A long Tuesday afternoon and I was getting impatient for my next interview with Tooler. I researched their website a for a bit, after much persuasion from the Pixr8 head Nitish. Not that I do not normally research a company before interviewing but the briefing from Nitish made think to myself “here we go again, yet another online aggregator”. And boy how wrong I was! In simple words, I was quite pleasantly shocked to have sat down for an interview with one of the founders – Sukanth Srivastav. Read on to know how three founders are so clear about what they want to achieve in the area of laundry and home services!
Here are the excerpts of my tête-à-tête with Sukanth.
Tell us more about yourselves, your backgrounds and what got you to work on Tooler?
I passed out of VIT, Vellore in 2014, and I am an engineer. I started working with Paytm and I was managing their integration with other logistic companies like Uber, TFS, Meru, Easycabs, etc. I was involved in their logistics in a big way so from there I had a thought that lets start our own logistics company. I currently handle product management plus I work as a marketing and operations person. My other co-founders are Vishal Gupta, an engineer with 8 years of work experience in the field of Android Mobility; and Himanshu Arora, who is a BITS Pilani alumnus and was working with Paytm to create the logistics end of their marketplace. Vishal is our App guy and our CTO, and Himanshu is our CEO but he also works on the Supplier and Vendor management and Sales side.
We wanted to work on the B2H model in the logistics space and we found that the laundry business has the highest margins with the best repeats one would want to have. For example, a lot of companies started grocery where the turnaround time is between 30 minutes to two hours. Whereas in case of laundry the turnaround time is anywhere between 24-36 hours and margins are on the higher end to that of 30%. This got us to start working on the laundry logistics model and we clubbed all other home services like plumbing or electrical maintenance and carpentry into the app as a cross-sell category. We do prime play as a logistics player in Delhi and cross-sell electricians, plumbers and carpenters with them.
So what are the statistics as of now?
We get close to 35-40 orders per day for our laundry services and 10 orders a day on cross sells on our service for plumbers, electricians and carpenters. At the moment we are making our money on our plumber, electrician and carpenter services and are very close to breaking even. We serve areas around Delhi, NCR, Gurgaon, Noida and Dwarka. We already have around 2000+ downloads on Google Play, we have fulfilled over 2500+ orders in the last three months and we are growing at a rate of a 150% month on month.
Our target group is basically two segments: one is the PG segment which lives alone, stays away from home, does not own a washing machine and does not have the money to own a washing machine and the other segment is the well to do working class which doesn’t have the time to do their laundry and does not want to pay an astronomically high amount to maids as salaries. We are cheaper than any maids in Gurgaon, we are cheaper than most laundry services in Gurgaon and 95% of the service providers in this business!
For profitability, we are profitable at the rate of as less as 500 orders! The company started in June 2015 and in three months we are neck to neck in competition with the largest laundry service providers in Delhi!
What do you do differently?
While I was working at Paytm, I noticed that most of the people wanted to work on home services and most of them were working on the model of matchmaking. But I wanted to work on the matchmaking plus delivery services with a guarantee sort of a business model. For example, most popular online home services companies have a skeletal workforce of their own and also matchmake with other aggregators to work on their behalf and collect payments with a commission. What we do is work with MGP or Minimum Price Guarantee and we work with our own workforce and give them a guarantee of a fixed amount per month as a salary, in return for certain amount of transactions and if they deliver more than that then we charge them a commission on every transaction.
We work with our staff exclusively and they are attached to us on a full-time basis and are willing to travel around for fulfilling our orders. Therefore we have more control over our order fulfillment process. We also own our logistics fleet for the laundry and we pay our riders on a commission basis. We have a system where the riders have an app and there is a customer facing app which is the most important part of our logistics piece so whenever an order is placed, based on the geographic location the app tells which rider should pick up what orders and likewise customers get to know who is coming to pick up their order. Not only that they can also track the riders with their pictures and names and this makes it better and different from almost every other provider in the market so far. Once an order is fulfilled, the customer can give his or her feedback or rate our staff and services. This gives us a feedback on how to manage our services.
What is your USP? How are you positioning yourself in the marketplace?
Almost everyone else is trying out the no stock category, some are trying out the house cleaning services or house repairs like plumber’s, electrician’s and carpenters. What we are trying to do is focus on laundry, as there is less friction in laundry services and it’s a category that is easier to manage and uphold. In the process we try to cross-sell our home repair and maintenance services. So we do not serve every single category possible as we feel that it is hard to manage and difficult to control in terms of order processing. For example some of the providers have more than 60 categories of services that they offer and it is hard to manage and fulfill so many leads. It gets complicated when you don’t know how to manage the feedback given, you know, whom to retain and how to replace. We are able to fulfill almost all our orders because we have a smaller workforce and we work on an MGP basis and that helps us to work as a delivery fulfillment guarantee system. If a customer places an order with us, we fulfill the order and do not leave it unattended!
