Hyderabad based entrepreneurs Ram Nutakki & Mitesh Majithia were bored of their ‘regular’ jobs. And the vibrant Indian startup ecosystem gave them enough motivation for starting up. Ram’s previous consultancy experience at Maverick Consulting and Mitesh’s Harvard background added to his experience of startin up his own enterprise, SPS Corp helped them with Sloyd. They took the plunge in August 2012. Sloyd is the main umbrella under which the duo plan to launch various startups, and then ‘sell’ them via franchisees; thus, enabling entrepreneurship spread to aspiring entrepreneurs via a tried and tested model. YNew is the first baby under this umbrella.
In Ram’s own words, “Sloyd helps budding entrepreneurs to cherish their dreams while pursuing our proprietary business models to reduce the risk of business failure and act as catalyst for their growth and success for mutual interests. Sloyd will also incubate consumer product/service ideas that are scalable through franchise channel. YNew is a consignment store for pre-owned and factory second gadgets (smart phones, laptops, desktops and televisions) which can help sellers to sell their gadgets.”
With YNew’s support you can sell your used product to your neighbor or someone in a different city without revealing your identity. All you need to do is call YNew and inform them about the product. Their team picks up the product, tests it, refurbishes and certifies it. After this, the product is ready for sale at the YNew store nearby. Once the good is sold, the seller will receive money within two working days. Buyers are offered refurbished products at YNew. In addition to this, the buyer also gets a 30-day free service warranty against the product that she purchases from YNew. Explaining their revenue model, Ram says, “We take transaction commission on every product sold from seller i.e. X% on ask-price of the product. And also promote extended service warranty plans to buyers to earn additional income. Hence we would make money both from sellers as well as buyers.”
Both, Ram and Mitesh, seem confident about their proposition with YNew, so I quizzed them on the availability of aforementioned websites. Ram stressed upon the fact that whether it was ecommerce or online classified platform, their reach was limited to internet, a medium that’s accessible to a meager 8-10% of the Indian population, he quoted. Moreover, re-commerce or the second hand goods’ market is more of a touch and feel, he says, where the buyer wants to examine the product properly before she makes a decision. And, this is what puts the offline mode ahead of the online.
Prima facie, it appears that they do have the first mover’s advantage. But the small shops and online mediums shall give them considerable competition.
Added to this, the fact that YNew being a market place has a chicken or egg situation to be solved i.e. whether seller first or buyer first. The duo is busy cracking this catalyst code being the new born baby and they are confident to cross this chasm at the earliest. Their pilot store at Hyderabad has already helped 10 sellers sell their products and 10 buyers own their dream gadgets at affordable price. They are anticipating reaching significant sellers and buyers to achieve operational break-even within next two quarters, and have identified the market potential of 35-40 stores in Tier-1 cities.