Wednesday, January 31, 2007

Topic "Real Estate Case..." - Complete Analysis

Hey guys,

Very very good GD. The focus was on both online business, entrepreneurship and real estate. I am sorry that I have not had time to analyze this before and had to do it too late. The points covered were varied and the number of people participating also was good. So the group does take brownie points as whole. So let me keep my analysis simpler by just giving some summary and additional points. One area of improvement is certainly ‘the start’. I will do a write up on how to handle case GDs in a while and will cover that. In the meanwhile, jump into the latest topic at

I have also tried to give analysis for all the points made in the comments section of the main topic at

1. In an internet business, you have to build volumes first. Only then comes money factor. In the beginning, you cannot go to Advertisers unless you have some data of people visiting your site. It also helps you sell at a higher price. To start with, they can even use Google Ads.
2. They have three types of customers that they need to attract. Buyers, sellers and builders.
3. The idea of marketing to buyers will be word-of-mouth through emails, yahoo groups, community sites like Orkut etc. It can be done from anywhere. Some sellers will also come this way. For sellers, may be they can tie up with a company like “Free Ads”. Advertisements from buyers come only when you have enough traffic.

Markets they should cater to
1. They should cater to Bangalore market as it is more internet savvy. Note that Bangalore need not be the location for this reason
2. Builders themselves need to have websites if they want to advertise here (That adds to the point of savvy market)
3. You should cater across locations because website development cost does not increase by this choice. Also note that the marketing cost to sellers/buyers also do not increase significantly. So why not have all cities.
4. Lets not even talk about them sticking on to their jobs. You can’t put half hearted efforts into a new venture especially for the greed of a month’s salary. Convince yourself before you jump. But once convinced, make the jump

1. They should not be hiring experienced people for website development. What is their own experience worth otherwise. Since they have to hire freshers, salary difference between Bangalore and Jaipur is not significantly different. It could be in the range of 2000 per person per month leading to 16000 total at maximum
2. The cost of rental is also not significantly different across location. You can get similar rentals in Bangalore if you take office space in outskirts. Again a total difference of 2000 per month.
3. Apart from ‘sales to advertisers’, rentals and salaries are the only two costs. Hence location is actually not making a difference. Go to the last point for a decision on this.

1. If they really need money, why shouldn't they go for a loan. That way you need not give away equity. Go to next point to see why.
2. They may not want significant money to start with. But they should go to a VC after the basic stage not just for money, but for the experience and expertise in managing such businesses. Note that these people are good in technology and project management only.
3. You need to go at stage 2 since you would have more clarity on your idea

Parting Shot
Note that once they go in for VC, the location decision may not rest with them alone. Especially since they are not gaining much by moving to Jaipur and VCs are usually biased for Bangalore (helps them to sell it better later. A Bangalore based IT company sells better than a Jaipur based one), Puru and Shuru may not have a choice.

Some time pass
They can have website development office in Jaipur and marketing office in Bangalore. One headed by Puru and other by Shuru.
Should they be targeting NRIs by giving value added services? Many NRIs buy through brokers in India. So you can make the brokers/sellers meet NRIs. Or NRIs can check the website and tell their parents about the picks they should check out
Allow users to put photographs so that people don’t have to visit the place unless they have a basic interest



Post a Comment

<< Home