When you gotta move, you gotta move. More often than not, it pays.
In May last year, Sangeeta Banerjee, one of the founders of ApartmentADDA wrote a tiny yet cheerful post on the company blog. It said
After 3 years in the garden city, we could not resist the call of the wild – the mad rush of Mumbai. Our love story with Mumbai began with Oberoi Springs and Whispering Palms Xxclusive, and it continues with many such amazing Management Committees of vibrant Societies of Mayanagari Mumbai.
What the post didn’t say though, was that Banerjee & Venkat Kandaswamy, the other co-founder of ApartmentADDA, were making a very tough decision. She recalls that it was one of the toughest times in their startup journey. Many startups find themselves in a position where they need to move closer to the market. Some decide to give it a go and some don’t.
“When you realize that you are building a product with inputs from a market that’s just getting starting (Apartment living in Bangalore), whereas a mature market (Mumbai) sits 1000 km away, you lose sleep,” said Banerjee.
The duo gave themselves 3 months to find out if moving to Mumbai was the right decision. From a 3 bedroom apartment in Bangalore, their 4 member family moved into a single bedroom flat in Mumbai. When they moved, some employees in the Bangalore office left and things were a little unstable until Ashika Sripathi took on the responsibility of handling operations in Bangalore.
For Banerjee & Venkat, it was about understanding the market and the ecosystem in Mumbai, where people have been living in apartments for many years. “The product matured 75% more after we came to Mumbai,” she says.
For nearly five years, the startup didn’t raise any money from investors. Which meant keeping their heads down and working towards profitability. “When you get in investors too early, you are impatient to see the big numbers. Such portals have fallen into the trap of becoming a real estate listing portal,” says Banerjee. The duo got customers to fund the startup for five years.
Revenues started coming in from the fourth month. The company became cash profitable in the second year and has been profitable for the last two years.
Profits didn’t elude them for long. In June 2010, the company started making enough money to pay their bills and monthly installments. However, it wasn’t an easy ride. Banerjee recalls calling up the bank once to ask what would happen if they defaulted on their monthly installments.
The plan now, is to scale services to other major Indian cities. How do they plan to do that? “By passing the first hurdle: coming out of the bootstrapping mentality!” Now that funds are not (that big) a constraint, we will move where market demands us to, she says.
ApartmentADDA also marketed in very creative ways. For instance, the team would conduct water and waste management workshops and got word of mouth and media coverage going. “We hardly ever talked about ApartmentADDA in these workshops, apart from a hurried introduction,” she says. The team also used it’s own software to do company accounts to save costs on testing as well as accounting.