Aside

Updates on progress

31 Jul

Hello world! This is Quijano broadcasting from Hubli, India.

Take away: Never waste people’s time. :]

Anu has convinced me to wrap up life in the United States and dedicate the next few years to increase access to water for the people, as the next Chief Operating Officer.

This is my 3rd day in the office and I have a lot to share on mobilizing individuals to create change.

To get straight to business, we’ve had a major disconnect with our customer base. This was one of my first observations being in the office.

How did I notice this? Well our customer surveys told me so.

Tuesday (first day in the office): Diving into the deep end. We kept our sales team (11 people) in the office because we had no direction on where they needed to be. Our office is barely set up to support 10 comfortably.

So where does the sales team go when the operations team is taking up all the space. The kitchen.

And what happens when you cram the sales team in a space not built for making sales calls? Not a whole lot.

Yup that’s what happened Tuesday. I was close to sending them home worried that nothing measurable would be accomplished. Instead they called customers to get feedback and informed them we planned on billing them this week.

What did we learn at the end of the day? We didn’t have a feedback mechanism in place to get the most out of our customer interactions. Poor interaction with a customer means potentially losing that customer.

I attended a great workshop in Ahmadabad hosted by GIZCIIE, at the IIM at Ahmadabad. This was my second day in India, everyone at the workshop knew me as the kid who was attending the workshop on his second day in India. Anu was known as the business partner to the kid who was attending the workshop on his second day in India. Overall, the workshop provided a lot of information on how to improve and scale our start-up. Feedback mechanisms were stressed heavily.

Wednesday (second day in the office): I pulled an all nighter reading the Lean Start Up by Eric Ries. I’m an Industrial Engineer and I know that Lean Manufacturing works well to create change fast. Anu also highly recommended the book!

From the book I pulled a fundamental concept of Lean Start-ups the “Build-Measure-Learn feed-back loop” and my goal was to see how NextDrop’s customer interactions could benefit from this concept.

What we did:

  • Targeted areas of the city which were receiving good service from us.
  • Identified which customers in those areas had already paid for the service once.
  • Sent our sales team into the field to survey and collect.

The results from our experiment were horrible.

  • Out of our list of 103, we managed to contact 51.
  • Out of the 51 customers we contacted, 16 wanted to continue.
  • 31% retention rate.
  • Our surveys took 10 minutes of our customer’s time on average.

After seeing the results we mobilized the operations team to accomplish a few things.

  • Analyze our results from the day.
  • Produce a complete list of all areas where customers have been billed twice.
  • Cross reference the list of billed areas with the list of areas receiving good service.
  • Develop a script to speak with customers in a positive manner.

Our thoughts at the end of the day:

  • Hypothesis 1: Our customers pay 10 rupees to be informed about water delivery, not to be hassled by sales associates.
  • Hypothesis 2: Our customers have a limited time period before we become a hassle.
  • Hypothesis 3: Our customers will be more responsive if we change our tone.

I left the office tired and a bit discouraged.

Thursday (3rd day in the office): We gave our sales associates a day off for the operations team to design the proper feedback mechanism to engage our customers.

Anu spent the morning developing the script with 2 operations members, Abhishek and Melwyn. After each phone call we documented the results and modified the approach until we were confident we had a script to test our hypotheses. The team also got the conversations down below 1 minute.

Once we had the proper feedback mechanism in place, it was time to trust our operations team and let them loose. They made phone calls this time based on data driven list, checking in every 5 calls and then every 10 calls until they had stabilized results.

Here are the results of our smart work:

  • 77 customers contacted.
  • 48 customers verbally committed to continue with service.
  • 62% retention rate!

Yes! An noticeable increase in retention rate — hypothesis proved. Now we have to bill, collect and find out the true retention rate of our customers.

Looking forward to keeping you all in the loop at the progress we’re making at NextDrop.

Until next time, Quijano.

We’re Still Alive (And Kicking!)

13 Jul

In our last episode, NextDrop was in the midst of tackling the evil scaling demon (and it didn’t look very good for our protagonist). How did we fare?

Well, I think we discovered the first step/key to winning: Just get good data about yourself. Period.  Even if it’s ugly.  Because after admitting there’s something wrong, the second hardest part is wading through the mess and figuring out what that exactly is!

