Tuesday, March 3, 2009

Learning Experience India 2 - 5

Dear All

This is the final Learning Experience India 2...

First of all I want to thank you for your kind feedback and also your own personal learning in relation to mine. Learning is a dual expressway, it can never be a single lane single direction road. The wider the dual expressway, the greater and faster the learning process.

Some of you wants to forward this series of learning experiences to your friends and colleague, I have no objection after all learning is about sharing.

I started this trip with two possible prospects and reviving old relationship.

On the propects, I have make some headway but it is still some way to go before closure. After so many years of business dealing, I conclude that all deals can be closed it is to what extend of the closure. As a consultant it is the daunting question of "Is it worth it?" Some deals require a lot of effort and some deals require reasonable effort and there will never be one that do nothing and get paid :). The 90% of the issues faced in any deal involves people or more specifically expectation. Only 10 % is technical issues to resolve.

Irregardless of whatever business you are in, managing expectation is never easy. If the client expectation is high, you have to ask yourself whether you can deliver. If their expectation is low then your remuneration or return may not be forthcoming. In any business whether you are in consultancy or in trading of widget, you have to put the client's expectation in line with the delieverable.... then you get satisfaction, better off if you can deliver greater than his expectation.

Expectation has a correlation with respect for you. The person you are working with must have your respect and only with respect will he/she listens to you. With respect, the expectation can be better managed. I come to understand also that respect has to be earned.

This trip has been very successful in more ways than one. First I get a chance to meet some of you and update on the happenings in your life. Some are happy with your job and some not so happy. My view is that to bear with the job for some time so as to built up your portfolio of experience. Four or even six months experience is just too short to be accountable to any future prospectus. As for those who have tie the knots or going to tie the knots.... my congratulation.

Continuing from the two prospects, my query "Is it worth it?"..... I have to walk away from one and focused on the other. Walking away from a good prospect job is never easy but as a business you must always know where is your limitiation. Keep the relationship with the client and be honest that you will not be able to help them......there will be job from them some other days. There is an old song and the chorus go like this.....

"You must know when to fold them
You must know when to fool them
You must know when to walk away
You must know when to run

You never count your money when you are sitting at the table
You can only count them when the deal is done."

From the song "The Gambler" by Kenny Roger.

Before I close off this learning experience, one of you asked me since I know India and if I have all the money in the world to start a business in India today..... what would it be.....The answer (not in order of perference)

1. Banquet Hall / conference center
2. Schools and education
3. Budget hotel
4. Retail training & consultancy
5. Geomancy
6. Pan masala
7. School bus
8. High end furniture
9. Infrastructure construction
10. to be continued........

The next Learning Experince will be in .......

Regards and best wishes

Koh Seng Choon

Learning Experience India 2 - 4

Dear All

Leaving Mumbai going back to Delhi.... In Mumbai I met up with a new client, who was introduced to me for the first time. Coming to meet with client, one of the challenges faced by most people is starting a conversation, especially in business where a poor or wrong start off can mess up a meeting.

Let me share with you a little instance, it happens during the World Cup held in Germany a few years ago. A young Malaysian professional approaches an Indian business man. It is their first meeting. He started the conversation about the state of the World Cup - the game , the top scorer, the poor performers of the stars etc. The monologue went on for sometime and eventually annoyed the Indian. You see, to an Indian there is only one World Cup and that is the Cricket World Cup, the other World Cup which the rest of the world is watching is not so important :) The Indian is passionate about his cricket and when the conversation started he was trying to expressed that the Cricket World Cup is the more popular and exciting while to the young man Soccer is the main World Cup watched by more people than the Indian sub continent put together. It went into a bad argument.

The introduction did not go on very well.

I called this introduction, the art of small talk. It can be learn and I believe practice make perfect. It is an art as there are many ways to expressed this artistry.

In my approach, the art of small talk is "TAT / TAY / TAM" (sounds good not very sure what the meaning if it is expressed in Hindi or Urdu or Tamil ?)

1.TAT = Talk about them
The THEM in this instance is the place, the environment, the country, the current affair etc. General topics, non discretionary and non opinionated. In the case of India it would be Cricket, Bollywood and Cars.

2.Talk about you
The YOU is the client/customer and the topics can be family, education and health. The approach should be sharing. Never patronizing. The no-no topics are sex, politics and religion :)

3. Talk about me
The ME is about yourself. This will not be too difficult, however customization is needed. Have a full version of about yourself that can be played like a recorder in your mind and when it come to TAM, just customize it to the situation and the objects intended.

