Lifeselfmastery's podcast I Startups I Venture Capital
00:08:45 · S2
[00:08:45] S2: Yeah. No, absolutely. I think, you know, since I'm Indian, we hired a company called Ola, which was competing with Uber. So, you don't want to be in a situation where there's only one player in the market. You need, you know, different players who can compete. So, that's always a good thing. I just wanted to touch base a bit about what's the expansion playbook that Uber uses for new cities. Because I work with OU rooms as well as with another marketer called Hyber. And it's always question on which new cities to expand into, but what was your experience like over there?
00:09:22 · S3, S2
[00:09:22] S3: Yeah. Just just just to make kind of a caveat here, I was involved in launching cities within the same market. And definitely, the playbook for launching new international markets is a bit different because you need to develop the legal framework. You need to understand how to convert currencies and all that kind of... Sometimes you need to ensure your government relations are in a good order when launching difficult markets. But when launching a market like a new city within the same kind of country, we were prioritizing by the market size, pretty obvious. We were looking at the competition, which was kind of one of the most important areas to look at, especially when fiercely competing with Yandex. So you you need to understand how to position yourself. You need to understand pricing. You need to understand who they are working with in terms of supply. So you need to develop kind of a supply strategy. You need to understand how to market services because, back those days, we were significantly relying on marketing partnerships with different organizations, brands, etcetera, etcetera. And a lot of these are quite local kind of brands and organizations, so you need to understand that. And, yeah, that's pretty much it. [00:10:38] S2: Got it. And how much did the role of, you know, promotions and discounting play when it comes to the growth strategy at Uber?
00:10:38 · S2, S3
[00:10:38] S2: Got it. And how much did the role of, you know, promotions and discounting play when it comes to the growth strategy at Uber? [00:10:46] S3: It's a it's a... It's an amazing question. Sometimes I hear that as a kind of concern whether Uber growth was sustainable during those days, And these concerns are partially valid, but in reality, the pricing discounts are necessary, let's call it, kind of necessary investment into the market. Because any marketplace, and especially ride hailing marketplace, reaches its top performing state where your, you know, ETA is minimal, where the idle time for the driver is minimal, just at a certain scale. And before you reach that, you can be easily kicked off from the market. So your goal is to reach that state as soon as possible. And the fastest way to grow to a certain market share is through discounts, through promotions. But they should not be too radical because you always need to keep in mind that you don't want to find yourself in a position when you compete with the public transportation instead of other ride hailing apps. We have these learnings as well, being too aggressive. [00:11:57] S2: And and did Yandex also involved in this price wars? [00:12:01] S3: Yeah. Definitely. It was it was fierce competition. I think it was one of the fiercest competition next to China potentially. [00:12:11] S2: Oh, interesting. Very interesting. And and you went on to build a leading company. So was it a conscious choice to move away from a marketplace to get into into prop tech space?
00:12:11 · S2, S3
[00:12:11] S2: Oh, interesting. Very interesting. And and you went on to build a leading company. So was it a conscious choice to move away from a marketplace to get into into prop tech space? [00:12:24] S3: Actually, yes. Because I was looking at the leading space as a industry where marketplace is needed as well. So when I left Uber, I was kind of looking for right industry to apply my marketplace knowledge. And with my cofounders, we created a long list of potential kind of applications of our marketplace expertise and letting space by the high level look of it. We felt that it's it's an amazing fit for a marketplace model because supply is fragmented. Demand is fragmented. There is no kind of single middleman. There is no no marketplace pretty much already in the industry. And the main limitation was and still is the transaction frequency. In the ride hailing, you can kind of book in a taxi pretty much kind of several times a day. In the letting space, especially in the long term lettings, the average tendency is couple years. It makes kind of your life a bit more difficult, but all other fundamentals are perfect for launching a vertical operating marketplace. [00:13:35] S2: Got it. And and did you sell the the company and and that's when you moved on to UK, or was... Is it... Are you still part of the company? [00:13:45] S3: We founded that company in 2018, and we sold that business in 2021 completely. So there is no connection to that business at all. And, yeah, we sold that three years ago.
00:13:45 · S3, S2
[00:13:45] S3: We founded that company in 2018, and we sold that business in 2021 completely. So there is no connection to that business at all. And, yeah, we sold that three years ago. [00:13:55] S2: Oh, okay. Okay. Got it. Got it. Interesting. And and you built 20... You know, how how is it different from any other, you know, traditional letting and property management company? And and how did you go about, you know, thinking about solving this problem?
00:14:11 · S3, S2
[00:14:11] S3: Yeah. I think the difference between traditional property management company is that we significantly leverage technology, especially language models, because the industry is super labor intensive, especially communication Like, majority of the agents' work is pretty much communication with tenant, landlord, or maintenance provider or some governmental bodies. This, especially now with the huge investment of LLMs, can be significantly digitized to empower agents to do a more value add job. So this is kind of the difference with the letting agency model. On top of that, our growth strategy is based on two main pillars. One is we acquire traditional leading agencies, and we recently posted news about our first acquisition in HAL where I'm currently based. And second pillar of our growth is partnerships with agencies because, yes, you can buy businesses, but not all businesses want to sell. Not all owners want to sell their business. And then vast majority of them want to continue develop their businesses. So we propose them kind of a partnership so they can bring their supply on our platform. We help them to increase efficiency similarly to what we do on our own portfolios, and then we share some... We share this upside in some proportion. So this is kind of a main difference between traditional property managers because they do not offer their services to other property managers. [00:15:52] S2: Correct. And and do you see AI will disrupt the the market and, you know, there'll be no need for agencies going forward?