Let me try and lay out everything we discovered about our service

Customer Side:

Goal: Bill everyone possible and make money

Immediate Problem: Billers wasted a lot of time because even when they found houses (which many times proved difficult), a lot of people were getting late messages, weren’t getting messages at all, were getting messages intermittently (ha, no pun intended) so they didn’t want to pay for the service (no argument there), or just didn’t want the service.

Immediate Solution: Make a list of areas that have been getting regular messages for the past 2 weeks, and then CALL all those people before we actually go out and bill.

Immediate Systems We Put in Place:

  • Creation of the “Green List”: We look through all of our valvemen data, and using the all mighty Excel, we figure out which areas received at least 4 calls within the last 2 weeks.  Our logic here is that since the supply cycle is once every 3-4 days now, if they are getting regular messages, valvemen should call in at least 4 times in a 2 week span.  This system is by no means perfect, but it’s a start, and at least gets us to the next level.
  • Conduct Phone Surveys: After we see all the areas that are on the “Green List”, we then call all the customers in that area.  We spent 2 weeks piloting the survey to even figure out what categories/questions we should ask, and we’ve finally got some classifications the Sales Team feels good about.  Here are the different categories of NextDrop potential customers:
    • Could Not Contact (people who had phones turned off, didn’t answer the call, possibly fake numbers)
    • Satisfied Customers
      • Pay (want to pay for service)
      • Continue
        • 1 month Free Trial (again)
      • Deactivate
    • Unsatisfied Customers
      • Deactivate
      • Not Getting Messages
      • Wrong Messages
  • Bill: We just bill the people that are Satisfied and want to pay, or who are satisfied but want another free month trial (and have already had one).
Here is a great flow chart that our Sales Manager, Adity, made of our Customer Cycle (and if any engineers out there think this looks familiar- you’re right! It is, in fact, a State Diagram.  This is why I love hiring engineers!) And let me say, this may look easy, but it took 2 weeks to analyze customer behavior to even figure out what states to include and how to go from one state to another state!

When we finally had data, we discovered some really interesting things about our service!

  • Total Number of people called: 1493
  • Total Number of people we could Contact: 884 (59%)
  • Total Number of Deactivated Customers: 229
    • 15% of Total Customers
    • 26% of Contacted Customers
  • Total Number of Continuing Customers: 655
    • 44% of Total Customers
    • 74% of Contacted Customers
  • Total Billable Customers (%Receiving Messages-%late messages>70%, and not including deactivated customers): 405
    • 27% of Total customers
    • 46% of Contacted Customers
  • Total Billed Customers (%Receiving Messages-%late messages>70%, and excluding “not contacted” and “deactivated” customers): 223
    • 15% of Total Customers
    • 25% of Contacted Customers
    • 55% of Billable Customers
  • Total Number of people Who Paid: 95
    • 6% of Total Customers
    • 23% of Billable customers
    • 43% of Billed Customers

As you can see, the 2 major problems we identified were a) we were unable to contact 41% of the customers we tried to contact and b) a majority of the people who we WERE able to contact were getting incorrect messages (54% of the contacted customers).

And that’s where we are at: trying to troubleshoot those two problems.  Here are the immediate solutions we are putting in place to increase the people that we contact, and to put customers in the correct valve area.

  • Instead of taking “Could Not Contact” customers off the billing list, we are going to try and contact them.  We are in the process of seeing what % of the “Could Not Contact” customers we can actually find/contact when we bill.
  • We have an intern, Kristine, from UC Berkeley, who will be working with us for the next 6 months to figure out how to place people in the correct valve area (because that is the critical question, now isn’t it?)

Kristine’s findings are pretty interesting (and definitely deserves its own blog post- to follow shortly), but our first prototype is to test a guess and check methodology:

  • First we call customers and find out what the last time they got water was
  • Then sort through our data and see what areas got water on that date (plus or minus a few hours).  This should at least eliminate 50% of the areas
  • Then, to narrow it down even further, we only consider those areas that are geographically close to the customer.  This should narrow it down to within 4-5 areas to check.
  • We subscribe the customer to these areas, and see when he/she gets the correct message (we will find out through the phone survey)

That’s what we are going to try- we will let you know how that goes.

