NextDrop

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 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.

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.

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.

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!

We’ve proven that NextDrop is useful.  We have 275 paying customers and we’ve generated 2980 INR in revenue last month (some people paid for multiple months, and some paid for multiple cell phones to receive messages).  We have an 86% conversion rate from giving people a free trial, to then getting people to pay for the service.  To clarify, our customers are middle class families  (preliminary surveys indiciate that the NextDrop service- as is- probably won’t work in slum areas due to the fact that the man of the house takes the mobile to work and there is no land line, but we are hoping to come up with some sort of prototype solution next month for slum areas).

All these numbers are great, but as Eric Reis says in his book on lean startups, if you don’t know WHY people like your service (or don’t like your service) you don’t really know anything.

Digging deeper, we figured out that our service is more of a convenience than anything else.  Out of the 10 messages people get per month, they probably see/use our message 1-2 times.  Would they pay 10 INR for this service?  Sure.  Would they pay 15?  Not sure.  20?  Possibly unlikely.  Now the hard part is that we set our service at 10 INR in Hubli because that’s what we agreed to with the water utility- so charging more (to test price sensitivity/test our hypothesis) in Hubli isn’t really an option .  It may be interesting to go into another city and price it higher (or lower) and see how many people pay for our service and compare numbers.  10 INR is already really low: to give some perspective, it’s equivalent to downloading an app that charges $.99/month.  So I personally don’t think pricing it lower will yield incredibly interesting results, but I don’t have hard facts to back that up.

What did we learn?  I think our product will be incredibly price sensitive due to the fact its in the “convenience” category as opposed to the “necessity” category.  So these are the things we need to still figure out:

• What is the price v penetration/uptake ratio?
• To generate more revenue, will it be easier to a) spend more money on customer acquisition or b) try to move NextDrop from the “convenience” category to the “necessity” category and thereby charge more?

That’s what’s up ahead for us in the customer category.  Stay tuned for more updates

After three months of providing text message updates to residents in Hubli using information sourced from utility employees who operate local valves, we believe we have created a service that people want are willing to pay for.  Never was this clearer to us than after what happened last week.

It was around 11am in the morning, a hot day in Hubli.  Four members of our six-person team were working in our office in Lingrajnagar.  Our office is on a dirt road in a residential neighborhood, about half a mile back from the main two-lane highway that runs between the twin cities of Hubli and Dharwad.  From the dirt road, it’s difficult to see our office.  The only thing to distinguish it from the other residences is a NextDrop sticker on the door.

“Namascara,” a man said, appearing at our open door.  “Is this NextDrop company?”

His name is B V Nadgir, and he is a branch manager at a local bank.  He came by our office because he wanted to sign up for our service.  Why did he take the trouble to come looking for us? we wondered.  Why now?

Mr. Nadgir (front) and NextDrop associate Avinash Anigol

The day before water had been provided to his area.  Because of a scheduled pipe repair, the utility had provided water to his area one day early in the late afternoon.  It would normally have reached him the following morning.  Because of that change, his family had missed most of the water, only collecting water for half an hour.  For many of our customers, it seems that knowing about a single disruption in the schedule is worth the 10 Rupees cost of a monthly subscription.

It’s been a while since we’ve talked about the things we’ve learned on the legal end (and trust me we’ve learned a lot).  Here is where we are currently at.

• We are officially an American C-Corp- “NextDrop”
• We are in the process of becoming an Indian Private Limited Company (hopefully) “NextDrop Private Limited”