LINKINDIALINKINDIA
BUSINESSBUSINESS VENTUREVENTURE CONCEPTCONCEPT
Submitted by-
Neetu Chitkara
Co-contributors: Amlan Chaudhuri Naresh Kumar Dubbudu Parvej Kumar RaveshC
Basic premise for plan Core business vision
OR
1 "To pprovideacommon pplatform and infrastructure E
IndiaIndia'ss untappeduntapped ruralrural potentialpotential
for various applications targeted at rural populace B
•India has ~ 611,000 villages with a population of ~ 750 m.
and distribute the costs across the different
USIN
Large untapped potential exists in rural India esp. in those
service/content providers which now find it
17% village that account for 60% of total wealth
feasible to enter the rural market due to the lower
costsinvolved" EE
yg p p (•Buying power is not a problem (Rural market sales > Urban
SS
sales for FMCG & Durables)
Contribution to sustainable development
•Information & Communication Technology (ICT) can help tap V
the real potential of rural India ISI
Optimum resource utilization: More number of
OO
•VariousVarious ICTICT initiativesinitiatives (b(byy GovtGovt..,, Companies,Companies, NGONGO's)s) havehave
applilicatitions per kikioskk as comparedd tto dddediicattedd ffacilitiilities
N
not realized the maximum potential since entire capital
expenditure has to be borne by one entity
Faster Growth: Classic elasticity problem- as price of
2 setting up decreases more and more
Sharing of fixed costs best way to exploit potential of
companies/manufacturers willing to set up shop
rural opportunity
•Demand & willingness to supply services exist but high Greater convenience for rural consumer: Various
capital cost is the barrier needs of rural consumer from procurement/selling of
goods to interface with government can be carried out at
•We can act as indirect channel for this cost sharing by setting a single place
up infrastructure and leasing it to run specific applications of
different comppanies Flexibility to use system for various public welfare
uses as well: Communications system & infrastructure
3
Indirect channel of cost sharing through setting up own can also be used for public welfare such as e-health, e-
education etc.
facilities and leasing it to run multiple applications
Providing cost effective channel to service providers to tap rural India's potential
Source: Census 2001, NCAERP
Product/Services supported Product/Services supported (Continued)
ROD
ƒƒSourcingSourcing ofof cracrafftt itemsitems foforr exportexportss anandd agricultuagriculturalral produceproduce UCT
on a large scale in an efficient manner with fair price for the ƒE-seva initiatives to bring Government services to village
producers like bill paying and registrations etc /S
ƒCashless payment and immediate disbursement for
ƒOutsourcing SME manufacturing activities to villages; a ERV
NREGA like initiatives
virtual modular manufacturing business.
ƒTiming of officials' visits by pooling requests from villages
ƒSelling of durables, entertainment and other requirements ICEDESC
aroundaround
by pooling of requests
Value proposition
ƒVirtual employment exchange for rural jobs enabling
efficient search for employers as well as employees RR
ƒCostCost effeffeectctiivvee educationeducation toto ruralrural ppopulaceopulace byby profitableprofitable EE- Social Imppact IPTION
learning initiative •Stopping 
exodus to cities 
ƒMeeting small base educational needs through pooling by creating 
them into economy level opportunities in 
villages
&
VV
ƒEtExpert didiagnosiisandd medidicall superviiision ththroughh E E - ALUE
health, a profitable intervention to doctors to serve from
urban areas
ƒServicing of infrequent medicine buys through pooling High SROI P
ƒIntegration of micro health insurance schemes to build
& R
bigger and sustainable micro insurance base OO
HighHigh ROIROI
POSITION
Villages
Business
•Increased  
ƒMaintenance of village economy on the kiosk to earning 
•Creation of new 
reduce/eliminate internal cash transactions opportunities  markets
•Improved  •Better input 
ƒMobile bank branches serving pooled banking requirements
access to better  sources
ƒInterface towards cashless transactions with outside world living
too
Opportunity to provide various services that produce high ROI and high SROI
Source: LinkIndia ResearchI
Target markets Competitors (to name a few) NDU
Attractive Market
Aims to provide cost-effective
~ 20,00020,000 villagesvillages withwith populationpopulation > 5,0005,000 STRY
directdirect deliverydelivery channelchannel foforr
~ 80,000 villages with population between 2,000 and 5,000 serving rural markets
Relies on rural entrepreneurs to bear the cost/risk of setting
States with high per capita income and high population up kiosks. Not the best model since investment of Rs 60,000 ,
density (in rural areas) - to be targeted first or more is huge sum for person in rural area; even though T
bank loan is made available, ultimately entrepreneur only AA
1800018000 RGETM
has to pay for it and therefore must recover it from operations
Specializes in e-governance
15000
& ICTD (Information &
communication Technologies
for development)
12000
AA
ee
ThoughThough professprofess inteinterreestst forfor bubusinesssiness appapplicationslications asas
RKETS
well, most work related to public welfare commissioned by
9000
government but since government has only limited
funds, limited impact, growth for the business model
Per capita Incom6000
Key Success Factors ,
COMPE
3000
ƒNumber of villages connected
ƒNumber of services provided
0
0 200 400 600 800 1000 TT
RuralRural populapopulattioionn densitydensity ƒWellWell integratedintegrated systemssystems fforor smoothsmooth ffunctioningunctioningITION
ƒContinuous up gradation and maintenance
Haryana, Kerala, Punjab, Tamil Nadu and West Bengal -
States that meet the qualifying criterion
ƒUnderstanding customers and providing customized
solutions
Target cluster of villages, nearby towns rather than individual
ƒStronggp tie ups with apppplication pproviders
villagesillages (similar(similar ttoo HHubb andand spokespoke mmodelodel
Large untapped market exists; growing industry
Source: IndiaStat, LinkIndia ResearchB
Model Revenue and cost details
ASI
C
•From service providers (can be '% of sales per kiosk' or 'fixed
O
amount per kiosk per year')
Service
Central Regional Village
Rural •From users: Possibility of nominal charge for accessing service PER
Provide Office Office Kiosk
Market
rs
•Capex - Dependant on number of kiosks ( AA
hdhardware, essentitiall softftware, fifurnitture, space ettc.)) TINGM
•Operational cost: Salary, Electricity, IT application
Our firm provides a cost-effective channel for all the development, IT support, Sales & Marketing etc.
