As the new world of unit economics trends in Startup Land, the much used 'pivot' seems to have fallen into the background. But, while global posterboys like Facebook, Twitter and YouTube (and many more) pivoted to figure out solid product and wider use case, several Indian startups, including Snapdeal, Myntra, and Exotel, did the same to become success stories.
For Rohit Mahajan (32) it was a case of two major pivots before latching onto a business model that could sustain and grow.
Keep pivoting till you achieve
I started my entrepreneurial journey five years ago in 2010 with the coupon website Thekha.com. However, it failed miserably because of poor planning and deep-pocketed competitors. Within two years of operation we had to shut down the venture with lots of learnings.
But this failure had its bright side too. It gave Rohit and his team a much better understanding of merchants, and what they expected. And enough highs to make him an entrepreneur for life. Thus, Thekha became a merchant-acquiring agency for couponing websites like eBay India, Taggle, Koovs and Mydala. To supplement revenues, the company ventured into event management business in late 2013 and worked for NewsX, Zee News and Shiv Nadar University. “After making three pivots, we launched Loofre in 2015,” adds Rohit. It’s essentially a dining and online programme for banks.
'Focus on internal funding instead of chasing investors’ gunpowder'
Rohit reminisces how this timely advice from a fund consultant inspired him to not chase external investment. He adds,
Instead of negotiating terms with VCs we focussed on making profit and were driven by the philosophy that if we were able to sustain the initial years of our venture, then it would not be difficult to grow the business.
And that’s what kept Rohit and the team going in difficult times. The company concentrated more on raising funds from within the company than via VC or some investor. “We understand the growth rate isn’t that fast, but we are making our ground levels strong. As it's said, slow and steady wins the race,” he adds.
Rohit is an alumnus MICA and has over 16 years of all-round marketing experience in brand management, thought leadership, creating and executing integrated marketing campaigns. In his earlier stints, he worked with media majors including Zee News Network, India Today Group and UTV.
How does Loofre help customer and merchants?
With 16 members team - Loofre helps restaurants to grow their business by increasing footfall, and diners to discover the perfect table as per their mood, cuisine, budget and ambience. Unlike other table reservation platforms, Loofre also lets users avail the best offers available with their debit/credit card.
Currently, the company is managing dining and online programmes for ICICI, HDFC and SBI among several big banks/credit card issuers. Last fiscal it did a little over Rs1.5 crore in revenue. “We are optimistic about winning more accounts in the sector. We’re a revenue-positive entity and made sizeable profit last financial year. With our current run rate we aspire to surpass Rs five crore-revenue mark by the end of the current financial year,” says Rohit.
Initially, it is a free service for both the merchant and customers, followed by a yearly fee. At present, Loofre has over 1,200 plus merchants on board and plans to on-board about 5,000 merchants by the end of this year. When asked about numbers of booking processed via Loofre on a daily basis, Rohit says, “We are doing daily numbers in three digits.”
Why is table reservation a tough nut to crack in India?
Restaurant reservation has not picked up so far in India in a big way. Rohit also admits,
It is all about the habit. Earlier, where booking a taxi was such a task, now mobile apps (Ola and Uber) have made the process much simpler. We believe any technological solution which makes your life easy will fit in just right. It is just a matter of time and convenient technological solution that will instigate reservation as a habit.
If we take a global example like Open Table, it has 8,000 plus restaurants listed in New York itself and here in India leading websites claim to have 2,500 after years of being in the business. “So, the idea is to get more and more merchants with our offer,” adds Rohit.
Road ahead and competition
The company is launching another category - wellness by June. “Our research says, wellness category will be the next big thing, especially in metros. And when we say that, we mean their penetration into newer consumer segments. We are looking forward to tapping around 25–30 cities in India, especially the tourist places, as not only foreign visitors but domestic travellers also indulge more when travelling on leisure,” adds Rohit. Loofre is also slated to launch mobile apps through which diners can book, order and pay through mobile.
Presently, there are only three serious competitors in the restaurant reservation business – namely Zomato, Dine Out (Times Internet company) and Easy Dinner. They are big brands with deep pockets. Rohit concludes,
The strong credibility of the existing players, plus the fact that food and dining is evolving so rapidly, makes us realize that whatever we are doing is right. There is space for three-four players in the market.