Sramana Mitra: How did your business ramp the following year? How many customers did you end up with by the end of 2010?
San Banerjee: We had around 110 customers at that point. We made around 17 lakhs that year. By the middle of 2011, Venkat and I started drawing a salary. We also noticed an increase in the number of competitors entering the Bangalore market. We had proven the market existed, and now we started to face competition. We saw 24 competitors enter the market in 2010 to 2011, and almost all of them targeted Bangalore.
Sramana Mitra: How did you compete?
San Banerjee: We had some of the most forward-thinking apartments using AppartmentADDA. We received great inputs and benchmarks from our customers, who had good existing processes. Our best approach to beat competition was to meet the demanding expectations of our customer base.
Our competitors started offering their software at half the price we charged. Our price was already rock bottom, so there really was no room for us to undercut them. We realized that this competition was in Bangalore. Mumbai was a larger market and a more mature market in terms of management committees. We believed that in order to make our product the standard solution, we needed to offer it in Mumbai.
In 2011 we started traveling to Mumbai monthly. That got to be expensive, so we rented a one-bedroom apartment there. Shortly after that we entered in the Grace Hopper Entrepreneur Quest for women entrepreneurs. There was a 5 lakh cash prize. Normally I would not have gone to a business pitch competition, but there was some real money involved.
We ended up winning that contest, and the money really gave us the boost to target the Mumbai area heavily for three months. We moved to Mumbai for three months and used the 5 lakh as a cushion. We figured that if things did not work out, we could move back to Bangalore. In May 2012 we packed everything, rented our apartment, and moved to Mumbai. There were four of us living in a one-bedroom apartment.
Our first two months in Mumbai were not very decisive. We could not tell if we had made a good move. By the time we hit the third month, we were confident that our solution was very well suited for Mumbai. We went out and got some office space and focused on selling the solution to Mumbai.
Maharashtra is the only state in India where there are standards for running a management society. Audits are mandated by law, and there are minimums for collections required. There are a lot of standards. Our customer base benefited because now they knew exactly how their apartments were run, and it made audits much easier.
Our approach in Mumbai had to be slightly different. There were a lot of offline software solutions for running apartment complexes. We had to adjust our sales approach to demonstrate the online solution we were offering.