Future CMO Movement

Bridging the Agency-Client Relationship

For whatever reason, there is – and has always been – a massive divide between clients and agencies. Creatives and brand managers don’t just sit on the opposite sides of the table in boardrooms, they sit miles apart in terms of expectations, ideologies and understanding of each other’s roles.

Brand managers are unable to harness and direct creative efforts just as creatives are unable to understand the many practicalities, restrictions and real-world risks that come with managing a brand. The solution is teamwork. The best results come when the lines between the agency and client are blurred; when an agency becomes as involved in brand management as a client becomes in brainstorming and ideation.

Brand managers should be as involved in the creative process just as creatives should involved in understanding the dynamics of budget allocation, marketing strategies, and target audiences.

Agencies should spend less time working in isolation and more time working alongside brand managers to understand the brand from its core instead of from a brief – that is of course, when time and resources allow that to happen.

Further reading:

 

Business Design and Transformation process for growth

I have been privileged to be part of some major enterprise transformation processes over the past decade that have taught a lot about how do you actually enable and enforce change for customer centric, holistic, agile and innovative corporate culture. In the business world we are living in today, brands are created with customer experience and corporate culture. The capacity to serve customers in an omni-channel world the way they want to be served is becoming a competitive requirement instead of being an advantage.. This can not be done with silo organisation with responsibility barriers, split budgets, strict hierarchy, fixed roles and waterfall development processes. Those things are true status quo traps that will eventually kill any business sooner or later.

Just like Jeff Gothelf and Josh Seiden, the authors of Lean UX -book, I got fed up with cases that were perfectly planned but never implemented or the implementation was too far from the plan and naturally didn’t deliver as expected. I’ve also grown out of creating strategies and roadmaps and moved to actual change making. I really love Lean UX. Lean Start-up- and design thinking adjusted to established enterprise environment. Solving real problems, creating customer insights, direct applications and implementing them asap is much more rewarding for everyone involved than just designing the change. Getting results fast accelerate learning, inspire innovation and motivation beyond anything else. The gradual change is also much easier to manage than a complete turnover at once.

The key rules for success are:

  1. Outside-in > understand customers and markets first, then look at your offering, customer interfaces, brand, invoicing, agreement processes, up-sales, cc etc. Be honest and learn.
  2. Bottom-up > The need for a change should be recognized at the board level, however the change learning should start at the bottom – with people who are directly communicating with customers and know their frustrations and understand company’s challenges. Most often they can directly tell you what needs to be changed. Once you know these, you can take it to the board room and be honest again and learn more
  3. Do and learn fast, adjust and improve. Don’t try to get everything right before releasing something. There are no watertight facts before there are real life results. Most things can be tested small before scaling or making major investments before proof of concept. Stay curious and lean even in case of larger enterprise

Based on my experience, this approach works every time:

customer centric management transformationIt is crucial to work you way bottom up in order to obtain actionable insights

Bottom-up strategy creation and implementation

1. Create customer insight. Use customer data, analytics, scoring model, online data, research and any available data sources in order to understand who the customers are how do they behave. If you don’t have enough data, get it, make 1-2-1 interviews or research and mash-up other datasources. Create a customer journey map based on these findings and engage with people who work in direct customer interfaces like sales, retail, call center, research, support, invoicing, credit negotiation, specialists, etc. By connecting these two realities you can see a couple of things:

  1. Who are the customers, what are they doing, how and why?
  2. How does this customer behavior show in your customer interfaces, what are the most important pain points and frustrations customers have and what can you do about it. Once you have the facts, you can see how you can extract painpoints by re-designing the customer journey experience across customer interfaces and how that will reduce costs to serve while also improving NPS. That has a direct bottomline impact. Also, you can recognize opportunities that will help you sell more effectively, improve conversion rates and thus drive marketshare and sales up.

