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A simple formula that tries and captures Success

This is my formula:

S = D x U x S

S (Success) = D (Delight) x U (Uniqueness) x S (Scale)

Each metric is ranked from a lowest score of 1 to a best of 10.

The final ranks are expressed as a %

Let's look at this carefully:

Delight = The combination of Price, Service and Consumer friendliness. Note that for some people (especially in India), delight means price. For others it means service and price. Therefore delight has been considered as a combined metric of Price, Service and Consumer Friendliness.

Uniqueness = is how Unique the service or offering is compared to others in the marketplace.

Scale = how scalable is the availability of the product or service.

Now, it would be easy to accept these ranks:

And similarly, these ranks could also be acceptable:

My deep introspection about what really makes a successful business is that each of the metrics of Delight, Uniqueness and Scale taken TOGETHER really make a business very successful or just an 'also ran enterprise'.

Thesis:

To make my point, people say - Flipkart is a 'Great Company' because of its Consumer Service! Yes, their consumer care is superb, BUT is the book that they are selling UNIQUE?

So, if I am buying 'Autobiography of a Yogi' from Flipkart, then the uniqueness rank of that book for Flipkart is 2, because I can buy the same book from almost anywhere!

Before I introduce the tables again, consider Apple. The iPhone is a very unique product. So, it's a perfect 10 or at least a 9. The delight of using the phone (no breakdowns, awesome app store, etc) is also 9. Now, can Apple make as many phones as the world wants? Yes! So its rank on scale is also 9!

I think this table will be easy to understand now:

Explanation:

Rather than inundate the tables with more data, let's dissect the categories above:

Apple and Samsung both are delightful Companies AND have great scale, BUT Android - is NOT unique to Samsung (It's available as from Google for any handset manufacturer that wants it) and hence it scores a weaker rank compared to Apple.

Crossword and Flipkart BOTH sell the same books and hence their uniqueness is ranked 1, but Flipkart has awesome service and scale and thus ranks higher than Crossword.

Indigo Airlines is small and niche, but Singapore Airlines has almost the same quality of service and is highly scaled up.

I love eating meals at the Golden Dragon restaurant at the Taj Mahal in Mumbai, but there is only one such restaurant of its kind in the world! McDonald's that serves a very standard fare, is available everywhere.

I am sure the rest of the examples are self explanatory.

E-Commerce Example:

Let's try and simulate a comparison of e-commerce companies using this ranking table:

Example: Experience when buying a book online

Clearly Flipkart is No.1.

So, can it remain comfortable in its lead?

Not at all, and that's the tragedy. Because PRICE is a function of Delight - if Flipkart raises prices, its Delight rank comes down, making it vulnerable to the others. Again to reiterate, for a lot of people I know, PRICE is a key 'delight' factor.

If Infibeam.com becomes better at Delight (reduces prices and delivers better), and improve its range of offerings (Uniqueness), it can catch up with Flipkart.com!

The true sensitivity of this formula becomes very clear from this e-commerce example. Even if Infibeam can increase its Delight by just 1 rank, its rank becomes 11.2!

If Snapdeal.com crashes prices (improves Delight) , stocks more products (improves on Uniqueness) and marginally improves its Scalability (I gave it 5 because I could not find certain books on it), then it begins to catch up to Infibeam.com and Flipkart.com!

Let's simulate the tables once again after assuming that Flipkart raises its prices (to become profitable), Infibeam lowers its prices (to capture market share) and Snapdeal just improves its Delight and Scale:

Clearly, just by improving slightly, the differentiators between e-commerce sites begin to vanish!!

This is my central theme around the point that e-commerce businesses in India have major pains to suffer.

Take out:

All the 3 dynamics - Delight (function of price, consumer care and service), Uniqueness and Scale TAKEN TOGETHER AS A MULTIPLIER make great Companies. If you consider just one function, then you cannot make an accurate business judgment of the health of that Company being considered.

Hence, you cannot call Flipkart a 'great business' because it's got great consumer service.

Search example:

Consider Google and its Search business. Its delight is 10, its uniqueness is close to 7 (most search engine generate the same results but Google indexes web links better) and its scale of operations is 10 (it's available everywhere as search tabs, via the Chrome browser etc) .

Let's compare Google's search results with those of bing.com and Yahoo:

Table for the search 'Autobiography of a Yogi' (Try it yourself):

Now, a quick run through the numbers above:

I score 10 for DELIGHT for Google because it not only gives me a well laid out, chunky search result WITH the option of buying the book locally; but also look at the left bar - the news, photos, discussions, etc. make my 'experience' complete.

Google's tool bar is ubiquitous and hence its 'scale' is 10 on 10.

In terms of UNIQUENESS, I haven't checked all the search pages, but I imagine that it will have indexed the most results. Having said that, search results are pretty much the same between Google and Bing - hence I start with Google at 7 on UNIQUENESS.

Bing.com's results are mixed. There is no option to buy and there are no more options for search results (images, etc) other then web results. Hence it suffers on Delight and gets 7 instead of Google's 10. On the rank of Scale, I rank Bing at 5 on since its search bar does appear in places (such as facebook.com), other than its own site but not as often as Google (which scores a 10).

Yahoo.com's search results are pathetic.

Gaming example:

Using S = D x U x S, I looked at a game called Parking Frenzy we made recently. It scores average on Delight (buggy, crashes, etc) but very high on Uniqueness and Scale (because it's not a Cricket game it sells globally). So, we managed to get some really great numbers on the app stores.

But when I look at Angry Birds, it's a 10 on Delight, 10 on Uniqueness and 10 on Scale (it's on every device and platform).

That's why it's the No.1 game in the world!

Conclusion:

You have to be Delightful, Unique and Scalable to win. Else you will just be a blip on radar, soon to stop glowing!

As an exercise, make a list of brands, companies, services (maybe your own business or corporate vs competition) and figure out their success ranks for yourself! The list could be a Company (So Apple vs. Samsung) or a brand or a service!

Guidance:

The factors of Delight, Uniqueness and Scale are objective and based on individual perception. And that is what makes the ranking tables effective. The purpose of rating success via this method is not to produce a list of winners or losers but rather to encourage the user to think of a product or service offering using 3 dimensions and the sensitivity of what happens when one of the ranks change!

The writer has no financial interest in any of the Companies (except in Parking Frenzy) listed above.

Alok blogs at http://therodinhoods.com/

© 2012 afaqs!
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