Most providers that work with vendors have to wait for a considerable number of feedbacks before they dissociate with their vendors, whereas we are quick in the sense that we have our own workforce and we get individual feedbacks, and for us the turnaround time for disassociating with our staff is just one booking. Nobody gives such a delivery fulfillment guarantee as of now in Delhi except for us!
Are you not worried about the competition in the house repair and laundry space?
The only direct competitor of ours that recently got funded was Pick my laundry and for a good amount. And let me explain this analogy to you – because of Flipkart, Snapdeal and others survived, had there been no FlipKart there would have been no Snapdeal, Jabong or a Myntra. Because they raised so much of money and awareness that people were ready to book orders online and accept the concept of cash on delivery. This gave out a message that this business could be done and then it became a lot more easier to work on such a business model. So I feel that our business model is more tech-oriented and we are in the process of incorporating more features to our app. Its going to be much more seamless as we are already in talks with an online wallet so that the complete service life cycle is online except for pick ups or drops. Our turnaround time for delivery is 24 hours for 95% of the deliveries, whereas the rest of the players are doing it in 48 – 72 hours. We have been also working on the concept of overnight delivery where you get your clothes picked up between 7-9 PM and we will drop your laundry between 7-9 AM! Its already done and getting launched and we can only do it because we are a tech oriented company.
We also provide a tech system to other laundry service providers because we understand the entire service life-cycle and we have perfected it, and since we own our logistics, we also aim to work on forward integration of our repair services with materials required for repairs through our app. Nobody is into that space so far because we are specifically focused on technical integration. Managing a technical system is always a harder than managing an operations systems, so we are far ahead in the race.
What are your growth and expansion plans?
I think India has more than enough opportunities available than anywhere else in the world, if I am able to take one city down completely then it is a billion dollar business by itself. I am talking about just taking down one area like Delhi, NCR and Gurgaon! If I go to any other city, it is a multi-billion dollar business. Even if I cover four metros, the market has a market potential of more than 5 Billion dollars a year! In just the metros, and with the sort of internet penetration, time crunch and the need for on demand services that we are seeing, it is just going to increase every month, quarter and year! Fact is that 85% of our users are our repeat customers so people who use our services once are coming back again. These are the people on whom we live and breathe on because if you focus only on customer acquisition it gets harder for you to survive. Because of our customer retention, customer services, rugged delivery system and nice looking app we are able to keep the customers bound to us and we are bound to do well!
I used to stay in a PG and would give my clothes for laundry and what I realized was that electricians, plumbers etc is based on a trust model, whereas there is nothing like that in the laundry business. So if we are able to generate trust in that service and extend it to our other services then I think we would have achieved our goal. That is what we aim to achieve and that is where we are winning!
So how has your journey been so far?
I would always go late to office, its an issue by birth! I was never early to office even while I worked at Paytm and that was one of my biggest motivations for moving out and starting something of my own but the bad part is that now I am in office for 72 hours at a stretch! Once you start working and see the revenues grow, and see the customers that like you and appreciate you, you just do not remember that you wanted to come late to office and that is why you started off on your own (laughs). It is a very hard job because keeping your customers happy is a very very very hard job but the appreciation that you receive and the self-worth that you feel is more than any sort of money that you get paid in a job.
It is harder for my co-founders because Vishal for example, has a daughter so he has to take care of her as a father should ideally do, take care of his family and also work here. He takes care of everything at office and he is a one man machine. In fact he is responsible for creating the tech system all by himself, every single code is written by him except for the website! We just hired our web developer a month ago, until then we have done close to about 10 iterations on our systems in trying to make it efficient. He would work for 18 hours a day, play with his daughter for one hour and then sleep for four!
Himanshu has done the same thing and he is about to get married and I don’t know how long is he going to remain married because the kind of pace, schedule and work hours that we put in, its literally impossible to get married! (Says jokingly)
You are already Pre-seed funded so what is your message to possible investors in one line?
We are going to get profitable soon, now would be a good time to get hold of us!
What is your message to your customers?
To all my customers I would like to say that if you buy a washing machine that is fully automatic, spend your time with a maid and detergent, over a period for five years if your amortize it for a year, we work out to be cheaper and we do great quality work and delivery!
Well what should I say.. It was the most insightful interview I ever had! We wish the Tooler team all the best and hope that they achieve every milestone that they have set themselves up for!
To know more about their services visit http://tooler.in/#/home