When you have understanding about the customers and you can define Customer relationship-, Customer experience vision, set goals and recognize their impact to revenue and bottomline. The Customer interface and customer analysis becomes the roadmap for better and enables a shared language thru organisation. Everybody can agree with the facts and understand their own role in the customers’ process. The discussion is around customer behavior and going forward, it’s not about blaiming anybody for their decisions in the past. The mandate for change comes frome the customers and dictates what needs to be done. This is why everyone can agree with it and don’t lose face or feel the need to defend prior decisions. In every single case this first part has been capable of igniting inspiration, trust in own capabilities to do meaningful changes and realize them. Insights and understanding create momentum that makes it possible for a company to change fast in a meaningful way. This change is done because people love it and their hearts and minds are burning to make an improvement. It’s not done because management has told employees to change or because the management team has come up with new organisation chart… This route to transformation can be rapidly implemented and the results are quickly at hand. These results justify futher improvement.

It has been interesting to learn, how much silent knowledge, un-tapped knowledge and supressed passion can be found in any given organisation. This capacity can only be realized by deploying the change within the organisation. This is why outsourcing the planning is not a good idea in my opinion. Carrying light inside with a bag doesn’t help, you need to light up the people. Once you release that passion and knowledge in constructive way, it will change the organisation permanently. The way of working will change, it will improve job satisfaction and willingness to push the limits further. At best, it will create a positive cycle for competitive advantage and growth.

2. The next stage is about turning insights and understanding in to systematic Way of Working. This is actually very practical consideration about recognizing responsibilities, ownerships over larger entities, creation of KPI’s and information flows or designing the approach to commercial management in general. Often there are factors like scorecards and conflicting interest in the organisation that need to be fixed, rewarding mechanisms or silo cultures that just need new perspective and solving. Very often dysfunctional organisation has everything in order on the surface, but multiple little things that paralyze the operational engine, innovation, productivity and motivation. Sometimes management isn’t even aware of such issues that could be historical relics that should have been solved ages ago.

What ever there is in the way of working, the new perspective gained in the first stage will help in finding solutions to them. The work is done gradually case by case and the excitement and positivity for change gradually take over the entire personnel. At this point, the company should reach a positive cycle that feeds winning mentality, job satisfaction and capacity to innovate.

3. The first two stages have already revealed the challenges that can be found from systems architechtures and platforms. While the first stage already enables major improvements with UX design and coding, the platforms enable strategic development and automation. This naturally takes more time and is different kind of project, but by this time the needs, benefits and requirements should be selfevident. As the learning has already started at frontend level, the understanding about available business benefits should also be clear for decision making and investment planning.

This kind of change can improve efficiency and productivity very fast without showing anything outside yet. However, when the company is really changing it should also show outside. In my experience advertising is actually very effective mean for internal change communication. The promises that the company gives outloud enforces the internal resolve to follow thru and deliver as planned. Advertising is about communicating the core values and that goes to own personnel, customers and the market. There’s just the question of timing that must be carefully considered. If the advertising starts too early and the personnel hasn’t really got on board, it might have double negative impact:

  1. internal feeling of disconnect between promises and capability to deliver and
  2. customers feeling that there isn’t enough substance behind those promises which could damage the brand and destroy the momentum that would have been available.

Like anything that has to do with people and emotions, these are delicate matters and require consideration. In order to do things successfully you need to have a clear plan but it has to be flexible enough so that it can be deployed in right order.

These transformation stories are truly interesting and educating processes. I’d love to hear your stories and experiences about them. Please comment and share 🙂

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About Author

How GLEE Hospitality Built & Grew Rice Creamery

With an outnumbered Emirati population and growing influx of expatriates, Dubai has had to adopt to fresh imports of tastes, traditions and styles. The latest addition at CityWalk last year came with Rice Creamery, an innovative dine in concept inspired by multiple cultures and preferences found worldwide. We sat with the MD of the food group behind this and other successful ventures.

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How did you get into the food business, and what was the “aha” moment behind Rice Creamery?

I have been in the food business for over 20 years and that’s after having completed my hotel management education. The”aha” moment came when a friend (now partner) in the business had the idea but lacked the “know how” or the where to attain financial backing. The idea went dead for almost a year then I came back to him telling him let’s do it via GLEE Hospitality.

What was the rationale behind the decision to have the flagship outlet at CityWalk?

