We’re going to walk through three main areas of how to position yourself for success. The first is how to predict the slowdown. And for some reason, there is a predicted slowdown, and there are two different schools of thought. Some say that maybe India will rebound after this whole disease situation much faster than the other countries. Then there’s the other school of thought, which says there will be a slowdown. So, how do you predict a slowdown? I’ll share some examples. Maybe they make sense to you.
And the second thing is how do you negotiate to a slowdown? What does all the things that you ideally should do? If you are a corporate professional, this applies to you. If you are a pure professional, this applies to you. And if you have a small or medium-sized business, this will apply to you.
Third is what exactly you can do in order to ascend the food chain, which basically makes you a little bit recession-proof for the future.
First Area to Position Yourself for Success
How to Predict a Slowdown?
Demand vs Supply
Now, how do you predict a slowdown? How do you figure out this thing is going to work? This thing is not going to work the way we do this. The first thing is demand versus supply. You determine whether the industry is going up or down based on the demand-supply equation. So if the demand for a particular skillset or a particular product is high versus the supply of that particular product of skillset, then the price for the skillset will keep going higher. There’s a lot of scope in that industry. On the other hand, if supply is high and the demand is low, then it’s not a good reason. You must evolve and figure out how to do something different in order to stay in business.
Educated Class
So, what’s happening in India is very interesting for the educated class of people. The people who have old fancy degrees (specific only about India may not apply to other places). There is automatic democratization of education that is good for everybody. But it has led to an oversupply in the educated market, especially for doctors, engineers, Chartered Accountants, lawyers, etc. You’ve had a boom in the number of colleges that offer these degrees, and pretty much everybody that wants to become a doctor or engineer can find a college seat and collect that degree.
Now, what happens is that the supply of an educated workforce in the Indian economy has overtaken the demand by miles. For example, in the medical setup, the number of super-specialty hospitals that have come up is not commensurate with the number of super-specialized doctors that are there in the market. So what happens in that situation is the overall price or the overall income group falls, the demand falls, the demand with relation to supply falls, and the overall income group falls.
The same thing applies to lawyers, engineers, and chartered accountants. For engineers, the glut is so much that mostly all the engineers are basically have gravitated towards either management jobs or sales jobs because of the oversupply. So, education in India has been a double-edged sword. The democratization of education has made the overall pay ranges lower for all of these. So that’s what’s happening. If you are in the professional segment, you may have felt that.
Cost Arbitrage
Now, what happens in the corporate setup? The demand was artificially high because of Cost Arbitrage. Cost Arbitrage is if an American or British or a German company sets up its offices in India, they will get access to a qualified workforce because of the education glut. They will be able to get a benefit because they don’t have to pay someone on site who will probably charge more. If you look at the pay scales, how their pay scales have risen over the last 20 years, and the average pay scale in the mid-segment in India is commensurate equivalent or just about thereabouts to an American pay scale. If you live in a tier 1 city and draw sixty thousand dollars a year in the US, it is considered pretty good. And then they may have a commission on top of that. It equates to about 40 lacs a year in India. If you look at the Indian pay scales, it may be lower. Some people say, well, yeah, but the level of jobs people do in the US at 62 grand a year costs pretty less in India. But as compared to 20 years back, an Indian employee was 120th of 5% the price of an American employee. Today, they must be maybe half or maybe 3/4.
So, when I say the word commensurate, it means the cost Arbitrage has not been commensurate, which means it has been declining sharply. And if you add on management costs and the headache of managing teams working in a different geography, it may or may not make sense for many foreign companies to maintain the heavy workforce over here in India. So the loss of cost Arbitrage is not a good sign. So the demand-supply situation in the industry is not good.
Ticket Size vs Delivery Format
The second thing in the industry is if you look at the ticket size of different products and services being consumed. At the end of the day, the consumer has to pay for your salary or income. The format in which they consume certain products and services has changed drastically in the last 10 to 15 years, and this is across the board. This has been happening over a longer period of time in the western world, but it has happened in India in a much sharper curve, much more dramatic fashion.
For example, think about something like a financial planner. If you’re in that industry, there were financial planners who used to come to your house and educate you about the different options to invest in the market. Based on their advice, you would balance your portfolio. The delivery format has changed so much that consumers do not want to spend their time. They don’t want to spend 30 to 60 minutes sitting down with somebody and getting educated when they can actually find that information online on money control and just go ahead and invest in a mutual fund etc. So the democratization of the Educational Service that a financial planner was providing, the change in format has basically put all those people out of their job. The stress level is so high because they have to go and make an in-person sale to somebody willing to buy without their personal presence. So, the delivery formats of things are changing. If you stick with the old delivery format, you may not be in a great situation.
