The Exchanges

Q owners and seekers save more than 90% of the transaction cost. Omid, I would like to start with, you know, before diving into how you raised one fifty, one million dollars of venture capital and build the India's largest platform in no brokerage. And this is a new concept altogether. I would like to start with your journey growing up, right? Your family, everything before, you know, starting no broker.

A Sure. Uh, so, uh, so my father is, uh, was a civil servant and, uh, he was posted in UP. And hence, because of his job, we kept on shifting, uh, cities every two to three years. So I think when you shift a lot of cities, either you become too introvert or you become too extrovert. So I moved towards becoming more extrovert because I had to change schools every, every one to three years and make new friends and just do a new school and so on. Uh, and so, uh, a lot of my schooling was done in Agra, which was 10th and 12th. And then as everybody, as it was prevalent at that point of time and to some extent even today, that if, uh, you get good marks in 10th and, uh, my 10th exam went well. So I was among the top 20 in the entire state, uh, in the board exam. So hence it was understood that, okay, because you are good in studies, which means you need to either choose engineering or be a doctor. And then I basically came for IIT and then went to IIT Kanpur. Uh, studied there for four years. Uh, and then did, uh, uh, then joined like, like everybody else. Uh, then again, there were two options either going outside and study, giving GRE or do a job here. Uh, then followed by MBA. Uh, so I gave GRE. I got into a good university in US to pursue MS, uh, because I was the class, I was the bad stopper. And again, it was quite prevalent that if you are among good in studies, then you basica…

AI assessment note: “my father is, uh, was a civil servant and, uh, he was posted in UP”

Q And what was the first version of No Broker IK? Was it an app? Was it currently or was it just a plain website or what are the yellow pages?

A So it was a plain website and you'll be surprised to know in today's age that early on we thought perhaps app is not something which will work. So, uh, it's not very well, it's what it's basically six, seven years back that we are talking, but at that point of time, uh, today app is basically, uh, omnipresent and, and you can't think of anything without an app, but at that point of time, we thought that perhaps this is something that people will use it once in a year, once in two years. So isn't a website, isn't a mobile friendly website sufficient enough? Would you have, why would you need an app? Or perhaps even if you need an app, perhaps couple of years down the line. Uh, of course, uh, thankfully we launched app and we are not late about it, but the initial version was, uh, was a simple website, uh, a very clean website, which we try to maintain even today, uh, trying to connect owners and tenants directly with each other.

AI assessment note: “So it was a plain website”

Q And, uh, you had only two models of revenue. You were charging the customers, uh, For example, in different plans of no broker starting at 1800 rupees, which goes up to 6000 rupees. And in some cases you are also charging the house owner for premium services, right? How long did you keep this model?

A So the model is still there now. So, uh, no broker is basically a freemium website. So you can, you can, uh, you can come to no broker site. You can search for properties for free. You can post properties for free. There is no charge, but for value added services, if you want more options, if you want premium filters, if you want, uh, uh, A relationship manager helping you. If you want your phone number to be hidden, then we will, we have different payment plans. And we launched our payment plan very early on. So, uh, so some people thought that we are going to take a year or so before we, a year or two years before we start monetizing. But I think after establishing office, it just took us seven or eight months when you said, Hey, we want to start charging. We might just get 10 rupees, but we want to charge something because otherwise we were very fearful that are we just is the concept is going to catch fire, catch importance. We are going to, we could see that customers are increasing, but we wanted to be sure that are we going to make money or is it just going to be more and more customers like many other listed platform did with no money inside. Uh, because see in Indian context, uh, moving from a customer who is paying zero rupees to who is paying one rupee is a very big move. But from one rupee to a hundred rupees is not a big move at all. If a customer has taken out his…

AI assessment note: “So the model is still there now.”

Q And what were the services, uh, if you can share the broad spectrum, which, which you know, and currently what's the share of revenue between, uh, the whole book of services that you offer?

A So our majority of the revenue, 50, 60 percentage of our revenue comes from the core real estate, uh, business. Then, uh, then, uh, then comes the home services, which basically, uh, forms under, uh, Uh, 30 percentage of the revenue, which is about, right, everything, right, from home loan to insurance to furniture to rental agreement, everything, which is basically related to home services that we do. And then we also basically make, uh, 10, 20 percentage money from the financial services, which is, uh, rent payment, uh, home insurance, uh, and home loan. So, so now we are, we have these four big verticals, which is financial services, home services, No brokerhood. It's the Western gate management app and the core real estate, which basically drives all of these businesses.

AI assessment note: “50, 60 percentage of our revenue comes from the core real estate”

Q So, uh, when everybody was spending, you know, huge on, uh, branding, what was your customer acquisition strategy for the first three years, right? Even when, once you had 18 crores in your bank.