There’s a lot more stuff going on that we’ve discovered, but I thought that was enough for one blog post.  More to follow on Valvemen information, our incentive programs and progress ont that front.

In any case, I think we see the path to the tunnel that has the light at the end of it, so that’s all we can really ask for: Progress!

And as always, we will keep you updated on our progress, what seems to work, what doesn’t, and more importantly, WHY.

Additionally, and most importantly, we are hiring! We are looking for enthusiastic and passionate individuals who want to be a part of our team!  If you love problem solving, and finding creative solutions to problems, we want you!

As always, please feel free to write comments, offer insight, ask questions, or just say hi.  Our proverbial door is always open!

More About Billing & Scaling (Because It’s Incredibly Fascinating)

25 May

Other titles that were considered for this post:

  •  “No Please Don’t Cancel Our Service- I Swear You’ll Get Messages In the Future and You Will Love Them!”
  • “Don’t Call The Police- We’re A Real Company I Promise!”
  • “The Irony of Ironies: For A Company That Collects & Sells Data, Our Internal Data/Records Are Pretty Comical”

That pretty much sums up what our billing has unearthed about NextDrop as an organization. I used to not understand why people thought scaling was so hard.  You figure something out, and then just…go do it again-but bigger this time.  That’s doesn’t sound so bad right?  Yeah….about that logic….it’s similar to going in thinking you just need to do some simple algebra, when you’re really dealing with multi-variable calculus (sorry, I had to get a little nerdy on you guys). But that’s the closest analogy I could think of.

I think if you keep your eye on the prize (profitability), then you learn a ton about the problems that arise when you scale.  On one hand, this is great.  We need to get better.  But man.  If you’ve never faced harsh reality, let me tell you.  It’s not the most fun thing in the world.

Here is the breakdown of the good, the bad, and the ugly.

The Good: People who get our messages regularly, pay for our service.  Not only that, they pay a 3 month advance payment for our service.  For people who regularly get our messages, we have in insanely high retention/payment rate (~95%). Yay us!

The Bad: A ton of people are not receiving our messages. (And by a ton, I’m talking ~50% of the customers we were supposed to bill this month).  So the logical next question- why not?  Well, there’s a simple answer.  The valvemen just weren’t sending the messages to the people.  Next question- why didn’t you do anything about it?  Simple answer- we just weren’t tracking it very well.  Why not?  Great question.  I have no good answers there.  (Nothing that doesn’t sound like an excuse at least).  Looking back, I think we were just focusing on growth, and validating our core business.  Up until last month, we were still trying to decide between the utility and the end user as our main revenue stream.  With half our focus with the government, and the other half with our citizen facing product, we were just trying to figure out if we had a real business here or not.  We were focusing so closely on whether our initial customers would pay/how they would react to the service (and tracking their behavior), that we really didn’t focus on creating a system to accommodate all the other people we were launching (i.e. we were not planning for the best case!)  Looking back, it seems so obvious and dumb.  Of COURSE you need this organized system in place!  How WOULDN’T you need this organized system?  No argument there.  We’re getting it together and putting it in place right now!

Learnings for the future: As soon as you know you have something, start thinking about systems.  Start putting systems in place from the get go so that you can practice at a small scale and leverage this “muscle memory” to run on a pseudo auto pilot at a larger scale.  That being said, there is definitely a tradeoff between taking time to establish a system, and agility/being able to produce results fast- but it’s our job to find the right balance.  I mean, we DID get a lot of people interested/excited about this service in a short period of time. Will we keep them interested and excited? We’ll see.  Hopefully we will.  But next time, I am hoping we get closer to finding that elusive balance between systems and scale.

The Ugly: People are starting to cancel our service.  I mean obviously, if someone asks you to pay for a service that really hasn’t been sending messages regularly, why would you ever want to continue?  Luckily, when we realized these people weren’t getting the messages, we quickly stopped billing in those areas and just used the opportunity to apologize/tell them the service will start soon (and by quickly, I mean 2 days).