service providers who are waiting to tap the rural market
OO
Process Differentiators
DEL
ƒ Village would be surveyed and segmented on the Why ICT initiatives fail Solution
basis of rural ICT demand estimation
Absence of useful  Provide variety of services. Partnership for 
ƒ Kiosk will be set up in the selected villages
content content development. Local Languages
ƒ Operator will be selected from the village and trained
Lack of awareness 
ƒ Sales and Marketingg team will gget clients ((service Reggular awareness sessions byy Kiosk opperator
among users
providers) from identified areas who are willing to
provide services in rural India Inadequate operator 
Process for Kiosk operator selection & training
selection & training 
ƒ Applications will be developed by based on needs of
service provides and keeping in mind user segment Services for only few 
Provide variety of services
ƒ Promotions will be carried out in villages to encourage segments
usersusers
ProjectProject ManagementManagementStrongStrong ManagementManagement capabilitiescapabilities
Other considerations: Partner with Govt. to provide e governance 
Lack of  Govt. Support
ƒ Hardware (in kiosks) would be company-owned services
ƒ Software development & maintenance will be
Unrealistic Financial  Infrastructure sharing (Low cost of 
outsourced
Model deployment) 
ƒ Communication technology will be used on availability
InfrastructureInfrastructure issuesissuesPowerPower backback upup usingusing SolarSolar
bibasis ((pay per use) )
Key differentiators will make us market leader 
Source: LinkIndia ResearchF
Revenue and cost estimates Growth estimates
INA
No of Kiosks
NCIALS
(i(inn RRss.)) ••FromFrom applicationapplication providersproviders
12,000
Mktg salary 200,000 per person per year •From users (not included in
10,000
calculations as it will be marginal)
Revenue 10,320 per application-kiosk per year
8,000
Capital Cost 60,000 per kiosk 6,000
Op. Cost 60,000 per kiosk per year 4,000
•Capex
AdAd costcost 50,0050,0000 perper 1010 secsec sslotlot 2,000
•OOperational cost
-
•Sales & Marketing cost 12 3456
year
Five year financials Cash Flow
Driver Initial Outlay Year1 Year2 Year3 Year4 Year5 2,500
No of Kiosks 1,000 1,585 2,512 3,981 6,310 10,000 2,000
No of Applications 6 7 9 10 12
No of Ad slots 100 50 50 50 50 1,500
Millions
CapexCapex 60,,,000,000 35,,,093,592 55,,,619,594 88,,,151,116 139,,,710,104 221,,,425,593 1,0001,000
Revenue 80,028,293 152,346,176 290,014,397 552,087,050 1,050,982,687 500
Operational Costs 77,546,796 122,903,389 194,788,744 308,719,355 489,287,203
Ad costs 5,000,000 2,500,000 2,500,000 2,500,000 2,500,000 -
Mktg Costs 1,200,000 1,441,349 1,731,240 2,079,435 2,497,660
12 345 6
Total Costs 60,000,000 118,840,387 182,464,332 287,171,100 453,008,893 715,710,456
ChCash iinffllow tto ddatte
Net Cashflow (60,000,000) (38,812,094) (30,118,157) 2,843,297 99,078,156 335,272,230
Cash Outflow to date
Cash inflow to date - 80,028,293 232,374,469 522,388,866 1,074,475,916 2,125,458,602
Cash Outflow to date 60,000,000 178,840,387 361,304,720 648,475,820 1,101,484,714 1,817,195,170
Net cashflow to date (60,000,000) (98,812,094) (128,930,251) (126,086,954) (27,008,798) 308,263,433
IRR 35%
Highly attractive project -IRR of 35%, Breakeven in 4 yrs
Source: LinkIndia ResearchEND OF DECK