I was looking at the performance of Tapprs in the last one month.
Tapprs did reasonably well in June for a 2 month old venture (actually a respectable 5 figure). July hasn’t been bad either. And I have a few advance bookings for August too.
So, I should rejoice. Right? Well, not exactly! (Read this post first).
Before I get into details, let us keep in mind the fact that Tapprs handles two different things. Travel rental & photography rental. So what I say needs to be taken in context with what category it is in.. travel or photography.
Photography rental is my core service. Travel rental (sleeping bags, tents, bicycle, etc) is just an add-on. (Also, I am finding it hard to handle them given that people take it on treks, wet & dirty the items, return it without bothering to clean them, etc. It’s a pain! I may remove it off.)
I was checking the statistics for Photography today.
- SEO traffic is bad. Conversion is decent.
- Facebook, readers of this blog and friends are my best referrers! Thank you guys :-).
- 10% business is repeat.
- User feedback is extremely good.
Now, what is bothering me?
Simple! The market size! The size of the entire pie!
I believe that a larger market is a nicer thing than a niche where you could be misled easily. A larger market means ideas are validated already and business models are in place. A small or a niche market could be easier to penetrate initially, but there may never be a market at all or even if there is one, it could be too small to think of scale.
As of now, am sensing the photography rental market in Bangalore to be too small.
Yeah, there is a chance that I could be wrong. However, my reasons:
1. SEO traffic is bad
There are 3 or lesser photography rentals in Bangalore (commercial ones that have an online presence, not part time). So, anyone searching for “lens rental in Bangalore” has to click one of the 3 of us. All the commercial ones happen to fall within 7-8 links on the first page itself. I have friendlier policy and pricing. So, naturally, I expect a decent % to convert to Tapprs.
In spite of it, SEO traffic to Tapprs is bad! Whatever traffic does come, converts pretty well actually. But low traffic means one of the 2 things.
- SEO of the site is bad.
- there simply aren’t enough people searching for it online.
Now, my SEO isn’t that bad. Already, I am listed in the first page within 5-6 links. Soon, I may even climb up. Also, there isn’t much competition really.
A quick check on the Google searches for photography rentals (including a lot of its variants) reveals a disturbing fact.
There simply aren’t enough people searching for rental lenses online in Bangalore. Remember, this is for rentals. Not sales which seems to have robust demand.
Maybe they are looking for it offline or they are simply not interesting in renting or whatever. But searches are few! My hunch along with a few random checks suggest that the total number of such searches is only around 1000 in a month or lesser in Bangalore.
That is too small a pie!
PS: For travel rental, the story is totally different. Almost all my traffic is SEO based. 65% of travel rentals is through SEO. Now, you put them side by side.. you get a picture of the real story.
2. A huge number of them are buy-testers.
Many of them seem to be renting just to test out the lenses before buying. That means, they wouldn’t come back once the decision is made. Repeat business chances are low. Your cost of customer acquisition is high. You need to keep churning new customers regularly.
3. It’s a weekend activity.
Mon-Thu,business is pretty low. Reducing rates to bolster utilization is a losers game. Esp when your weekend rates itself border close to the lower range.
The market is too small for viable rental services.
Size of the pie
The size of the pie matters. Really really matters!
Though there are only 3-4 vendors, the pie is too small to even be split between them. I would rather prefer a huge pie split between many members.
Forget 10’xing Tapprs, I am now uncomfortable with 3’xing. There simply isn’t enough scale in this area. At least as of today!
Even the original idea of making Tapprs a photography rental platform doesn’t seem too viable.
Now, what does that mean?
- Bangalore hasn’t really woken up to photography rentals.
- Maybe its a lifestyle thingy and people prefer the joy of owning a lens to the cost effectiveness of renting it.
- People are affluent enough to be owning lenses.
- Renting isn’t really cost efficient in the long run as most serious photographers use their stuff regularly. Renting works out for only the not-so-frequent guys or those that cannot afford the equipment.
There could be other reasons too, but simply put.. its not rosy!