The Good (that came out of the ugly):  We found out that ~10-20% of the customers who don’t even get our messages will pay 30 INR advance payment for this service! That was pretty cool to find out.

Learnings for the future: I think we handled this part well.  We reacted quickly, and changed tactics.  I have a feeling that even in the areas where we DO regularly send messages, some people may not see them.  We’ll have to figure out what to do in those situations- probably try to tell them about our IVR system and see if that works.  But some good still came out of this- if we have a 95% payment rate with people who get our service and a 10% payment rate with people who don’t, we’ve validated the fact that the free month trial is pretty key to getting customers to sign up/buy the service.

In the grand scheme of startup growth, I think we’re right on track/par for the course.  The main thing is that we have a product that people want and will pay for.  We are undergoing the classic growing pains of rapidly scaling, and I think this is going to really test us as an organization.  What is our team really made of?  Can we figure this out and still keep all of our customers? Given our track record, and our ability to rapidly recognize and solve problems, I am confident we can handle it.  But it really doesn’t matter what I think, or say.  The numbers will speak for themselves.  So we’ll see in a few months what happens.

Will NextDrop overcome the growing pain pitfalls and defeat the evil scaling demon? Stay tuned for the next episode of NextDrop’s unfolding business drama.

PS- the thing about the police.  Some people didn’t think we were an actual company, and one of the local politicians threatened to call the police on us.  Then, we had to get her on line with the Chief Engineer, who vouched for us and said we were who we said we were. She seemed ok with that.  Mini crisis averted! This is why it’s key to work in conjunction with the government.

Go Go Go! (i.e. NextDrop is scaling!)

13 May

In Jan 2012, we had 1000 customers registered for our service.  On May 13,2012 (in just 4 short months), we have over 25,000 people subscribed to our service.  Ramping up in such a short period of time is challenging to say the least, but it’s an exciting time- and a great opportunity for us to learn a ton.

The Stats:

  • We’ve signed up over 25,000 customers for our service (i.e. they have said, “Yes I want this service”)
  • We have started service for ~12,000 of those customers (i.e. they have started to receive the NextDrop SMS updates)
  • We have billed ~2700 of those customers in April (~1200 of those paid an advance payment of 3 months for the service).  In the middle of April we decided to experiment by making it mandatory to pay 3 months advance payment to receive the service (to reduce billing costs) and everyone we billed paid the advance
  • We have a customer retention rate of ~ 98% (50 customers deactivated the service of the 2700 billed)

Here are the main challenges we are currently facing:

  • There’s a lag between when we recruit the customers, and when we start their service.  This is because we’re down to our last few valvemen in Hubli to train, and it’s been difficult. They need to make 2 consecutive calls to “graduate” (i.e. they show us they know how to use the NextDrop IVR), but the problem is they say they forgot, or they misplaced their mobile, or they forgot the list with their valve ID numbers.  At the end of the day, the result is that we can’t start providing service to these customers until they get it right.
  • Learnings: In the next city, I think we want to get the water board more heavily involved in the training process, and have them organize sessions where we train 40-50 at once, instead of the more ad hoc way we are doing it now. That way, we also have immediate authority and they know this is something important that they have to do as part of their job.
  • After launching the service, it was time consuming to go around and find all the people that signed up for the service (Because, as many of you know, addresses don’t mean much in India).
  • Learning: We realized that in order for this to be at all sustainable, we need to collect for at least 3 months at a time, otherwise our billing costs will be too high. We’ve proved that people are willing to pay the 3 month advance, so now we’re scaling up.  We’ve hired 5 professional billers to go door to door and bill our customers.  We need to see if we can bill at least 10,000 customers a month.  If we can do that, then we’re in the game.  We’ll know in the next month if this will work.
  • Making sure people are getting the right messages (i.e. they are placed in the correct valve area).  We’re still trying to figure out if people don’t get the right messages because a) they are in the wrong valve area or b) they have a cellular network issue (which is definitely a problem sometimes).
  • Learning: We are trying to implement a system where we call each customer 2 weeks after he/she starts the service to see if the messages are on time.  Customers have also started reporting that the messages are off, so that’s a good sign (i.e. we’re getting more customer feedback).  We just started implementing these processes, so we’ll have better updates on if this catches issues in the next few months. We’re going to have to do a good job of bundling things together (i.e. billing+feedback+other things) so as not to bother customers, but we’ll figure out the best way to utilize our customer touchpoints

So if you don’t hear anything from us for the next couple of months, this is what we’re working on!