Finding a prime location for a new brand isn’t always easy especially if it’s not a franchise. Preferences are always given to international brands. The site came available quiet late in the development of the mall and we jumped on it. Being a neighborhood location with relatively reasonable rent was a prime factor, and it faces the kids play area.

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What is your personal philosophy and that of Rice Creamery behind customer satisfaction?

Rice creamery is a simple product which most people are familiar with in one shape or form. The customer most importantly must appreciate and enjoy the product / flavours, after that the rest is manageable. So far the response has been very good, as the flavours have been very well received. In some cases people told us we should increase our prices, which is a good sign of value for money vs quality vs service

How did you navigate the venture capital investment process?

Our financial partner approached us for another project after which we presented RC. She immediately loved the idea, and before you know it we had the location secured and we started the recipes trials

When can we expect to see franchises of Rice Creamery cropping up all over UAE?

For the time being we have decided not to franchise in the UAE. We are about to open Abu Dhabi in Dalma mall and soon in Sharjah. We have franchised in KSA , Bahrain and Kuwait.

Should someone be interested to build their own food business, how can they contact you or your team?

I’m easy to reach and quick to respond. They can email me on aboudisaadi@gleehospitality.com or call GLEE Hospitality’s office on 04 4503775.

From Levi’s Jeans to Dairy Milk – Asian Family Business Diversifies & Thrives

In 2012, Pakistan was producing over 20 billion liters of tradable white milk per year, making it the 3rd largest producer in the world. In 2013, Nestle issued a press release claiming a production capacity of half a billion liters of milk. It is estimated that Pakistan fails to meet local demand by up to five billion liters. So its not surprising that the promise the industry and its returns attracts business families. We spoke to Suleman Monnoo of the Monnoo Group regarding the decision to enter the high demand market, their USP and more recent endeavor to break into flavored milk. 

I’ve heard shoppers say “Bonus wala Surf dedein” and ask “Powder wala Milk Pak hai?”, so we can assume that there exist established players in multiple high frequency CPG categories. How does a textile family gain interested to compete in the most cut throat one?
Anyone with the capital backing is after this space and yes, there are some established players in the mindsets of the masses. So education was our largest concern, as was ensuring product quality at a level that addresses the concerns of our rising educated audiences.

In 2008 we faced a crisis in the textile industry and to counter this, everyone was trying to diversify. At the time, Pakistan was the fifth largest producer of dairy in the world. After reading “I Too Had a Dream” by Dr. Verghese Kurie, my interest in the area was fueled. I learned that New Delhi’s sales as a city are equivalent to our entire country. We studied the category and found it advantageous to become the first in Sindh to enter dairy. Punjab has had it easy because of the processors in place, the drawback for us was the minimum requirement in volumes need to afford the required processors, which when unmet, can result in the product going bad. Our research reflects that 80% of consumption is loose milk. To avoid these issues, we set out to have our own farm.

The kind of infrastructure you’re referring to drives up costs. How did you mitigate this against the existing investment needed?
If market visits to India taught me anything, its that no MNC could beat me if I had the vision, because MNC’s have too many overheads coming with growth. At the moment, Nestle has collection centers in the radius of villages like Sahiwal. Along with Engo and Haleeb, they utilize a contractor system and the incentives rotten the game. So when the demand goes up and the contractor cannot meet it, the product is fabricated with fake shipments.

While studying MBA from IBA, I learned about corporate farming abroad, wherein the incentive’s for fraud is less and contractors are incentivized to provide the right product at the ethical volumes they can create. Demand is therefore generated based on these volumes instead of the other way around. This is evidently not the case here because we are currently the third largest creator and consumer of dairy in the world. The high frequency of consumption encouraged in the demand generation process creates an unnecessary strain on the contractor.

DayFresh

You’re not only competing with large players, but pre-purchased shelf space, a product that lasts longer than yours and an acquired taste to buffalo milk. What was your unique counter?
In this industry, raw material is a game changer. And yes, the local pallet is developed on buffalo milk instead of cow milk. But the cow is more economical and it’s milk is better for digestion. A buffalo eats more and produces less. A business family like ours thinks long term, invests in assets that are longer lasting and efficient. We imported cows from Australia because the local variety are hard to certify as legitimate. We brought in an expatriate farm manager and the corporate farming system (similar to Almarai) to ensure quality assurance and meeting of standards practiced in developed nations. Taimur Butt, the master franchiser of Red Mango, recently visited one of our farms and gained international clearance to use our products to create the his acclaimed frozen yogurt products.

