The hardest business to run is a consumer business.
Mind you we ain't no novices. We have successfully created a 700+ headcount profitable company in the highly competitive corporate services Industry in less than 5 years. But nothing, I mean nothing prepared us for the heavy toll of a consumer business, that too in the dog eat dog world of e-commerce. Moreover we were the first of the lot trying to create an e-commerce model in services segment fighting tooth & nail with heavily funded startups backed by the who's who of the angel, VC, PE world.
Since we come from an annuity business background, where once you land a deal, you have 12 to 36 months of assured revenues, the biggest change for us was the mindshift; of a consumer business. Basically you need to dig a well literally every day to survive. Moreover when you go direct to a user, you don't have the cushion of a dealer or a franchisee in between for any kind of revenue guidance. Your only light-tower is some kind of market / need analysis that you would have done.
Thankfully we are the incumbents, there was never any doubt in terms of the potential of this market (Home Services / Services). We understood this opportunity quite early and started building a platform to productise our service offerings. However by the time we launched there were over 100 such ventures. Within a span of 12 months, mass hysteria had taken over. Just about everybody wanted to get into hyperlocal; services, food, delivery, you name it. There was a rush of investors scavenging for deals and just about every VC wanted a pie of this play.
We got contacted too but somehow did not make the cut. In hindsight, it definitely was a blessing in disguise. Over these last 12 months, we have also seen 90% of these entities closing down, pivoting or just disappearing. A gold rush that quickly vapourized into thin air.
We met up with some of these founders and teams who had been funded but shut down. The underlying theme was of not being able to meet investor growth expectations. The moto with such determined funding plays is always “if one has to fail, its gotta be fail fast.”
We had lost the first mover advantage and the marketing noise by these funded companies had helped them garner the early customers.
Those were worrying times. We thankfully had the advantage of our corporate client base which we had nurtured for many years. Such clients and their employees ensured our initial orders. As our competitors claimed thousands of enquiries per day (mind you, not orders), we were perfecting our tech, customer service, order deliveries and merchant standardisations.
Our biggest learning during this period was:
- Perseverance and
You see services are a totally different beast. Goods are tangible, so are easy to compare and rate, besides having the business ecosystem of third party ratings and regulatory standards. Services have no such inherent benchmarks. Every buyer has his own expectations. In other words, the biggest challenge is standardisation of services that can appeal to a vast majority of paying customers.
We already had experienced; while building our facility services business for corporates, that standardising services require efforts and time. Because both the buyer and seller have to agree on an acceptable level of standards for a transaction to occur. And creation of such common ground takes months & years of education and transactions.
Technology we believe is always the enabler and a means to disproportionate growth. However, technology would never be the business model. Something that the mass hysteria earlier didn't fathom. Vanity metrics are another anomaly that is plaguing our entrepreneurial ecosystem. Unit metrics, CPA, Lifetime value, GMV, ARPU are all data points that shy away from the fundamental basics of a business - Sales, Cost, Capex and Profits.
We stuck our heads into creating the building blocks that we believed would give us long term success. There is nothing extraordinary that we did. We knew we had a business model and there was money to be made if we solved real problems.
And when I say perseverance pays, I mean it. As other companies folded up, the market turned to us. In the last 6 months, we have witnessed stupendous growth. Sometimes I wonder how we could suddenly get so lucky but then we never stopped building the following:
Our building blocks:
1) Identifying at the most basic level - The problems you are trying to solve.
In our case, after many iterations and customer feedback, we zeroed down on the following problem areas that we are focussed on solving
a) Discovery of service providers
b) Evaluation and verification
d) Lack of standards / quality
2) Building the most intuitive and easy to connect customer touch points
Unlike others, we have multiple touch points by which customers can book services with us - Wesbite, MSite, Mobile App, Live Chat, Chatbots, IVR, Direct Calls
3) Standardisation of services
Creating standards in the most basic of service delivery aspects - greetings, communication, execution, billing, after sales, grievances handling
4) Education and skill development of service providers
And yes, don't be too psyched up about building a differentiation. We are all in some ways unique, which translates to our businesses and endeavours.
Having said this, there are also things we do on a day to day basis to drive sales (without spending a dime on advertising) but that’s for another post.