FIVE YEAR-OLD START-UPS: RANK 2
Sitakanta Ray and Sulakshan Kumar, both in their mid-30s and friends for 17 years, remember October 2010 vividly. It was when their long-held ambition to start a business reached tipping point. Both quit jobs they had been holding for years.
"We had been planning an entrepreneurial journey for almost eight years but could not muster enough courage. Finally, we felt it was now or never," Ray tells Business Today sitting in the conference room of the office of MySmartPrice, an online shopping research venture the two had set up in Hyderabad in 2011. In the first year leading to the incorporation of the company, they kept working from their homes, giving shape to the business and developing the code.
MySmartPrice is an online platform that helps people find products in nearly 250 categories. Of these, it offers price comparison in 100 categories.
But why shopping research? "We felt the start-up must be in a space that is growing but not yet big. Second, the key skill the venture needed should be what we two have, which is our capability as product engineers," says Ray. Also, given that Indians are highly value-conscious, shopping research seemed the space to be in.Ray and Kumar first met when they joined National Institute of Technology, Rourkela, in 1998. After graduating, both joined Oracle in Hyderabad. From there, Ray got into the Indian Institute of Management, Bangalore, while Kumar joined Infosys.
"Odd as it may seem, I spent time studying management but handle engineering and marketing, while Sulakshan (Kumar) pursued engineering but is today involved in management," says Ray. What unites them, however, is their drive.
"For us, passion trumps experience," says Ray. This principle, he says, also guided them when they were hiring to build their team, which now has 80 employees and is expected to touch 100 when new campus recruits join in June.
The venture, says Ray, started with books, as comparing prices of books across websites is easier. These comparisons are done using a code they developed (referred to as Web Crawler), which browses retail sites for indexing. "Any average engineer can do this at a broad level,"he says. However, the two have made a difference in the way this tool is used and the details it throws up. "When we started, there were three to four players in this space. Now there are 30 to 40. Where we differ is not in the range of features but in the depth of solutions. As against 24 hours earlier, we now update prices every 10 to 15 minutes. Plus, we will add offline products also," says Ray. A pilot project in Hyderabad is already giving products and prices from the brick-and-mortar store next door. The founders plan to take this to 10 cities in the next one year and eventually go national.
All this is making investors happy. Helion Ventures and Accel Partners have invested around Rs 8 crore in the venture, says Ray. Rahul Chowdhri, Partner, Helion Ventures, says numbers speak for themselves. "From five lakh visits every month when we invested around 2011, they now get around 20 million visits every month," he says. He does not think this is a crowded space. Incorporating offline prices, he is clear, will give them an edge.
What MySmartPrice does is help the user solve two problems - what to buy and where to buy. In cases where like-to-like product comparison is difficult, for instance in footwear and fashion, it has a range of filters such as best discounts that help it come up with a consolidated bestseller list with popular products and their specifications. The focus is not just on providing the best price but also sharing information on best deals.
On the future, Ray says five to six years ago it was relatively easy to predict the world. But not anymore, given the speed of change. "Four years ago only 10 per cent of our users accessed us on mobile phones. Today, the figure is 65 per cent. In the last one year, we have grown five times, earn close to Rs 20 crore revenue and are near cash breakeven. We hope to grow at least four times in the next one year and earn revenue of Rs 80 crore."
The company's revenue model is simple. It gets a cut from retailers for sales executed through it. Of all the stores that pay it, the top four are Flipkart, Amazon, Snapdeal and Paytm. The potential is huge. According to the company, Indian e-commerce should generate sales worth $10 billion in 2016. The Indian affiliate segment has the potential to contribute $2 billion to this, it says.
The company's philosophy, according to Ray, is not to let growth depend on breakthrough innovation but on being consistent and the best at what you know. He says he picked up this mantra from an entrepreneur who told him that "not everybody can be an outlier like Sachin Tendulkar but one can certainly aspire to be a consistent player like Anil Kumble".
"If you continue to throw the ball at the right place, it will hit the wicket sometime or the other," says Ray. That's why the focus is on continuous improvement.