Delta > 4 Theory

An interesting theory called the Delta 4 coined by Kunal Shah (founder of CRED & Freecharge) helps to assess whether an idea going to be a winning business.

To take a deep dive into the theory one should understand the three traits of Delta 4 theory.

Irreversible:

This trait can be well understood by asking one simple question. Will I book my train tickets offline if I have used IRCTC before? The majority of the answers will be no for obvious reasons. It’s because using an IRCTC app to book tickets is much efficient than booking offline. Therefore, once users get the chance to use a delta product like IRCTC, there is an ultimate possibility to stick around the product for a sustainable period of time.

Once the business or a product reaches this stage it’s irreversible growth which leads to the success of the product.

What businesses should keep in mind or do to increase the Δ4?

Affordability (No one would take a train if they can afford a flight everywhere)

Readiness (Youtube wouldn’t be popular if data was not cheap enough)

Learning effort (Tally may not be the most efficient software in the market. However, thousands of CA’s stick to it because they devoted long hours to learn the software)

Micro Configurations (Mom’s usually don’t tend to let go of her maid as she made many configurations on how to do a particular job)

Collective participation (getting users to use to your product. e.g. TikTok.)

Branded lanes/verbs (using WhatsApp me or google it, instead of text me or search for it on the web)

UBP>USP

UBP stands for Unique Brag Worthy Proposition: Anyone who has used an efficient state of the product would brag to others in the inefficient state. Remember, when we got our first smartphone we would brag to our friends who had a normal cellular phone where the inbuilt camera option was unavailable or using a TrueCaller. Almost everyone downloaded TrueCaller not because they saw an ad but because someone who is already using it bragged out it. USB creates a state of efficiency and get a higher delta score.

High Tolerance:

This third trait explains the state of efficiency where people stick to the product even after facing certain problems while using the product. Example: We tend to use IRCTC, UBER, etc even after facing certain issues as it offers a higher state of efficiency. Thus, improves the delta score.

To sum up, using these traits one can score the state of efficiency of a particular business idea or product within a range of 1-10.

Thus, any product or service offers Δ4(Delta 4) creates enormous wealth.

Every time the Δ is less than 4, it may result in reversible behavior. There would be no UBP with no tolerance.

If Δe = >2 but <4, Business becomes unstable and you may need to pour in more money(can be referred to OLA CABS or businesses that give discount to get more customers) to increase the delta. If Δe = <2, the business is not worth doing.

Before starting with your business or implementing an idea, make sure that your business will be at least Δe = 4. Make it Brag Worthy.

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