[Matrix Moments] How Stanza Living survived the pandemic and continued to bet on a physical business
is India’s leading co-living startup that manages accommodations targeted towards students, employees, or anybody who moves to a new city. Both founders – Anindya Dutta and Sandeep Dalmia — were also recently featured on Fortune India 40 under 40 list, which recognises India’s young and brightest entrepreneurs.
In conversation with Tarun Davda, Managing Director at Matrix Partners India, Anindya and Sandeep talk about the impact of COVID-19.
Tarun says, “The second wave of COVID-19 was brutal for a lot of us personally as well as, you know, for our companies. It looks like things are stable now but there is always this lingering fear of a third wave. And I was asking Anindya, ‘How do you guys plan? You guys are in what people call a phygital business which is significant on the ground operations but being disrupted using a sort of digital layer?”
Founders Anindya Dutta and Sandeep Dalmia
Anindya says the big challenge for the Stanza Living team came in April 2020 when the team had to acknowledge and embrace the uncertainty. “I think one of the key important points at which Sandeep and I said that this is how we’ll approach things was when we realised, this is not a one size fits all answer,” he adds.
The team realised what works for other businesses necessarily will not work for Stanza Living. So, the team had to look at everything from the first principles.
“There was a lot of talk around pivots and about how you pivot from something to another or do something else differently. We took a contrarian approach to that; we said, focus on your core,” said Anindya.
He added maybe there’s a pause but the idea is to focus on what the team was good at.
“We think we do things at a sensibly aggressive pace in the sense that we’re not mindless with our expansion. So, we want to be sensible with our aggressive pace of growth. Next, we focused on the quality of people who are running different parts of the engine. For us, strength is important. We are not an ecosystem of stars but we want to be like New Zealand of the startup ecosystem where there’s no one single star and everyone, as a collective, punches above their weight,” said Anindya.
The next thing the team focused on was playbooks and creating a scalable ecosystem. This meant going back to the systems, processes, and asking the question – ‘how scalable are the systems?’ They then focused on tech and product to see how they can double down on it.
“Every single process at Stanza was minutely revisited and luckily for us, we had this period from December 2020 to March 2021 where we could stress test it as the business was starting to come back. And then again, we’ve gone back to the engine room and said, let’s look at what we’ve learnt from these three to four months and again revisit that,” says Anindya.
On the supply side, Sandeep said they had to work with the partner ecosystem as well, as it was a new thing even for them and even the partners were confused about their business and what would be the impact.
“We had clear and transparent communication with our partners on day one. For example, if we needed a certain amount of discounts even above and beyond what the contract had said we were pretty open towards discussing that this is what we need and why don’t we talk it out and figure out what you need to do to give us this discount,” said Sandeep.
He explains one of their largest fixed costs can be the cost of the internet, and the team got upwards of 60-70 percent discount month on month from their internet partners on an ongoing basis.
“They were a strategic partner and it was a very frank discussion, and he said that the go-live of any new property will probably be deferred by 30 days if I have to give you this discount because I will do certain things at my backend to do it. And therefore, we figured out that if our business timelines change, we’ll plan for it because we also don’t know when we want to go live. But we got a 60-70 percent discount without getting a hit from our partners. We’ve continued to get that discount with them on most of our assets as we do,” adds Sandeep.
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