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Tag Archive : venture idea

Are Capsule Hotels the Future of Indian Hospitality?

The horrendous experience travelling to Hyderabad was definitely salvaged by the quality of interactions I had at the Campden Regional Family Summit. The summit was followed by a co-investment workshop where startups pitched their ideas to a group of family offices for investment. While most of the ventures were the kind that would appeal to patient capitalists, one of them stood out to me. This startup has the potential to open up a blue ocean in the space at the cross-section between low budget business hotels, hostels and solo travelling ie capsule hotels.

With the ability to pack in a large number of beds in a small area, community bathrooms to cut costs, and the capsule design providing an air of privacy that one craves in a hostel, the capsule hotel format brings their customer the best of both hospitality verticals and cost.

The venture that was presented yesterday viz UrbanPods has set up a location in Mumbai. I am planning to stay in their hotel for a couple of days to fully immerse myself in the experience because I truly believe that it is a great business idea for value-conscious travellers in a high-cost real estate market like India.

70/2018

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Who Will Save India from Bad Customer Service

It took a lot of painstaking effort and careful planning to ensure that I would be in my hotel bed in Hyderabad between 11:30 pm and 12 midnight so that I would be fresh for the conference I was attending today. Bad weather coupled with lousy pilot scheduling resulted in a 4-hour delay, most of which I spent sitting on my seat waiting for Indigo to send out a new pilot to commandeer the aircraft. I finally reached my hotel at 3:30 am and fell asleep around 4:30 am thinking to myself whether the airfare I had paid to Indigo was cheap enough for me to endure the toll this lack of sleep would have on my body today. As you might guess, it is not, and will rarely ever be.

It is time that the enterprising youth of our country got together to create a service along the lines of Resolver. It is a known fact that consumer courts have the highest resolution rates in the country; add that to the rapidly growing internet population statistics and a growing consumer market with many new brands and there could not be a better time than today to start such a venture.

Karishma and I have worked on this idea previously and we are very passionate about investing in this space. If you or someone you know is working on this or anything like it… reach out to us ASAP!

69/2018

Contact Management Solution for Gifting

This year, I have chosen to simplify several things in my daily life, one of them being my 5000+ member contact list that grows by 100-200 new contacts every month.

Currently, I use FullContact to manage all my contacts. It scans business cards, merges duplicates and scrapes the internet to find and attach all the social media accounts of my contacts to update me on their latest activities.

Additionally, I have been using Accompany. It sends me a daily email digest with the latest media articles involving anyone from my contact list. It also allows me to sync my calendar and sends me a bio of the people that I am scheduled to meet. It usually includes their latest media mentions and articles, giving me the chance to build a strong rapport at the beginning of every conversation.

However, there is one service (or a feature) that I wish there was an app to address. It would save my team and I the time and effort we spend doing this task manually every year.  Every year we go through an arduous process to send gifts to my contacts on their birthdays, anniversaries or religious occasions like Diwali, Eid, Holi, Christmas, etc. A feature or service that could semi-automate this process, providing an easy solution to this problem could be an interesting concept that an enterprising group of individuals could work on.

My idea for this model is:

  1. Connect with my (the user’s) contact list
  2. Scrape through online sources for birthdays and anniversaries of my contacts
    • Also, try to figure out the religion they follow so that a personalized wish can be sent on their respective religious festivals.
  3. A week before someone’s birthday/anniversary, ask me the budget that I would like to allocate to their gift and try to find them an interesting card, bouquet or a gift that can be sent on my behalf.
    • Then the service could send me a variety of options for gifts based on the budget that I had allocated and allow me to pick the one I prefer most.
  4. This service will also need to get in touch with the person I am sending the gift to, for their latest address, a response that the person getting the gift can choose to keep hidden from me or let me update on my contact list with the latest info.
  5. The service can start to learn and over a period, start getting smarter in terms of the budget and the gifts that I like to send
    1. They could also start to classify who I prioritize from my contact list based on the budgets and frequency of gifts that I send that person
  6. A similar exercise can be done before a religious occasion on a larger scale.
  7. As my contact list continues to increase, so does the business for this service

There are two ways the company makes money. Thus, the revenue model could be:

  1. Convenience Fee

If the company decides to charge this fee it is imperative that the quality of the gift and of the service is of the highest order. A low-quality gift or shoddy service will ensure that the user is lost forever due to the embarrassment it would cause him/her.

