D’Silva’s 10-year-old niece Rhea recently picked up Diary of a Wimpy Kid by Jeff Kinney. When Rhea wanted to read the other books in the series, the library, called Just Books, offered to get her those books within 24 hours. The books would be sourced from other member libraries.
Until a few months ago, the D’Silva household were not members of any library. “I was last the member of a government library, 12 years ago,” says Sharlon D’Silva.
So, what’s the reason for the change? Simply that Sunder Rajan, a software engineer from Bangalore, had a bright idea. He hated travelling miles to access a library. So, in May 2008, he decided to start one near his house with the help of his wife. This was the beginning of Just Books. He thought it would be a good part-time run, but he was surprised when he got 1,000 members in three months. He shrugged it off as the initial excitement about a library in the neighbourhood. But after another three months when his fledgling library grew to 2,000 members, Rajan knew he had stumbled onto something. He decided to make it his full-time job. Today, his company has 22 libraries all over India with a revenue of approximately Rs. 4 crore.
A New Way to Read
Rajan wanted two things to become the DNA of his company: One, the libraries had to be integrated so that members could borrow from one library and return books to another; two, members should spend more time reading a book than searching for one. He has achieved both these objectives.
Members can borrow or lend books from any Just Books library in India. “Once we reach 5,000 members in a city, we establish a warehouse in that city,” says Rajan. “This helps us network the libraries so that if one member from one area needs a book that is in another library, we can get it for them.” Rajan calls it the milk van model. “We collect all the books [that have been asked for in other libraries] in the evening, and sort them out to be sent in the morning.” Rajan already has a warehouse in Bangalore, where most of his libraries are based. The next warehouse will be between Mumbai and Pune to service the libraries in both cities.
Most transactions in a Just Books library — searching, issuing or returning a book — can be done through a self-help kiosk using an ID card given to members. Users can locate the shelf within any library on which the book is placed. Members can also have books picked up and delivered from any address in India.
“The clichéd image of a library — dusty, books untouched, no one knows what is where — is done away with,” says Ramesh Prabhu, a book lover and a member of Just Books.
Tech Does the Trick
The one secret ingredient behind all this efficiency is Rajan’s belief in technology and the software that he invested in early on.
As his chain grew, Rajan convinced 10 of his old colleagues from iFlex (now Oracle Financial Services) to leave their full-time IT jobs and work at half their pay to build an Enterprise Resource Planning (ERP) solution. The ERP software integrates all aspects of running a library and makes efficient use of all the available resources. For the software engineers, who were bored with their jobs, Just Books provided the spark they were looking for in their line of work.
Rajan also coupled the ERP offering with Radio Frequency Identification (RFID) technology. RFID is usually used in stores like Wal-Mart or in other supply chain management systems.
By using RFID, Rajan can ‘read’ several books at one time, and route them to their library with one click. This, in turn, increases the efficiency of the user experience.
Akilesh Kataria, Rajan’s colleague at iFlex and now the head of the IT team in Just Books, says, “Initially, we used to process 200 books; this number has gone up to 1,500 per day, and will keep going up.” Just Books has approximately eight people working on four different entry processes. RFID enables them to track the books and move them across libraries efficiently. The entire inventory is connected to every member library. These technical nuances have helped Just Books grow from five libraries in May 2010 to 30 libraries across four cities by May 2011, and an inventory of over three lakh books.
|Infographics: Sameer Pawar|
The British Council, which has a network of nine libraries, has adopted RFID at its centres in Delhi and Chennai. Neeti Saxena, head of central content procurement unit, British Council Division, says, “[It] can lead to extended opening hours for customers as minimal staff is required to manage the floor. [Also there is] higher customer satisfaction as most of the transactions are carried out by members themselves.”
For Rajan, scaling up has also reduced the cost of the technology. An RFID tag now costs him Rs. 9 while market rates place it between Rs. 20 and Rs. 40. This is because his order has gone from 25,000 tags to 100,000.
Rajan says his vision is materialising only because he employed technology early on. “Most libraries in India operate on limited funds, therefore their first preference is to expand their collection of books and journals instead of parallel investments like RFID,” says Shamik Basu, general manager, track and trace division, of tech company 3M India. “What libraries must realise is that installing RFID systems will eventually bring down the operating cost,” he says.
Building a Business
While he was solving the software puzzle with RFID, Rajan had already invested Rs. 50 lakh from his pocket. Then, in May 2009, he chanced upon the N.S. Raghavan Centre for Entrepreneurial Excellence affiliated to IIM-B and his story grew. “They have finished their incubation period,” says Suryanaryanan A., ex-COO, NSRCEL. “They should not be less than 200 libraries in the next couple of years, which gives them the potential to reach half a million homes,” he says. Since then, “a private investor has helped us by investing a few crore,” says Rajan. He refused to name the investor.
Another cornerstone of Rajan’s business model is the franchisee system, with a 50:50 ownership pattern. The franchisee looks after the procurement of space and day-to-day operations, while Just Books owns and operates the software.
The business opportunity is also huge for franchisees. Rajan says, “My average revenue per customer is Rs. 2,500 for two books and one magazine a month.” Franchisees can make between Rs. 70,000 and Rs. 1 lakh per month. Bhanu Ganesh, a franchisee of Just Books at Navi Mumbai, says, “We broke even within three to four months. I had invested Rs. 20 lakh, which was only for interiors.”
Each Just Books library has approximately 10,000 books and is approximately 1,200-1,400 square feet. But Rajan has smaller formats at 300-400 square feet, as he found that people were open to having small libraries inside their apartment complexes. They do just as well for the business. He also sees an opportunity to convert his libraries into community centres and grow other businesses through that, such as holiday planning and developing a music hub.
A vision that is in closer sight: Become the largest rental space for paperback books. Rajan’s confidence comes from his conversations with publishers, who told him: “As long as children continue to write on paper, India will have a market for paperback books.”
from: Forbes India