⌚Reading time – 7 minutes
This story originally appeared in my short-story series, Easy But Hard. In this series, I take a look at stories of people that are easily forgotten.
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“Truckwaale.com, a startup founded in 2016, once valued at over $100 million, looking to raise fresh capital.” Amit read in the newspaper while sipping another cup of tea.
One, two, three… sold!
Last night, like many other nights, Amit had stayed back at his godown to oversee the loading of three of his trucks. Mata Rani Trucking had been his life for almost twenty years now, and long nights were a part of the job. City rules didn’t permit heavily loaded trucks to enter the cities during the day. Thus, most of the loading and unloading happened at night.
But nowadays, Amit had wrinkles on his forehead when he had to work late nights. With the increased traffic and the worsening condition of roads, his drivers were often delayed. Answering phone calls from angry customers was also taking a toll on him.
Having had seven cups of tea throughout the night, acidity had not allowed him to sleep. He kept walking across the porch, thinking of several random things, checking his phone every once in a while, until the newspaper boy threw one towards him.
The Truckwaale article made him wonder how these start-ups raised money at such high valuations. An avid reader of the Economic Times, he had developed a keen interest in learning about these hot tech startups, their massive valuations, and how most of them didn’t even make a profit.
But in the case of Truckwaale, Amit knew the company’s business model well. About a year ago, he had also decided to use the Truckwaale platform to expand his trucking business. The company’s proposition was that independent fleet operators like Amit could list their trucks on their site. Anyone who was looking for trucking services could now find them online, thus helping businessmen like Amit ensure sustained demand for their trucks.
On hearing there was no fee for signing up, Amit happily listed five of his trucks on the site. He waited for a year, but only three bookings happened through the website. Truckwaale.com worked very well in the big cities, but for a city like Indore, the demand for trucks was not very high.
Amit decided to part ways from the company and focus on finding leads for his business using his tried and tested method – handing a business card to anyone he met.
The newspaper article added fuel to the bile rising in his body. Thirty years – it had taken him thirty years to build a decent-sized business with five heavy-duty and two small-sized trucks. Last year’s annual revenue was close to Rs. 50 Lakhs, with a profit of Rs. 14 Lakhs. Even if he multiplied his revenue by ten times, his business would be valued at Rs 5 crores.
How could a start-up which was founded only four years ago grow to a $100 million (roughly Rs. 740 Crore) valuation?
He had to do something about it. He picked up his phone and looking towards the sky while speaking. The wrinkles on his forehead contracted.
“Hello?” he said.
“Yes sir. This is Seema from Truckwaale.com. How may I assist you?” the lady said.
“I want to meet the founder of your company,” Amit was straightforward, “can you connect me to him?” The customer service representative was taken aback. The founder was a busy person. Even she had rarely met him 1:1 in the one year she had been working here.
“Sorry, sir, he is a little busy at the moment. Can I leave him a message instead?”
“Yes, tell him Amit Agrawal from Mata Rani Trucking called. I had to discuss some business details with him.”
“No, that’s it. Please ask him to call me back.” Amit said. He was now strolling in the small garden in front of his house.
“Thank you, sir. I will leave him a message.”
As his acidity now grew into heartburn, he turned back towards the kitchen. He had an analgesic and a spoonful of Kayam Churn. After taking a shower, he went into his bedroom and turned the air conditioner on. It was time to get some sleep.
He didn’t hear back from Truckwaale.com for three days. Still irked with the news article, he could no longer resist. He called the customer service line once again. This time there was a gentleman on the other end, who had a similar response.
Amit started reading more about Truckwaale’s history on the internet. It was founded, like every other start-up, by a techie who came from an IIT; had been a part of a start-up accelerator in Bangalore, after which it had raised massive funding from some Japanese venture capitalists.
The company’s business model was based on commissions. Whenever a client connected with a trucking company and placed a shipment request, the company would take 10% of the total shipment cost. In order to gain a high enough market share, however, the company was discounting its fees heavily.
The company didn’t have any other sources of revenue. There were some articles stating the company was in trouble, but in terms of raw growth, the company was not stopping its expansion plans. It had already scaled up to more than 100 cities at this point. “Expanding without making money?” Amit scoffed.
On the fourth day after the first call, he received an email from Truckwaale.com, stating that the founder of the company wanted to talk at 3:00 pm that day. A phone number was included in the e-mail.
Amit dialed the number at 2:59 pm. After ringing three times, the phone was received.
“Haan, sir, sorry I couldn’t talk to you earlier. I looked up your company, Mata Rani Trucking. I must say, you have an impressive experience in the trucking industry.”
“Yes, I know a thing or two at this point. I had a question for you – you must have realized by now that the business model you’re following is not working for you. Although you can scale your company to thousands of transactions every month, the revenue generated would be very less. How are you thinking of profitability?”
“I’m sorry, sir, I didn’t understand.” Someone was ridiculing the founder’s entire business. How could he not be befuddled?
“I know what you’re doing. The only way to get to profitability would be to expand into the actual trucking business, rather than being a marketplace where you connect truck-suppliers with clients who want to ship materials.”
“Sorry, sir, I can’t comment on it as of now.” The founder replied while clutching his wrists.
“Okay, so you do agree that your business is in trouble. I called because I wanted to provide advice, not to learn your secrets.”
“Thank you for your support.” The founder stayed silent for a few moments. “So, in your opinion, what should we be doing?”
“Well, first of all, find some experienced people in the industry. You might have the best tech team, but trucking is a very well-established industry. Things, even if they are inefficient, have to happen in a specific way,” he paused to see if the founder reacted at all. No reaction.
“Second, buy a profitable trucking business with whatever capital you have. That will teach you so much about how to run trucking companies. Focus on scaling this company, rather than scaling your marketplace business.”
“Well… I didn’t understand your reasoning for the second point. Why should we buy a business? We don’t want to get into trucking. We only want to be a marketplace.”
“To be a good marketplace, you need to learn all you can about trucking. You can learn only so much about trucking companies by researching or talking to them. You should invest in buying a profitable, mid-sized firm, so you can actually learn how the business works.”
“And why do you think I will take your suggestion?”
“Because I know you need my suggestion right now. It took me thirty years to build my extremely profitable business. Companies like Truckwaale can get big valuations by generating investor hype, but to create a long-lasting business, you will have to trust someone like me.”
“Well, thanks for your suggestions. I will keep these in mind.” The founder’s tone remained ever-so-diplomatic, despite Amit’s harsh criticism of his marketplace business.
“Great. Also, I have a proposal for you. If you find the points I stated valuable, I’m willing to sell my business and join your company as Chief Operating Officer. I will help you get to profitability faster.”
“No, seriously. I am not joking. Don’t follow the venture capital game. Follow the business game. Chase profits, not valuations.”
“Let me think about it,” the founder disconnected the phone.
Six weeks later, after more rounds of negotiations, Amit was making his second trip to Bangalore. Mata Rani Trucking’s trucks now had the Truckwaale branding. Amit had sold the business for Rs. 5 crore cash, and joined Truckwaale.com as COO, his sole focus being to get the company to profitability.
He no longer had to stay up all night looking at the micro-level operations for each consignment. The equity and the salary he now got far exceeded the profits he made every year with Mata Rani Trucking.
And he was confident – getting to profitability wasn’t very hard if the company stuck to the basics of business.
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