Also, we are hiring for various positions (check out a few of the posted ones here, on our new and improved website).  If you’re interested, do get in touch with us

Finally, feel free to drop us a line with any thoughts/questions/comments/concerns/just want to say hi. Even if we don’t get a chance to write updates all the time, we still always love hearing from you, or answering any questions we can!

Our First Public Tap Pilot!

28 Feb

Our first 15,000 customers have been primarily middle class families.  However, we wanted to see if our solution could be used for people who use a public tap as well (i.e. they have no in home connection).  To test this out, we recruited 37 families who used a local public tap, and gave them the NextDrop service (voice call instead of SMS) for 1 month, and then went back to see how they liked the service.  These were the results (as documented by our project consultant, Melissa Morazan):

Summary of Results

  • Households that received the phone calls were satisfied with the service.
  • A lot of people said they did not receive the calls
  • What are the possible reasons?
    • Phones could be turned off
    • They could be assuming it’s a spam call
    • Could have given us the wrong number
    • They change their number often
    • Often working in the field or away traveling
    • NextDrop’s service can help households plan their day: When we went, the water was 3 hours late: women were out waiting by the tap, many with buckets full of clothes soaking, waiting to be washed.
    • During first visit, only 2 households said they had more than one phone.  Second visit, we learned many of those who had said that they didn’t have two phones in the house, actually did.
    • During both visits, there were a lot of school aged children helping to collect water and waiting for water with their families.

Potential for Impact

There is a great potential for NextDrop’s service to make a large impact in slum and low-income areas in India.  The majority of households in these areas share a public tap.  The houses are very compact and crowded and most households do not have a way to store water.

The public water tap is scheduled to supply water every 2-3 days however this schedule is often changed and/or delayed.  When water does arrive, it is collected primarily by women and children.

Our team’s visits to these areas have occurred both during water supply and when the scheduled water supply was delayed. During the water supply we found women and children collecting water from the public tap.  They would line up with their bucket, fill it and then return it to their house.  They would then use the water for activities such as bathing or washing clothes so that they could return again to collect more water.  This process is time consuming and it requires them to devote all of their time during water supply to water related activities and chores so that they can get the maximum use of the water while it is running.  When the scheduled water supply was delayed, we found women waiting around the public tap area, many with buckets of clothes and dishes waiting to be washed.  During both of our visits, we also found a lot of children helping to collect hour and waiting with their families.

There is great potential for NextDrop’s service to have impact in low-income areas.  Its service would allow households to plan their day and save the time they normally lose waiting for water to come.   If they are able to use their time more efficiently, we believe this will also eliminate the need for children to miss school to help collect and use water during supply hours.

Anecdotes

As we were finishing up our survey this week in Siddrameshwar Nagar, a low-income neighborhood, my colleague Adity struck up a conversation with a women sitting near the tap.  The women, Mrs. Savakar, told us that she had been waiting for the IVR phone call from NextDrop but had never received it. The call had not been made yet that day because water had been delayed.  She then told us that she worked near by and that the call was very helpful because when she received it she was able to leave her job, fill up her buckets, and then return to work.  Before our service she had to choose between missing the water and losing hours of work.

Mrs. Savakar was able to use our service to save time and collect water more efficiently.  It was clear that she had come to depend on our service in just a short period of time.  But when she didn’t receive our call that day she assumed there was a flaw in our information, and waited by the tap as she had done before.  We believe that once our customers are able to see that our product is reliable they will no longer need to wait by the tap, even when there are irregularities in the supply.  Our service will save public tap customers precious time and allow them to efficiently use their water supply.

Customers Are King (And Unfortunately Kings Have Limited Patience)

30 Jan

I thought this topic deserved a post of it’s own, because it’s a problem that I had not anticipated until it came up.  And that is customer feedback.  Any good product design course will tell you that you need customer feedback during the entire design process- from inception to final design. So that’s what we tried to do: we had put out our first product iteration, and now it was time to see how we had done.

