Muhammad Shahin, Founder and CEO of the country’s largest online property marketplace pbazaar.com, reflects on his path into business, his serendipitous journey to the tech world, how pBazaar came to exist, struggles of the early days, growth and current state of pBazaar, competition, the greatest challenges and lessons from his journey and his plan to take pbazaar.com to the remotest users of the country.
What follows here are edited excerpts of the interview. This is the part two of our conversation, you may read the part one here.
FS: In your early days, you largely performed offline. You approached clients in person, convinced them and collected data. But, technologically you are a strong web platform now. How does your business model work? What is the process?
Muhammad Shahin: We started, largely, offline and used to rely more on agency business in order to generate revenue, but we always wanted to build an online marketplace. We started with a website but it was not that good. Once we became sure that we were generating enough revenue to bear the operating costs, we decided to create a marketplace.
Our ultimate goal was to create the largest property marketplace in Bangladesh. But I knew that working only offline and just by myself wouldn’t make it easy. So, I tried to utilize the knowledge and experience I gathered while working at CellBazaar. I also started to follow the model of the similar marketplaces in other countries, like- 99acres.com in India, trulia.com in the US, rightmove.co.uk in UK and others.
Initially, we started to implement our plans by creating a section on our website for property owners where they could place ads- both for rents and sales- all by themselves. As our target was also to create a successful agency model in Bangladesh, we created a section for agents as well where they could showcase their properties.
Afterward, we thought on a more macro-level. We felt the need to incorporate every player in the field into our system. So, we first screened out reliable individual brokers and enlisted them. Then, we approached the real-estate companies. It was quite a difficult job to convince them to use our platform given that they have their own websites to put ads on.
Moreover, people were yet to take anything online seriously. But, we managed to overcome the challenges and now we have over 1,500 real-estate companies in our clientele.
In fact, we have got more real estate companies on our platform than REHAB! Some real-estate companies are doing such good business that a significant portion of their sales come from our platform.
FS: How about charges and fees? Who pays the bill?
MS: If someone puts an ad on our website, we don’t charge a thing for that, even if s/he makes a sale. It is entirely free. But if someone approaches us to put an ad on their behalf and manage it, we charge a commission. The rate of the service charge is uniform.
For a small fee, we do everything starting from finding clients to signing the agreement with the owner. Our legal department also does the verification on behalf of the users. And we don’t charge a penny to our users (buyers, tenants and also agents). Only owners pay the charge, that's also when we manage a sale for them.
We have created a model using the characteristics of a number of business models practiced in different countries. Surprisingly, it has become very popular in Bangladesh and many companies are now using it. For example, if one of our in-house agents rents a flat, we take a service charge. Now, many companies are using the same model.
We have now about 200 enlisted individual agents who use our platform to advertise their businesses. Many of them make pretty good money on our platform. We still don’t charge them anything, but we have a plan to introduce a small fee in the future.
FS: How do you verify data and why it is critical?
MS: We verify every piece of data no matter how small it is. In fact, this takes up a significant amount of our expenses. We have a quite big team who look after the data quality.
We never make any data public without the permission from the proper authority. Moreover, we make sure that there is no old data on the website. Our data team checks every month and update the listings.
FS: How do you select your agent?
MS: When someone creates an agent account on our website, our customer care team contacts with the person for confirmation. We also explain him/her our process and advantages of our service in details. After primary verification, the profile goes live.
FS: How did you find your first few clients?
MS: It was largely through the personal network. I spent a lot of time in corporate networking. We came to realize very early that a company could have multiple clients for us. So, when we got a client at a company, we knew that there were other potential clients and in order to get to those clients, we used to nurture our relationship with the first client to expand our network.
We worked hard to make our clients happy so that they refer and talk about us. We invested heavily in building relationships with our clients.
This approach helped us to build a pretty good clients base and recover our operational costs at the early stage and our business to survive.
FS: Tell us about growth.
MS: Our business has grown quite satisfactorily in terms of revenue except for a brief period when we were low on human resources. But we have managed to pace up again. Revenue-wise, we have a steady MRR.
In respect to month-over-month growth, we have a phenomenal revenue growth at the early stage with a quite good profit margin. It slowed down and became totally flat in the middle stage. But currently, we have a 15%-20% monthly growth. The growth of users is also very promising.
