Sulakshan Kumar and Sitakanta Ray launched their company with zero investments. But in 21 short months they’ve raised Rs.2 crore
For former classmates from the National Institute of Technology (REC), Rourkela, and colleagues at Oracle, setting up their own business was a dream. Despite their well paying jobs, the duo Sulakshan Kumar and Sitakanta Ray decided to start their own venture in 2002 and it took them eight years to finally quit their jobs to start MySmartPrice.com, a price comparison site. The company that was launched 21 months ago with zero investments has raised a whopping Rs.2 crore and has almost 25 lakh visitors per month.
Quiz them on what drove them to give up such a well paying job and Sulakshan says, “We’d wanted to start a business for a very long time. The satisfaction one gets by creating something on his own cannot be found in a regular job. The idea took birth when we were at Oracle but did not materialise as we did not have the courage to quit. Eventually in October 2010, we decided to give up the job. We knew very well if we did not do it then, we would never do it. The more we would delay setting up the business, the more difficult it would get on the personal and professional fronts.
“It is very difficult to leave a job at mid management level and also when one has family responsibilities. So when we did decide to set up the business, we decided to give it two years. If it worked fine, else jobs are always there.”
When the duo launched the business in October 2010, it was without any employees or office space being leased. “All that we had were two laptops and an internet connection. We operated from home. We knew that e-commerce was the next big thing that was going to happen in the technological space. There are different websites selling the same products at different prices. It is also difficult for a customer to compare prices of all these products by visiting each website manually. The prices can vary by a 30 per cent difference and sometimes up to `2,000 on various products. We aggregate the content and display the prices of different products in various categories on our site by which the customer can save valuable time and money,” says Ray.
The concept seemed to be a hit with users. MySmartPrice had almost a million visitors per month within a year of its launch. This enabled the company to generate revenues to the tune of `70,000 per month. Talking about the revenue modes, Ray says, “As e-commerce stores were still in the nascent stage, the affiliate model (where stores pay a certain percentage of revenues for the transaction that is generated from the website) which is successful in the West did not pick up in India. We had to depend solely upon advertising revenues. Even though, we could have made double the revenues with the traffic we generated, we had to limit ourselves to minimum advertising keeping the user in mind. The minimum advertising had helped us to recover some of our monthly costs,” says Sulakshan.
The company also started adding human resources and other categories like mobiles, books by looking at the traction during the end of last year. The site has doubled its traffic in the last 10 months and reached 2.5 million hits a month recently. It also increased its product base to 10,000 unique products, 10 lakh books and refreshes the price data every 24 hours.
MySmartPrice includes and compares the prices of the products only from reputed 20 e-commerce stores. Talking about the current plans, Ray says, “Any business should stick to its core values. We excluded stores, that were paying us for display as there were customer complaints about their quality of service. The immediate aim of the company was to enhance the customer experience by adding different features like store reviews and bringing them a mobile version. As of now, the store has become a guide for buying a product. We want to bring in new features for users who do not know what to buy.”
The eight-employee company also offers discount coupons and is expecting a break even during this fiscal to cover its monthly costs. It also got `2 crore venture capital funding from Helion venture partners and Accel partners. The company wants to go with affiliate model over time to generate revenues. The duo is confident that they can bring down the customer acquisition costs for e-commerce stores.