There is no sequence to TAT/TAY/TAM. It application depends the situation and event. But to do well you need to do your home work. Read, watch and analyze. Information is every where. From the airport newspaper counter to observing the traffic on your way to your visit. One little trick worth noting is the office and desk of your client / customer. People put this info about themselves all over their working habitat, you just need to see it and talk about it.... like the photo of the family, the souvenir from Thailand etc...... the conversation piece is endless .... even the clothing of the person is a conversation topic if you know how to do it. A desk or office without any souvenir is also a topic for small talk....Think about it :)

Tomorrow I return to Singapore and will conclude on the experience of this visit....


Seng Choon

Learning Experience India 2 - 3

Dear all

Touch down in Delhi and drove straight to Jaipur. They are renovating the airport.

I am so glad that NH8 is finally finishes and even have tolls along the way. These are good signs and bring me to the subject of oversea business development......

You may wonder when do people start investing oversea and where do they go. The when is not too difficult to answer, the difficulty is the the where. The world is a big place and for small business starting to built business oversea is not cheap. A scouting trip to India will cost at least USD 5000 per person for one week and this is even before you get any business just exploratory.

Now where do we start. I always feel that the stakeholder of the company should just take a holiday (have fun and also business). With the purpose to understand the market you want to enter into. You can read all you like about the country but the real understanding comes from observations and appreciating the environment. You may argue that going on holiday is very different from going on business trip. True but al least in the exploratory trip for the stakeholder there is some fun and pleasure which comes out of the trip. If he decide not to come to invest, at least he experience some pleasure out of it.

There are several tell tale signs in a the country you should look for in a country. Taking the example of India. For the businessperson, you must look beyond the child beggars tugging your sleeve on the street, the dirt and mud pile on the street, men pissing on the road side, the many bumps on the road and the shanty housing you see on the hillside.

For the intelligent investor they look at (this is my personal perspective)

1.Plane trains and people transport
The first impression of India is the airport. On this trip I have the good fortune of seeing three airports. The Delhi IGI Airport is a renovated version with new coat of paint and shining cladding on the facade. The Jaipur airport on a verge of a new building and Bangaluru airport, a brand new airport with its individual chute, sparking marble flooring and more important the impressive and extensive duty free shops (something that India Capital's airport is lacking).

Delhi is building its Metro, Bangalore is starting the process and Jaipur is starting to talk about it. There is a need for people's mobility to be address, meaning that there are enough economic activity and will to do something for the economy. Like Beijing, Shanghai and its second tier cities like Tianjin, Qingtao, Chengdu and even their third tier cities, which already have their mass rapid transportation. This is for within the city and not about the inter cities people transportation.

For the budding investor, these two signs tell you to enter that market - not before and maybe the after is a bit late.

2. The youth in a hangout
I believe the youth of the country is the country's future and as such look at the youth population and what they do. Go to the shopping centers, the clubs, the playing field and witness their activities. The youth of Singapore is no different from the youth of any other countries. They do hangout somewhere. Meet with them, talk to them and feel their enthusiasm or their frustration. This is the best form of market survey. Talking to businessman never always get a good impression :)

3. The magazine in the bookshop
A magazine stand in any country is a good sign of the information flow of the country. Many people feel that information are from the internet. First of all the people that wrote on the internet are a certain breed of people and secondly internet accessibility has not penetrated to the lower income and older generation. Magazine and newsstand on the other hand caters to the masses. Just try standing in front of the newsstand at CP in Delhi or the newsstand near Victoria station in Mumbai. Just the scope of topics is mind bogging. You do not see this in Vietnam or Myanmar. It is the wealth of information make available to the masses. Just the number of newspaper available in India is beyond comprehension.

4. The LV factor
LV stands for Louis Vitton and where LV goes, there must be people who can afford them. So is the Gucci, the Mont Blanc and the Ferragamo. These brand only enter the market legally in the last five years. I remember the first Mont Blanc shop opening in the Delhi Taj with full fanfare and now they are everywhere. The LV factor is the sign of wealth and the number of wealthy people who wants to buy them. The LV factor has three stages. Stage 1 is when they are only available in hotel, Stage 2 is when they are appearing in shopping centers and Stage 3 is when the fakes and imitation start appearing in the market. This tell you that even the lower and some middle income can afford it - the wanna-to-be market....... :-)

5. Preservation of its heritage
The Forbidden City started it renovation work about ten years ago. When a country starts to look after its heritage, this is a time to go in. To draw a parallel, its it like the family starting to renovate their house, the parents must have money to renovate, making their house looks better. Likewise the government of the country not only have the money but also the will to preserve their heritage, it can only be a good sign.There are many world heritage sites where the country where it is based are not and cannot do the preservation. That country is either not ready for investor or not willing (maybe too corrupted) to even preserve their heritage. Look at the country that are doing well like Japan, Paris et al. I am just waiting for the Red Fort to be brought to their excellence some day.

