Entrepreneur Kiran Shrestha of Nepalaya

This is a summary of the Last Thursdays where Entrepreneurs Speak: With Kiran Shrestha of Nepalaya

The name Nepa~laya was derived from the words “Nepa”, which means Nepal in Newari language and “laya”, which means music in Nepali. It also sounds similar to “Himalaya”, the name by which Nepal is known internationally. Kiran Krishna Shrestha, Team Leader of Nepa~laya explained that Nepa~laya is a book publisher, event manager, music producer, movie maker, and photo exhibitor. When this company was established in 2001, they started with music and worked in a single room in his house with just 3 people. Today the area of their office in Kalikasthan is 8,000 square feet.  “There was not much market for music then and it is not much different now. When we got into publication a few years later, the market for Nepali books was almost non-existent and though it has grown since then, it is at an unsatisfactory rate. We have also made documentaries in the last few years. People don’t seem to have a good perception of documentaries as they are not commercial films but independent films,” shared Mr. Shrestha. Based on his work experience in various sectors, Mr. Shrestha shared his knowledge and inspired the 70 or so entrepreneurs and students gathered at the “Last Thursdays” interaction program organized by Entrepreneurs For Nepal (E4N) and Samriddhi at Hotel Dwarika’s, Battisputali on 26th August, 2010.

“In most of our work, people generally don’t know us but they recognize the people we work with,” said Mr. Shrestha. Since 2000, the folk-rock band Nepathya is being managed by Nepa~laya. They also started the Paleti series with renowned artists of yesteryears. On the publication front, they have published books of Narayan Wagle (Palpasa Café and Mayur Times), Kunda Dixit (A People War trilogy) and Sanjeeb Uprety (Ghanchakkar). In documentaries, their first project was Bheda Ko Oon Jasto in 2003. “I made that film myself as I am a film-maker by hobby” said a proud Shrestha. “That film was an opportunity to redefine documentaries in Nepal. We tested how we can successfully show non-fiction films to the public. Probably Bheda Ko Oon Jasto was the first non-fiction film to be released in a cinema hall in Nepal”, he further elaborated.

When Narayan Wagle was writing Palpasa Cafe, Nepa~laya conducted research to assess the book market but what they found was not encouraging. “While talking to different publishers, what I realized was that none of the publishers was author-oriented,” lamented Mr. Shrestha. (LESSON #1) He believes that the author is the property and books come and go, so if publishers promote the authors, they will be encouraged to write more books. “What I felt was that nobody was investing in the writers. We identified this scope and hence started publishing books,” Mr. Shrestha said. For the market research, they created very simple questionnaires and conducted two types of surveys, one among general readers and the other among book stores of Kathmandu. “When we asked the publishers about the number of copies we should publish, we received very discouraging suggestions. Most of them recommended to print 1000 copies, a handful advised to print 2000. But challenging ourselves, we told Narayan Wagle that even though this is our first publication, we can sell 5000 copies” said Mr. Shrestha on the brave decision they had taken.

Five years ago, Nepali books were generally priced between Rs. 50 and Rs. 125 and production quality was not given much importance. Even Narayan Wagle hesitated to price his book for more than Rs. 100. So Nepa~laya went back to the market and surveyed again on how expensive books are being sold. They discovered that foreign books with a price tag of around Rs. 500 were having good sales but there was no Nepali book in that price range. After getting feedback from shopkeepers and book readers, they came to the conclusion that their first book can be priced at Rs. 250. (LESSON #2: Conducting research is essential for making important decisions.)

Nepa~laya also went on a book tour with Narayan Wagle to different places around the country. Some people criticized Nepa~laya for degrading the value of books by making it commercial. “For me, book readers are the consumers. From a marketing perspective, you have to let people know that the product is launched and available in the market. And more importantly, you have to make the product available and accessible to the consumers. In the current situation, we never know what books are being launched in the market and if we want to buy a book in a nearby book store, we will not find it,” defended Mr. Shrestha. This approach led to Mayur Times being available in book stores across 46 districts of Nepal on the day of the launch and also informing the public about the book shops where the book would be available. “I got a quick feedback the next day from Baglung. The reader said that this was the first time he found a book in a book shop the same day it was launched,” said a satisfied Mr. Shrestha. The launch of Mayur Times dispelled the general perception that the book market in Nepal was limited to Kathmandu. This time, 10,000 copies were sold out in two weeks and 40 percent of the sales was made outside Kathmandu. (LESSON #3: Kathmandu is not the only viable market in Nepal.)

