Interesting Startup: Cars24 – Making Car Selling Hassle Free

Cars24 is an interesting startup which is making car selling a hassle free and easy experience for customers. From getting an instant quote to completing the entire process within 30 minutes (as they claim), car selling has never been this easy for Indian car users. Cars24 basically earns a spread between it’s purchase and sale prices (it sells the car further to Dealers, Owners, OEMs etc.).  

Why I like this?

Great UI: The portal is very easy to use and the entire usage flow of the website is great. Starting with getting a quote, booking a free inspection and then getting the money instantly at the inspection center is amazing for any car seller.

Service Business: These guys are actually providing a service and are not competing in the ‘online platform for everything cars’ space.

My Concerns

Trust: They will need to build trust as car selling is a high value sale for any customer. Getting the right price and fraud are feelings we generally attach with this process

Competitive: You have trade in schemes, offline dealers, online car marketplaces who are already competing in this space. The ease of use and services provided by Cars24 should give it a reasonable differentiator to create a space for itself.

Overall, I really like this startup and the way there are doing things, I feel it can do very well.

Dogspot – a Delight for Dog Lovers

Dogspot is a portal where you can buy the widest variety of dog products in India. Also they have a community where you can discuss anything related to dogs. I have been tracking this website for a while and have seen it grow from stage to stage.

They started out as a community for very long and then got into ecommerce a few years back. Initially they were selling products of various brands. With the big horizontal ecommerce players entering this space, they are moving towards creating a private label.

WHAT I LIKE

Speciality Store – They are sticking to a niche and have emerged the leaders in that space.

Strong Community – It is the biggest and strongest community for dog lovers. It serves as a great tool for engaging users.

Very Targeted Market – Dog Lovers & Owners. They are building tools for them and hence the engagement is higher.

Private Label  - Dogpsot has a big user base and is now pushing it’s own private label. The good thing here is that the margins are higher and a private label is sustainable in the longer term. They are also selling their products on other websites like Amazon.

CONCERNS

Small Market – The market size is quite small for dog products in India.

My Suggestions

Demerging – They are currently running 2 businesses, a community and an ecommerce store. They should demerge both of them as both have different growth potentials and challenges associated with them. This will help them unlock value in the future.

I feel that Dogspot has created a strong place for itself in this niche and is currently in the process of pivoting it’s business model into one which looks more at profitability and sustainability. 

Interesting Startup: SNAPCHAT

SNAPCHAT

Snapchat is a photo and video messaging app. The difference is that the media sent lasts for only a very brief amount of time and is deleted forever after. The time the media lasts is defined by the user sending it. Snapchat received a great response from teens and young adults and was very commonly used for something known as sexting, i.e. sending media having sexual content.

Why I find it Interesting?

- Easy to use; Having a good interface
- Limited Usage; Users want a product which has a very clear offering; On using the app, users defined a dominant use case (in this case sexting) which made the app viral

My Concerns

- Risk of Competition; Whatsapp has become the default messaging app; Adding a time cap for certain message would be easy to implement

Snapchat has shown fantastic growth in the past. Facebook tried to acquire it around 2 years back. Turning that down, Snapchat's valuation has grown over 5 fold since that.

Interesting Startup: GROFERS

GROFERS

Grofers is an on-demand delivery service connecting local shops with consumers. It was one of the first companies in India to create a hyperlocal marketplace for goods, starting with groceries. It has raised a lot of funding and has shown good growth in the Indian market.

Why I find this interesting?

- Essentially a delivery service; Fulfilling orders by procuring from local vendors; Scalable
- No capital required for buying inventory
- Shortest delivery time since goods are purchased from vendors closest to the customer's location
- Strong competitive advantage since big e-commerce players like Amazon & Flipkart will find it difficult to establish last mile logistics
- Lower delivery costs since delivery is done locally and does not involve large distance/intra-city logistics

My Concerns

- Margins are limited since goods procured from through retailers primarily
- Limited products for customers since only products which are available locally are shown
- Profitability is more difficult to achieve

Grofers and other startups operating with this model have seen a lot of interest from investors in the past. Profitability will be a key concern going forward. I feel the model has a lot of value and is here to stay in the long run.

Interesting Startups: UBER

UBER

An on demand transportation system which connects users to taxis based on their preferences. Users can use the app to select and book a taxi category (cost efficient/luxury). The taxi in the selected category closest to the user is alerted and attends to the customer. Fare estimates are also given to customers beforehand on the app.

Why I find this Interesting?

- Low capital required since taxis are not bought; Scaling is easier and faster

- Technology backend useful for optimizing the entire process and checks on the system; Backbone can be replicated to any geography 

- Customer gets a taxi in the shortest period since the closest taxi driver is alerted

- Customer selects the taxi category he/she wants and has an idea about the costs involved

- Drivers can focus on driving and leave customer acquisition on Uber

- More business for Drivers as better marketing by Uber

My Concerns

- Safety since drivers are not on Uber's payrolls; Uber does a detailed verification of the drivers though

- Customer Experience may take a beating as model is dependent on vendors (taxi drivers)

Overall, the UBER model is an awesome model and has been able to disrupt the public transportation system in the world.