CASE STUDIES: Home Service

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 ,
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