When I started my company M/s HomePlanGuru.com, I was not sure about how to do the pricing.  I was providing all the plans (viz Floor Plan, 3D Plan, Electrical Usability Plan, Plumbing Usability Plan, etc) at a flat Rs.20/- per square feet.  This means that if a customer intends to buy/build 1000 sq.ft home, he should pay Rs.20 x 1000 = Rs.20,000/- for all the plans I provide.  For first six months, I was not able to sell my concept at this rate.  Then I realized the mistake in my pricing model when I heard about ‘The Bottom of the Pyramid’ model by C K Prahalad.

In India (and many other developing countries, I guess) people don’t have the habit of planning their dream home.  They find it as ‘waste’ expense to do planning.  Not only that, the architects used to charge anywhere between Rs.25,000 to Rs.1,00,000/- for the simple drawings.  This was another reason for people not going to Architects and plan for their dream home.

I changed that model through my new venture HomePlanGuru.com.  I understood that people won’t mind paying in small amounts.  If they are happy with the initial plan, then they won’t mind paying a bit more for the plans.

I priced my services in such a way that even a lower-middle class person can afford a simple plan.  For example, my service charge for a 2D Floor Plan is just Re.1/- per sq.ft which means for a 1000 sq.ft. home, it is just Rs.1000/-;  for 3D Plan it is just Rs.3/- per sq.ft which means for Rs.3000/- one can get a basic 3D model of their dream home with all the furniture, fixtures, etc placed in 3D which they can walk-through from their own PC/Laptop using FREE Google Sketchup tool.  I also took a bold decision of publishing my service charges for all the services we do in our website because of which the customer feels confident about how much they would have to spend for planning.

Thanks to C. K. Prahalad who helped me understand the ‘Pyramid’ model to price my services.  It is unfortunate that he is no longer physically with us though he is there in our minds.

One month back I gave some small gifts to my ex-colleagues through a friend. Since it was more than a month and only a few collected the gift from the anchor person, I wrote an email “Collect the gift before 24th March after that it won’t be available”. To this, one guy replied, “Viru, I’ve never heard of timeline for a gift”. Even though I replied with some inane excuse, his sentence worried me and made me think. Yesterday I went to my Alma matter (Madras Institute of Technology) to attend the Alumni Meet. There, I got an answer for the thing that worried me a lot.

Most of us are in touch with our school and college friends. But once we join the corporate world, the degree of closeness starts reducing when we move up the ladder. The reason is very simple. In a corporate company, the pyramid structure is followed. If a person joined the company after college, initially he/she along with his/her other batch mates will get promoted to the next level with a time factor (with less weightage on performance factor). After a few years, the ratio of People who get promoted to People who are eligible for promotion decreases due to “Pyramid Structure”. At that time, your own batch mates become your competitors (or ‘enemies’) and your manager may promote the person according to his/her perception. The persons who were denied promotion will start finding fault with his/her peers ( i.e. batch mates) and the “degree of closeness” will start decreasing. When they leave the company, the relationship vanishes in thin air.

But the school and college friends’ relationship continues because they were never considered as your competitors who would affect your image in the society. That’s why the social network websites continue to grow.

Coming back to “timeline for a gift”, I realized that, even though I left the company three years back, I still have some “degree of closeness” with my ex-colleagues which made me write to them in such a manner (which you can do only with your school & college friends). I was fortunate enough to quit the organization when I was in the critical place in the pyramid. I’m not sure whether I’ve good status or not, at least I’ve good friends who are my ex-colleagues.