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Strategy
Research from McKinsey shows word-of-mouth recommendations can do more to help you close a deal than any dealer incentives.
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Give your website a makeover. After all, it is the face of your organisation in cyber space.
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It’s a tough life for start-ups. Business is hard to come by, there are more critics than believers, money is hard to come by, and of course, their peers are always eager to dismiss them. And yet, the brave-hearts who found them pursue their not-so-ordinary ideas with single-minded determination and a burning passion. They are not really bothered about any of these challenges—at least most of the time. In our last issue, we had sought out three founders from three different cities, who had launched their dream companies. Here’s how the cool fellows have been faring on start-up-land.
Delhi: The Shoe Spa
The background: Two management graduates, Saral Budhiraja and Tabish Ahsan, bag jobs on campus and await their turn in the corporate world. Their employers keep deferring dates, leading them to differ in thinking. With the concept of a shoe spa having carved permanent real estate in his mind, 23-year-old Budhiraja decides to experiment with the idea along with close friend Ahsan (22). Shoe Spa, their shot at turning old and dirty soles into shiny pairs, starts walking. Nearly two lakh flyers later, the service is starting to get its due attention. Last October, the young turks got more than 50 shoe orders in a single day.
The update: Shoe Spa gave itself some much-needed space, expanding its workshop in Civil Lines, a suburb of Delhi, by more than 600 square feet. It now has the luxury of three rooms. Two new machines for reconditioning, cleaning and re-colouring have also been commissioned. But, the young promoters aren’t satisfied. “We want to shift to an industrial area. This is important from the business respectability quotient. It’s good for the image,” explains Budhiraja, who adds they are waiting to reach critical mass before withdrawing capital.
Last month also saw an upgrade of their “test run” prices. The duo attributes the hike, a leap of nearly 70%-80%, to the use of premium ingredients. The real reason, however, is a steady stream of customers. Shoe Spa gets around 20-24 articles (shoes, belts, wallets) for “treatment” every day now, up from 15-20 at the end of last year. “Shoe Spa is finally making a buzz. We also get a good chunk of clients through referrals and word-of-mouth,” says Budhiraja.
The partners have also fine-tuned their marketing, working on one neighbourhood at a time. Flyers continue to dominate their minimalist marketing campaign. Over January and February, a little over 10,000 flyers were dispersed in two separate blitzes. The focus zone was limited to Civil Lines, where the Shoe Spa workshop stands. Next month, the target moves to South Delhi colonies like Lajpat Nagar and South Extension.
The business model has also been tweaked to improve profit margins. A small delivery charge now gets tagged on for every article that makes the trip to the workshop but need not or cannot be treated. Free delivery is offered for all items that do undergo treatment or repair.
What next: The next month offers a mixed bag. While a rehaul of the website and improvement of the online order system needs to be urgently tackled, a new business vertical is also in the works. Interesting B2B deals are being discussed with “a couple of people”, say Ahsan and Budhiraja. “We’ll hopefully have something great to update soon,” the duo assert confidently. The world is sure taking a shine to Shoe Spa.
Hyderabad: RideInSync
The backgroud: It all started with a debate at ISB, Hyderabad, on how carpooling had failed to impress Indian masses. Deepesh Agarwal and Amit Gupta, of the 2008-09 batch, were convinced that the concept could have worked only had it been presented correctly. So instead of seeking high-profile jobs, the duo decided to test their theory. A quick survey across three metros showed 65% of the people were willing to share a ride. RideInSync was launched in 2009 from ISB’s Incubation Centre. It packed the concept of carpooling with the option of choosing your co-passengers to and from a common destination. The USP–the entire service was accessible through a mobile or laptop. Currently, the service is functional on a single route–to and from Hyderabad and its twin city Secunderabad to the Rajiv Gandhi International Airport. With 730 registered users, the main challenge for Agarwal, whose partner has since moved on to a job in Mumbai, will be to crank up the numbers.