Unbranded milk accounts for three quarters of the current market, so why invest so much in branding when the market is so fixated on tried & tested favorites?
That’s short term thinking and a middle class approach. A brand is a life line, its like a child. We invest in our children and eventually they in turn support us. It’s the same with DayFresh and the overall brand experience. My experience in textile has taught me that if you have the right product and can communicate it, you can sell anything. We also learned (the hard way) to play with price perceptions. Five years ago, milk was PKR 50 per liter; we priced ours at PKR 45 per liter and it backfired because consumers new to our brand considered this to be reflection of quality. Total plate counts (TPC) is the industry standard for measuring milk quality. When it exceeds 100k, it becomes unfit for long term human growth and consumption’s. At the expense of shelf life (one week), our product has a 50k while our competitors measure in the millions. For the retailer, low shelf life is a problem, so we have our own distribution centers and network as well. Luckily, trade level education campaigns have improved the adoption, and the name DayFresh, reflects the brand promise.

You’ve been in business eight years to date. What were your key challenges, and what do you think is driving the sustainability and adoption? 
Like I said, a good product that is communicated well, will sell. We have the right raw material, are small enough to focus and deliver on promising. We are also small enough to respond to consumer needs and its very important in a product like milk. After being exposed to open air, milk goes bad pretty fast. So we pump our cows with automation and chill the milk to 4 degree Celsius to stall further bacterial growth. This commitment to high quality limits to shelf life, and its adoption by retailers is a challenge so we need to invest more in attaining touch point shelf space and our own distribution network.

Based on advertising messaging, we can safely postulate that flavored milk is aimed at children. A glance at local or international trade further shows that international players in the direct and indirect nutrition positioning dominate shelf space. Canteens at major schools and colleges have been branded with some of these for years. So what was the rationale behind entering flavored milk?

We think Pakola has done the best job in this category because they are exclusively focused on flavored milk and research points this to be a small category, expected to reach 20 billion liters in demand this year alone. We sought it out due to our increasing capacity and interest to tap new markets backed by retained earnings from DayFresh. The only downside is that the market is not that developed, and when you’re leading the charge, you’re also incurring costs.

While children are the end consumers, their parents – health conscious and concerned for long term health & safety – can be influenced by our campaigns. We are a trusted brand, so when we launch flavored milk backed with the same high quality infrastructure, parents trust us. Insights from our own delivery network indicate that our products are consumed as a key breakfast item, and chocolate or strawberry milk is more appealing to children than the plain alternative.

Thank you for your time Suleman, it was a pleasure.


Further reading:

 

How Microsoft Must Market the Mobile Suite

Our projected personalities, tone and narratives change depending on whether we are on Facebook, G+, LinkedIn and Twitter. In that context of understanding, Microsoft has to realize that there’s a place and time for everything.

“Most, if not all of us, use our smartphones and tablets for different purposes than a PC or on a Mac,” clarifies Danish Ayub of MWM Studioz, “however big you make the screen of the devices, nobody’s going to do serious work for long hours on a tablet, never mind on a phone. There will always be a place for PC at work, but in the consumer space? Not so much.”

Certainly, giving away software to achieve market penetration has worked before. Yet, giving away software after the market has rejected is a Hail Mary Pass. The Microsoft Office mobile suite has never been successful by its merits alone. It could not compete earlier on against other competitors, when these weren’t free, and unless the product improves, it will not compete against competitors now that fully or practically free.

True cloud-centric solutions, like Google’s and Salesforce, are likely to dominate this market until a true piece of software, that nobody has invented yet, makes Office-like labor (composing complex documents, editing large spreadsheets) actually more productive in tablets than in the desktop (not referring to frameworks like CX Cloud). At this point nothing beats Word’97 or Excel’97 on a dual monitor desktop for data entry, writing business emails, etc.

