6 Things that Carrots can teach Technology Entrepreneurs
June 30, 2007
For our foreign friends, a “Sabzi Waala” is a small road-side vegetable shop found commonly in India / Pakistan. The people running these have typically not gone far on the higher-education track, and many wouldn’t be able to write or read well.
I was buying vegetables the other day and the way I am I thought I’d spend the time to learn a little about his life from him. So I asked him about carrots “Why is the price high here in the off season?”
His response made me feel like asking him to start a blog. He said:
Look, you have an increase in demand for carrots right now, whereas supply is limiting, so prices have to go up as we compete to get our goods from the wholesalers and distributors and their limited supply.
You see, you have to think that with the summer heat and rising costs of commodities, most people today would prefer a quick vegeterian meal rather than a bigger meal with meat - so you take your potatoes, capsicums, onions, 1/8 kg carrots etc and you can get by for a couple of days.
We have to forecast this in advance to get carrots on time. To get these carrots, in fact, I had to really cut some harsh deals with the distributors.
Think about it — if someone comes to me today and gets onions, potatoes and capsicum, but I say I dont have carrots — what will he think? It doesn’t matter if I have 5 of the 6 things a customer needs, he is likely to say “Well why dont I shop at the one place which has all 6 items instead of dealing with two people”. So even if I carry all the 5 other things, I lost a customer didn’t I?
So we’re actually selling these carrots at loss here - sometimes you have to sacrifice the margins on one product to ensure you retain customers. Sometimes you make a loss at one thing so that the whole suite covers for it.
Well said (and he literally said margins and the last paragraph)! Maybe he should be a guest writer at G&W.
So why should all these proud, cynical, “techy”, geeky hi-tech entrepreneurs with access to VC funds or with “tens of dozens of customers” (you know who you are) care about what a vegetable man says on a street corner?
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Posted by Osama A.
