VCs Fund my Lifestyle
Four years ago, working in the city of lakes- Bhopal, I was aware of the new startup culture picking up the trend. But something which I could never have imagined was the marketing techniques the companies will adapt to establish their base. By marketing strategies I mean, back in 2012–13, I would never have imagined a taxi service coming to my city and start giving free rides. For them, they were acquiring new users, but for me, I was just enjoying “Free” rides.
Now that, I had lived in 3 different metro cities in last 3 years and visited much more and have seen (and enjoyed) the offers (gimmicks rather) from many startups which actually made no sense, but were covered up with a reason to establish a new habit.
Before getting into the reasons of whether such offers helps companies or not, I would like to mention few hacks which I have either used or am using or will be using in the near future to make use of such “user acquisition” offers by the startups.
- Free Taxi Rides (Uber/Ola/Taxi For Sure):
I guess this to some extent every one of us has already done and was very famous, especially amongst teenagers and youngsters. In the past 3–4 years, I have registered both my numbers on Ola, Uber, Taxi For Sure and a couple of local start-ups each of them giving me about 2 rides free. If we take a count of this, I got almost 8–10 free rides. The best part was the referral program, where I referred my own second number and got 2 rides for making the referral join as well. This doubles up the number of free rides to 20. To add to that, during my graduation (i.e. last two years), at least one person was joining at least one of these services every now and then. And yes, if I pass on my coupon both of us gained free rides.
So, these were the normal free rides which everyone can get. Apart from that, there were many college going students who turned this into business. They earned a lot of free rides by purchasing new phone numbers and internally referring these numbers. What they did next was to sell off these Rs. 200 free ride coupons for Rs. 50. For them, they made money out of thin air with almost no expenditure. And for people like me, Uber became much cheaper than Autos.
- Rs. 9 Meal (Little):
Before saying anything here is an image of the bill. Yes, I was charged Rs. 0 for it.
- This was again a new startup which funded me and my friend’s one day evening snacks/dinner. The startup was called Little and it is into providing offline store deals. And if someone is thinking about the fate of the website, I obviously uninstalled it after the free meal sponsored by its VCs.
- The Buy One Get One Rush (Hola Chef/ Fresh Menu):
Currently, there is a very stiff competition in the fresh food industry domain. And with competition comes more deals. This time, Hola Chef had an amazing offer to make. They offered Buy One Get One Free on any item at Hola Chef for an entire month. But there was a catch in this deal. To avail this offer for a month, one need to pay upfront Rs. 500. So, what I did is, I pooled in this money with my colleague at the office. Both of us spent Rs. 250 each to purchase this coupon. Now, we both order from the same holachef account and enjoy our meal for as low as Rs. 50. For people, who might be thinking, that I still had to pay Rs. 250 up front, what about that? So, it took me just 3 days to recover that amount. And in addition to this, I use the same coupon to order food at home too. So, I and all my roommates enjoy all our “healthy” food at just half the price.
But the company isn’t a fool, right? Yes, they bumped up the prices of the dishes and it didn’t go un-noticed. So, as a resort to this comes Fresh Menu. For the time Holachef was charging higher than its usual price, Fresh Menu ran its Buy One Get 1 Free with no extra charges. And you know what happened then.
- Pocket Money Sponsored by SBI Bank:
This was used by my cousin to build his own pocket money out of thin air. So, SBI wanted to promote internet banking transactions and decided to give away a cashback of (say) 1% (as I don’t remember the exact percentage) on every online transaction from SBI to SBI worth Rs. 10,000 and above. And yes, *drumrolls* my cousin had two SBI accounts with internet banking enabled. All he had to do is transfer some Rs. 10,000 from one account to other and then vice-versa 10 times per day (yes, at least SBI had a cap on this, else he would have earned more than Ambani). And, it took him 15 minutes to thus generate Rs. 100 per transaction for a total of 10 transactions. Rs. 1000 isn’t bad for “daily” pocket money, is it? - Again Free Cab Rides but this time by Pretr:
Note: This is still on my To-Do list
There is an app called Pretr which is into hyper-local fashion. What they do is, they let you choose any fashion item of your choice available in the malls in your city and you can book it on Pretr. What happens next is, Pretr gives you a free cab ride (Uber or Ola) to go and pick up the item you just purchased. 2 months back, while testing it, I purchased (COD) some accessory worth Rs. 100 and in turn ordered a cab from Saki Naka, Andheri East to Ghatkopar. The cab was booked and claimed to be free of cost for me but unfortunately, I couldn’t travel that day to confirm the same.
So, how I will test is, the next time I am travelling to Church Gate from Andheri, I will purchase an accessory (COD) worth Rs. 100–150, order a free cab and then might refuse to pick up the accessory I just purchased (just to be a bit eviler). I would love to see if it works or not.
There are much more examples of such deals/offers from startups which I can include in this list. But the idea is not to populate just a list of hacks in daily life. My point here is to raise a question that whether such marketing gimmicks actually do any good to the company. The company owners enjoy the initial traction and have those large user acquisition numbers to boast about in those board meetings and in their friend circle. But are these acquired users going to stay any longer after the deal ends? Are such activities ever gonna justify ROI? Startup owners might just neglect this question and emphasis again on User Acquisition and claim it to be the most crucial thing in the initial phase, but isn’t this the root of entire start-up bubble and we all have seen multiple instances of what happens when it bursts (VC funding ends).
P.S.: You might think after reading these examples that I am a deal hunter and count to a very small percentage of customers, but then you are in India and in India everybody is a deal hunter and everybody values the money he spends, especially the middle-class person. I still believe that the day Uber starts charging the actual fare from its customers and start paying the actual commission to its drivers both of them will leave being unsatisfied and jump back to the old taxi service concept unless some other startup raises a funding and starts subsidizing their rides again.
