role in their saga. Their influence however is crucial here. We developed a feedback loop from the water board to the valvemen. The water board now monitors valvemen performance through the same messaging system that informs the customers. As a result, if a valvemen didn’t send correct notifications, they would hear about it from their water board supervisors. Even though it is primary a verbal warning or praise, it goes a long way in cementing the importance of sending in timely notifications to the NextDrop system.

6)     Are you funny and charismatic? – An important note in conclusion; No incentive program can work without some old school charm. I continuously feel that the role of charisma is grossly under-estimated in enhancing productivity. Here is a perfect example. None of the ideas on the incentive program would have worked without a team that has been able to charm their way into the valvemen’s daily lives.


Here ends the first part on what I learnt while creating the incentive program. In part II, I will throw in some field experiments based on behavioural economics, game theory and some highly original ideas that we have come up with to structure the incentives. In the meantime if you all have any ideas you always thought would work and are itching to find out, here’s your ready laboratory.



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