Secondly, the company should ensure that the prices they provide for their gifts are the best prices in the market. I have tried Wishup and Quintessentially to solve this problem in the past, but they tried to price gouge me, dissuading me from using their service again.

  1. Affiliate commissions

The company can get affiliate commissions from their vendors and then decide to share a part of it with their clients by providing better (cheaper) prices than they could find anywhere on their own. As the number of gifts grows, the relationship built with the vendors and customers would act as a significant moat against competing service providers.

There are numerous articles that can tell you that the size of the gifting market in India is huge. In fact, this research report from Technopak estimated the size of the market to be $40-42 billion, and a more recent article from TOI estimated it to be $65 billion. There is already an abundance of digital players trying to make their mark in this space. However, most of them do not provide as in-depth a solution as I have drawn out here, which opens up a blue ocean in an otherwise red sea.

Karishma Kirpalani from our team is in charge of finding me a startup that provides this service. If you or someone you know is pursuing this, email us on prospects@artha.vc attn: Karishma Kirpalani.

56/2018

Farming as a Service

At a personally & professionally challenging time in the 2nd quarter of 2016, I went out and stayed at Damodar Farms in Vapi for a short while. The serene setting of a farm, farm-fresh vegetables, raw milk and Mahatma Gandhi’s The Story of My Experiments with Truth allowed me to cleanse my soul and reset internally.

In addition, the farm stay made me realize that what I eat, and drink plays an important role in determining how I feel. That awesome feeling got me hooked on an idea. Those who experience the joy of eating high-quality nutritious food will not want to go back consuming the “dumb” calories provided by chemically sprayed, industrially produced or genetically modified food.

Months after returning from the farm, I continued to eat only farm fresh produce. I was so motivated to get the freshest produce that I embarked on a quest to buy farmland, rear cows for milk, grow vegetables and supply the produce to my family, possibly making this my side business. I scoured the internet and my WhatsApp groups to seek advice on where I should buy land and what the infrastructure and setup costs to run a dairy & fresh produce farm would be. The deeper I got into this play, the more I realized that this couldn’t be managed remotely, at least not by me.

What I required was a group of individuals who had farming experience, strong motivation, excellent organizational skills, marketing, and branding experience to educate the audience about the benefits of buying fresh produce. My part would involve investing the capital to buy land and equipment, aid marketing & sales strategies and put together a solid team who would run and scale the business.

However, there was a major glitch in my utopian plan. The growth of the team was directly proportional to the amount of money that I could invest every year and therefore made it necessary to weigh in the team’s aspirations. Since putting a lid on expectations wouldn’t work, I started looking for startups who do farming as a service. The business offering is simple – the venture will identify the land, provide an in-depth ROI analysis and facilitate the investment. The abundance of liquidity in the market coupled with the idea of purchasing profitable real estate would bring onboard many HNI’s with both money to spend and willingness to pay a service fee based on returns.

Nikunj Thakkar from our team is in charge of finding me a startup who does farming as a service startup to invest in. If you know someone that is pursuing this (or you are the one) email us on prospects@artha.vc attn: Nikunj Thakkar.

20/2018

Venture Idea: A Micro-Investing Layaway Platform

Today my online behaviour is tracked constantly to create a virtual persona. That persona is constantly being bombarded with offers to spend or invest my money whether it be on ecommerce, travel, insurance or even financial products. In this world of confusion is there someone that can bring in simplicity for me to achieve my goals?

What is the use case?