Similarly, think about the industry-wise delivery format of food. People would like to go to a restaurant before, but today they’re like, I’ll order and probably eat something at home. Think about entertainment. The delivery format of cinema halls will very soon be obsolete because, over a period of time, people will realize, especially during the slowdown, that it is amusing to sit down with the family that they haven’t sat down for a while with and it’s great to do Netflix and its great to open a beer at home.
The delivery format will be impacted because there is no real value in going to a cinema hall in any event. Cinema halls lose money on the actual screening of the movie. The only thing they actually make money on is the 400 rupee popcorn. So if a new law comes that says cinemas cannot force you to buy their popcorn, you can bring your own burger in a parcel into the cinema hall. Then they’re pretty much out of business. So the delivery format of different things is changing. People are happier consuming entertainment in the comfort of their own homes.
Look at primary health. People don’t really go to a doctor anymore. If they have flu or a fever, people just go online and see what’s happening to them. They’ll probably buy paracetamol. You have the One MG app, which basically will educate you about your health. All you need to do is put a symptom in there, and it will tell you the things that could be the possibility, the medicines, the contents of the medicines, the safety level, and the side effects.
For basic things, you can pretty much take your own decision. So if you are a Doctor who’s a general practitioner, the market is not looking very good for you. If you’re a chartered accountant, things are not going to go your way. People know more about taxes today than they knew ten years ago, and they’d like to check things online. They like to fill in their IP returns. If you are staying in the old delivery format, if you don’t change, your delivery format will impact you.
Same Market But With Better Tools
Many people ask me, it is so maybe because the competition is higher in this market and the demand is commensurately not scaling that much. Would you recommend I go into a market that has lower demand, which has no competition? That’s not the idea I am getting at. You don’t need to change your market and go into an area where there is no competition. The competition is great. There’s a lot of vendors if there’s a lot of different suppliers playing in one market. It is great because that means a lot of money to be made in that market.
It is just that you have to jostle with a lot of competition. So stay in the same market but use better tools. Bring better weapons to the game. So in the computer gaming kind of scenario, bring a better Avatar with a lot more powers to the same game. You have more elbow room; you take away a larger market share. So play in the same market, but with better tools.
Second Area to Position Yourself for Success
Levels of Influence
Now, before we go to the actual tools, we’ll quickly go into the mindset item, which is how you build your influence? So at the end of the day, you will be paid if you solve a problem either for the customer or your employer. It is the perception of how well you can solve that problem versus other people. It will decide your survival and also your price point in the market. It is the perception that you are the right person who can solve their problem better than others. That comes from a personal influence standpoint, which is very relevant in today’s market. That is building your personal influence yourself.
Why do we talk about the five stages of influence at a personal level? Because the rise of the internet and social media has democratized your voice and my voice. In old times, people would spend 40 years building a specialty. Then they would probably go ahead and write a book at the time of retirement and then utilize their industry connections to make sure that a publisher would accept it and publish it. So the whole thing was in the hands of your industry connection or your publisher. In today’s times, it’s not like that. You can grow your influence pretty fast if you don’t think in a linear fashion if you think about putting a footprint in different buckets all the time. So, what are the different buckets?
First Level of Influence
Level 1 of influence is a done-for-you service. If you’re in a service where you do something either for your employer or your client, you’re basically in a done-for-you service. That is level 1 of influence. Only your immediate customers know you. If you’re good at what you do, only your immediate customers or employers know you.
Second Level of Influence
Level 2 is done-with-you, which is you do half of this, and I will process all of this. So you can have many more customers. If you have a template format of what they need to give you, all you need to do is look at the template and utilize your expertise in the industry processes in some fashion. So your time gets leveraged better, and you can handle more customers, and your influence is obviously higher.
Third Level of Influence
There’s a level 3 of influence, which is hyper-specialized doctors, lawyers, or companies, proving one-on-one services, which is basically, I will consult you. I will tell you the solution to your problem, but I will not work with you or work for you. That’s a Level 3 of influence.
Fourth Level of Influence
Level 4 is where you have group consulting, group coaching, public speaking, and that whole industry where you have many people. You’re sitting somewhere and have 50 people in your workshop, and then you give them information. They’ve signed up for that workshop for 3000-6000 rupees. If you can get 40 people to fill a room, just think about how much money you can carry home for that one day of work.
Fifth Level of Influence
Level 5 of influence is an ecosystem. Where not only can you bring a prospect in, they can actually buy an entry-level service from you where they can get socialized, not a very high-risk thing for them. And then they say, this guy seems to understand and relate to what I am saying. Then they go and buy your consultation and then buy something else, and the overall lifetime value for a customer is maximized over a period of time.
That goes with companies who created entire ecosystems like Amazon. Amazon loses money if you buy anything worth 200, 300, 400, 500 rupees because they absorb all that cost of getting it from China and shipping it over to you in the space of one day and charging a rock bottom price for it.