Implications on Tapprs
- Morph into something else in the travel & photography space.
- Shut down.
- Continue as it is just for the fun of running it. Perhaps, Bangaloreans will turn into renters one day.
- Sustain by tying up with photography workshops and tours. I might do this only if I decide to stay in this space. As of now, I am just gathering more market data.
Key lessons learnt:
- Make sure there is a market for your idea first, and fast.
Well, get a very quick prototype of the minimal product. Then see if you actually can get a paying customer. Tapprs did this very well I guess. - Make sure the existent market is large enough for your liking.
With time, Tapprs is realising the truth behind the scenes. Of course, being a photographer myself, I could have foreseen a few things. I didn’t. If the market isn’t large enough, you are going to be fighting for oxygen in a cramped space! - Is the idea sustainable & viable financially?
Well, this is another separate post. And I have covered a good portion already in my previous post. - Don’t get conned into untested waters with the lure of being the first entrant.
It is alluring to step into markets where there is little or no competition. But there could be a real reason behind it. This is exactly why lesson no 1 & 2 are so important. Lack of competitors could be a vital clue that the market isn’t viable really. - The best way to gather market data is NOT by surveys or market research, but by having a minimal viable product out there and testing it live in real situations. At least wherever possible.
- Don’t fall in love with your idea until the market falls in love with it first.
Do I need to explain this? On the contrary, I have no issues in killing Tapprs if I see it don’t see it growing the way I want it to.. it could be your baby.. but dead weight is dead weight. Period.
Your comments?
Now, I have shared my thoughts and lessons with you. Do you think its valuable enough? Do you agree? Or disagree? Do let me know!
Prem,
I agree to most of it. Yes, your 2nd reason is completely true and all the other serious photographers (or the beginners) do have their own equipment. May be they are having too much money.
I guess Tapprs have not yet actively started partnering with other photography tour operators from the “just-started” to “mid-sized-well-doing”.
I have not seen (at least to myself) Tapprs doing extensive marketing on its service and products.
If you can achieve 5 figure revenue in June and few advance booking only through your Facebook and twitter activity, I guess you can reach out to so many people in the photography forums (where ad is allowed).
I guess, you might need to give little more time/money on the marketing front and decide.
I may be wrong. Just my initial thoughts.
Cheers
Kesava
@Kesava:
Active marketing is a different story. Tapprs is indeed discussed on BPC, Flickr and a few other places.
Workshop tie-ups are just one part of the pie. There too, seeing people signup after they get their expensive cameras mostly. Also the few I tied up with didn’t really give me any biz even though the guys really tried to help me.
Well, its a niche space. So you need patience. But there are very few people doing this. So my page rank is very good on the searches.. inspite of it, there isn’t enough SEO traffic.
The no of google searches done locally for a few set of keywords is rather low. You get a clear sense of it when you compare it with something like “book libraries in Bangalore” or “cars on rent in Bangalore”.
That fact cannot simply be ignored… esp when you think of scaling up later on.
Hi Prem,
First of all, I love the rental service (you know why 🙂 ) and I am one of your target customers. I get few chances of going out and I dont want to buy expensive lenses during those trips. I rather rent them out. And I do know of folks who still work with their kit lenses.. These are the amateur folks who given an economic plan and knowledge of such service would happily take it.
My three cents
1) Marketing is the key (active & passive).
You are right that people are not searching for rentals, but thats because they dont know such service exists or how does it work. Target the buyer space.. Try to come up in searches for lens. Entice them with advts of better economies. You will see more folks clicking on. That would probably be the first step. See if there are related activities like vacations (expensive key words), travel websites etc.
2) The inventory utilization as you mentioned is going to be the other factor.. Mon – Thu will be low, but you should have enough to meet demand for the weekend(your other post with numbers was not opening for me). That may require additional investment on the same lenses as well as additional ones. Once turned back, customers dont come back.