This is a long email....... we will talk about the art of conversation next ..... to be continued.


Seng Choon

Learning Experience India 2 - 2

Dear All

Continuing from the last email.....

The two projects has one thing in common - NRI.

There are two categories of NRI. The first group are those who have spent some time in India and then for various reasons gone aboard to live and work. Some could be following their family oversea and some who went aboard to study and then stay on to work in the foreign land. The second group are those who have never stayed in India or left when they were just babies.They have no idea of India other then what they have read or saw on television. Both are very different in their perspective of India. For one thing they are not well liked by the native Indians.

This dislike is not unique. The equivalent in China is Hwa Cheow or Oversea Chinese. These Oversea Chinese faces the same problem when China opens up in the early 1970's and 1980's. The native Chinese have certain "misconceptions" of these Oversea Chinese and initially they were perceived to be wealthy and can bring experience to jump start the Chinese economy in the early days. In a way this is true, at least to the extend that the Oversea Chinese is the impetus to the change in China today. I should know, I was treated as an Oversea Chinese when I went to China in the early 80's. Over the years I have seen the line between the native Chinese and Oversea Chinese become less and less apparent. The native Chinese too starts going oversea for holiday and work etc hence the distinction become less obvious.

The NRI brings with them the experience and idea to rejuvenate the economy. In these two projects, one was a nephew returning to the Uncle's business (the Uncle do not have a son just daughters) and come up with the idea to turn a plot of their family land to a golf resort rather then another shopping center. The other was a bank where the younger brother who left India for the last twenty years, worked with some international bank, return to the family business and felt the need to have strategic alliance with a foreign bank in order for their family bank to grow. He brought the idea of securitisation to the family board of directors..... very similar to the current sub prime issues in India :)

There are two personal characteristics that I found in these NRI. One is impatience and the second is arrogance. Impatience in wanting to change and arrogance in their attitude towards the native Indian who has not been "exposed" to the "outside world". These two characteristics caused friction even within the family business.

Some of you are the NRI.

Lessons learnt is that change takes time and patience is a virtue. As for arrogance.........

Tonight I fly to Delhi and then tomorrow drove down to Jaipur. I have never been to Jaipur and I heard from you lot that it is a beautiful place. I will be back to Delhi on Sunday for a few meetings and then fly off to Bangalore on Monday.

My adventure begins tonight. To be continued........

Learning Experience India 2 - 1

Dear All

Business is about relationship. Over the years I have come to understand that I get consultancy work through recommendation. Words of mouth recommendation is a very powerful tools. In order to get recommendations two things must happen. The first one is doing a good job and the second is keeping your good work in the mind of your customers. To do this you need to keep in touch with them at all time. This even apply to customers who were not happy with your work, you will be surprised that over time these customers can even be won over. For one customer who did not appreciate my work as I recommended that he step down from his GM position to give way to his younger brother who is more capable for the position, over time he appreciate me for my follow-up with him. I tried to make sure that if I "push" you off the cliff, I have a airbag at the bottom of the cliff to cushion your fall :)

To keep the fire burning, I have two methods. One is remembering people's birthday and sent them sms to congratulate them and the other is to meet with them occasionally. You will be surprise as one grow older the little greeting from someone on his/her birthday can go a long way.

This is the introduction to the Learning Experience India 2.

Yes I am going back to India from the 25th July to 2nd August. Like the previous Learning Experience, I do have several leads to work on in this trip. (My trip has to pay for itself, at least cover the cost) but the main purpose is to renew some relationship that I have forsaken for some time.

Relationship is a function of TIME and EVENT. With time one can built and strengthen a relationship, in business there is seldom "love at first sight". While happenings or events in the course of a relationship can strengthen or weaken a relationship. Let me give an example, the recent tsunami brought four working colleague to help out at the disaster. There was limited water and facilities and the four acquaintance through volunteering at the disaster site, strengthen their relationship in the course of the two months. Upon their return the four person decided to resign from their company and start up a child care center....... It is just like company organizing team building event at resort to strengthen a relationship...... In your case to strengthen your relationship with your customer, create events like in a restaurant give out some sample food for food tasting or inviting your customers for a golf game :)

This trip covers two key projects- a golf course and a bank.......to be continued

Learning Experience India 1 - 4

Dear All

This is the last and final learning for this Indian experience and I hope you have enjoyed the sharing.

