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.
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!