Startups must plan every step, move with frugality

Sumit Chhazed, cofounder of the used bikes marketplace, besides creating a robust business plan, startups should also invest in hiring the right kind of talent and have robust operational efficiencies

TechGig.com Bureau

CredR, an year-old startup, is aiming to organise the second-hand two-wheeler market. The Mumbai-based company that sells pre-owned bikes online was started by three IIT Bombay and a Stanford University alumni and recently raised $15 million in Series A funding.

In an interview with TechGig, Sumit Chhazed, one of the cofounders, said the way for startups to grow is to understand the evolving marketplace and the changing consumer needs and build capabilities. But he also said that if a new business is unique and has created a category of its own, securing funding gets tough.

Edited excerpts from the interview:

You are in a unique space of second-hand two-wheelers. What made you get into this segment?

We have a huge consumer demand for pre-owned two-wheelers across urban and tier II and III markets because of their affordability, easy commute and maintenance. However, this segment is currently unorganised and cluttered with local players which make the process of buying a second-hand bike quite cumbersome. Often it gets really tricky to buy a good second-hand bike from the market owing to the inconvenience, unreliability and hidden transaction processes, and to add to it, there is no price standardisation of the vehicle.

There are innumerable issues and unprecedented aspects that the customer needs to tackle, making the whole experience very stressful. We realised this challenge among consumers and wanted to bring in an easier, convenient and trustworthy process to mitigate the perils of buying pre-owned vehicles, and hence launched CredR.

The entire process on CredR is transparent, convenient and there is utmost focus on ensuring the quality of vehicles listed, thus enabling a 100 per cent trustworthy transaction among consumers. The easy access to any information required and the convenience of transaction also makes CredR a viable option for consumers who might be first time buyers or not very tech-savvy thus catering to a larger segment of the audience.

The segment you are in already has strong competitors. What is it different you offer to attract your target segment?

CredR is not a mere listing portal. We are committed to not only ensure an easy transaction but also ensure a genial consumer experience by offering vehicles that suit your requirement and assured of quality.

All vehicles on our site are verified and quality checked by the team of auto experts and then rated as per our systematic rating algorithm. Thus there is no room for any ambiguous pricing. The rating algorithm considers over 80 parameters before being listed on the portal. We also share a detailed inspection report for each bike on the site allowing the consumer to read through and make an informed decision.

These factors not only add credibility to the transaction but also make the process trustworthy and easy for consumers across genres and background. We provide end-to-end assistance to our customers starting from selecting a bike to paper transfer assistance to post sale services. Some of the other unique features we offer, include free test ride, online bike reservation and easy loan facility. Our after-sales service includes free six-month warranty, free one-year roadside assistance and easy buyback policy. We want the whole process of buying a pre-owned vehicle to be comfortable and assuring, rather than a mere business transaction, and this outlook makes our approach very different and consumer centric.

Many in the industry feel that shakeup in the startup scene has began. What learnings have you gained from the mistakes of startups that have floundered?

A startup business is essentially very much like any other business and requires a strong focus and sound understanding to the market it operates in. It is extremely crucial for any startup to function with proper planning at every step and move forward with frugality. One must understand the evolving marketplace and the changing consumer needs and build capabilities to expand the business, to stay relevant to these changes. Along with a robust business plan, startups should also invest in hiring the right kind of talent, robust operational efficiencies and build a capable team that delivers the desired results and progressively take the company ahead.

What aspects startups must keep in mind when going for funding?

As a startup, you will either have a business model which is unique or a model which is based on an existing practice in the market. If the business model is based on any existing practice then getting funds might be easier, as the investors know the practice and have already seen the growth.

However, if the business is unique and a category creator one, the challenge is higher for funding as you need to build the faith of the investor in your business. You need to have a strongly defined plan and show scalability of the business in terms of potential profits. Some pointers that work for investors are key differentiators from competition, strong team resources, unit economics of the business and potential scalability and expansion of the business in the long run.

Online branding plays a key role in today's world when it comes to not just attracting customers, but also in attracting the right talent. How do you plan to address this key issue?

At CredR, we are active in the online space, engaging with our audience through our company website and other social media platforms which allows us to not only to build a strong company reputation but also reach out to prospective talent. We also recruit with the help of a mobile application called the Super App.

This app lets you create customised job profiles that candidates can view and then apply accordingly. Thus it is easy for the candidate to choose the right job profile and it is easy for us to filter out the right talent for the same. In addition, social and professional networks are also important avenues to source right talent. As our engagement and brand building is getting stronger on the digital platform, we have seen an upscale in the number of candidates applying with us, as we receive more than 5,000 applications in a month.

This article first appeared in techgig.com