On project 1, I am very pleased that I have manage to fixed up three potential candidates for acquisition. It is actually five. Two in Delhi and three in Mumbai. There are several others that I rule out. Those are generally the ones that are just "testing market" - wanting to know what's the potential of their business. Some of them I felt are rather too small with no good management and there are those wanting unrealistic valuation of their business. I want to share with you about valuation. In all the years I have been in this profession. Valuation of a business is always the most challenging. There is no right or wrong method and what you learn from your MBA classes is just the foundation for you to be creative/flexible in negotiation on the valuation. Methods like DCF or PE approach personally is just to support your proposed pricing. For the sector that I work in (the small and medium enterprises) NTA + goodwill is the best approach. Personally I conclude that a lot has to do with your negotiation skill. I have seen negotiation where the NTA is only 40 million ringgitt and the eventually sale is slightly over 92 million ringgitt and it all down to a old but shrew lady's approach in negotiation. Only advise that I can share with you in negotiation is that do your homework and take note of all the little details. Need not remember them by hard but know where to them them. Also always take note. On this project I will be beck on the follow-up in January. This is where the interested buyer meet the interested seller. First impression is very important. As I am working for the buyer in this instance, I must project the buyer in a very professional & sometime benevolent if it in about a family business.

On project 2, I was a bit disappointed. Having spoken to several contractors and developers, India's tier 1 cities is still not ready for prefab in a big way. Firstly cost of labor is cheap here, road system is not good enough to transport large slab and finally the general public still have poor perception of prefab buildings. In this instance, I must be ready to drop this assignment even though I can carry forward and charge the customer for feasibility report. As a consultant, people pay you for your knowledge and if you feel that at this stage the market is too early for your product, it is better to be honest with the clients. You win some and you lose some. Being a consultant does not mean that you have to take on all the work. Leave some for a later date :)

On project 3 however, I was lucky. I have an accountant friend who brought to me a very established book distributor. I thought I was going to give up on this assignment. The lesson I want to share about this project is the mindset of the company owners. This business turnover US$20m and its profit after tax is only US$200K. There is under declaration over the years. I cannot tell you more. The lesson you have to take away from this business is that under declaration has its pro and con. When it come to selling or raising money for the business, you really have no ground for argument as it is all book value that valuation is created. I have met them and discuss their financial. The owner was disappointed with the value of the business.

I guess this is the end of the learning experience

I am now sitting in Mumbai airport typing this email. I slept over in the lounge for five hours because Air India flight back to Singapore was cancelled :)


Seng Choon

Learning Experience India 1 - 3

17 August 2008


On project one, after a series of telephone conversation, I have come to one positive lead. A chain of restaurant chain that has a small catering business and a good branding in Delhi. Personally I always look for business with good branding, it is easier to develop the business further on acquisition. I am still lacking a good lead in Mumbai. I always thought that Mumbai will be easier to find restaurant chain interested in expansion and also there will be more family run business looking to corporatise their business. So if you have any lead of F & B business in Mumbai , do let me know.

On project 2, the prefab industry I will be visiting one infrastructure contractor in Delhi and a developer in Mumbai. Reason is for me to understand construction market in India. I normally do this ground research on top of my other desktop research prior to my visit. It helps when you are selling this project to my Japanese client. As a consultant you are dealing with information and hence you have to be well brief at all time. the question is what info are you fishing for. This varies with different clients. Generally all info are valuable is a matter of when you use them. There will be a follow-up to this project as I will need to bring the Japanese to visit these people later.

On Project 3, bookstore distributors are hard to find, as this is not my strength. This is a big market and yet it is also a close market. There are few major players in the market, generally they are small family run business. Even for book distributors there are many small business who tie up with printers and publisher. For your info, there are about 3000 printers or publishers just in Mumbai alone. The major players are doing so well that they are not keen to talk to foreigners. There are also finanancially able to modernize their setup and some of them are doing very nicely like those you see in Delhi CP and Mumbai Narimun Point. I will maybe have to focus on those business who want to move into the book business but does not have the expertise, maybe Pantaloon etc.

The schedule is by now 70% confirmed.

On 3rd meeting with a hotel group
On 4th morning meeting with client who wants to develop business in China, I need to know how their product will fit into the China market.
On 4th afternoon meeting with infrastructure contractor on the prefab
On 5th afternoon meeting with restaurant chain
On 5th night leave for Goa
On 6th morning visit to a hotel project to discuss on funding requirements
On 6th evening leave for Mumbai
On 7th afternoon meeting with developer
On 8th morning visit to cafe business
On 9th return to Singapore

To be continued....