3) One more way to get customers on-board is through viral marketing (easier said than done). But, you may be in a better position due to your personal interest. People love to read about photography, travels etc. If you can step that up and have your blogs marketed also through SEO, it will get you dedicated followers who will turn customers. You can also potentially be the website who gives advice on the photography workshops for the weekend or tarvel tips. The idea is to get the word out through people with varied interests..
In short, I believe that you do have enough market to run a sizeable business. Especially after FB, where people love to showcase their talent.. But, you would need to put in investment both in terms of inventory and marketing.
Note: – Operationally, you may need to send the lenses to the customer. they wont mind the additional charge
Hope it helps !!!
Thanks Dilip.
Awesome suggestions!!!
I have thought about active marketing (paid), but I guess I can spend a bit more of time doing unpaid marketing through forums and such. Let me see. But will work on SEO and try to improve and add content that lands me higher on related searches too like you mentioned.
On the inventory part, yes, there have been a few customers who were sent back. But I am still not convinced on the profitability part of the equation.. and that is keeping me away from adding more stuff. Will take my time… at the risk of sending customers back :-(.
The third point is pretty interesting. I tried a bit by adding content on what lenses to choose and the like.. but haven’t been able to generate more content. Perhaps I will add a bit more here. That should help.
Finally on the last point.. that it could be a sizeable business.. well, I hope it turns true.
I will keep Tapprs running in this beta mode for a while until I get a hook on things.
But its an interesting thing to be doing.. just like you seem to be enjoying running Mylib.in. :-).
Thanks a ton for the awesome suggestions!
Prem
I have been reading your posts with interest since you started the business – just curious to see how B’lore society had advanced into the new adventures like photography and camping.
I can give you one example as a girl growing up in a small town in K’taka in the 80s. A rich Dr’s home maker wife ran a book library because her own personal collection was huge and I guess she thought she could earn pocket money. But I now look back and think it could not have been v profitable. The book rent was v low and not much damage to books was done by rough handling but it also meant the lady or her kids had to be home at all times to handle customers during evening and holidays. What a hassle with the bell ringing at all times!
Now to extrapolate her side business to yours, I see more downsides – you are renting out such expensive gear and hope people are careful with the rented things that are so expensive to replace. Each time a tent or a bag is returned someone has to sit and inspect it, maybe clean and repair it also? I mean how careful is anyone with cheap, rented things, right?
My prediction is that the tent/sleeping bag rentals will be more in demand because more families will want to experience this new way of touring while saving on hotel costs. They will experience the novelty, discomfort, hassles and may never camp again but at least there are enough families that you may never need repeat customers. I fail to see camera related rentals taking off primarily because the nouveau riche youngsters have so much money to blow that they may just end up throwing money to buy the tools just for bragging rights. Hey at least s/he can show off, “look at my new lens/filter/shade”.
Just a guess from my very limited experience.
Hmm. Anupa, interesting comments! Thanks. My few cents.
1. Tapprs is NOT my main idea. I see it a pre-cursor to other things I would do soon.. the learning I am getting is pretty good. And I haven’t bought anything extra… its all stuff I already own. Also, am not too concerned about loss here. Quite ok with getting hit. Just that I would love to learn how to manage risk in such a business.
2. It’s not a bread-winner for me. Its purpose today is to teach me a few things like risk management, book keeping, marketing, branding, etc.
3. How careful is one with rented stuff? For lenses, people are scared to screw it up and baby them. Tents are my only problem today. Of course, Travel is not the main line.. its purpose is to help spread the Photography rental to the travel crowd.
4. Photography rentals may not take off.. but I think for a totally different reason. Because, most of us think we WILL USE the item longer than just few days. In which case, rental becomes higher. Its a hobby unlike a book that you dont read twice. So if you use it repeatedly, rental doesnt always make sense. This is the only reason why I feel rentals may not be really huge..
5. By statement 4, I actually mean… the size of the individuals pie is small (repeat business).. but there are many many individuals getting into photography. So, there’s a good chance you could get a small bit out of such numerous pie’s. In that case, you still may make a profit.
6. It’s an experiment. Something like a beta version. IF it does well, the next version will roll out. Else, will close ;-).
cheers,
Prem