[The Turning Point] How the book ‘Uncommon Service’ helped HomeLane hit a home run in profitability
Buying a house is far easier than getting its interiors done. And serial entrepreneur Srikanth Iyer will vouch for it, as he not only bought a house and struggled to get its interiors done, but also went miles ahead and setup an entire home interiors company to help make it easier for others.
Bengaluru-based, which provides end-to-end personalised home interior solutions, was started by Srikanth along with friends Vivek Seetharaman, Rama Harinath K, Prabhu Venkatesh and Srini Battula in 2014. While they are no longer part of HomeLane, Srikanth has roped in Tanuj Choudhry, who was elevated as co-founder and COO last year.
Image Credit: HomeLane
In a conversation with YourStory, Srikanth talks about how his experiences inspired him to launch a services company, and stumbling across a turning point in 2015. “From working with carpenters on simple low-cost DIYS, to getting big cabinets constructed, getting interiors done was a headache throughout,” recalls Srikanth.
The home interiors segment, back then, was rather fragmented and unorganised. Customers often had to deal with multiple delays, uncertain product quality, and unprofessional standards.
HomeLane solved this with a technology-driven platform that delivered interior services in a personalised yet professional manner.
And according to Srikanth, reading 'Uncommon Service' by Frances Frei and Anne Morriss , a book he highly recommends for every entrepreneur, made all the difference in defining the purpose of his company.
“Reading this book was a real turning point for HomeLane. We have now become the only player in our space to be profitable,” he claims. While the book gives many business tips related to productivity and efficiency, it highlights one point that struck Srikanth specifically - which is that the customer service experience involves trade-offs - some things can be done well, but not all.
Great at some things, not all
When HomeLane was launched in May 2014, the company experienced the kind of buzz that most startups would give an arm and a leg for. Within five months of its launch, sales were growing at 100 percent month on month, and investors were making a beeline to be a part of that growth. Investors led by Sequoia Capital pumped $4.5 million in Series A funding in 2015.
However, the company was soon unable to deliver, and its Net Promoter Score (NPS), a key metric to measure customer loyalty and satisfaction measurement, fell to - 40. Srikanth is candid when he shares that executing the growing number of orders had become a nightmare.
Srikanth Iyer, Co-founder & CEO of HomeLane
Deriving key lessons from the book, Srikanth says, “Striving for all-around excellence leads directly to mediocrity. Achieving service excellence requires underperforming on the things your customers value least, so you can over-deliver on the dimensions they value most. Decide what trade-offs you will make – where you will do things badly, even very badly, in the service of great,” he adds.
Post this, he decided HomeLane would excel at customer service, and the company will follow the concept “less is more”. “We shrunk our catalogues, concentrated our services, and focused on becoming great at delivering beautiful homes at predictable costs, predictable quality, and more importantly, predictable timeline,” says Srikanth.
The brand’s NPS now stands at 67, which means eight out of 10 customers rate the company 9/10, or 10/10. “Second, our margins are the best, pricing is much better, so is our unit economics and we are profitable, delivering 25-30 homes per day” Srikanth claims.
Earlier this month, the company even announced it has raised a Series E round worth $50 million led by IIFL AMC’s Late Stage Tech Fund, OIJIF II, and Stride Ventures. Its existing investors, including Pidilite, Evolvence, NuVentures, Sequoia, and Accel, also participated in the investment round. HomeLane has raised a total of $104 million in funds over the last seven years. In August, the company also announced a three-year strategic partnership with ace cricketer Mahendra Singh Dhoni as an equity partner and brand ambassador.
The startup claims to have created a community of over 20,000 clients across 18 cities and is soon expanding to 25 cities, recording a Rs 850 crore annual run rate and aiming to reach Rs 1,500 crore annual run rate by March 2022.