(Republishing from LinkedIn. Originally Published on November 13, 2019)
The year 1995. Indore, MP, India.
It was my summer vacation. There were long days to kill and not much to do.
It cost 10 Rs. for a 1-hour video game rental at a video parlor close to my home. (10 Rs. = $0.14 cents in 2019).
My mom won’t give me that 10 Rs. more than once a month as it was a waste of money and I should be doing something worthwhile instead of wasting time playing video games. (Pretty much the same thing I tell my son when he asks me to buy a new video game for $49.99). Even though I thought it was worthwhile saving the princess in the Mario Bros. game, no one at my home agreed.
Making Money
Table of Contents
So I had to find a way to earn that money myself. Over the past few years, I had collected tens of comic books from relatives, friends and winning competitions. The closest comic library to where we lived was 10 mins bike ride. There were a lot of young adults and kids in our community who didn’t have a bike and many didn’t even know about that library. Moreover, the gentleman (Uncle) who ran the library was not always there and his wife was quite mean if you took too long to choose a comic book.
So, I decided to start my library of comic books for the kids in my area. It was summer, so we’ll open in the morning and evening. 9 to 11 am, and 5 to 8 pm. That was enough time to make sure people can come in, choose a comic (out of 25 that I had) and return in the evening or the next day after reading. The plan was to save some money for video games.
Little did I know that this plan to save money for video games will become my first real business venture. Over the next few months, my 25 comic books library grew into 200+ comics and over the next two years, my library grew into 1500+ comic books library with 50+ paid members. How, and what I learned from this venture applies to any business in one way or the other.
My 5 lessons from this business venture
Market Research:
It is important to know your customers. It’s important to know the market size, potential to run the business and make it profitable. In my case, we knew there was no other good library with good customer services in the nearby areas. I met with the kids in the area and found out what kind of comics they liked (Hindi, English/Action, comedy), etc. I also found out how much they are willing to pay as rent. It was surprising to find out that all other libraries had one price model – a daily rental price and a late fee if you miss returning the comic on time. A standard 32-page comic book would take an average kid a few hours to read. They may want to read a couple of times, so 6-8 hours max before they are done reading. So, instead of having a daily (24 hrs) rental, I had a rental option for 8 hours, which was cheaper. Kids could rent in the morning and return in the evening – also thereby increasing the number of comics they can rent and increase overall revenue. These may seem small things but every business has its own little things which can turn into big profit margins and sometimes USPs. Kids came to my library because only we had an option to rent for 8 hrs. instead of 24 hours!
In any business, researching and finding your market and aligning your product/service offering to the market is critical to success. In the world of product management its called a “Market Fit”
Connecting with your customer:
Another important aspect that I learned while running the library is the importance of connecting with the customer. When the reader has read the comic, they want to share that with others. They want to share the excitement and good/bad part of the comics with someone. They want to act out a dialogue from the hero or act out a kick pictured in the comic book. They need someone to listen to them. I game them that sounding board. When they came to return the comic the next day, I would ask them if they liked it and suggest something else of a similar kind. I’d also ask them what else they want to read. At one point I had 8-10 kids looking for a certain comic book that I did not carry. I asked them to advance the rent, and I was able to buy the comics with a waiting list of renters already signed up!
It is equally important in any business! The more you talk to the customer, the more your learn about their business, their decision making, and potential new opportunities!
It’s the same kids who grew up to be directors, presidents, and the CEOs of organizations and they still want to share when they do something good. Hear them out!
Up-sell, Cross-sell and Starting New Product Lines:
In talking to my customers, I found out what else they wanted. Stickers of their favorite comic characters, superheroes, trading cards, and other “toys”. I started providing them those products and services. It was a 30 minutes bike ride to a store in the city where I could get these things at 30% discount and sale them back at a markup, making myself a good profit after expenses. Every comic book came with some free stuff, ads of next comics and promos. I also innovated in finding a way to convert them into magnetic stickers, zigsaw puzzles and other creative products that people would buy. Over time, my income from other services and products was more than my rental income.
I also provided a monthly subscription to the regular users, who would save money by subscribing instead of paying for each comic book. This helped pay for not-so-popular titles as that’s included for them to read for free while they wait for more popular titles to be returned by other kids. It also gave me enough cash flow to buy more comics.
The same is true for many businesses today. There are hidden product lines, services that may sometimes prove more profitable than your original business. Look for them.
Keep an open mind and open eyes to receive customer feedback and turn them into upsell, cross-sell and new business opportunities!
Partnerships
You can not do everything alone. I had about 50 comics by the second month of our operations. Kids needed more options. I did not have the budget and funds to get more comics. I knew that some of the other libraries in other colonies had 500+ comics, and many of them did not rent regularly. I reached out to two of them and formulated a tie-up where we’ll share 50 comic books every week and rotate them. I’ll also have a list of the comic books that they have so that if any of my customers wanted it, I can book it for them for next week. This helped me keep the customers coming back to me instead of finding other ways to read those comics. Also, I built partnerships with other friends in my colony who had their collection of 10-20 comics and started renting their comics from my library. This game them opportunity to trade their comics for other comics and helped me increase my offerings. It was a win-win!
In business, you can not do it alone. You may not have resources, time or talent. And its always an opportunity to partner with your peers or competitors in some cases, to build a better service for the customer.
Exit Strategy
If you recall, the reason I started this library was to get some pocket money to play video games. I was so engaged and excited about the whole growth of the business that my motivation and interest to play video games went away. I was having more fun running the library, meeting with other kids, creating new strategies.
At one point, one of the kids who rented from me told me that he had a Nintendo game system at his home – and I could share/play with him! The business created a way to solve the problem that it was started to solve, in a whole different way. Even when that was done, I was fully engrossed in the business.
I was writing my own comic books, making stickers, expanding my collection and in all this, I was spending so much time that it started hurting my other priorities – my studies. What started as a part-time Summer vacation gig, became a big part of my life. Kids in the colony started to know me, and call me by my occupation. Most knew me as Ashish bhaiya, but a large number of kids knew me as “library wale bhaiya” (the Library guy). As this continues, it gave me more reasons to continue on this path. It was also a profitable business, which means I was making good money after all the expenses. I did not have an exit strategy! Then came the college – and a juncture where I had to decide if I wanted to continue running the library or move on to more important things in life.
I had to plan for an exit, handover the library to my brother and move on with life.
The same is true in business. Sometimes you need to know when to quit. A product or brand may be too popular, but is that keeping you away from your real purpose? Are you giving in to market acceptance and financial gains and moving away from the real reasons you started your journey?
Just like with anything else in life, look at your priorities and decide what’s the best path forward.
There were so many things I learned with this small venture of mine, that has helped me with my next ventures and still helps me once in a while. Hope you can take some of these insights and relate them to what you are doing.
Share your comments, thoughts, and feedback! Would love to know your take on life and business.