Co-founder of taxi booking app applies lessons learnt from an accelerator program in Dubai to grow the business
Looking to raise RM2.4mil with RM600,000 going toward 2,000 smartphones for taxi drivers
IT was during a particularly barren run of business in 2010 that the realization hit Nizran Noordin and his partner Khairul Firdaus Akbar Khan that to build a sustainable business, they needed to own their own product.
Since launching their system integrator company Epiweb in 2005, the duo had been resellers of technology and mainly relied on government contracts.
“While deciding on what we wanted to build, we also decided that whatever it was, it needed to scale so that we could sell it to the world, not just in Malaysia,” says Nizran.
It was an ambitious goal for a company that had not built anything of its own before, but this was 2010 and the talk in the ecosystem was all about building a product that not just solves a Malaysian problem but can scale regionally and also globally, thus also making it easier to attract funding.
And in fact, a few months back, Nizran received an inquiry from one of Malaysia’s leading corporate figures wanting to find out more about his app. This rapidly led to a soon to be launched three-month pilot in which his app will be used by the corporate figure’s listed company.
“That’s going to be big news when it comes out,” says an excited Nizran, who also hopes to attract the tycoon to invest in him.
The product in question here is a smartphone taxi booking app, called TaxiMonger. The story is that when looking around for a problem that needed a solution, Nizran came across Shafiu Hussain, a Maldives student based in Kuala Lumpur (KL) who had built a taxi review app during a local hackathon called HackWeekend2 in December of 2011.
“I wanted a technical partner who was talented and I saw that in Shafiu. Plus, at that time, I was already reading about GetTaxi and HailO in the UK and was intrigued about the possibility of such an app working here,” says Nizran.
A taxi app was also chosen because it would be an income-generating app and Nizran was confident that the public would find value in it. After all, the humid weather of KL was not the most ideal environment to be in while trying to flag a taxi down, and don’t even hope when it’s raining.
“So we decided to join forces and launched TaxiMonger on Feb 13, 2012, during the Malaysian Social Media Week 2012,” he says. It was initially supposed to be a taxi rating system, but there was little avenue to monetize such a service and hence the change to a booking system.
The app was among 10 that were showcased, with Tourism Minister Datuk Ng Yen Yen present, and it caught her attention, giving Nizran and Shafiu (pic) a confidence booster that they were on to something.
Now 10 months into the journey of enhancing the product and trying to monetize it, Nizran has learnt that customer acquisition is not worth it, especially when they only charge the taxi company a flat rate of RM1.50 (US$0.49) per booking.
He is looking to move upstream to what he calls the “source of bookings.” This could be in the form of hotels, train and bus operators, airlines, travel companies and even the cab companies.
He is even ambitiously aiming to replace the current radio dispatch systems of the taxi companies. “It is a matter of time before they replace them anyway, and I want people to think of TaxiMonger when they think of replacing their radio systems.”
That may take longer than Nizran expects as every taxi company will want to maximize the infrastructure it has put in place to connect its taxis back to a central booking hub.
The relationship TaxiMonger has with a local cab company attests to this. Zalnas Limousine is part of the Naza group and has 800 existing taxis in its fleet. It plans to add 1,200 taxis in the next two years and it is in these new taxis that it will implement TaxiMonger.
“We will place our own headcount in their booking center who will assign the excess bookings made which cannot be filled by our initial pool of taxis which will be quite small.
“Every new Zalnas driver gets a TaxiMonger app with an Android smartphone instead of a radio dispatch system. Once we are up and running smoothly, the onus is on us to then convert existing drivers to TaxiMonger,” says Nizran.
This does not exactly make for an exciting revenue stream for now, pending any major changes. But with the product already in use and some revenue coming in, and with the ability to scale to neighboring countries in the Asean region, Nizran and Shafiu are now trying to lock in the next round of funding.
Slightly over RM400,000 (US$130,700) has been invested into TaxiMonger thus far, coming from Epiweb, says Nizran. “We are now trying to raise RM2.4 million (US$784,000) for the next phase of our growth.”
So far, he claims to have one expression of “indicative interest” to invest RM1.2 million. If he is successful in raising the money, he intends to use RM600,000 (US$196,050) and get 2,000 smartphones into the hands of taxi drivers who can immediately use his booking app. He intends to partner with a telco for this.
What has changed also is that Nizran is now fully focused on building TaxiMonger. He is not distracted by Epiweb nor by his interest in personal security app, SecQ.me, where he has given up his business development role.
Lessons from the desert city
To be fully focused was one of the lessons he took back from a three-month program he attended at an accelerator in Dubai beginning in June. SeedStartup is an acceleration program that mentors selected start-ups from all over the world, and is affiliated with TechStars from Silicon Valley.
Nizran (pictured here with other participants) says he benefited immensely from the program where he counted the likes of Dali Kilani (chief technology officer of Zynga), David Haigh (deputy chief executive officer of GFH Capital), Evangelos Lianos (executive director of Etisalat) and Tariq Al Asiri (founder of Arqaam.com, a business news portal dubbed the Bloomberg of the Middle-East).
TaxiMonger was one seven startups that were invited to pitch at a DemoDay at the end of the program and is now on the radar of some interested parties that however want to first see him get some traction.
And this was another lesson Nizran picked up. “Investors want to see an exit path but how confident can they be of one if you can’t even be operationally cash-flow positive?”
Nizran learnt that investors will naturally be wary if you need to use their money to grow your business and can’t do it on your own first. “As an entrepreneur, you have to realize what you want and have to prove yourself first before others can believe in what you are doing.”
The most important lesson he learnt though was to measure the performance of one’s start-up, “so that you know where the business stands and what you must do to move things.”
Guerrilla marketing is another tactic he learnt there. “The mentors kept hammering into us that we do not need a lot of money to promote our start-ups, but we need to be creative and smart about it.”
Hence, TaxiMonger is now trying to raise US$20,000 via crowd-funding site http://www.pitchin.my/ to create a short film that realistically portrays the life of Malaysian taxi drivers. “Theirs is really a kais pagi, makan pagi type of life,” he says using a Malay proverb that describes a hand-to-mouth life.
For Nizran, even attending the accelerator program was a test of his determination to succeed. While his was one of 300 companies that applied to be in the program, taking part comes at a cost. SeedStartup actually takes a 10% stake in each company it accepts into its program for US$10,000.
Naturally Nizran values TaxiMonger much higher than that, but he convinced himself that the value of taking part in the program and the relationships formed would pay off in the long term. That payoff may happen sooner if he can convince one of the investors he met in Dubai to invest in the current round of RM2.4 million he is raising.
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