Sharekhazana.com should deploy some time-tested and proven business skills like cutting costs. That is a basic requirement. However, in an attempt to hasten the path to profitability, it is important to avoid a knee-jerk reaction. A quick-fix approach damages the brand, and dilutes the customer acquisition process.

Among the immediate measures that I would suggest is a cut in the salaries of senior people. This should, of course, be done with their consent. In fact, the company should move towards a performance-oriented salary structure, where the variable component would be higher. Simultaneously, it should shun extravagance. Shifting from a big office to smaller premises may be a good idea.

Clearly, sharekhazana.com has several things to its advantage. These must be strengthened. The profile of its target audience is its biggest marketable proposition. A youthful audience with impressive purchasing power that will only grow over time and whose ''investible'' surplus will only rise over the next 5-10 years gives sharekhazana.com a formidable edge.

Also, the company's strong off-line presence is something competitors will find difficult to emulate. The fact that the portal enjoys considerable brand equity, and that it has a technological infrastructure in place will enable sharekhazana remain ahead of competition. It must leverage these strengths, both as part of survival in the interim, and for securing profitability in the long run.

Whether the company is to remain a pure play trading site or become an integrated personal finance portal is a choice that Mukhi alone can make. A major issue here is the vision of the VCs and their ability and willingness to provide additional funds.

True, integration provides an opportunity to build on existing skills. However, one cannot ignore the fact that there is a need to acquire new skills and competencies. There is a learning phase, which carries its own costs. You also need to fund the losses because the break-even period extends further. The main risk in the transition towards an integrated portal is the difficulty in estimating, in precise terms, the resources required to be committed both at the beginning and as the project gets underway. It is also by no means easy to determine the time required to break-even.

That is where the importance of a contingency plan lies. You need to make not only mid-course corrections but even change the direction. What is desirable, in my view, is a step by step approach-test the waters, gain experience, and move up. A phased entry is less risky in a personal finance portal business.

It thus makes sense to go for an integrated personal finance portal only if the main promoter and the VCs are prepared to commit necessary funds. If they want to achieve break-even as soon as possible, then it is good to focus on stock-broking, which is the firm's main area of strength.

Globally, e-commerce has always started with a single key product where the provider has either a history of competence in that product or an innovative way of delivering it. Besides, most customers of financial products prefer standardised services. The cost of duplicating a standardised offering is low. It is, thus that a niche player who pioneers a set of activity is quickly stampeded by ''me toos''.

Price becomes the only differentiator for the customer. Loyalties in the online world can shift with a mere click. The only way for a portal to drive profitability in a scenario of largely homogenous product offerings is to constantly review its internal cost structure in an effort to become the lowest-cost producer of online financial service.

Assuming that no additional sources of funds are available, and that it has to work within the existing revenue and cost structure, sharekhazana.com should first review its online financial products. A focused survey among existing customers on their requirements will help it shortlist a portfolio of products. Some logical questions surface at this stage. What are the legal processes involved? With what level of current it architecture can the new products be supported? How much redeployment from the current team can be effected without going in for additional recruitment?

It is based on these that a cost structure of each product will be evolved. The revenue prospects of each new product would be available both from market feedback and the customer survey. With the resultant cost-benefit analysis, Mukhi and his team should quickly roll out products that ensure the retention of a larger share of the customer's investible income. Other products can be ramped up, based on the unfolding profitability scenario.

Sharekhazana.com has built up expertise in niche areas. This should be strengthened further through alliances. There is no merit in spending capital on being everything for everyone. The alliances should be tightly integrated by way of Service Level Agreements (SLAs) with the partners to ensure smooth and consistent product delivery.

It is important to ensure a common front-end on the website so that the customer feels that he is being duly serviced.

The very nature of online services-where transactions are impersonal-carries some risks. There are the financial risks.

Volatile market conditions make both the customer and the broker vulnerable to major exposures. The best way to mange this risk, particularly in secondary market equity related products, is by putting real time margin collection and mark-to-market mechanisms in place.

The negative positions of one customer should not be compromised by dipping into other customer's accounts. Due audit of Chinese walls is necessary.

Sharekhazana.com typifies the state of a number of early birds (dotcoms launched pre-1999) who fed handsomely on a number of early worms (glassy-eyed venture capitalists), and squandered the early mover advantage by embarking on initiatives first and thinking next.

While sharekhazana's management has realised that something must be done, it continues to be flawed in its thought process-confusing packaging with product and add-on with core value proposition. Customer and commerce have been kept as 'pariahs'.

There are some major lessons, learnt the hard way, on the status of the internet in retail business in India. Indians (unlike, say, Americans) have never been active users of technology in personal life. Therefore, there is an intrinsic 'fear of technology'. Internet penetration is limited and the access is expensive. The service quality, in terms of speed and reliability, is still patchy. And the demographic profile of people in the 25-35 years age group is as misleading as the famous epithet of early 90s-'a 200 million middle class'.

Mukhi and his team see two alternatives-niche portal and integrated portal. I do not recommend the latter option for sharekhazana, for three reasons. First, banks and financial institutions enjoy a huge franchise with their existing customers. They can leverage their clout with customers by broadening product offerings, including third-party distribution.

Secondly, the acquisition and retention of retail customers expensive. The process requires resources, which are scarce at sharekhazana. And, finally, the personal finance business is complex. An equity broking firm does not naturally evoke the confidence of customers.

I recommend that Mukhi and his team:

• Explore opportunities to generate commerce and revenue in equity broking through the off-line source, by leveraging a 130-year lineage and franchisee operations in 60 cities.

• Set targets on either a weekly or fortnightly basis, and monitor actual achievements.

• Use the internet to provide 'after-trade services' to customers such as trade confirmation, weekly/monthly reports, and gain/loss calculator/simulator. This will help build comfort level for the customer with the internet.

• Ensure that the franchisees use internet-based information to service customers, thereby creating confidence in the medium among customers and franchisees.

• Prune revenue expenses ruthlessly on a 'need to have' basis as against 'a nice to have one'.

• Defer capital expense, in site building and technology, till revenues are stable.

• If all this does not help the company show a positive cash flow within the next 6-12 months, it is time to pick the next option: close shop.

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