When asked why Nepa~laya only selects “celebrity” kind of people to work with and whether they can provide a platform for unknown people with potential, Mr. Shrestha acknowledged that they do face this criticism. He further commented that working with Narayan Wagle was risky because he was known as a journalist but they had to present him as a fictional writer. Ghanchakkar written by Sanjeeb Uprety is apparently his second book. People assume he was already well known though most people don’t know about his first book. He shared Nepa~laya’s plan of publishing 2 books this year, one of which is being written by a resident in Rolpa and the other by a retired government employee.

According to him, there are two ways of marketing – one is through Public Relations and the other is through advertisements. Mr. Shrestha opined that the general tendency of our media is to be concerned about ‘whose’ book is being published, rather than ‘what’ the book is about. This attitude has to change for the media to be mature and professional in Nepal. Pointing out possibilities, he said that in today’s world, print and television are not the only means of advertisement and various other platforms like Facebook can also be used for promotion.

During the making of the documentary Bheda ko Oon Jasto, he met a Nepali film maker at a party who said that he made commercial movies targeting rickshaw drivers and other low income earners as audience. Mr. Shrestha told him that he knew only two kinds of films, good or bad. When asked what film he made, the film maker argued that people like Mr. Shrestha don’t watch Nepali films but complain about the quality. Mr. Shrestha’s response was, “You just told me that you made films for rickshaw drivers. Make a film for people like me and I will watch it.”

Nepa~laya showed Bheda ko Oon Jasto in different places around the country. They were about to show it in Jai Nepal Cinema in Kathmandu but coincidentally a Shah Rukh Khan film was released. But their friends from the cinema hall’s management allowed them to show the documentary once a day. Initially they had planned to show it for a week as they thought that very few people would turn out to watch a documentary with such expensive ticket price. But even though the length of the documentary was 85 minutes and the price of the ticket was the same as that of a regular show, 90% of the tickets was sold! “This explains that there is scope in the market but you should know how to tap it (LESSON #4),” said Mr. Shrestha. He shared that they also invite film making crews from abroad. They have sent some footage for a program for National Geographic channel and recently, they worked on producing the footage of Lukla airport which was featured in History Channel’s program on the world’s most dangerous airports.

On the music front, Nepa~laya also organizes the Paleti series. “People ask me why only old artists are invited to perform in the Paleti series. My reply to them is that we don’t need to invite artists who are selling or promoting their music themselves. We want to bring back those artists who have been out of the musical arena for some time. We need to bring them back and it is also a good opportunity to archive our music history,” said Mr. Shrestha. When doing the first Paleti in 2003 with Phatteman, people reacted in strange ways; some didn’t even know that he is alive and some doubted if he could still sing. Till date, Nepa~laya has invited 37 artists like Amber Gurung, Kumar Subba, Prem Dhoj Pradhan etc. and for most of them, it was their debut solo concert even though they were in the later phase of their life.

Mr. Shrestha thinks that there is no culture of solo concert in Nepal. Normally concerts are organized by clubs and social organizations for charity. “In the entertainment sector, organizers think of concerts as Parents’ Day in schools and include everything from singing to dancing and other activities. But we only organize solo concerts. In Nepathya’s concerts, we don’t even hire MCs because I have seen MCs being booed.. People come to watch musicians play and I don’t want to pay someone to be booed by the audience,” analyzed Mr. Shrestha. Nepa~laya organizes concerts outside the valley and maintains the same quality everywhere. He highlighted that they always start and end the concerts on time. “We project the clock at the concert venue and if the concert has to start at 2 then it will start exactly when the clock strikes 2. Everyone has appreciated this effort,” he commented. Satirically, Mr. Shrestha observed, “The news on radio and television always start on time. Assembly in our schools started on time. Even today, in programs like these, 60 to 70% of the audience arrive on time. But we give unnecessary value to the remaining people by waiting for them. If only we start on time will we be able to finish on time.” He also informed that they are coming out with Nepathya’s new album in September. There are difficulties in selling music because the music market is not yet developed in Nepal. But he and his team are committed to try to change the scenario. He also shared  that though it is challenging to work with artists, he is happy that all the artists he has worked with are satisfied with Nepa~laya’s work.

He said that they want to contribute to the sports sector as well. Two years ago, they toured Nepal with NRT football club and organized matches against local clubs. This year they had planned to bring an English semi-professional club to play matches with local teams here but the volcano in Iceland prohibited their trip to Nepal. The club will be here next year.

According to him, the work they do is not for commercial purposes hence one cannot plan and focus on profit/loss too much beforehand. For him, this business is passion driven and they thoroughly enjoy what they are doing. In conclusion, Mr. Shrestha said, “Till date, we have published some books, made a few documentaries and worked in music. Whatever we have achieved was driven purely by our passion for what we do.”