A set of smart founders could create a service that:

  1. Allows me to tell them what I would like to purchase and set these products as my goals
  2. Allows me to set deadlines to achieve these goals
  3. Creates an investment plan (based on my risk-taking ability).
  4. Chooses a date to automatically transfer money from my checking account into my goal based account
  5. Constantly tracks my spending to keep me on track to achieve these goals
  6. Provides a daily/weekly/monthly report tracking my progress in relation to the goals
  7. Let’s me know if there is any offer on a product that is part of my goal basket

What is the business model?

Online retailers utilise re-targeting, discounting offers, and financing offers to convert those on the fence of making a purchase. However, I haven’t come across any players that are utilizing the age-old selling technique known as the layaway plan. A layaway plan allows a buyer to choose what they want, put down a small deposit to place the item on hold and finally choose an interest free payment plan to pay off the balance for that item. Once the balance in paid off, the item is taken out of layaway and the sales is rung up.

On the flip side, there are numerous wealth management apps that will help me plan for retirement but none that will allow me to plan for purchasing specific products by a deadline while accounting for my recurring expenses. In a world of increasing demands and availability there arises a need to strategically save.

A service that allows me to choose an item from Amazon, or vacation from MakeMyTrip or that love couch that I always wanted from PepperFry and sets up an investment plan for me to achieve that goal by a certain date solves a problem for both the seller & the buyer.

What is the revenue model?

  1. Fees from mutual funds for bringing in investments
  2. Affiliate commissions from retailers where the goal proceeds are spent

What is the total addressable market?

As per the latest data available from the RBI for the month of September 2017

In millions except transaction size Debit (YOY growth) Credit (YOY growth)
Number of Cards 819.76 (11%) 33.34 (22%)
Number of Transactions: POS 265.30 (89%) 112.63 (27%)
Transacted Value: POS 366,292 (67%) 374,654 (25%)
Transaction Size Rs. 1380 (-12%) Rs. 3326 (-1%)

 

As the data suggests Indians are getting comfortable using cards to settle bills, with debit cards continuing to dominate digital spending in India. In addition, mutual funds AUM’s grew 31% to 21 trillion rupees in October 2017, suggesting that more Indians were adopting mutual funds to save & invest. Both trends strongly indicate a shift in how Indians are spending & investing their money.

Utilising a bottom up approach we assume:

  1. Credit card owners (CCO) have higher incomes than debit card owners (DCO) i.e. higher spends.
  2. An annual vacation for a CCO is Rs. 1 lakh vs Rs. 50,000 for a DCO
  3. A major annual purchase for a CCO is Rs. 50,000 vs Rs. 25,000 for a DCO
  4. Only 20% of DCO make enough money to a worthwhile customer

Therefore, the total addressable market for

CCO (33.34 m x 1L) + (33.34 m x 0.50L) = INR 5000 billion

DCO (819.76 m x 20% x 0.50L) + (819.76 m x 20% x 0.25L) = INR 12,296 billion

Combining 1 + 2 we get a TAM of 17,296 billion

Current competition

Tracxn suggests that a startup that does this would fall under the automated micro-savings or automated micro-investment platform categories. There are currently only 5 start-ups that fall under these categories, 1 of which has been acqui-hired (SYM).

Globally Accorns, Moneybox and Dvendo are the most prominent startups in this space with Accorn in the lead, having raised over $107 million from Paypal, Rakuten, Bain, Great Oaks and 8 others.

Conclusion

While we can all agree that goal-based saving makes sense for the new age Indian, what remains important is how we create an emotional bond with the saver. This can be done by giving them the reigns to choose what they want to purchase so that they can dream up an image of ownership or enjoyment and be motivated to achieve it.

Allowing retailers to know that a potential buyer is saving up money for a future purchase will be valuable information. Retailers can tap into this data and make strategic offers to drive up sales or even plan future sales as the data gets richer.

I for one am excited about working on this idea!