So…It’s Been a While…(I.E. We Are Alive and Kicking! Part II)

19 Nov

I feel like that’s the title of every other blog post we write- apologies.  There’s just so much going on, lots of really interesting things happening, and so much we are learning, I forget that people can’t read our minds- we actually have to write about it to transfer information (unless someone has invented telepathy in the time we’ve been over here in India, which would be really amazing.)

Potential Scaling Plans:

So we’ve been eyeing Bangalore, to see if we can actually make the impact we want to. First, as luck would have it, Ashish, an Indian Institue of Management, Ahmedabad (IIMA) student from Bangalore, emailed us because he was bored and looking for a project to do during his break.  (We love when we get smart people who want to work with us!)  He began our market research in Bangalore, and came up with these initial findings:

Ashish is going to continue to interview people, and do an independent market sizing exercise for us, and we expect his report by the middle of next month, which we hope to share with everyone (thanks for being awesome Ashish!)

Basically, Ashish’s preliminary research told us that it was worth investigating Bangalore further. After some more conversations with people from, they introduced us to one of their local partners in Bangalore, Mythri Seva Sarma Samithi (MSSS) who is working to improve water/sanitation in 19 urban slums in Bangalore (among other things).  They graciously took precious time out of their day to show us around, and find out if a NextDrop solution could be helpful to the people they serve.  Here is what we found:

  • The Bangalore Water Supply and Sewerage Board (BWSSB) has given a contract to 4 NGO’s to help provide legal in home water connections to 96 slum areas in Bangalore (MSSS being one of the 4 contractors). This means that there is a large population (~96,000 families we know of) who will have access to in home connections, one of the biggest assumptions we had to verify
  • MSSS is ahead of schedule, the connections have already been installed, and now they are waiting for the BWSSB to start providing water to these areas
  • One of the main problems in the slum areas is simply a lack of water
  • Some areas that MSSS works in already have in home connections, and get sufficient water supply.
    • Of those areas, we estimate from our conversations, that people (especially women), lose approximately, 4-6 hours/week when the water is off schedule.  It was reported that water was off schedule ~ 2-3 times/month (more in the summer season). Also, it was reported that many times, depending on how far work is from their house, one person from the family will miss an entire day of work if they believe water is to come that day.

From our learnings, we believe that if we can get families to change water collection behaviour, we can save each low income family ~$27.59/year, amounting to a savings of  ~$500,000/year  for the 96 slums in Bangalore with in home water connections.  This only includes the monetized opportunity cost of waiting for water, and does not include any benefits from: sharing NextDrop water information, keeping children in school, health benefits from receiving clean water, increased time to do household chores, money saved from buying private water (which seems to happen quite frequently at ~ 1 INR/pot of water-located 1 KM away), and increased access to water due to timely information.  These are all things that I believe could be true, but would like to study it further when we operate in these areas.

Here are the assumptions we used when we came up with these numbers (We would love to get input and see if these numbers seem reasonable to you all!)  The biggest assumption, I feel, is that we can change water collection behaviour.  From our learnings in Hubli, we have found that if we provide accurate information, people seem to benefit from the service- which we are confident we can do.  However, those were in middle income brackets, and I believe that we will have to spend more effort in lower income brackets to accomplish this.  This is something we are really excited to take on, and a new challenge we would love to enter into, with other partners on the ground who know more than we do- like MSSS.  (We love learning, partners, and challenges!)

