Looking at The Other Side of Tech; How Are the Door-to-door Services Doing?
Technology is exciting and a huge chunk of the startup revolution is happening here. Internet and mobile will be huge and there's hardly a soul that doesn't believe in its potential. Millions are gung-ho about the power of internet and are ushering in the new digital age with huge furore. We, at Yourstory.in will also be talking a lot about technology at TechSparks but amidst all the technology talks, there's a big bunch of entrepreneurs who are doing work on the field and providing services.
While talking about Evomo, the founder Abhinav Das told us, "Technology is great but just making apps and passing people’s time won’t help." A rather pinching statement, it makes one think about the parameters that investors in India look at. Being a very nascent country in terms of start ups, the investors aren't very sure about what works as there is no real proof of concept and hence the talk is always about global scale. But do investors look at non-tech companies? Yes, they certainly do. "A lot of investors including us do look at non-tech companies but only if the market is large and the model is scalable." explains Sarabjeet Singh, investment analyst at Seedfund.
Drawing the line between tech and non-tech companies is rather difficult as every business now has has to be leveraged by technology to succeed. Here are some of the Door-to-door services that have been doing well:
The Burgeoning Shoe Story
The shoe laundry business is huge if one goes by the number of looking at services that are coming up.
ShoeLaundry: Founded by Sandeep Gajakas, The Shoe Laundry started its operations at Mumbai in 2003. India's first professional footwear laundry and refurbishing service for all types of footwear, the Shoe Laundry has gained prominence and now has franchisees outside India as well (Bhutan and Kenya). The customer gives them a call and the footwear is picked, serviced and delivered back to them in a stipulated time.
Another such service is The Shoe Spa. Founded by Tabish Ahsan and Saral Budhirajain in 2010, Saral wasn't confident about the idea and dropped out but Tabish took it forward. Doing well now, The ShoeSpa is floating and above the water. There is also the Reboot Shoe Laundry which was started in 2004 by Vinnie Chadha in Mumbai.
This is another huge area startups are looking at targeting. Founded by Nishant Prasad in late 2010, CleanFanatic is a Bangalore based mattress and upholstery cleaner that has grabbed significant market share in Bangalore. CleanFanatic has a manpower of 15 and a fleet of vans that go around in Bangalore, offering services. Looking to raise funding to scale further and integrate technology, CleanFanatic will try to make a point to the investors soon.
Founded in February 2011 by Ashish Pingle and Sushruth Munje , Hammer&Mop specializes in taking care of residence cleanliness. Both these startups have offers for residences as well as corporates and are looking at ways to open up more revenue streams.
High End Services at Your Doorstep
People crave for luxury. And they have the money to earn it. This is one segment which can be cashed upon; just like Belita, a beauty&spa service. Funded by IndiaQuotient, Belita knows what it takes to grow and scale. An impressive team leading the company, Belita aims to deliver relaxing and rejuvenating beauty treatments, right at the customer's doorstep. The timings are also set accordingly, they work from 4AM to 8PM!
All these startups show that there definitely a big enough market for surviving in this service economy. But very few are in a position where they can say that, "We're comfortable with our financials." A common complaint is tha the business demand is very fluctuating and being an on the road job, scaling is difficult. Anand Lunia, the founder of IndiaQuotient has invested in Belita and other non-tech companies. He says,
Focus on internet and mobile is due to their ability to scale fast, and scale efficiently. Flipkart is likely to soon become the largest retailer, online or offline, despite of so many well placed crony capitalists chasing offline retail. Services businesses, unless supported very strongly by technology, fail to scale. And unless they have a brand that deliver very high value addition compared to unorganised sector, the margins remain under pressure. I am associated with companies like Faasos, Belita, Mydentist. These companies are not your regular services companies merely adding a designer logo to a regular service. They are trying to implement best practices, tech or non-tech, to their industry to set a new, very high benchmark of customer delight. If they don’t do that, they will not succeed in the long run. These are tech savvy, brand savvy, management savvy businesses, like any tech company, but also have an offline backend to deliver. Just dial is a classic example- do you call it offline, or online? Although some valley returned VCs cannot fathom businesses that have any offline component, that is a narrow approach. In India, roti kapda aur makaan, school aur ispitaal remains the best opportunity. But companies not having very strong tech backbone will not scale beyond a point.
A very good learning for all the service startups, "if you want to make it really big; technology backing is essential." Franchisee model is again a huge question service startups have to think about and leaves the founder thinking about how much freedom is he willing to give to the business model. Franchising also depends a lot on the ability to pick the right guys for the job.
Finally, apart from the market and funding, the core questions a service business should be looking at are:
- Do I have the technology to scale?
- Do I have the processes in place?
- Do I have a team that’ll stick together?
- Do I want to adopt franchising; the rocket fuel for growth. (Higher chance of failure)
So, to sum it up, an alluring but tricky market, the service economy is a huge opportunity to show your organizational prowess.