Frankly, the only appeal of Office in mobile, is that it still reigns the business desktop. But unless Microsoft makes Office substantially better in the desktop, this is also a last gasp. Most users will probably say the last useful improvement of Office occurred in the Office 97 version –all other changes basically have been moving menus and icons around to the detriment of usability.

Is it really that people need to try out using Office while they’re on the go because they never use Office? Of course not. For MS to even put that as a end goal, it’s laughable.

MS should take a leaf from Oracle whose focus (and bread-and-butter) remains in the corporate sector. Oracle never pretends to know or even try to get in the consumer space because that’s simply not their target customers. MS should need to keep that focus.

If MS wants to tackle the consumer space, they need to have new offering to a brand new audience. Trying to retool its current offering won’t work. MS should have learnt from its past mistakes of trying to retool windows OS (aka mobile platform) for phones. Same goes with Office. Those are cash cows and huge success, but those were past glory. MS should use these cash cows to fund new initiatives to charter new waters if it really wants to corner the consumer markets which is where the growth is.

Start-up Watch – 9Lines

Ever wanted to walk around looking like you belong in the Museum of Modern Art?

Unlimited SKU’s.

Described has a “fresh, fun, yummy fashion & lifestyle brand”, 9Lines merges art, fashion and design in its first season, with the aim of taking audiences through the lives of pop icons & make them accessible in daily life. The founding team follows the leadership blend of  creativity and numbers, with Hasan Iqbal Rizvi and Saad Shahid respectively, both with half a decade of relevant work experience between the two of them. As the brains behind the business, they design everything from T-shirts to stationary, posters to jewelry, mobile phone accessories to bags; almost anything you would want a quirky and fun design on. They take pride in producing unique products with a major focus on print and illustration with bold and colorful designs.

One of many USP’s.

It’s the brainchild of Hasan Iqbal’s love for creation and Saad Shahid’s fondness for pop art. The idea behind this was to create a label that shouted fun, quirkiness, edginess, and creative originality.  People are consumed in popular culture but still 9Lines were very intent on exploring classic Hollywood, and drawing inspiration from the very many mass culture inspired visuals that have been long forgotten. They made pop culture even more visually appealing and accessible to people of Pakistan. To say necessity is the mother of invention wouldn’t be totally wrong in 9Lines’s case. Unable to find a small keepsake like a decent stationery compelled the founders to combine two things they loved to do–write and design. With the idea of creating notebooks that celebrate Pop Art, 9Lines transformed into much more.

Based in Lahore, they primarily function off of their Facebook page, the occasional exhibition and a snazzy little website where you can have a look at everything that they have in stock and get ordering. If the item’s in stock, it can be in your possession in about two working days. And if it’s a customization, then in about three days, obviously once you’ve approved the design. Delivery across the country is absolutely free and comes with the beautiful option of cash-on-delivery.

For more info, visit their online store or Facebook page.

Achieving Retail Conversions with Complimentary Insights

In the consumer good industry, your best bet is to be contextually relevant and meet the customer half way. I like cross selling like anyone else, but complimentary sales strategies are doubly effective.

TROJAN (condoms) next to baby food, as in “While you’re in this aisle, how about this mistake prevention mechanism?”

M&M’s in the feminine hygiene aisle, as in, “You might want to get here these as well and get bonus points for caring.”

Invest in conversion* marketing, points of sale data and shopper marketing. Raise awareness by engaging your target customer around a common cause or interest point – all positive.

Got any more ideas?

Interview with Taimur Butt, CEO of Red Mango (Pakistan)

New York Magazine calls it “the yogurt that started it all is on its way… Reeks of authenticity; the thinking man’s yogurt.”
Red Mango (2)

Who
Born and raise in Pakistan in a military family, Taimur Butt walked the talk on Wall Street with JP Morgan after graduating from Georgetown University in 2001 and gained an experience that offered him the mindset for high stakes negotiation skills that contributed to his ability to serve a family business – Area 51 – with new revenue streams and a refreshed positive image in Karachi. In 2007, he armed himself with a MSc in Real Estate Development from the coveted Columbia University and was later named Chairman of Georgetown University Alumni in Pakistan. He stays true to his roots and was always interested in exploring new opportunities; this year his family business – TMN – was awarded Master Franchiser for Red Mango in Pakistan and launched Zamzama Mall in late 2014.

