• StartUps

Two-and-a-half years back, Bopanna B.P. found himself with a flat tyre on Bengaluru’s Inner Ring Road, Koramangala and he instinctively called Rescue First, referred by a friend. “The mechanic reached in 20 minutes and I was satisfied with the promptness of service,” says Bopanna. So happy was he that he signed up immediately as a member for both his two- and four-wheelers with three breakdowns being serviced since.

Co-founders Prasanna Sivan and P. Sanju too had found themselves in similar situations on numerous occasions. These instances often made them wonder why Bengaluru, a city known to have a significant number of two-wheelers, didn’t have anyone providing 24/7 support on the spot. This was in 2007 and within a year, they chucked their corporate jobs to address the issue. Rescue First was launched in 2008 as a 24/7 vehicle breakdown service company for Bengaluru, earning revenues through an annual membership model, Rs.444 for two-wheelers and Rs.888 for four-wheelers.

They tied up with garage owners and started offering services to 40-50 members sought through friends and family. It wasn’t a fool-proof model and a pilot program over four-five months brought up several loopholes. “Our first breakdown was a nightmare, the mechanic refused to go and we had to attend to the customer personally,” recalls Sivan, Co-founder and Chief of Marketing, Rescue First. After 10-15 complaints the entrepreneurs realized this method wasn’t wise as mechanics were giving their own customers priority. Also, the startup had negotiated low rates on the promise of volumes, this was taking time to build up.

The answer was clear, the model needed to change. The attraction was money this time. The founders hired one sales guy to identify area specific garages (two-wheelers) to add to Rescue First’s network. “We offered Rs.150-Rs.200 for every complaint,” notes Sivan.

In addition, they appointed two in-house mechanics to service vehicles. Witnessing a demand for four-wheelers, by the third quarter of 2009, the entrepreneurs forayed into the segment. Sourcing quality manpower was a natural hurdle and the men lay first bets at industrial training institutes. Selling their concept of on-the-spot service was a challenge as it didn’t seem to gel with a mechanic’s mindset. “Most mechanics were not open to new ways of doing things and convincing them was a tough part,” says Sanju, Co-founder and Chief of Operations, Rescue First. Marketing the venture was easy enough. Flyers, referral campaigns and kiosks in big IT parks and MNCs created initial buzz. “Admin/HR heads considered our service as good incentive for employees and we gave 5-10 percent discount during this period,” says Sivan. This means they had to increase their core mechanic base as well over time.

Since then, the founders have identified mechanics on the basis of number of potential customers in each area after which each employee is provided a shed and tools. Plus, they are tested on the basis of their experience and trained for soft skills like dealing with customers, communicating via SMS etc. Rescue First’s Head Mechanic is in charge of background check of all new candidates and the firm has a strict policy of hiring teetotallers. “We pay them Rs. 6,000-Rs.7,000 per month, double the wage at other garages, plus conveyance, vehicle maintenance and a handset with a SIM connection,” Sivan adds. Mechanics are free to service any vehicles they find on their own, in addition to the startup’s customers, provided they aren’t secured through outside employment. On an average, their staff services four-five vehicles a day, and end up putting in less hours than a job at any garage. The only pitfall is they can be called for duty anytime.

So far the firm has covered 22 locations between the city’s periphery and center. Once a complaint is registered with a customer care executive (placed at a friend’s BPO), the rescue team takes 20-30 minute to reach the breakdown site. It’s taken a fair amount of time to streamline logistics. The wait time for customers has not always been by the clock. “Now we call the customer after 20 minutes to check if our mechanic has reached,” notes Sivan.

For reasons of scalability, the startup has been working on tie-ups with corporate firms to increase its customer base. Yamaha was one such client. In December 2010, they struck a deal with Yamaha customers through its dealer network. “We were giving a month’s free service with each purchase of a Yamaha two-wheeler,” mentions Sivan. “We are trying to convert this segment into customers,” he adds. So far the conversion rate has been 10 percent. “Their service goes well with our product and the partnership has been beneficial to us,” says Manu Choudhary, Senior Sales Executive, Orion Motors, dealers for Yamaha. Orion tied up with the startup two months back and has sold 25-30 memberships till date.

Pharma company AstraZeneca signed a contract with Rescue First starting July 2010 until August 2011 for 100 employees. So far it has serviced 30 complaints in six months. “Majority of our staff own two-wheelers. We were looking for initiatives to make things easier for them,” explains Anu Elisha, Manager Safety, AstraZeneca.

Since February 2011, the firm’s focus has been on marketing. They plan to use the time till mid-year on radio advertising, more referral schemes and hiring additional staff. This has been possible because of an angel funding of Rs.15 lakh which was received through family and friends.
In March 2011, Rescue First entered the retail space with pre-paid temporary membership cards. The entrepreneurs hired interns to identify feasible retail locations, including the unorganized market which includes kirana stores and local garages.

“We tried this model earlier at modern retail chains but it failed as commissions were as high as 50-60 percent,” exclaims Sivan.

Looking to expand their reach, Sanju has been on a road trip lately identifying garages in parts of Kerala and frequently-traveled routes within Karnataka, seeking garage tie-ups. “By mid-2011, we plan to offer services in these regions as well,” points out Sanju.

©Entrepreneur May 2011

Tags:
astrazeneca, Bengaluru, Bopanna, Koramangala, manu choudhary, Rescue first, road, sanju, Sivan, yamaha