But over a period of time, as the confidence grows, you’re going to buy a TV from Amazon, you’re going to buy a fridge from Amazon. What typically happens over the lifetime value of a customer, they end up being profitable. So while all of the other retail stores etc. are going out of business, Amazon, even at a very low-profit margin, is the biggest and most valuable company in the world because they have a customer for life. Once a customer buys from Amazon, they are never going back to any other retail store, retail platform, or online app. So over some time, if you want to have the maximum lifetime value, you find the customer once. They will do business with you for life, not only on one product line but also on multiple product lines. In fact, everything they ever need in a particular area, they will buy from you.
So that’s how influence works. If you are at a one-on-one consulting level, you would ideally need to go downstream and build a small product that people can consume off the shelf. Then you need to build higher product lines, which people can consume in a different format where it takes less from your side to produce, but more and more people can get impacted.
Third Area to Position Yourself for Success
Ascend the Food Chain
Linear vs Full-Stack Footprint
Now the next is, how do you ascend the food chain? First of all, instead of a linear, you need to have a full-stack footprint, which is if you are at a particular level on the influence spectrum, you need to have downstream products, which people can buy off the shelf. And then you need to have upstream products, which educate not only the customer about your industry but also the other players about your industry.
For example, if in a restaurant business with so many restaurants coming up today and there are many restaurants in the market, Zomato is willing to give you a 50% discount if you just book through their app. That’s because the restaurants are hurting and if you were a restaurant, what you would also do in addition to your core business, is to create a little bit of education around. What are the different types of restaurants you should go to? Not only that, you will create content that is useful to other restaurant owners saying that the 15 different things you need to look at before setting up your own restaurant, the 20 different things you need to look at before setting up your own eat out, takeout shop. How to get partnered with Swiggy, partner with Zamato, and improve your business by 40% just by adding takeout to your menu. A lot of top restaurants are doing that. Many restaurants that used to be snooty earlier are now happy to make food for you and send it to you because they’re hunting for the business.
All you need to do is create some value around. What are the best practices in the industry? And literally, give that value to other people, which could include your competition. When you do that, it may not necessarily be a for-profit product. You may not make any money off of those consultations. But what you do is a signaling item. Its signals that you are an authority in that industry.
When that happens, not only does business comes to you from customers, business comes from competition because they’ll say, hey, why don’t you join my board as a consultant and just help us outside this place up.
And the third thing is you get a lot of visibility in the investor lobbies. So if a multinational chain comes and they want to set up like five restaurants in your town, then all the signaling that you’ve done and established yourself as an authority in the L3, L4 space, they will say, hey, what we would like you to do is come and work with us in our team and will give you stock options, etc. And just help us set up these five restaurants or a chain of stores or restaurants in your city. And that’s when you start getting into the L5 segment, which is creating an ecosystem, just like Starbucks is like an ecosystem. You have a Starbucks literally on every corner.
What these people had to do when all these foreign chains had to come to India, they needed Indian partners. Whom did they choose? They chose only the top, the most visible experts in the industry to partner with. So, you need downstream products that people can say; I trust this brand, I’m just going to order some stuff right off the shelf. Then there are upstream products that are more educational in nature, which can feed your competition but establish you across the different footprints of L2, L3, L4, and potentially L5. You don’t need to go out and grab attention and grab business and fight for business every day; the business flows to you. This is not easy to do. It may take a year or two to do, but this is a mindset item. If you apply your brains, you can expand your footprint across these different areas.
Overarching Themes
Now, what are the overarching themes that will be prevalent in a post-recession or post-slowdown market? These are the failsafe, foolproof themes that are going to be growth areas in the post-Corona era, guaranteed.
Health
The first thing is health. People are going to be more health-conscious. Regardless of what business you are in, if you can have a theme around health, even if you’re in the restaurant business, let’s say you have a restaurant where alcohol and all the unhealthy things are served. If you still come out with workshops on the off days, saying we’re going to have workshops, where we will teach people on how to create healthy food recipes, we’ll teach you how to create continental dishes that are healthy, and you can drum up in 15 minutes, people are going to be very interested and will definitely join you.
During the lockdown, people realize that they need to have some cooking skills. If they have only four dishes on their spectrum, and if they get locked down again, they’ll get sick and tired of eating all that. So if you hold workshops, which are centered around health, if you have something around immunity, or if you have an educational program, these things will do very well.
Career/Finances
It doesn’t matter what area you’re in right now, if you can draw from any of these six areas (health, career, business growth, personal improvement, relationships, entertainment) and over an upstream or downstream product, it will help you. It will help you to add income streams to your existing income stream. If you are a chartered accountant, you can have a workshop, teaching how to plan your finances, how to get the maximum return on investment on your savings, it’s going to be a smashing success. So, in addition to a done-for-you service, a level one service, you are now providing a level 4 service, which is that workshop.