How
Taimur approached the regional directors for Red Mango in Seoul and secured a deal whereby 10 outlets would be launched in the next 10 years. Unlike other players in the fro-yo business, he has no interest in franchising Red Mango to interested local parties (as yet) – for the sole purpose of quality control – something competitors have steadily lost control of and Taimur values relationships. In 2013, he launched an outlet a Nueplex and will progress with further outlets in Lahore and Islamabad (Safa Mall and Bahria Town).

Why
Red Mango is a QSR – Quick Service Restaurant and one of the fastest-growing retailers of all-natural nonfat and low fat frozen yogurt and fresh fruit smoothies. Unlike its competitors in Pakistan, it is recognized by numerous health & fitness experts as having the highest nutritional value per gram and has earned numerous awards, including the prestigious Nation’s Restaurant News’ “Hot Concepts!” award and the industry-recognized SupplySide’s “Scientific Excellence Award,” as well as best frozen yogurt honors in Dallas, Seattle, Las Vegas, Chicago, Utah and New York by highly-regarded independent publications. Winning the Zagat award in 2011 and 2012 for being #1 in frozen yogurt placed the brand at the center stage of taste and health excellence.

Value
According to various independent sources, Red Mango serves uniquely delicious frozen yogurt that is all-natural, nonfat and low fat which helps support the immune and digestive systems when consumed as part of a balanced diet and healthy lifestyle. As the first frozen yogurt retailer to earn the National Yogurt Association’s “Live and Active Cultures” seal for meeting the required criteria for healthy frozen yogurt. The market demand for fro-yo in Pakistan has boomed rapidly in the last decade, with imitators cropping up alongside international franchisees, and the consumers are steadily experiences the drop in taste, quality and health value. Red Mango has swooped in to claim those customer bases for itself and has retained a healthy following online and in-store.

Marketing
Awareness on this fresh market entrant is gained by a strong online & offline presence:

  • 8-10 billboards strategically placed within 20 minutes of the outlets
  • Social & digital media presence (managed by Symmetry Digital)
  • Public relations and events (managed by CatWalk)

Challenges
The current challenged faced are operational in nature and are in the process of becoming streamlined as key players hasten their learning curve:

– Inventory management, having to source by importing key products
– Shortage of experienced talent in F&B industry, with exposure in frozen desserts
– working in a country that is used to a dine in culture as opposed to place order on counter and get served.
– satisfying requirements and climate expected by HQ

Opportunities
The business boasts a wide range of consumable options, from fro-yo’s to smoothies, panini’s, cookies and shakes – so there is something for everyone – all its all healthy & fresh. The targeted customer profile – health oriented women in the 18-35 age range – is heavy on spending, noted for consuming multiple items from the menu range due to its calorie count provided (allowing them to track their diets) and enjoy the outstanding taste. With a small cup at 140 calories and a filling taste, it meets the target markets’ need precisely.

Conclusion
The Zamzama outlet has a maximum seating capacity of 35 to 40 customers (depending on understanding of personal space). Based on my teams observations during peak seasons and from a survey with 30 current and 14 present customers:

– Average time taken between order placement and completion is 8 minutes (an average that is decreasing everyday)
– Average time spent in the outlet was 55 minutes (including the 8 minutes fulfillment time) per customer or group of customers.
– Average value consumables were PKR 1,525 per head (exclusive of taxes).

Based on these estimation from our team, the Zamzama outlet alone has the earning potential of USD 5,000 per day and it operates at 90% of capacity from Asr to Isha timings according to staff and outlet guards. Within the next 8 years, 10 outlets will be added in Pakistan, with 5 coming in a 30 months cycle. While determining the margins wasn’t within reach nor the franchisee fees, the growth and insurgence of fro-yo in Pakistan spells a positive note for this industry – more so in fact – due to the superior taste quality & healthy value maintained by Red Mango Pakistan.