A Problem is an Opportunity

A Problem is an Opportunity

Prasanna Dhungel


Many of us that read this article and attend talks by E4Nepal want to be entrepreneurs. Many of us must be thinking of an idea to start a business. I dedicate this posting to this topic.

There are many problems in Nepal. We all hear “yo chaina – tyo chaina” [we don’t have this – we don’t have that]. Well that is exactly a potential business opportunity. For an entrepreneur “wherever there is a problem, there is an opportunity”. This means there are tons of opportunities in Nepal.

You start a company to cater to a problem in the market. Simple example – the price of basic food such as rice is very expensive and has increased exponentially in Kathmandu.  Yet when you go the villages, the farmers aren’t getting a large part of the price increase. The brokers and the ones in the middle between us consumers and the farmers are pocketing the money. How can you start a business here? You can offer quality rice to consumers in Kathmandu for a cheaper price than what is available in the market and you have a booming business. Of course, you have to think a lot deeper but this is a big problem that has a simple solution. Your task as an entrepreneur is to figure out how to offer this simple solution to the residents of Kathmandu. This could be your million dollar idea that serves millions!

Let me discuss a few other ways that you can start your business and service your customers. At a theoretical level, you can think of these as applications of the 4P framework in marketing – Product, Price, Promotion and Placement.

You can compete in and be different than your competitors in some of the following and many more ways. These are some examples -

> Quality – offer a different quality product than what is offered in the market. Eg. If only Japanese cars are sold in Kathmandu, you can sell a Maruti to a different population segment who are fine driving a simple car but cannot pay for a Japanese car. Before Maruti was introduced in the market, many in Kathmandu said “We can’t afford a car.” The dealership of Maruti may have realized this and started the Maruti dealership to convert this problem into an opportunity.

Price – offer a product for a different price than the market. Eg. Jaya Nepal movies offers movie watching experience at a higher price. Residents of Kathmandu who want to hang out and watch movies in a nice safe hall will pay the premium here. One way Jaya Nepal compete is in price. It is more expensive than others but this brings only a segment of customers whose needs were not served before. Pre-Jaya Nepal, we might have said “No nice safe place to watch movies and chill” This was the problem. Jaya Nepal founder converted this problem into an opportunity.

Service – offer superior service compared to what is offered in the market. Eg. Many storeowners in Kathmandu are very rude to their customers. You cannot look at a variety of items or ask a lot of questions about what you are buying. If you do, you are asked to leave. I remember going to buy a flute in Khich Pokhari music store a few years back. The storeowner showed me a few flutes, got rude when I started asking questions and said I wasn’t going to buy. I got pissed off, walked out to a street flute seller. This street vendor was super nice, showed me 10 to 15 flutes and taught me how to play. So I bought a flute with him versus the storeowner in Khicha Pokhari. My point is – if your friends say “This business is terrible. We can’t even go there and ask a few questions” there may be an opportunity for you to compete on service

Size – offer a product size different than what is offered in the market. Eg. A few years ago, you could purchase Mango Frooti only in small cartons that you would sip in 2 minutes. “Real” started competing with Frooti on size. You can buy larger size mango juices and take it home to consume it with the family, with drinks and a lot of other occasions. It was difficult to do so with small size Frooti boxes. So you feel that you cannot do certain things with your product because of its size, your business opportunity may be a same product but different size container.

Location –offer a product at a location that is convenient for your customers. For example, in Kathmandu where we have bunds all the time, it is extremely difficult for the old, disabled and sick to go to the hospital. If you are a doctor and want a good job or earn extra, you could go directly to a patient’s house for home service.  You differentiate from the hospitals and other doctors who don’t go to the patient’s house.

You cannot compete only on one facet alone. When others see your model, you will get competitors. Price and Quality are great ways of competing. However, you must continually strive to offer good price and high quality and service. If you don’t, you will lose your business to new and existing competitors. Also, superior customer service is a must. Without this, your business builds a bad brand name amongst customers and you are doomed.

There are many other ways that you can compete and be different. Read the 4P framework in marketing for more ideas. However, at the core always understand your customer. Your customer problems are a great recipe for your next business. In Nepal, we hear lots of complaints (and many rightly so). So as wanna-be-entrepreneurs, keep your eyes and ears open. Observe. See and experience what sucks and be different. Open your business. Make a profit and always offer outstanding customer service to your customers through product, service, quality and price. And constantly strive to innovate, improve and be better.

Prasanna Dhungel is a Nepali Technology Entrepreneur and Entrepreneurial Advisor. He was an early employee of D2Hawkeye, a successful Healthcare Technology entrepreneurial firm. He enjoys helping entrepreneurs translate their ideas into products and building companies.