  • An average family loses 15 Hours/month due to unpredictable water timings ( reportedly off schedule 2-3 times per month, and 4-6 hours lost each time it is off schedule, on average)
  • The person who stays at home to collect water is the woman
  • There are 96 slums which will be receiving in home connections (~96,000 families, at 1000 families per slum area)
  • 75% of the people in slums have a cell phone (~72,000)- this is one stat we’re not sure about, it could be low or high
  • Assuming NextDrop customers include 50% of the total market (low income residents with cell phones) ~36,000 NextDrop customers
  • The average amount a woman makes is 1300 INR/month (and another paper to corroborate this)
  • The number of hours a woman works to make the full salary is 160 hours/month (hourly wage= 8.1 INR)
  • The NextDrop message will only help the family 50% of the time
  • Assuming exchange rate is 53 INR/1 USD

Next Steps:

  • We need to follow the money.  Basically, now we need to get a contract to provide this service to low income brackets.  What we are learning in Hubli is that it costs a lot (and more of a headache than its worth), to collect these small micro payments from individual customers (surprise surprise).  We can do it, but it’s not something we want to spend our time and resources doing. The reason we wanted to do this in Hubli was because we wanted to see if this information would actually be useful, and we wanted to get actual feedback from users.  We’re convinced that it is, which is why we’re comfortable pursuing a contract to provide this information to low income brackets.  Also, we’d like to use that bandwidth to shift our focus to other metrics for success, like an increase in monthly earnings, and other discernable social outcomes.  We still have to think about this a little more, but it’s something we’re excited about doing: Getting some real impact going!

So that’s where we are with that.  We basically need to find a partner who is interested in providing this information to people who could really benefit from it.  This is where the business model evolution comes in: instead of end users, where can revenue come from?  That’s what we’re working on for the next few months.


It’s not something we’ve talked about, but we have a new Vice President, Nishesh Mehta, who has joined our team recently!  He is a World Bank/Charles River Associates guy who decided to quit his job and move to India in September (woot!)  He’ll probably be writing about his experiences working with valvemen, as he is in charge of our valvemen incentive scheme (and doing a fine job at that!) He has learned some really interesting things, and I’m excited to have him share those learnings.

Also, we have Thejesh G N, our data loving hacker in residence, who is leading our tech efforts! You can look at all his awards and accolades (most recently a Mozilla Scout- congrats Thej, we’re proud of you!)

And then, of course, you know Quijano, our new Chief Operating Officer.

That’s something we’re really happy and proud of: adding new and amazing talent to our team to really reach our potential and do all the amazing things we want to do!

As always, if you are interested in joining our team, we are always looking for great talent! Drop us a line :)


We’re getting better at troubleshooting, fixing, and getting paid.  We’ve increased the number of valvemen who are providing consistent service, and now we’ve put a system in place to fix people in a timely manner, make sure they are getting good messages, and then getting paid!  We’ve made progress, but we still have more to go.  We’re close to cracking it though, and I’ll let Quijano and Nishesh fill you in on all that good stuff.  They’re doing a fantastic job, and I don’t want to steal their thunder!

Phew, I think that’s it! Of course there’s always more to write about, but I’m going to wrap up this post for now.  We’ll try to get better at posting at regular intervals.

As always, we’d love any questions/comments/concerns/just want to say hi!

On the Quest For More Social Impact, Scaling, and Big Picture Things

26 Aug

When smart people  tell us that we’re not making the social impact we really hope to be making, we usually tend to listen.  So then the next obvious question: What’s our next move?  Well, after talking to some other really smart people from Unitus Capital, we realized that we are straddling the social and the non social.  We’ve found a product that people (across a whole lot of economic levels) really like (for various reasons).  Which is great- we’re all for people loving us.  But since we went into this business to maximize social impact, that’s what we are going to try and do.

How do we do that?  Elementary my dear Watson: Use Hubli to perfect the information delivery mechanism, and pick the next city we scale to based on where we WILL make the most social impact.  (Ok we lied-we didn’t come up with that idea- one of our amazing advisors, Catherine Berman did.  This is totally why we have advisors.)

Learnings/Hypothesis: Tier II cities like Hubli probably don’t have a high number of people that fall into the “If Statements” that Amanda outlined, which will get to the type of impact we’re looking for.  We think that there will be more people who fall into that category in larger, Tier I cities, like the working poor of Bangalore.  This is still purely speculative, and we have no numbers to back this hypothesis up…yet.

