Thursday, August 7, 2008

Problem Definition

We are a group of folks thinking of forming a startup focussing on a specific business problem related to Rural India. Something along the lines of MicroFinancing in rural india, but instead of solving a banking problem we are attempting to solve a pricing problem, which seems to be very applicable to rural space in India. In addition to solving a common problem for rural india, we also have a compelling monetization mechanism as well.

Proposition: Build a system that allows producers and consumers to discover each other based on the most attractive price point for a given produce.

For example : Fishermen at the coastal andhra would like to get the best price for their fish on a particular day, and they should be able to pick/contact the dealer who gives them max price. Though it sounds quite simple, there are various logistic issues to solve this problem. For example, for perishable goods (like fish/vegetables etc.) the pricing could be extremely dynamic, and rural folks should be able to set a dynamic pricing model with a single bid ( e.g. reduce the price with time for perishable goods with something similar to a stop-loss feature used in stock-trade context). Conversely for something like selling a concert-ticket, one might want to increase the price with time. Timing is just one of the criterions, there are literally hundreds of criteria which could come into the play, but the final goal for the consumer is to get minimum price and for producer is to get max price. Our model is symmetric for both producers/consumers ( unlike in internet advertisement world driven by google's ads it is the producers who drives the need) .

I personally feel that if done properly with low entry barriers and judicious use of technology, it could be a massive hit in rural areas in India.