Jugnoo: Great Business Model, Great Strategy

 

Business is not just about Funding and Execution. It is also about Judgment.

And, this is where I feel Jugnoo is making some right judgment calls–both on Strategy as well as its Business Model. Its founder Samar Singla recently articulated his thoughts on Jugnoo’s Strategy and Business Model. Below are a few quotes/highlights from his speech:

On their Strategy:

We don’t want to compete with these gorillas (Uber and Ola). We are currently following the Cockroach approach: Our focus is on survival, not winning. Also, we focus on growing in spaces where there is no competition.

We are differentiating ourselves. We don’t go to thousands drivers. We go to few drivers, engage them really well.  Our engagement metrics are very healthy. For example, consider the following metric: Rides per driver per day in Delhi. The number is 0.4 for Uber, 0.8 for Ola, while it is 4 for Jugnoo. Therefore, the drivers become our evangelists.

We will be able to corner a bigger market because we are targeting the bottom of the pyramid. We will be able to do it because our cost of growth is less than 5% of that of these big guys! (Please look below at their ‘few-drivers-only’ business model to understand the reason for the low cost of growth.)

On their Business Model:

A audience member then asked how does a focused few-drivers-only model ensure adequate driver-availability for riders. To which Samar replied:

Each city has a critical number of drivers needed to be available at a time to serve riders within an ETA. And that number is not high. It is only 200 for the city of Bangalore! So, Jugnoo aims at getting to this magical number as soon as possible for each city. And then it focuses on driver-engagement.

These guys know their Strategy as well as their Business Model well!

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