Is This How You Want To Grow Your Startup? [Case Study: Grabhouse]

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A couple of days back, I came across a video titled “This Naughty Bathroom MMS is Going Viral For The Right Reasons” posted on a Facebook group. While the title itself was clickbaity, what caught my attention was the url which read “GRABHOUSE.COM“.
Having known GrabHouse to be a real-estate portal promising to offer ‘broker-free transactions’ and which raised $2.5mn in funding recently from Kalaari Capital and Sequoia, I was intrigued by the link title and clicked on it, post which I landed on “Urban Cocktail“, a BuzzFeed/ScoopWhoop styled media portal/sub-portal, which is run by GrabHouse itself, and with the domain – www.grabhouse.com/urbancocktail !!
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To understand better what the strategy behind Urban Cocktail for GrabHouse could have been, I browsed through a few more of their posts and besides the posts related to housing, eating out and lifestyle, a large number of the posts over there were absolutely irrelevant to a real-estate portal. A couple of posts read:

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Now, even more intrigued, I turned towards Quora to post a question on this topic and figured out that somebody had already posted a similar question, which was duly answered by Munjal Dhamecha who happens to be the CTO of GrabHouse). Here is a screenshot of the Q&A:
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Ok. So, the few articles present about “finding cool hangout place, weekend getaways, shopping to decor your home” are fine, but where do the AAP, Kiran Bedi, movie reviews, Boy gives girl roses reaction, etc.. all fit in??? Is it an effort to just drive traffic in the name of anything and everything? Is it about sneaking in some viral-worthy posts and hide it from the world? And mind you – except the domain name, there was nothing that suggested that UC was a GrabHouse initiative. Probably the only intention behind UC was to add to GrabHouse’s overall traffic and still keep it separate for obvious reasons.
Many people in the startup and the VC community have probably been made to believe that GrabHouse is closing in on Housing.com’s traffic without spending much, but is GrabHouses’ traffic a true representation of its growing popularity? Or is that rising traffic largely attributed to their newfound smart ways such as the one in this case?
Even if GrabHouse’s reported traffic of 1.5 million visitors/month (reported during their recent fund raise) as a real estate portal is excluding their traffic on UC (which I don’t believe is the case), does that still justify what they are currently involved in? Can they grow like this? Should they grow like this? There are many such questions going on in my mind as a growth hacking professional and a startup enthusiast.
Another important question to answer here is whether the investors in GrabHouse are aware about this model of the company’s growth? I expect them to surely be aware about the stated intention behind Urban Cocktail but do they know what the company is doing in the name of helping its users discover ways to make life easier, fun, and more interesting? If at all they are aware, does the leadership and the rest of the board support such tactics of growth for their portfolio companies? (assuming that they still believe that they have invested in GrabHouse to grow as as a real-estate portal and not otherwise)?
In a world where you have a new competitor popping up every few days, any dilution of the company’s focus on the core product can slow you down and leave you behind in the race. Yes, it is undoubtedly great to have a hockey-stick growth in traffic if you are a consumer internet product but if the traffic is not converting into meaningful business and moving your core metrics in the right direction, then you have a problem at hand and need to rethink your strategy. GrabHouse is just one example of many startups who I believe are falling into that trap and even with such experienced investors backing them, if they do not get their act together, they will fizzle out soon or end up being something else than what they intend to be.
Though I am in no way related to GrabHouse nor do I have anything personal against anybody in the company, but being a stakeholder in the Indian ecosystem by virtue of being a part of it, I feel it is my responsibility to ask questions and discuss issues in the open to make way for big but genuine startup successes.
This is meant to be an informative post and all views expressed above are my personal views and are in no way related to the organization I work at or to anyone else.
Note: I have sent an email to the founders of GrabHouse and one of the investor representatives on their board to better understand their thoughts on their strategy behind Urban Cocktail but haven’t yet heard from them. Will update the post with their responses if and whenever they choose to respond.
[About the author: Gaurav is currently the Lead Product Manager and Growth Hacker at Lybrate.com, a healthcare-tech startup based out of Delhi/NCR. He has previously worked as a Product Manager at Gaadi.com and MyParichay. He was also part of the founding batch of the Young India Fellowship, a liberal arts program in New Delhi, where he discovered his passion for building internet products and scaling them up.]

5 comments

  • Nice investigative job and well written.
    On similar lines, I have noticed that most Indian companies who have apps are not careful about what permissions their app requires. Recently I tried to download tinyowl app and was baffled by the kind of permissions the app wanted me to give. When I emailed the company they did call back in 24hrs but were clueless about what I meant about app permissions and said, they will get in touch with their IT team and I never heard back from them. I guess we need an app/privacy police to raise questions about our personal info being misused for financial games. What do you think?

  • This article misses the strategy behind this. The goal behind UC isn’t to drive traffic to the GH domain but increase the no of inbound links to the GH website and hence increase the PageRank of the GH domain. This way, when someone searches for “apartments in Gurgaon”, GH ranks higher than its competitors.

  • Interesting analysis. Thanks for the article.
    There is a reason why companies usually stay clear of posting such irrelevant content. Grabhouse is going to lose a number of customers who disagree with their articles on AAP, Kiran Bedi and Jesuis.

  • It’s simple. Free money can be burnt in the name of growth hacking. Fancy startups in hyperlocal, food delivery, B2B hyperlocal will not survive once most of them shut shop.
    It’s just FOMO (rightly said by Ashish) of investors that is making it happen

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