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About a month after Rahul Yadav was ousted from realty portal Housing.com, the start-up indulged in some soul searching, which it says has given it some ideas to trim flab and focus on generating revenues.
According to executives at Housing, the start-up had expanded into verticals that were remotely relevant to its initial idea of changing the real estate landscape.
"Nearly 95 per cent of the real estate segment consists of segments including buy, rent and sell. These are the core. We had ventured into segments such as commercial, land and short stays, which form a minuscule share of the real estate market. We had a serious look at these verticals and decided to opt out," said a source.
Of its five verticals - rent, buy, land, short stays and commercial - Housing has now decided to focus only on the rent and buy segments.
"The land, short-stays and commercial verticals were only at the conception stage when we decided to pull them down. In future, however, we may look at expanding again," said Rishabh Gupta, interim CEO and chief operating officer, Housing.com. However, sources say the start-up has realised it had over-hired and spent more than required on some verticals.
An executive at Housing said some verticals had a good 30-40 member teams in place. "We had given them expensive MacBooks and there was not much that these teams had in terms of work or portfolio. We had spent insanely on building and marketing not-so-important categories. So we decided to downsize," said an executive.
"They got into land, commercial and even short stays. I am not sure if the management team had the bandwidth to do them all. What they are saying today is: 'we can put them on the back-burner, we don't need to do it today'," said the CEO of a real estate portal.
Housing executives added that in categories such as commercial, land and short stays, there are established players capable of doing a better job than Housing.com.
An obvious implication of doing away with these verticals was laying off 160 executives. "Earlier, we had no clue of who is being hired and for what role. Now we are more in sync with the human resource demand and take decisions accordingly," said an executive, adding that the start-up might not be hiring externally for now and would be expanding the roles of existing work force.
Housing acquired HomeBuy 360, its third acquisition this year, for $2 million. The company is not looking at any more acquisitions for the next six months.
"From acquisition perspective, we are not looking at throwing insane amount of money for companies that do not deserve such a valuation. We're getting our act together and looking at acquisitions wisely now, obviously saving ourselves cash," said an executive.
Clocking revenues, which were earlier next only to building a successful product, is on agenda for Housing now. Although cash burn has come down for the start-up, executives did not divulge the details of the same.
"Housing does not have a promoter to run the company, so it becomes imperative for the investors to look at the interest of the company. Revenue generation, which was not on the company's table so far, is now part of its agenda," said the promoter of a real estate portal.
Gupta said monetisation was always part of the firm's strategy. "We want to grow and our investors have always been supportive. The changes we're bringing in are to strengthen our revenues."
The Softbank-backed portal, which listed a million verified properties this month, is also beefing up its senior management. Last week, it appointed Jason Kothari as its chief business officer and member of the 'operating committee' to drive its overall strategy and growth in India. Jason, together with Gupta, report to the operating committee and the board.
"Jason's recruitment is critical from the client engagement and revenue perspective and despite the lay-offs, we'll continue to hire good people," added Gupta.
The company has given out the mandate for a chief financial officer. "Our strategy has always been to grow 10X or nothing. In the past 20 days, we have been re-working our strategy. So far we were growing horizontally. Now we are looking at a vertical growth and go deep into our areas of expertise," said Gupta.
HOW HOUSING'S SHAPING UP
- Reduce cash burn
- Focus on generating revenues
- Trims verticals from 5 to 2
- Lays off 160 employees
- To expand roles of existing work force
- Bargaining hard for acquisitions
- To hire a chief financial officer
- To look at growth vertically