Business Growth
Anything around business growth, if you have any products, consulting, books, audio programs, or video programs around business growth, it will be big in the post-recession error, or even in the post-Corona, assuming that business stays healthy.
Personal Improvement
Anything around personal improvement is going to be a huge burst. Now that people have the time to look internally. They have the time to contemplate; they’ve not been running around towards different attractions and what you call the shiny object syndrome. There will be a lot of change with people introspecting and building new goals. And there’s a lot of new things, new initiatives, that people may have taken during the lockdown days, and they will want to continue with them. They will want to utilize their time better, they will want to do a little bit of exercise. So if you can have anything around the personal improvement space, you are doing great. If you can just have an educational product, which teaches people how to do one, two, three items, that is the area of passion for you.
Relationships
The next one is relationships. If you have a passion, if you have any insight around how to improve relationships with people in general, areas like a spousal relationship or family relationships: how to be a better parent, how to be better with kids. Then you go into the abstract area, which is how to be a better person, how to concentrate the energies of your mind, how to be into sound healing, how to heal yourself. So a lot of these energy areas are doing very nice right now. They’re going to continue to do well again because, over a period of time, people will realize that we are becoming as a society very consumer-driven and very materialistic. And during this phase, they will realize that they need to connect back with their higher self. That’s a huge potential area.
Entertainment/Gaming/TikTok
And then there is entertainment, gaming, and TikTok. Many people would have probably developed a passion for games because they’ve been playing them during Covid. Tiktok is huge. It is pure play entertainment if you can have educational content on tiktok right now. You’re going to find a fortune in TikTok because the TikTok adoption has gone up so much just because people are sitting at home. And then they’ve done their Netflix for two hours, they’ve done their Facebook, made calls to all the relatives, checking if everybody is safe and TikTok, as of right now, is a brainless micro-entertainment. It has created a huge amount of audience. So if you can create microlearning and go to TikTok, that’s a huge opportunity.
So these are some of the overarching themes. It will be huge if you can have your current business inside any of these themes. So whatever your current business is, you can set up a layer over it, or you can set up products under it, which are the commoditized products. These are some of the ideas on how you can add income streams.
Absorb Complexity
Information Overload
The world is reeling under information overload today. So what’s happening is that there’s a whole lot of information. People’s curiosity is aroused, but it’s complicated in their minds. They watch so much of YouTube and Facebook that everything becomes complicated in their mind. They end up thinking that all of this stuff is great to consume, but maybe I can never do something because there’s so much knowledge out there. I will never be able to do this.
While in reality, the actionable knowledge is less than 2% of what’s there on the internet. Some bloggers have made an entire living out of talking about 20 different points on how to select a good cell phone. When there are only three points on how to select a good cell phone. So when you watch some information like this, your brain goes into overdrive when you’re like, oh my God, this is complicated. So, what you do is you can absorb any complexity for your customer, whether it’s in the information, education domain, or whether it’s in the domain of the hard product.
I’ll give you the example of Amazon. People say, well, Amazon is an e-commerce company. Amazon owns the largest fleet of aeroplanes in the world. Amazon owns most of the shipping routes. They have their own ships doing freightage. They own the largest warehousing space in the world. They have 600,000 employees in the US. So what they’ve done is they have absorbed the complexity of the customer, which is if the customer wants to buy something, then the customer takes their car out. They go to a different place, invest 20 minutes of their time. They waste an hour of their time looking for something, and finding the exact model they wanted is not even in stock. So they just wasted an hour.
Not only that, the only time when a customer has time to shop for things like groceries, for example, is on Sunday. Going to the grocery store on Sunday is a hellhole because, guess what, everybody is there on a Sunday. You have to stand in a very long line. You don’t find parking etc. So, there’s a lot of complexity in the retail domain. Amazon has sorted that out for customers. You don’t need to worry. Whenever you have time, you can place an order. Instead of you coming to my store, I will get it delivered to you. Not only that, I’ll get anything in the world delivered to you right at your doorstep, even if I have to get it all the way from China overnight. So, in order to do that, in the hard product space, they don’t make anything of their own, but they have figured out how to get anything over to you at the lowest possible price over from China overnight without you ever stepping out of your house. So they have absorbed all that complexity.
iPhone absorbed all that complexity. What you had to do on a laptop, they put it inside a phone and right from the next day, the world changed. So with your product, if you can absorb complexity from your customer, then even with your service, or even with the education, that will be an overarching theme.
Lack of Actionable Structure
If there is any kind of information overload that you can clear out and give people actionable information, which is I can help you do one, two, and three things within 30 to 60 days, I’ll get you this result. Then you have a space in the market. So be in the results market, don’t be in the skills market because going back to how the industry has grown and died, the skills market is not great.