The update:
RideInSync might not have had a rough ride this month, but it’s been no smooth sailing either. “Given the volatile nature of a start-up, the goals keep changing,” says the 31-year-old entrepreneur, rather matter-of-factly. Though there is a long distance to cover to reach the critical milestone of 5,000 subscribers, the service has witnessed a humble rise in numbers—its registered user community has gone up to 810. Route expansion is another top-priority task. But, Agarwal concedes this will take some more time, despite the dozens of requests that pour in for expansion beyond the airport route, especially to the city’s three railway stations.
The first-generation entrepreneur is currently focussing all his energy towards devising an integrated carpooling solution. “Most corporates we approached liked the RideInSync idea. And, they have promised us support. But, they want us to come up with an integrated transport solution on which they can run both carpool for employees and cab-planning for the company. We are working towards a cost-effective transport solution with pooling built in,” explains Agarwal. He is cautious about setting ambitious sales targets for the coming month, or even the month after. “No one wants to be a guinea pig for the integrated solution. Many companies we have approached are waiting and watching. They all want someone else to try it out first.” The tie-up plan with the corporate world, thus, remains both an area of challenge and immense opportunity. Even now, despite no official association, Infosys employees are the biggest users of the RideInSync service.
What next:
Finding talented and passionate people ready to invest hours of work for unglamorous start-up salaries remains a hitch. Though he recently managed to hire a computer science graduate from the elite Indian Institute of Information Technology, talent is always a shortage for start-ups, feels Agarwal. “We want the best of employees but don't have enough money to pay them. So, our radar always keeps screening for that crazy lot who put work before money and are inspired about being part of change,” laughs he.
Bangalore: My Sunny Balcony
The background:
If apartments cannot come down to the gardens, let the gardens travel up the apartments. That was the logic used by four friends—forever ruing the fact that Bangalore was losing its beautiful green spaces—to start My Sunny Balcony (MSB). A garden consultancy, this start-up designs dream gardens for busy professionals and creates little patches of green in balconies across Bangalore’s growing concrete landscape. More than a year and 30 unique gardens on, this green team has created enough buzz to keep its business going.
The update:
With things moving real quickly, the MSB team decided they needed to take a hard look at where business was headed. The team spent the first few weeks of the year taking a good look at their numbers, and rethinking their plans and strategies. The four also decided it was time to get them into a space that could be called office. Nothing fancy—just an innovative renovation of their small warehouse in Sadashiv Nagar with “living” walls that they hope will talk to clients who walk in. Besides the flora and fauna, the office has also helped nurture efficiency. “Our turnarounds are much faster. It’s easier to bounce off ideas with everyone together. I am a big fan of tele-commuting, especially in crowded cities like ours, but I have to say we find our office time highly productive,” says Sriram Aravamudan, one of the co-founders. Reena Chengappa, the other full-time founder-member in the business, agrees wholeheartedly.
With office geography defined, the team has also taken on more people. The two “extra hands on the deck”—one a former airline ground staff, and another an ex-content analyst with a big multinational, who were only too happy to join the green army—are expected to ease the load on Chengappa and Aravamudan, and enable them to take on more clients.
What next:
Temporary investments and calculations out of the way, MSB is now ready to dig into some revenue. And they do have a lot in line with almost 10 gardens to deliver. Finishing up those is top priority for March. Unlike most start-ups, theirs is a problem of plenty. The main challenge here is to upgrade the infrastructure in order to tackle the demands of a vibrant fan following. In fact, a large part of the last two months was spent responding to the huge backlog of emails and inquiries that had stacked up. “If we even manage to tackle one-fourth of the inquiries we have got, we are good. We don’t see too many setbacks in that sense,” the team says.
Also, with more people on board, the team will be able to devote attention to proposed verticals like annual maintenance contracts for upkeep of gardens. In short, this green corridor is sure to remain sunny for quite some time.
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