A new turn to used-car sales

Access to capital is not the be-all and end-all of entrepreneurial success. The fact that small businesses and start-ups are creating most new jobs, investing in employees is now the new paradigm, to ensure an organisation’s success.

Or so believes Vikram Chopra, co-Founder and Chief Executive Officer, Cars24.com, which is in the business of buying and selling used cars. Chopra learnt the maxim the hard way. Earlier the co-Founder at FabFurnish, an online furniture and furnishings retailer, which was sold to Kishore Biyani’s Future Group, Chopra maintains tracking employee satisfaction is an underrated metric with most start-ups, but is an essential component of being a good entrepreneur. Though ROI, growth margins and customer churn are standard metrics to track whilst building a company, Chopra is clear there are other numbers one should be aware of to build a profitable business.

An engineer from IIT Bombay, Chopra should know. For, at FabFurnish, which he co-founded with friend Mehul Agrawal, he realised that investors don’t just place a bet on a business, they place a bet on the entrepreneur.

“The used-car business is a $20-billion market in India, growing at 25 per cent year-on-year. In terms of units, 30-35 lakh used cars get sold every year, whereas only 20 lakh new cars are bought every year. So, the market is much bigger. The opportunity that we saw is strong consumer demand, but the bottleneck was less supply,” he says.

Chopra says, “Connecting supply to demand is difficult given that the market is highly unorganised. We realised if we could organise the supply side of things, we could organise the category.”

In their second stint — Mehul Agrawal is also a co-Founder at Cars24 — the duo decided to think differently. “Most categories often think about organising a market through demand. Take the case of e-commerce, where it is done that way. Instead, we thought of organising the market through supply,” Chopra adds.

Agreeing that there are several competitors such as Droom, Quikr, Carwale and Olx, Chopra insists the latter “are only lead generation websites. They are just marketplaces that don’t facilitate the transaction. They don’t have the data. We own the transaction,” says the ex-venture capitalist at Sequoia Capital.

Chopra insists hiring the right talent is paramount for entrepreneurs. “Though there exist myriad entrepreneurs with talent, great ideas, passion and a burning desire to succeed, when you ask them what they need, most will reply ‘capital’. A lot of start-up stories are how much money they have raised, what new cities they are launching, and about their products. It lacks one important ingredient, employee happiness, which is a huge part of an entrepreneur’s growth story,” says Chopra.

In their first stint, the entrepreneurs realised to their dismay that “every passing month we had not invested enough in people. It was a costly lesson, for it is important to see how happy your people are, how they are developing, how strong the team is. Now, we are focussed closely on these aspects to building a company,” shares Chopra.

Happy businesses have little trouble attracting top talent. “We invest a lot in people, in terms of how much time Mehul and I give to the team. We have worked hard to ensure our people are developing and investing in their development. Instead of doing weekly business reviews with employees, and telling them they have fallen short of their targets, we focus on helping them do the task better. It is a great way to create a conversation with employees. We take personal training sessions on how they can become better managers. It is very contextual, but as a company we do not criticise any of our employees,” Chopra adds.