Where’s the problem?  When we went to ask people for feedback, people considered us a nuisance and didn’t want to answer any questions.

“What, all this for a 10INR service?  Just cancel my service, don’t come back”.

What we forget when we are making our product, throwing our lives into it, and essentially thinking that our product is God’s gift to mankind, is that to the end customer…it’s really not.   Well, let me rephrase that.  It is helpful, and people like it (especially for 10 INR). But do they like it enough to have us come to their doorstep 3 times a month (once to collect money for the service, once to see if they want to add the cost to the water bill, and once to ask for their input?)  No.  Not yet at least. (And yes, as soon as we started getting these negative responses, we stopped asking for customer feedback)

One thing that we need to streamline are the customer touchpoints.  Until we are a household name, we can’t afford to “bother” the customers.  Which means, that we have to be smart about how we interact with the customers (this sounds like common sense, but believe me, when you are thinking about your product 24X7, your perception becomes skewed).

The end lesson to any new startup:  Make the customer experience seamless, and tie customer feedback into that process from the very beginning.  Think of the types of things that you will want to know about your product and somehow find a way to unobtrusively build that in to your customer interaction framework.

This will happen in the coming months for NextDrop (as I am confident that our team will find a way to make it part of our systematic process of customer enrollment), but as of right now, we are back to the proverbial drawing board.

We will post updates in the coming months.

Cool Web-Based Dashboards Win Business Plan Competitions, But Are They Actually The Most Useful Thing?

5 Jan

One year ago, when we were just a team of graduate students with a big idea, our teammate Thejo Kote came to Hubli and demoed a web-based dashboard to the Executive Engineer and Commissioner in Hubli.  The dashboard uses google maps to show the status of valves and other system components in real time, using information provided via voice or SMS.

Building that dashboard marked a turning point in our company — it was our 1st real “pivot,” as we moved decisively away from crowd-sourcing information from residents, which wasn’t working.  It was also the way to make progress with the utility, partner with them, and ultimately, win competitions that would enable us to get NextDrop off the ground.

Implementing that dashboard is part of the larger vision of how NextDrop can ultimately revolutionize information flow in water utilities, but based on what we’ve learned so far, it’s not clear that it’s the low-hanging fruit in terms of how to make the lives of engineers easier today.

In Hubli, utility engineers have the computers and internet access you need to follow the days’ supply cycle through a live dashboard, but they’re not quite there yet in terms of integrating that technology into their day-to-day routines.

But there’s a different technology they are using — everyone in the utility has a mobile phone, and they are incredibly adept at handling calls from 100s of people each day, as they do things as varied as managing valvemen, dealing with customer complaints, coordinating tanker deliveries, overseeing pipe damage repairs, and interfacing with other engineers.

Last week, Adity and I went to the field with Mr. Santosh, one of the two Section Officers in Hubli’s North Zone.  While he was showing us the NR Betta Tank, we got to see first hand the volume of calls he deals with.

Mr Santosh at NR Betta Tank – Hubli

Like all the engineers in the utility, Mr. Santosh’s number is public, so even customers in his area can call him directly with complaints. Here are some notes from my interview with him:

How many calls do you get and who calls you?

  • 30 to 40 calls per day from NR Betta Tank, the major reservoir tank he is responsible for, where he checks on the reservoir level and chlorine levels.
  • 15 to 20 calls per day from his valvemen updating him on where they provided water.
  • 20 calls per day from the public inquiring about new connections.
  • 40 calls per day about tanker tuck deliveries.

While we’re still learning a lot about the utility, we think the products that will make the lives of utility engineers easier today will have the following qualities:

  • Reduce the volume of calls the engineers get.
  • Provide them information through the mobile phone, the medium they already use.
  • Generate clear electronic records that can be studied over time.

With this in mind, we’re launching a daily SMS that will inform utility engineers whether water was delivered to all the areas they’re responsible for, and notify them of any exceptions to the set schedule.  Beyond that, we’re looking at opportunities to help engineers track the status of pipe damage repairs and tanker deliveries.

More news on new utility products soon to follow!

Follow

Get every new post delivered to your Inbox.

Join 3,404 other followers