HandyMama, a service network and marketplace that connects households and service providers i.e. cleaners, electrical, plumber etc., launched last year in Dhaka. The startup came out of first batch of Founder Institute, Dhaka Chapter, received a seed fund from Fenox Venture Capital as well.
Recently we had a chance to sit and talk with Shah Paran, Founder and CEO of HandyMama. We spoke about current state of Handymama, growth, team, Shah’s challenges as a founder, and future of Handymama. What follows is a lightly edited version of our conversation.
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Omar Faruk: Briefly tell us about HandyMama and your state of growth.
Shah Paran: We are a service network, solving people’s everyday problems by bridging the gap between service providers and receivers. We have few metrics like customers, service provider, partnerships with existing service companies, that we take seriously when it comes to measuring growth. Growth-wise, as a first mover in this industry, I would not say we are growing very fast but we are growing steadily. If we consider weekly growth, it is around 7 to 8 percent.
While we are working hard to acquire new customers, retention is what we are more serious about which is around 30% now.
This is a relatively new space in Bangladesh and it is hard to find examples and learn things from others. We are working hard to make sure that we offer best service possible, maintain time and ensure smooth service delivery.
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OMF: What are the key challenges?
SP: Building a great team has been the, so far, biggest challenge. Finding right people is incredibly hard in Dhaka. Moreover, since I’m a single founder it makes things even harder for me. I am still looking for a co-founder with the same kind of passion and dedication that one needs to have in order to build a company from scratch.
We also face daily challenge with pricing. It is hard to set a standard price point for a service like cleaning or electrical because it is hard to quantify and we don’t have a culture of paying hourly for these services. We used to have house-maid who does everything for food and stay.
Generally, for an electrical repairing their is no hourly rate, people used to charge randomly. When this is the situation in market and we come and ask people to pay hourly basis, people seldom get it. They consider us costly. But we are also offering convenience and security and assurance of quality service but when price becomes the key matter of discussion, other things seldom get the attention.
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OMF: How do you tackle all these challenges?
SP: Hiring is always a difficult job. It is hard to find great people. We are putting together processes so that we can quickly train people and get best out of them. I’m personally working in sales and working hard to learn and understand the sales cycle in order to get deeper understanding of our business. One thing I can understand is that this problem is not going away and we will never be able to get rid off it over night rather we have to work hard, maintain consistency and get over this gradually.
For pricing, we are working hard to design a pricing strategy that works. We are trying to understand our customers better, segment them and offer prices that works for them. For cleaning, we are introducing hourly and daily rates. For electrical, which is a little difficult to define price, we are keeping it open. We are setting a minimum base price and rest will be decided on the spot after negotiating with the client.
We are experimenting with marketing. Recently, we have launched a direct marketing campaign in different clubs in Dhaka. As I said earlier, this is relatively new space in Bangladesh and we are learning things the hard way by trial and error.
We used to take feedback from our customers on regular basis in order to improve our service. Almost 80 percent of our customers are happy with our service but we are working hard to increase that percentage. As we are in service business, expectation is naturally much higher. It often feels like you are paying more but getting less. To minimize this gap and ensure the service quality, we have set the service standard for all level of services.
For example, for electrical maintenance, our electrician first identifies the client’s problems and notifies to our customer support team, then customer support department instantly contacts with the customer, if customer agreed with our charge then we go and fix. If the customer does not want to take our service at said cost, customer only pay the electrician’s calling fees.
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OMF: What about your team?
SP: We are now a team of five people. Our platform have now more than 100 electricians and we have partnership with 7 cleaning companies.
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OMF: How do you maintain service quality when you work with contract workers and service partners?
SP: We have strict service guideline and quality standard. The service provider must not be under age. We train them in 4 disciplines i.e. hygiene, health and safety, manner and technical training related to the specific service. Our service provider wear HandyMama uniform when they are on the job.
Top of that, in order to ensure safety of our workers we are about to offer health insurance if anyone get injured on the job. A deal on this issue is yet to close with MetLife ALICO and Progoti Insurance.
We are constantly learning and meticulous about our services. We make sure that our partners also ensure our service standard. When a customer report dissatisfaction about our service we try to compensate it either by redoing it for free or giving a discount next time or doing the same job at a minimum cost.
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OMF: Do you face any difficulty finding and hiring service provider for HandyMama?
SP: Yes. People who work independently are not interested in working with us. They think they would lose their existing business. That is because they don’t understand the benefit of technology but we hope things will get better as people understand better and we are working on it.
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OMF: What is your take on the industry you are in?
SP: Maintenance is around 400 million dollar industry. There are around 250K holding number in Dhaka city. There are 10 lakhs apartments. Then there are around 50K corporations. Top of that, there are hotels, mosques, shops. All of these people need services that we provide. It means the market is pretty big. The challenge of-course is that orientation is not there. Once people understand the importance of our service, things will change dramatically.
In Dhaka, number of young and independent families are on the rise and these people are too busy to handle these types of household chores. They are becoming more interested in outsourcing these services. It means, down the line five years, more people will be availing our service.
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OMF: You took investment from Fenox last year.
SP: We bootstrapper for first couple of months. Then in August 2015, we raised a seed round from Fenox Venture . Now we are in talk with few local and regional VCs. Probably we will raise a round down the line six months.
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OMF: How does your business model work? How are you doing business-wise?
SP: We make around 15-30% commission depending on service, availability of service provider, and demand. We offer customized services for both corporate and households and pricing for each is different.
Number-wise, we have 55 percent household, 30 percent corporate and 15 percent other customers. To gain the recurring revenue, currently our main focus is to get more corporate clients. Though households is the our long term focus.
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OMF: What do you think about competition?
SP: There are few new startups about to launch in this space but we are yet to face any competition. I think the market is quite big enough to accommodate few players. Said that, it is all about product and quality of service that matter.
As we are focusing more in cleaning, few existing service providers consider us as competitor. But we are not. We rather bring business for them, train their employees and standardized the whole service quality.
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OMF: It is hard to start and build a business from scratch. As a founder, tell us about your personal challenges?
SP: It is incredibly hard to start a business in Bangladesh. Probably it is hard elsewhere as well. There are issues with the society, people don’t see starting a business as something positive.
It is hard to find support. We don’t have a culture of mentoring. Finding a mentor is difficult. There is a general lack of talent in the market. It is extremely hard to find good people and motivate them to work in something that is not big. I think all these things put pressure on you as a founder and make things extra hard.
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OMF: Tell us about few lessons you have learned from your journey so far.
SP:
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OMF: Do you think you missed something that, if you had access to, could have made your journey a lot better?
SP: Yes, mentoring and proper guideline. Later on, Founder Institute was an amazing experience for me.
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OMF: What’s your plan for this year?
SP: We plan to cover entire Dhaka city by this year. We are also working hard to add few more services along with electrical, plumbing and cleaning. You will see some real changes soon.
Interview by Omar Faruk, edited by Ruhul Kader, Images by HandyMama
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About the sponsor: This story is made possible in part by our friends at BetterStories Limited, an ideas agency based in Dhaka, Bangladesh, whose generosity enables us to publish premium stories online at no cost to our readers. Thank you, BetterStories, for teaming up with us in 2016.