Next Steps:

We at NextDrop understand where we make discernable socioeconomic impact: where both the man and the woman work, they do not have the social network to help them collect water (if they miss water collection), and they don’t have the coping mechanisms (storage containers vs number of people in the household vs number of days between each supply) to deal with missing the water supply.  What we need to do is quantify this market size in Bangalore: what percentage of the population (if any) does this definition apply to?

That’s very specific- what if you find that the market is too small for the business to be viable?

Upon talking to more smart people, (like April Rinne from, we realized that this could very well be the case.  Are there people who are new enough where they don’t have established social networks/coping mechanisms for missed water, but old enough to have access to piped water/in home connections?  We don’t know- that’s what we have to figure out.  But if we find that this market IS too small, what we will do is figure out what other types of water information we can provide to serve low income households. We’re thinking things like timings of water tanker truck arrivals- basically things that can still leverage the same NextDrop mechanism but in a slightly different water context. We’ve perfected (or in the process of perfecting) the delivery mechanism here in Hubli, and it may be a great chance to see how the mechanism works in a new context.  How robust is it?  What tweaks do we need to make it work?  All exciting questions we would love to be able to answer.

Also, a note on “Big Picture Things”- just for kicks.  Mostly the way we work/our philosophy.  As always, input is more than welcome.

Paul Graham said it best in his blog post about “Frighteningly Ambitious Startups”   In this post, he goes on to talk about “frighteningly ambitious ideas”: how to create the next generation of competition for Google, replacing email, replacing universities (you get the idea).  Basically things that are incredibly difficult and at the beginning sound ridiculously crazy.  I want to quote his advice on tactics: How he thinks companies should go about actually making this happen.

Let me conclude with some tactical advice. If you want to take on a problem as big as the ones I’ve discussed, don’t make a direct frontal attack on it. Don’t say, for example, that you’re going to replace email. If you do that you raise too many expectations. Your employees and investors will constantly be asking “are we there yet?” and you’ll have an army of haters waiting to see you fail. Just say you’re building todo-list software. That sounds harmless. People can notice you’ve replaced email when it’s a fait accompli[4]

Empirically, the way to do really big things seems to be to start with deceptively small things. Want to dominate microcomputer software? Start by writing a Basic interpreter for a machine with a few thousand users. Want to make the universal web site? Start by building a site for Harvard undergrads to stalk one another.

And that, my friends, is our strategy (well, not building a site for stalking part):  Start with deceptively small things.  We want to tackle big hairy audacious goals, like structural change.  But you know where we start?  With the small, focused thing.  Because that is actually really hard to do well, turns out.  We’re STILL trying to figure out how to provide accurate water information to the city of Hubli, and we’ve been at it full time for the past year, working our tails off.  That’s not to say we’re not close, but I’m saying that on paper, it looks really easy to do.  Geez, I came in thinking it would be really easy to do! (And it constantly amazes me how long “simple” things take to accomplish) That’s what people say when I tell them our business.  “Really? That’s it? Don’t people know this already? That sounds so simple”  Yes.  Deceptively simple.  But when we pull this off, our team will know just how hard it was, and we’ll definitely be patting each other on the back.

I think in the social enterprise space (the little I know of it at least) people are so used to talking about that big hairy audacious goal that they’re trying to tackle.  And people who prefer Paul Graham’s philosophy (starting small, doing it well, change the world), maybe get kicked to the side a bit.  Because at the end of the day, MAKING CHANGE IS NOT SEXY.  Doing good things means a doing a lot of really painful, really unsexy/boring things 99% of the time.  It’s looking at a lot of data, hearing a lot of things you don’t want to hear, and making decisions that are really not fun (because honestly, who wants to say that their brilliant ideas are not so brilliant, turns out?) You think finding out that you are currently not making the social impact that you thought you were making is fun?  No, it is not.  Not by a long shot.  But you face it. Brood a little bit (like maybe 1-2 hours) and then move on.  (And write a blog post about it).