Carmudi’s CTO on Infrastructure, Processes and Achieving Scale

Jean-Jacques Borie, chief technology officer of Carmudi, recently spoke to Babar Khan and shared how his knowledge has allowed him to go from global architecture as well as helping developers in deep coding issues. His role, as we will learn more, goes beyond engineering and Jean contributes to corporations’ strategic visions and alignment with IT. Edited excerpts of the discussion follow.

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Please describe the scope of your role at Carmudi.com and the impact of your work.
My role is to manage the technical teams to have a scalable platform that is reliable, fast, secure, easy to maintain and cost efficient at a global scale.

My teams are composed of experts in the field of web and mobile development as well as infrastructure. It is my role to ensure that the entire IT is aligned with the strategy and goals of the enterprise, to remove blockers that could slow the company down. I also need to make sure that current decisions don’t evolve into problems later.

A CTO in a start-up like Carmudi needs to have a solid knowledge of global scalable architecture. He needs to share his vision and then ensure that the team is committed to achieving it. However, it also needs to have great coding skills to quickly fix issues and make the right decisions when there is an emergency situation.

Building a project like Carmudi can be complex. You want to have a platform that is faster than any competitor’s in any country you are present. The internet connection quality can vary a lot. You have to optimize your application as well as to find the right connectivity solution for your markets. You need to work closely with your product team in order to challenge, optimize and simplify new features.

What advice do you have for aspiring tech entrepreneurs in terms of scaling companies to be globally successful?
Rocket Internet’s approach is very good and I suggest following their 4 pillars:

Infrastructure
Unparalleled experience in scaling world-class Internet businesses globally
• Deep technical and operational expertise
• Strategic partnerships and framework agreements

Processes
• Highly structured / best practices
• Centralized IP with regional execution
• Repeatable and scalable

Rocket Network
• Founding 10 new companies p.a. on average
• Consistent returns across network of companies

Technology
• Proprietary technology platforms allowing rapid global deployment
• Comprehensive KPI analytics driving continuous optimization
• Provision of shared services to jump start new businesses at low cost

To conclude, what would you like our readers to know about the culture at Rocket Internet and what fresh incumbents can expect to experience?
On your first day working as CTO for Rocket and also the following days, you are immersed in their culture. You have an internal CTO’s channel of communication where every venture shares its experience, gives feedback and explains the problem it is facing and are trying to get rid of.

You have to understand that every venture is growing at a very fast pace, which from time to time can lead to some technical challenge and can count on help of an internal network. Rocket shares best practices with their ventures therefore minimizing risk. You have a standard process methodology to handle production. We have KPis defined on every team with target to achieve thus at central level as well as local level.

Venture’s start with a first release of a product done by Rocket-Internet that you have the freedom to adapt it and re-factor once is endeavor to you.

Thanks for sharing your time with us, always a pleasure.

Carmudi’s Co-Founder on Entrepreneurship, Ecosystems and eCommerce

Fritz Simons, global managing director and co-founder of Carmudi, is regarded as one of the world’s leading authorities on competitive advantage and go to market strategy.

Mr. Simons recently spoke with Babar Khan, the entrepreneur in residence turned managing editor in the Dubai office of Ephlux Insights and the former CMO of Application Services with Ephlux in the MENA region. They discussed strategies to detect and develop ideas that have the potential to impact how companies think about competitive advantage. Edited excerpts of the discussion follow.

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What are the key drivers of successful innovation-driven entrepreneurial (IDE) ecosystems?

We operate from our global Headquarter in Berlin, Germany. In fact, one of the reasons why we do this is because this city has developed into some sort of ‘European Silicon Valley’. A historic city, lots of free time activities and low living costs have attracted many young international professionals. They tend to be more innovative and hence we have seen an incredible growth of small and medium sized tech firms.

People are one of the major drivers of innovation if they get the right environment to work and foster in. What also helps are flat hierarchies. Many established companies have failed to reinvent themselves because the same people that have been there for years have been trying to control and manage progresses too tightly. Only if it is part of the company culture that going against the stream is worth a try, it will lead to innovation. In conclusion: Bringing together the right, young and ambitious people and motivating them to try and make mistakes will give an innovative edge over your competitors.