Working Capital Management

by Prasanna Dhungel

Working Capital Management is an extremely important tool that every business owner must know by heart. It consists of three parts –

  1. Accounts Receivable  (A/R) – what you lend or sold to others and are waiting for payment
  2. Inventory – what you have bought from others and have in stock to process further or manufactured products you have in stock to sell
  3. Accounts Payable (A/P) – what you need to pay others

The first and second parts are a drain on your cash. It is cash that you would have in your pocket that is now in others’ pocket.  Your customers may be buying your products but you could go bankrupt if they don’t pay you on time and you don’t manage your working capital.

Let us take a simple example to hammer this concept. For example, Mr. Ram Thapa, owns a biscuit factory in Patan. He buys wheat from the farmer to manufacture biscuits, pays his workers to make biscuits out of wheat, keeps manufactured biscuits in his store and sells the biscuits to wholesalers in Kalimati.

Assume the following,

To start, Mr. Thapa has Rs 2,000 in Cash in the bank and Rs 2,000 worth of biscuits (Inventory) in store.  He needs to pay the wheat farmer Rs 2,500 that is Account Payable.

He buys 50kg of wheat for cash from the farmer for Rs 20/kg. So he pays Rs 1,000.

He pays his worker Rs 500/day in Cash for 2 days to make biscuits. So he pays Rs 1,000.

He stores the manufactured biscuit in store. This makes the biscuits in store worth Rs 2,000 + Rs 2,000 = Rs. 4,000. However, he has no cash left in the bank now.  A wholeseller, Mrs. Pasang Tamang, buys Rs 2,000 worth of biscuits from him for Rs 3,000 on credit and agrees to pay him the amount in 7 days. This reduces the biscuits in stock to Rs 2,000. Yes he made a profit of Rs 1,000 but he has Rs 0 in his pocket. This increases his A/R to Rs 3,000.

Do you see what the problem is? He has sold biscuits but has no cash in hand. He has A/R of Rs. 3000 and you would think he made a profit of Rs 1000 by selling the Rs 2000 worth of biscuit for Rs 3000. But he has no cash in hand. Now see what types of problems he can have with zero cash in his pocket –

  1. Let us say Mr. Hari Magar wants to buy biscuits worth Rs 10,000 from Mr. Ram. He wants Mr. Ram to manufacture and deliver the biscuits next month.  Mr. Ram will have to buy wheat and employ people to do the work. Yet he has no cash to pay for the wheat or the people. So he has tells Mr. Magar that he cannot do the project for lack of cash and loses a big business opportunity.  If he had collected the Rs 2,000 from Mr. Tamang, he would have cash to do this project. => Danger of giving your vendors your goods on credit rather than collecting cash.
  2. Mrs. Tamang tells Mr. Thapa that he will only pay Rs. 800 out of the Rs 3000 of biscuits as most of them were stale. Mr. Thapa couldn’t do anything about it as some of the biscuits he had in stock may have gotten stale. They were in the warehouse for 1 month. => Danger of having inventory on stock. You want to sell your inventory as soon as possible.
  3. Imagine what would have happened if Mr. Thapa had to clear the Rs 2500 in payable to the farmer first. He couldn’t have manufactured anything. He had Rs 2000 in the bank. If he had paid the farmer all of the money, he would still be down Rs. 500. And, he couldn’t have purchased the wheat of Rs. 1000 and paid his worker the Rs. 1000 to make the extra biscuit. He would be bankrupt.

Even if Mr. Thapa receives all Rs. 3000 from Mrs. Tamang but decides to clear the Rs. 2,500 account payable to the wheat farmer, he will be left with Rs. 500 cash on hand and no balance in the bank (because he used that to make the biscuits that he sold to Mrs. Tamang).  With that money he won’t be able to produce enough biscuit to make a decent profit. Hence, for Mr. Thapa, working capital management, or when to clear account receivable, inventory and account payable is critical for smooth operation of his business.

Account Receivable (what others owe you) and Inventory are a drain on your cash. They can bleed your business to death. Account Payable (what you owe others) saves you cash. So you always want to maximize your account payable and reduce your account receivable and inventory.

To summarize,

Maximize Account Payable (but know that it’s a liability that you eventually have to clear)

Minimize Account Receivable and Inventory

Maximize

[Account Payable] – [Account Receivable + Inventory]

Maximizing A/P can be tricky and is a sensitive matter. You don’t want to annoy your suppliers with too long A/P payment. They may stop supplying you in the future or may provide you inferior quality goods. Likewise, you don’t want to rely too much on one supplier as s/he may increase prices or stop supplying thereby impacting your production.