Building businesses around Habits
If you are building a consumer business think habits.
Every successful consumer business uses a fundamental insight into consumer behaviour to exploit the same and profit from it.
Even if you ask a tea vendor by the roadside, he operates on great insight. He knows people have lunch between 1 PM and 2 PM. As the food makes its way down to the stomach, the stomach starts to digest the food. This requires energy. Which in turn takes energy away from the brain which causes people to feel sleepy. People choose to have caffeinated drinks at around 3 PM to chase away the lethargy and keep the brain from turning off.
Repeat use is super critical to building strong and successful consumer business. Take any business, from clothes to food to transportation and on and on. This is even more true when you are an online business. What would Google or Facebook be without repeat use? What would Ola or Swiggy be without repeat use? The need for repeat use cannot be emphasised enough.
Having said that, in order to benefit from repeat use, it is important to be able to identify the need and serve it well enough. When you attempt to change the way people have been doing things, it comes down to being able to cultivate new habits.
If you are working on a consumer business, what is your insight? What habit are you looking to exploit?
Manufacturing a habit is time consuming and expensive.
Think Ola, Paytm or Flipkart.
The quantum of money given away as discounts (read – incentivise the user to change their habit) in order to change behaviour is just phenomenal. They started at a time when the ‘India is the next China’ theory was highly accepted. Today, VCs know that is certainly not the case. Hence think twice before you take that path.
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