We shut down the operations of GyanApp in October, 2019. It was one of the toughest period of our life as we had let go of 75% of our team reduced from 16 to 4. All of the people who left have landed in good places.
We always wanted to build something that drastically improves the quality of life of the non-metro people. We tried to build something at GyanApp but failed(a separate article on it coming soon). From October to December, we met more than 300 SME owners(and their employees) ranging from retail shopkeepers, wholesalers, manufacturers of hardware, embroidery, loom, construction, furniture, diamond industries in Surat, Ahmedabad, Patna, Sivan, Jaipur, Delhi and Bangalore. Here are few major problems we found that these people are facing now.
- Maintaining bahi-khata and recovery for retailers and wholesalers(Already being solved by Ok-Credit and KhataBook)
- Invoice and Inventory management. This problem is solved by apps like Vypaar. But we found out that people need their industry specific solutions. In Surat people are using offline softwares like Embroidery-Pro(and paying upto Rs 9K)as it tailored according to their need(you can enter design pattern number, length of cloth in meter etc). Now this just one example people from diamond industry are using some other softwares.
- GST payment. As the GST payment has been made mandatory monthly. People are paying from Rs 500 to Rs 2000 monthly to their CA. This number used to Rs 2–5K annually previously. Now almost all of it can be automated via API’s from GSP’s like Masters India with a industry specific Invoice and Inventory management software. But still practically people use CA’s to adjust money to minimise the tax. But as rules keep getting strict it will become harder to keep the money in black.
- Staff Salary, Work and Attendance management. Now a lot of people have more than 4-5 people working for them(Typically every segment except a small retailer). In a mid sized setup you can find upto 20-30 people too managed by a single person. Now these employees typically earn between Rs 8-15 K depending upon the experience and industry. So on a regular basis of 6-7 days the employer gives some advance(also called upad in Gujarati) of somewhere Rs 100-1000 to the employee for their day to day expenses. This industry is only work driven so 90% of the workers don’t have a paid leave. So every hour counts and in some case every minute counts. So to maintain all the advances given in between the month, work done and attendance(hours/days) people use 2-3 ledgers/attendance cards, and in most of the cases employees also maintain a ledger of the same for reconciliation.
- Staff hiring. A lot of employees keep leaving after 7-8 months due to various reasons like farming season break, family emergency, finding more work somewhere else. Some of these also comeback after the farming season. So for employers its hard to find a replacement or hire more when their business is doing good. It is relatively easy at places like Surat(Manufacturing Hubs), but otherwise it’s difficult as employers have nothing to trust except employees word. An employee has no official/document/digital record of previous employment. Sometimes employers also hire on contract(only for 3-4 months) depending on the work/volume cycle, this is done through contractors which charge 10-40% of employee’s monthly salary.
So after analysing the above we thought to solve the staff salary, work and attendance management and staff hiring problem due to the following key reasons:
- A big chunk of SME’s need this solution, approx 25-40 Million.
- According to the report of NSSO( National Sample Survey Office ) approximately 50 Million blue collar people switch their jobs annually.
- More than 200 Million blue collar workers are present in the country whose lives can be better just by having a standard work and financial history.
- Design financial products like loan, insurance, savings account for these 200 Million people, which will be a first mass scale effort to bring these people online financially.
So our first question was do people even want it, but again if you don’t have a product you would never know what people wanted. Also we were hopeful because of the JIO boom and penetration of apps like WhatsApp, OkCredit, KhataBook and Vypaar.
So we built a very basic version with just advance and salary calculation in 5 days and shipped it on 1st December 2019. We gave a large focus on “Help/Suggestions on WhatsApp” in the App.
Around 300-350 people installed the very first version. On the first 1-2 days we got WhatsApp messages from 50-60 users demanding features like attendance, add different types of employees(Daily Wage and Pay Per Work, we only gave monthly fixed employee types in our first version), add bonus/overtime, change in some representation of numbers, message being sent to employees on adding an advance and many more. We talked to more than 100 people from these 350 and got a similar response. We understood that their might something to build here as people started to pull features. We have had calls with users at 2AM in the morning too, explaining their requirements and helping us build a better app. Our Co-Founder Rupesh has contacts of more than 1000 PagarBook users in his personal phone, many of them give constant feedback on new updates and keep pulling more.
The Surat Visit
After building the next version with most of the above feature requests in 8-10 days, another batch of 300-400 users came and some of the previous people were very happy with the update. We thought let’s see how people are finding the app and how easy is it for them to use the app so we went to Surat on 24th December to actually meet some of our users.
Surat was a very overwhelming experience. We spent around 1-2 hours with more than 30 users. People were very welcoming and explained their business problems deeply not just staff management related but otherwise too(as mentioned in the very starting). We spent time with the employees too, understanding their financial, lifestyle, professional needs. Here are the major inputs we got from the people.
- People wanted a really simple UX, some of users even drew how they wanted the app to be.
- People also needed an employee app. Employers needed it to maintain transparency and reduce the hassle of communicating every-time. Employees need it for reconciliation and some proof.
- Some of the employees take loan from the locals at very very high interest rate, if they could take loan at low interest rate it would make their life easier.
- Employees take their salary in cash and then transfer their salary to bank. If this process could be made simple it would simplify both the employer’s and employee’s life.
- Some employers provide insurance to their employees(Star Health Insurance, specifically designed for blue collar workers). But this insurance only lasts while they are employed under the same employer. If insurance can be provided irrespective of the employer, it would be of great help to the employees.
Surat visit was when we realised that its not just a nice to have product its a need and if we provide the best UX to the employers they will definitely use it and then we can build a lot over it.
We have been constantly working on user inputs and trying to provide the best experience.
Currently we have 2.5 K active employers who have added 4.5 employees on an average. We have had transaction worth more than Rs 6 Cr recorded by these employees till now(7th Feb). Upon improving the app, 15-20 % of the people have also asked if this app is paid, most of them are ready to pay somewhat between Rs 500-Rs1500 per year.
Also we have received the following major inputs in January.
- If they can have a desktop app too, managing more than 50-60 employees can be a bit hard on mobile.
- If UPI payment can be done to the employees.
- If people can add their managers in this app who will manage employees for them.
- If we can integrate their biometric attendance into the app directly.
We try to keep things creative at PagarBook, which has helped in some good growth in past few weeks. Here is look at some of our creatives.
The Journey Ahead
We plant to improve the Employer App as much as possible and also release the Employee app by last week of Feb. In the long term we want solve the following problems on top of this.
- Blue collar hiring for employers and easy employment for employees.
- Better accessibility to savings bank for employees
- Better accessibility to range of financial products like Loans, Insurance, Investments etc. to employees
- Solving more deep business problems of employers as mentioned above.