So that, for anyone curious, is our strategy.  We’re doing Hubli well- getting the information delivery mechanism down.  Then we’re gonna do it and measurably make people’s lives better (maybe in Bangalore, we’ll see if the data backs it up).  And then when we get that under our belts, we’ll tackle bigger things.

What are those bigger things?  Honestly, it’s too early to tell.  I mean don’t get me wrong, we have a lot of ideas and theories.  But I’m not out here to distract everyone from keeping the eye on the prize, and holding us accountable.

What is the prize?  Delivering results in Hubli &  showing we can make measurable social impact in one more geography.  If we can do that, we are well on our way to tackling those big hairy audacious goals that everyone loves talking about.

PS If you are a smart person and want to consult for us/work with us/be part of our awesome team, shoot us an email!  We are always looking for smart people to tell us what to do.

What Sort of Social Impact (If Any) Are We Actually Having Anyway?

24 Aug

It’s a good question, and what we brought on Amanda Meng from the Fletcher School of Law and Diplomacy to find out.  Here are her thoughts on the matter.  (We will let her introduce herself, we are linking interested people to her personal blog about her experiences in India, and we are so sorry for taking so long to post this Amanda!)

If there’s something just as fashionable as social enterprise these days, it’s impact evaluation (especially of the RCT variety). So it makes perfect sense that NextDrop would request some of the great minds at Berkeley to design a rigorous evaluation that could isolate change caused by the information service.


The first phase of an impact evaluation is preliminary qualitative research, aiming to answer one question: Is there measurable, socioeconomically relevant impact?


Enter me.


Last year I was an economic development M.A. student at the Fletcher School of Law and Diplomacy. In August I’ll move to a Ph.D program at Georgia Tech to dig more into an earnest curiosity in how Information Communication Technology can affect development and democracy outcomes. When my advisor mentioned this opportunity, I jumped at the chance to join the inner, elite Berkeley circle and participate in an evaluation that might explain how access to water delivery information can overcome a lack of access to said water.


After outlining a utilization focused evaluation question, nailing down NextDrops’ assumptions of change, and four weeks of focus groups and guided interviews, I’ve discovered how and where we can find a social impact from NextDrop’s service. And from this reservoir of information, my own concerns of the danger in the hype for social enterprise in the development realm have floated to the top.


Finding Impact


Countless chais, puzzled looks, dosas, and inviting smiles later, I began to better understand users, non-users, and the context that NextDrop’s service lives in.


Based on discussions, interviews, and direct observation:


Users range from lower income slum areas to upper middle class, majority falling in the middle class. Highest potential  areas (in terms of subscription renewal) are middle and upper middle class. Water comes to these individuals every 2-5 days. Households are generally able to store sufficient amounts of water until the next supply cycle in underground tanks and/or roof tanks. Having enough water to make it to the next supply cycle depends on size of storage containers and how intermittent water supply is. Middle and upper middle class households all have underground and/or roof tanks. Upper middle class users reported occasionally missing supply cycles without a problem because they had sufficient water stored. Users and non-users claim to be aware of the water schedule, which is printed in the newspaper. They have expectations of which days water should come and those expectations are usually met. Most users and non-users across classes are not worried about having enough water and have little stress caused by water supply. The lack of stress across class is best explained by the ubiquitous practice of women staying in homes at all times (easily able to collect water) whether it is a housewife, mother-in-law, teenage daughter, middle-aged mother, or maid.


So why do people use? They like the convenience of knowing, whether they are 10 feet away from the tap, or a kilometer down the street at the market.


From this research emerged an archetype of users that could exhibit socioeconomically relevant impact, but it requires a few quite particular “If” statements that I imagine may be hard for NextDrop to isolate, reach, and tailor an impact evaluation to.