FS: You faced challenges in your early days. You are also facing new challenges now as your company has grown and got more structured. These are fundamentally different challenges in nature. Tell us how you tackle these different challenges. Also, what advice you would offer to the early stage startups who are struggling?
MS: There is a saying: it is hard to earn the independence, but it is even harder to protect it. Building a brand is tough. But preserving that brand image is much tougher.
When Lamudi came into the business, we felt threatened. We used to constantly track the activities of our competitors. We have always been paranoid about improving ourselves. But luckily it didn't take much effort on our part to beat Lamudi in the competition.
Then, Bikroy.com entered the scenario. It was a tough one for us. When we were competing with Bikroy, we saw that their biggest strength was the massive amount of data they have. But at our company, we focused on the quality of data all the time. So, we worked hard to increase the amount of our data. We hired a third party company for it who worked under our supervision. And, surprisingly, it took us only three months to beat them in numbers.
We have yet another formidable competitor now. They came to Bangladesh in November last year. They have raised a huge sum with a relatively big team. We are still observing them. Let's see how things play out.
However, competition is not something one should worry about. But it keeps you alert and pushes yourself. What is more important, though, is to understand your customers and solve their problems well.
FS: How do you think competition?
MS: Competition is good for a company because it forces you to develop yourself. A new competitor in the same field can enormously boost up the growth of an existing company if they use it positively.
I have already given an example of such growth when Bikroy.com came into the scenario and we had to improve our quantity.
FS: It is quite hard to reach out to your customers. How do you do that?
MS: Word-of-mouth is the best way to expand your customer base. If I provide quality service to someone, he will refer it to another. I think that is the most effective model of marketing.
Moreover, you need to create awareness among your target customers. These two things could work like a charm if you could apply properly. You also need to make your service easily available and accessible to your customers.
FS: Tell us about the team. How do you work? Also tell us about your organizational culture.
MS: We are like a family here. Everyone has a defined role with a specific set of responsibilities. No one acts as a boss or a subordinate here. We value everyone's contribution to the company.
If you ask someone working here that who is the owner of pBazaar.com, s/he will reply that s/he is the owner. We have that kind of camaraderie.
FS: What is your philosophy when it comes to managing people?
MS: I think motivation is the key. You can get anything done by anyone with kind words. I don't believe in the practices of a traditional boss where you force or intimidate your people to get things done.
I may not be able to give my employees high salaries, but I have succeeded in inspiring them for a greater cause. They may not be leading a luxurious life but they do feel this company as their own.
FS: Lessons from your journey.
MS: For starters, as I have mentioned earlier, a startup needs to concentrate on revenue generation and not on investments.
Secondly, doing an online business in Bangladesh requires a lot of patience. You'll stumble a thousand times, but you have to stand up every time. You will also need someone to support in the hard times.
It's hard to have someone like that but never give up. And if you do find someone like that, keep that person.
FS: Have you had a mentor along the way?
MS: I had Kamal bhai of bKash guiding me in the early years. He taught me everything about e-commerce–how to manage an online business, how patient you have to be to run such a business and countless other things. I still seek advice from him. He has been very kind.
I have always been very close to my former bosses and I seek advice from them when I’m in need.
FS: What are your future plans?
MS: For now, anyone can post her/his advertisement from anywhere in Bangladesh on our website. So, our online service is widely available. But, we still can't provide our offline services everywhere. That's why we are trying to establish the agency model. Our target is to place our agents in every union and every village in Bangladesh so that every flat and land owners and buyers can have access to our service.
We don't want to be a metropolitan-centric company, because only Dhaka, Chittagong, and Rajshahi are not Bangladesh. Real Bangladesh is in the villages. Say, a farmer in a remote village in Bangladesh wants to sell her/his land to bear his child's education costs. The only buyers he got are the handful of affluent people in the village who might very well cheat and underpay her/him.
On the contrary, people living in the cities or even outside of Bangladesh often want to buy land in the villages. But they do not know from whom they can buy. Our goal is to build a bridge between these two parties by providing country-wide online and offline service.
Interview by Ruhul Kader, Transcription by Rahatil Rahat, Image Courtesy; pbazaar.com
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