The start-up: Set up in the Western region of India, the start-up aimed to serve
the community by providing plumbers, electricians, carpenters, etc. They wanted
to deliver to users, Assured quality, Convenience, and Affordable rates. The firm
was started by people who studied at IIMs and had worked in top management consultancy
firms.
Year of commencement : 2015
Total funds raised : More than US $ 5 Mil
Year of closure : 2017
Name of the firm : Founders do not want it to be revealed
Names of the founders : Founders do not want to be reveal
Reasons for failure:
• Without having a clear business model in mind, they raised money. Once they raised
money, they had to immediately focus on profitability when there was no clarity
on how they will run the business.
• The pace of hiring was faster than the pace of growth. This made them burn money.
Learning - Ensure that you hire less than you need.
• Since they went through the B2C route the cost of customer acquisition was high.
In hindsight, they should have gone by the B2B route.
• They estimated x number of repeat orders from customers that acquired. The actuals
was far far lower and hence they burnt money to acquire customers.
• The percentage utilisation of the people that they hired was far lower than their
plan.
• When the going was good, there was enough enthusiasm in the team. When the going
was tough, there was not enough passion and conviction to solve the problem for
customers.
• When there were delays in getting the money that they had signed up to receive,
there was tremendous fire fighting to pay salaries, placing more strain on the day-to-day
activities of the senior management.
- Reported by
Rameshwar ,healthyjio.in
rameshwar at healthyjio dot in
About Founders :
Total : 4
Educational back ground : Graduates in Engineering from IIT. One Person with M.Tech
& MBA and another with CFA
Any Start-up experience prior to this start up : One co-founder was previously involved
in start up, which was closed.
Experience : One cofounder had 7 yr experience, another 5+ yr experience and other
two less than 6 months
What they are doing now: Details of one person not available . Other three have
taken up jobs. Two senior people are now in Management posts ( CEO/AVP)
- Reported by
Ramesh kumar
rameshb at vsnl dot com