What inefficiency are you trying to solve with your startup?
Which goods and services were more efficient 10 years ago? That is a difficult question to answer. This is because all efficiencies that have been created are for the future. And this is unique to human beings; they are hacking efficiency through different goods and services.
So, recently Kunal Shah, founder of Freecharge proposed a new theory which if understood correctly may help many businesses in various fields and help them prosper. Here’s a glimpse of what Δ 4 is all about.
Efficiency
The Conventional law we follow, All efficient things exist in future, all inefficient things exists in past the rate at which this is changing is really really fast.
Efficiency Scoring: Any business upgrade we do, which is efficient as compared to previous business model/product which makes getting back to a previous way of business moderately irreversible. an example is Online and Brick & Mortar shopping. To compare all this with the scoring system from 1–10 is Efficiency Scoring for any business.
The Theory
Kunal says,
If Efficiency Scoring (Number of customers who adapts the new model and those who sticks to the old one) is more than 4, It carries a huge potential to be successful
Factors that ensure you have a Delta 4
1.Once the business or a product reaches this stage it’s irreversible growth which leads to the success of the product. you do not go back to the previous inefficient system, whether it is booking an Ola or Uber or booking tickets and paying bills online.
2.UBP v/s USP – While USP is a unique selling proposition, UBP is a unique brag-worthy proposition. Citing the example of TrueCaller, Kunal says that the TrueCaller app wasn’t downloaded because of ads or any marketing, it was all word-of-mouth. “Everyone is trying to get you to move away from the inefficiency and those who have, brag about it to others who haven’t,” adds Kunal.
3.High tolerance – While there are glitches, the user behaviour doesn’t change. You might have faced problems with IRCTC, but that doesn’t mean you will not go back to the ticketing counter.
“If you do not have a Delta 4, it becomes difficult to actually create wealth. If you take the example of buying shirts online v/s buying shirts offline, you see that it hasn’t created a Delta 4, because people are still wary of it and many don’t see buying offline as being inefficient, and this, therefore, doesn’t unlock a pot of gold,” says Kunal.