CASE STUDIES: Whatsonrent

Names of the founders: Sulabh Jain, Bharat Goyal, Shreyans Shrimali

Started in 2014, the firm rented out a range of products to domestic consumers. They tested out the market for such a service by hosting an FB page and making available a few items for their circle of family and friends. Slowly, they saw traction from the public for domestic appliances. Enthused by the response, by May 2015, they decided to enter the market in earnest. From an inventory led model, they moved to on to engage rental agencies to handle the servicing part, while being the front to customers. While they were able to reduce the amount they needed as capital, this led to a lock-up of working capital which was funded by the founders.

Moving from an FB page to an app, they found interest for funding from a founder of an established startup. With SEM and other tools, they also say the number of orders go up from about 7-8/day to about 35 orders/day. In Jan 2016, a group of angel investors led by a founder of an established startup, agreed to invest in whatsonrent.

Over time, when one of the angels did not find excitement from VCs, the murmurs of slowing down the funding began. The committed funds did not come through and running a small-sized operation in this segment was felt to be operationally unviable, leading to shutting down of the firm by mid/late 2016.

Key highlights of operations:

1. The team consciously tested out using low-risk mechanisms, the need and the service-delivery model, before going all-out.
2. They focused on retail customers, acquiring them one by one. They went by how the market works, which is the SEM route. With focus on growth, there was not a significant monitoring of the effectiveness of this mechanism for their nature of business. Alternate means of acquiring large number of customers such as engaging the HR functions of corporates was tried only during the fag end of the life and possibly not too earnestly. Looking back, this could have been a more economical way of acquiring customers.
3. They chose to offer on rent a range of items, right from utility appliances to party equipment. While the utility products had a different model of installation and support, the customers who hired party items needed a different mode of support. From a financial point of view, it required stocking of party items when agencies were available for the utility appliances. Could a focus on one set of items have helped? However, providing a range of items helped the startup service the range of a single customer’s requirements.
4. Late in time, they started the ‘Try and Hire’ model. Would a set of advisors/ coaches/ mentors have helped the team structure their go-to-market strategy, instead of indulging in adhoc responses?
5. Once the angels agreed to invest, the team went with the term sheet. They agreed to release the amount in tranches. They did not complete any documentation to formalize the discussions. The startup received only 40% of the committed amount not because the startup did not meet their milestones but because the angels decided to end their support. When the investors back out of fulfilling their part of the agreement, can a startup force them?
6. In hindsight, the person who led the interactions with the investors considers that he could have been more assertive in the discussions. He lost out on the articulation part to present the potential of the market and the startup and thus did not successfully excite the investors. While being truthful to the state of affairs is essential, there is also a need for the key founders to provide the needed confidence to investors, without being untrue.
7. One founder was assigned the task of monitoring cash. It is possible that the alarm was raised late. Had the founders taken stock together of the cash at periodic intervals, could their responses have been different?
8. Upon winding down operations, the founders helped the employees find jobs. The founders are now employed in other organizations.

Points to reflect for entrepreneurs

• What are the ‘assets’ of your firm? Ultimately, investors pay for assets and you depend on the assets to monetize. What are you doing to manage the assets?
• Anything can go wrong. Do you have a Plan B for each of your actions?
• Do you take time off to reflect what the chinks in your armour are? Here is a suggested approach by Sulabh Jain.
      o Consider you are a competitor for your own firm. You also know all details of your own firm. Think what you can do to bring it down.
• There are appraisals for employees. How about founders? Find a means to critically evaluate each founder.

- Reported by
Rameshwar ,
rameshwar at healthyjio dot in

About Founders :
Total : 3
Educational back ground : 2 Co-founders from NIT ( one has MBA in Finance) , One co-founder IITB & IIMA
Any Start-up experience prior to this start up : No
Experience : 2 to 5 years
What they are doing now: All have taken up jobs. One is Managing Director, One is Vice President and anther Senior Product Manager

- Reported by
Ramesh kumar
rameshb at vsnl dot com