What digital capabilities does Rocket Internet focus on?
Over the last years, Rocket Internet has gathered significant experience and best practices especially in the eCommerce sector all over the world. Particularly from a technical perspective we are able to do things right the first time by looking at what Rocket ventures have done before. This includes scalability of the platform but also other important topics such as security.

Beyond that, Rocket has established an enormous global network of brilliant people. We as Carmudi benefit from this as we ourselves operate all around the world. Hence, there we have access to a large pool of first-hand knowledge and experience that we can utilize in all of our markets. For example in Pakistan we have direct connections to many of the major online players in the country.

What data is most critical to your people’s ability to work smarter?
For us customer data is absolute priority. We use a variety of tracking tools to gather quantitative data but also a lot of qualitative feedback to constantly reevaluate what our users like and don’t like about Carmudi. Of course this data needs to be 100% accurate. Only then it allows us to get a clear direction on what we want to achieve as a company. By channeling our effort on what makes a difference to our users, we work smarter and more efficiently overall.

How do you derive value from business complexity while keeping that complexity manageable?
Business complexity has never been something we are trying to achieve in any way. However, rapid growth and expansion automatically increases the complexity of operations. We counter this through clarity and simplicity in hierarchies as well as direct and to-the-point communication. We operate in Asia, Middle East, Africa and Latin America. The only way we can keep this young but global operation manageable is pulling it together as much as possible. This means communicating with each country at least once a day. Global calls also do not require a set meeting time. We are always reachable and mostly only a click of a button away.

What metrics do you use to track whether you are delivering customer satisfaction on a daily basis?
Although we are not an eCommerce business in the classic sense, we use very similar metrics. One of the KPIs we look at is the conversion rate of how many users that come to our website actually inquire with our sellers for any of the offered vehicles. Furthermore, we measure the engagement on our site, i.e. metrics like how long do people stay and how many pages do they view in one session. Furthermore, we gather qualitative feedback from our users. This is made possible for example through direct dealers (or more generally speaking, sellers), events but also through e-mail questionnaires we send to our valued users. We appreciate any feedback and we also spend a lot of time evaluating and acting upon it.

How have you gained a competitive advantage in the digital economy?
We benefit greatly from international synergies. With our global headquarter located in Berlin we have access to world class resources and people with a lot of international experience. We couple this with local talent in the countries we operate in, such as Pakistan. This a somewhat “glocalised” approach, which comes down to combining synergies from experiences and learning around the globe with localized knowledge in the countries we operate in. So far we have found that this is one of our greatest strengths in delivering outstanding value to our customers.

How does Rocket Internet create, identify, and evaluate new venture opportunities?
In our case it is actually remarkably simple. Car classified websites have been super successful in many of the developed markets around the globe such as the US and Germany. In combination with Rocket’s expertise in emerging markets, we are convinced that we can provide a great offering to our clients in Pakistan and other countries around the globe.

In your experience, how has the process of starting new ventures varied geographically and culturally?
Of course differences between geographies and cultures are huge. Our approach is one of Glocalisation. We identify international best practices to maximize synergies between different markets. With these best practices we enter the market in a relatively standardized way. However, as we continue to learn more about a specific market and regions within it we continue to localize our approach. From our experience this gives us a great competitive edge. We keep the speed up but build something our local customers want.

What’s your advice to aspiring entrepreneurs on navigating the venture capital investment process?
Unfortunately, I cannot share any details on this. However, one advice I can give to other entrepreneurs is that being convinced yourself of what you do helps a great deal in convincing other people that your venture has a great future ahead. Hence, always question yourself whether you are really on the right track.

How should aspiring entrepreneurs start enhancing and expanding their networks?
From time to time, networks can be incredibly helpful. Always remember that if you want something from someone you must always be willing to give in return. Approach people with an open and helpful attitude. Don’t think of it as building a network but rather as getting to know people. This way your relationships will be more personal and hence way more fruitful.

Thank you very much, Mr. Simons, for sharing your perspectives with us.

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