Seng Choon

Learning Experience India 1 - 2

August 16 2008

Dear All

Finalising the date of travel, I will now have to fixed the appointments and meeting. Given the time constraint, meeting to me in very important. I have to be clear of my objectives which is to find the business to work with in the five projects.

In my business model I come to realise I need local resources. Hence in various countries I will have people who can help me to do the necessary research, networking and set up the various meetings. Finding these people takes time. After eight years of working in running around India, I have set up a base in Delhi, Jammu Kashmir, Mumbai, Pune, Kolkatta and Cheenai.

The resources in this areas are of two categories. One are very distinguish members of society (with the network) and the other are young people who help me with the research and logistics. These young people are not just any body, they themselves are GM and CEO who I have trained and coach for the pass years. Whenever I got a project I will liaise with these young people and they will take time out from their work to work with me. To them it is a valuable learning opportunities. For example, in my the last trip I have to bring a group of educationists to Chennai. The person (CEO of a drug company) who work with me in Chennai, took time out and provide the consultancy input. He got to learn about the education opportunities in China. There is a selection criteria for me to find the local resources, most of these are graduate from US and UK and they are all in their family business. There is a financial incentives for them as well (not that it matters), we share on the consultancy fee.

For the five projects, I will sent out the feeder to these people in Delhi and Mumbai, to get them to give me contacts which I will then followup with email or phone call to fixed appointment. I will also need to make cold call (remember the Who's Who game we play in class). Fixing Indian appointment for me can be very difficult at time. One is the language issue and another is that Indian boss does not like cold caller. Hence having someone to help "open the door" is very important. By the way speaking in a foreign accent and being a foreigner helps.

One week before my departure, my secretary will have finalise on at least 50% of the appointments

Learning Experience India 1 - 1

Dear all

Some of you wanted to know how I carried out my M & A work and business development in India.

So I thought in the course of next two months, I will conduct a virtual platform for you to follow me on my next projects in India

M & A is a specialise work, basically looking for businesses who want to sell and businesses who want to buy. For this experiment we will focus on India.

Planning Stage

Prior to going to any country, I will do the groundwork and check out businesses who are interested in India. This business can be from any countries outside India.

In this exercise for India, I have started with four potential projects and one in closing stage of negotiation (this will be the one that will pay for the expenses of this trip).

Project 1 is a food catering company based in Singapore with operation in China, Thailand and Dubai. Their customers are corporate function, contract catering (for school and business offices) and food court. They also own a restaurant chain. They are interested in finding a caterer / restaurant chain (listed in stock exchange or otherwise) who are keen to find oversea partners to help them to grow their business.

Project 2 is a Japanese company who supply connector parts for pre fabrication construction. I will be looking for precaster and distributors who are currently supplying to the prefabrication construction industry. Contractor and developer who are looking to diversify into supply will also be considered

Project 3 is a listed Singapore printer and publisher who owns a chain of bookstores in this region. They are looking to set up business in India through acquisition. My task is to find them the possible candidates.

Project 4 is an Indian company who wants to set up business in China and my task is to finalise on the mandate for this project. I need to know the scope and can they afford to pay my fees.

Project 5 is an engineering hardware company supplying bolts, nuts and bearings. This project is in the final stage of company formation and setting up the sales team to market the company's product. This is to prepare the business plan for the new startup.

My next task is to plan out the itinerary. I normally try to cover as many cities as possible in the shortest time. (Unfortunately I don't always get to do much sightseeing)

For this trip I plan to be in
- Delhi from 3rd to 6th Dec
- Goa from 6th to 7th Dec (to see a hotel chain)
- Mumbai from 7th to 9th.

On all my trips I will also try to meet potential client and also my reqular clientele, so that they know that you are still in business. Very important.


I always look at M & A as like going shopping. You must first of all know what you want to buy and how much is your budget. The starting to look for project is always the hardest and when I first started I get a lot of enquiries and not all can turn out successful. The success rate was for 15 - 20 enquiries maybe one will be successful enough to cover your cost. Nowaday my success rate is better. With six enquiries I will get the commission from one of them. What I do differently is that I am more selective in attending to enquiries. By the way the six enquiries or projects that I follow up can be over two to three years. In some of the project, I get to do the business development work that follows the acquisition. This help with the expenses.


In this learning experiment, I will allow you to ask questions so as you understand the technicality of M & A and business development work; and I will try to answer them as frankly as possible. To me this is real time learning and I hope you will benefit from this experiment.

I have set a time frame for this learning from now to end December as I progress to India and back.

I will update you on the various happening in the build up to the trip and also the follow up on my retrun.

Some of you may find this learning quite unique...... is it not what entrepreneurship is all about :)


Seng Choon