Socioeconomic impact exists…

  • If NextDrop service is on-time
  • If all members of the user household are out of the house (work/school) and the household can’t afford help or don’t have neighbors to rely on
  • If water supply is sufficiently intermittent that missing a supply day requires the household to go to other supply sources (coming once every 5 or 6 days)
  • If water collection methods are limited (in some sort of proportion of size of water collection containers to number of members in household) such that the household is pressed to not miss collecting waters on days of supply


If these conditions hold, then impact can be measured with

  • hours of work/school missed
  • number of times forced to collect water from alternative sources
  • loss of disposable income due to cost of alternative source
  • health impact due to quality of alternative source – self reporting of water related illnesses (doing a baseline survey of how different water sources are used… drinking v cleaning v laundry could give an idea of vulnerability to water born illnesses)


I am still in the process of estimating how large this population is in urban India. In this search I have found the following interesting statistics: 20.45% of Indians fall into the lower middle class which consumes 2$ – 4$  per person per day (2005 PPP) – this would be the income bracket that I think the impact archetype falls into. Partly because from observation, this is the group that doesn’t have underground or overhead tanks. Additionally, studies show that the higher a husbands educational attainment (which is correlated with income), the less likely their wives are to be employed. Which brings me to another relevant statistic: the female labor force participation rate (LFPR). It has hovered at around 23% for the past few decades. If you include women in school, the rate jumps to 32.3%. Urban women’s LFPR is consistently lower than their rural counterparts.


This leads me to my developing concern of the hype and hope the development world has placed in social enterprise.


When we think about water systems and development, the real challenge is access – access to water. This lack of access most certainly frustrates what we call development symptoms/outcomes. They are our indicators: health, hygiene, efficient time use, income constraints, empowerment, livelihood opportunities. In this case, outcomes are impacted by the coping mechanism adopted (ie – households have to pay for water to be trucked in; use of alternative, contaminated water sources; members of households stay at home to wait for water and therefore cannot use time efficiently). And, yes, NextDrop may impact these outcomes for a certain user profile. But what this social enterprise doesn’t change is the system that creates the symptoms. Communities don’t have 24/7 water for reasons like infrastructure, technology, corruption, or perhaps resource constraints. These are the system inputs that NextDrop likely can’t and won’t touch.


Consider lack of access as a power issue. On the street level, power may manifest as bribes to valveman or other water utility employees to open certain valves more often or for longer periods of time. At a government level, this power struggle has more to do with priorities and the voice of constituents to set government priorities. A community culture of accountability and power structures in the home and the community also play a role. What I am getting at is, a social enterprise that offers a service to make a lack of access more comfortable, does not change the systems’ power structure, is not development, not systemic change, and it may even be dangerous.


Why is it dangerous? To affect the system, constituents or utility workers have to be empowered to hold their public servants accountable. A big part of empowerment and accountability is the ability to envision change. What if NextDrop’s service of sending a text on the water schedule makes households more complacent with the water schedule? more complacent with the poorly performing water utility? and effectively lowers their expectations?


That’s dangerous.


NextDrop becomes merely a crutch for coping. It doesn’t impact the system, and in fact, it needs the broken system. If and when water is 24/7, the service would not be needed. So in terms of market and the all powerful incentive, a social enterprise that relies on revenue from a text on water delivery may be particularly incentivized to have the water utility never offer 24/7 water.


If we look away from the user side, we can see one, unproven opportunity for NextDrop to create system change. And that is through the valvemen. What if calling in to NextDrop’s IVR system is acting as an accountability mechanism for vavlemen? If it is, does this mechanism improve timeliness of water supply? These are questions that might point to a system change.


To those on the elusive quest, I offer caution in how we identify the work of development. And the way I see it there are systems of inequality that allow lack of access and  poverty to thrive. Any organization, enterprise, government, or person that does not recognize this symbiotic relationship between the system and symptoms of poverty and inequality and is not working to change that system, is not working in development.



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!


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