A So see our strategy was more focused towards BTL. That instead of putting billboard ad, can I put a no parking board? Can I put an ad on the behind an auto? So why should I spend 50,000 rupees on a billboard? If I can spend 200 rupees, 10 rupees on the back of an auto, perhaps it will give me more visibility. So, uh, and of course, uh, Facebook, Google, uh, gives you It gives you a very good ROI in terms of actually knowing how many customers came. So I think it is also a different stages. When you are very small, it makes sense to go more for BTL because the ROI is very high there. Now, when we have become bigger, of course, now we know that now that given our size, we need to have TV ads. So for the past couple of years, we regularly do TV ads and we, we do billboards. So, so that we do. My only point is that you, That we did not copy and try to do TV ads too prematurely when we knew that the other less expensive mediums will give us better ROI. So we let the ROI decide rather than the vanity metric or a copy pasting of others decide.

AI assessment note: “our strategy was more focused towards BTL. That instead of putting billboard ad”

Q And what was the time period when you raised your second round after SAF? Like, and was there any challenges raising the round after SAF?

A So after SAF, I think the next three, four years were, were very challenging. So I would be honest here that, uh, that until basically Uh, from 2015 to, I would say, 2019, those four years were very tough. See, the reason was that earlier people were not giving us funding, saying that, hey, another, other players have raised huge amount of funds. So how are you going to compete with them? And the moment, a couple of these large players got in trouble, then the question became that, hey, there looks to be some problem in the industry. There looks to be some problem in the industry, so we are not going to invest. Now, how do you answer such a vague insight? Tell me what's the problem? Look at, see, we can only show us, show you our numbers. We can only show you the traction that we are getting the acceptance that customers are giving to this concept. And we can tell you that we are not repeating the mistakes which others might have done. That's all that we can do at our end. But I think so many Indian investors had burned their fingers investing in real estate startups, unfortunately. Uh, just a matter of time that everybody was became super cautious. So wherever we went, we said, yeah, numbers looks good, but no, not interested. So I think at that point of time, two things which happened well was that SAF continued to, uh, and Mayim Khantuja is our board member, he continued, th…

AI assessment note: “from 2015 to, I would say, 2019, those four years were very tough”

Q And everybody was expanding like crazy at that point. I remember, but, but, uh, what was the reason that you, you never expanded that fast?

A So I think this was a question which our teammates used to ask us most in, I remember, I still remember the guys who in my office used to ask me every few days as to why are we not opening more cities? Uh, and our simple reason was that see, even investors, many of the investors asked us as to why, when are you going to add one more city? And we felt that adding more cities is also another vanity metric because it gives you a feeling of aha that you are expanding, you have become a larger company, bigger company. But for a moment, just think about from a customer's point of view. As a customer, you don't care whether we are in Ranchi or whether we are in Vishakhapatnam. You just care that right now, the, the street on which you are searching a house is the house available or not. If I'm not able to do a good job on that, then you don't care as a customer in how many cities am I. So our question was that why shouldn't we do better in the city that we are already in rather than basically going to a new city? First of all, our market share in the given city should be decent. Customer experience should be decent. And moreover, when you expand more and more cities, it puts a huge amount of pressure in terms of your finances because every new city will consume a lot of money. First of all, to become, to make you establish there, and then some revenue will start flowing. Uh, and Many …

AI assessment note: “we felt that adding more cities is also another vanity metric”

Q So, uh, uh, you, one unconventional thing is, right, when everybody in your sector was burning many, uh, housing was there, common floor was there, which was very prominent. You choose a very conservative approach. What was the reason for that?

A Uh, so, So this is a good question because, uh, at that point of time, many of the companies which were there and they were very good. So common floor, common floor, housing, grab house, all three amazing founders, very solid founders, very good company, very good brand, uh, that they were building. Uh, and, uh, so if you see from that perspective, it was impossible to imagine as to how can we beat them? So we thought that. Let's forget about beating anybody. We can only focus on ourselves and perhaps hope that the market is big enough for multiple players, because these are good companies. These are good founders. We can just focus on ourselves. So let's stop looking at others. And everybody had raised so much money. And even when they had raised money equal to us, uh, they were spending a lot. Uh, so, so I remember basically getting down from the airport and seeing that the, the Meru car is covered with branding of one company and, uh, Adjoining billboard is covered with the ad of another company. And we were figuring out as to how can they make money because real estate in real estate, see, if you are, if you have huge amount of, if I show you right now, if I show you the world's best ad to shift a house, will you shift a house? Because there's a one by 12th chance that if you shift a house every year, one by 12th chance that you will be in that month today. So what is more …

AI assessment note: “This is not e-commerce where you will order the other pair of jeans”

Q But, but your competitors were doing so many things. Your investor would also be saying to you, Hamid, why don't you do this? Why don't you try this? Uh, what was your reply to them?

