Customers help you make the best business plan
Sagar Chaudhuri, an Engineer from IIT Kharagpur and an MBA from IIM Lucknow worked for around 16 years with Infosys, Genpact, ICICI before he starting up in 2010 along with Jagadish Velagapudi who also comes in with a similar background and has worked with Infosys, JP Morgan, Reliance and Wipro.
Sagar and Jagadish started their company DealsNow as an online platform for corporates to offer special deals and discounts for employee personal purchases as part of their employee benefits. As employees, Sagar and Jagadish had found out that many individual employees strike deals with Service Providers/ Restaurants and avail discounts but the rest of the employees do not necessarily get to know this and spend more. They found the pain point as companies trying to get various deals and discounts for their employees and its communication to all employees and began building a solution based on that idea.
Excited by the opportunity, they began reaching out to both the service providers and the HR of the corporates and began building a two sided marketplace. Their value proposition to the service providers was that of aggregated purchase volumes by employees of corporates and to employees was that of special deals and discounts by the platform. DealsNow signed up 30 to 35 corporates with 2.5 L employees but were not able to scale it beyond a point and get recurring revenues. The founders figured out employees just wanted the best deals and discounts irrespective of the source. They also realized that the HR (their first point of contact within corporates) was not particularly excited with communicating these deals and discounts to their employees as they had other priorities. Service providers were not interested in giving deals unless they got sufficient volumes. The weak value proposition for their three main stakeholders became a big problem, putting a question mark on the viability of their idea and the business model.
The founders also realized that a few of the HR managers were enquiring if they could buy some vouchers in bulk from DealsNow and give it to their employees who could redeem those vouchers. They seized this opportunity and started providing DealsNow vouchers to these companies. Soon they figured out that new prospects wanted DealsNow vouchers as well. The founders realized that this could be their new business model and pivoted towards employee rewards and recognition.
They dropped the DealsNow brand name and adopted HiFives as the new brand identity as they transformed themselves into an employee recognition platform. They soon realized larger companies needed workflow systems for assigning budgets to different business units, creating and approving nominations, customized e-certificates, wall of fame etc. The team began building a technology-based SaaS based platform with workflows and globalized it by aligning with e-commerce partners who can take care of fulfilment and delivery across locations.
HiFives(www.hifives.in), now has 15+ large customers (F500) and operates in around 5 countries and caters to more than 100,000 corporate employees. HiFives has recently been chosen as the finalists for Google SMB heroes from Bangalore, one of the Red Herring Asia top 100 companies and has been covered as one of the six successful start-ups out of Koramangala by Times of India. The founders say that they have done it all without any sales team and without any marketing budget!
Sagar’s advice to start-ups in the B2B space – it is important to make prototypes, mock-ups and iterate it with as many prospects before you build a full-fledged product spending a whole lot of money and time.