A So, so I think it was just perseverance. We, we, we three as a nature, we don't like to argue a lot. Uh, uh, so I think we just always, uh, with our, I think we have also been very lucky to get investors who are very understanding. So, so I think when, so we just basically followed an approach in which we try to tell them this is what the business reality is. Uh, and we have this much of money. We don't want to copy others to burn like crazy. We want to focus on cutting customers. We want to focus early on on revenue. And most of the things make common sense. Uh, and we also pointed out towards the lot of failures, which has happened in this industry because of not following these commonsensical rules. So I would say that in hindsight, I think we were just lucky to have very good investors. Bnext and SAF, they are awesome, amazing, uh, investors. Uh, they don't interfere at all. They guide when it is required and they have huge faith. Uh, Peru, uh, has basically from Bnext has helped us like crazy, uh, has used his own personal connections to get us funding when the times are tough. Uh, so I think that way we have been blessed to get good supporters.

AI assessment note: “we try to tell them this is what the business reality is”

Q So how did you finalize the idea of NoBroker when you, and how did you find your co-founder?

A Yeah. So basically, uh, me, Akhil and Saurabh, we started NoBroker. Saurabh, uh, had thought of the, uh, name NoBroker.com and he had registered the NoBroker.com domain many, many years back. Uh, and, uh, we three, as a, as individuals, we three were, had experienced brokers, because me and Saurabh had lived in Bombay, Akhil had lived in Bangalore, and we had shifted houses, and our experience in brokers was pretty bad. In fact, when I, whenever I used to have long assignments, for example, in Calcutta, I had a long assignment, so my wife also basically shifted there for that period of time, and we took our house. And we had a horrible experience with brokers. Uh, yes, there are some great, amazing brokers also. Uh, but Because this field does not have any entry barrier, right? At least for advising a client about taxes, you need to have a degree. You need to perhaps be a CA. You need to be a doctor to give any mental advice, but to give advice about which house you should take. And when you are making such a big amount of money, there is no entry barrier. So the grocery guy, the paanwala is also basically a part-time broker. Uh, and because the entry barrier is zero, people are doing it part-time, uh, And their main objective is to close a deal because you just need to have one phone number, connect two, three people over WhatsApp, get the client and, and get everything in cas…

AI assessment note: “we three as individuals we three had experienced brokers because me and Saurabh lived in”

Q Did you at any time feel right? Have I entered the wrong space because other people have raised so much and am I doing something wrong here? People are not giving me money in spite of customer growth.

A Somehow that I think as a founder, you are always, uh, trying to basically, uh, solve what is being thrown at you. So what was being thrown at us was that, okay, Indian investors are not interested or investors are slightly interested and they're giving you some money. So we responded by saying that, okay, we are going to respect this money. We are going to spend a lot. We are going to spend less and we are just going to focus more and more on monetization. And more and more in terms of expanding where, uh, where, which can be future seeds of monetization. So, and everything. So we, as a philosophy, we generally don't go after sexy product features. We don't. Our objective is that we are going to do what customers are telling us. So we are very shameless in that manner. Uh, we are just going to learn from customer. Our entire game is to just keep our ears to the ground, listen to what customers are saying and just copy that. So if customers are saying, we want Hyderabad city, we will launch Hyderabad. Customers are saying, why are you doing only residential? Can you can't launch commercial? We'll launch commercial. So we have been just basically listening to customers and also monetizing them so that we don't end up creating a huge company in terms of customers, which And have no idea as to how to monetize because it takes a huge amount of time. At least for us, it took a huge …

AI assessment note: “what was being thrown at us was that, okay, Indian investors are not interested”

Q It's almost been, uh, seven years. Can you share, like, how did you build the initial traction and at what point you approach the various VCs?

A So, uh, so we started approaching VCs very early on because, uh, because from this IIT IAM connections, we had some couple of friends who were already in the VC industries. So we started sounding it off with them. Uh, uh, and of course the effort became more serious. The moment couple of months passed away after launching the website, because we came to know that this is a very competitive industry where there are very large players in the industry who have been there for a very long time. And if you really want to make a, uh, make a difference and get a decent set of customers, then, uh, you need to have a good amount of traction because this is a network effect sort of business, right? The more tenants you have, the more owners will come and post their property. And more owners you have, more properties you have, more tenants will come. And the same thing basically holds true for buy and sell also. Uh, so we, uh, realized early on that we need to get funding and just our pool savings will not be sufficient. Uh, so that's, uh, when we started approaching investors.

AI assessment note: “we started approaching VCs very early on because, uh, because from this IIT IAM connections”