Leveraging WhatsApp for Proof Of Concept (POC) & as a Platform to build scalable businesses.
WhatsApp for a Proof Of Concept (POC); Dunzo & Digi-Prex. WhatsApp as a Platform; Bikayi.
Hello there, Welcome to issue #19. This week I was intrigued by how startups in India are using WhatsApp as a means to launch a Proof Of Concept (POC) & how others are using WhatsApp as a platform in itself. There are some lessons for potential founders in South Africa on opportunities that exist.
WhatsApp for Proof Of Concept (POC).
In January 2018 WhatsApp launched WhatsApp for Business as a standalone app after testing it out in Mexico for a couple of months. The standalone app has a few rudimentary features that help small businesses handle communication with customers but the clear intention of the app is to enable a separate platform for commerce.
The app took off in India, where there are over 400 million WhatsApp users & as of August 2020, the WhatsApp for Business app has been downloaded over 100 million times. In some markets like South East Asia, WhatsApp has more users than WeChat. In Latin America, it is the most used method of communication with a 64% market share, Brazil alone has 120 million users, second only to India.
So naturally, I have been quite intrigued reading up on how startups in emerging markets are using WhatsApp as a way to prove concepts. WhatsApp has what all startups serving consumers & small businesses (SMEs) need; Distribution.
Often people with no experience building things (myself included) mistake the Proof Of Concept (POC) for the Minimum Viable Product (MVP). We want to build apps without actually understanding what that entails or how that fixes anything. This happens a lot in consumer & SME focused products.
So let’s investigate the how. How companies in India are using WhatsApp to test ideas. It is important that we be prudent in our approach & understand that this might only be applicable to certain business types & models. If you are building self-driving cars or deep tech, maybe this isn’t applicable to you but if you are building a startup with a commerce revenue model, maybe it is.
Dunzo is an on-demand hyper-local logistics company based in Bengaluru, India. Founded in 2015 by Kabeer Biswas, later joined by his other co-founders, Ankur Aggarwal, Mukund Jha & Dalvir Suri. Dunzo started on WhatsApp when Kabeer thought of creating a concierge service by leveraging the GPS capability on WhatsApp.
Kabeer & his team spent a year testing out the service by collecting to-do lists from people on WhatsApp & using the inbuilt GPS as a dispatch system, connecting drivers & people who need tasks to be completed.
Dunzo began with a small set of users & in the process, gathering data & understanding the environment required to make this kind of service work. Crucial elements of a Proof of Concept wireframe.
How the service works:
Once the team hit 500 orders a day, Kabeer was comfortable that the proof of concept worked. Only then did they begin to automate elements that were essential for scale. For instance, they built the driver app first before the customer app.
From 2017 onwards they focused on optimization for scale, by then they had 80 000 orders per month. Dunzo had proven the concept works using WhatsApp.
This is not to say that building a POC is not hard, as shown by the growth curve, it is, & pivots are necessary to find product-market fit. but it was a start for Dunzo, a proof of concept.
Another startup leveraging WhatsApp for Proof of Concept & beyond— Digi-Prex, a Hyderabad-based health-tech startup that runs a subscription pharmacy.
How the service works:
“The patients pay a subscription fee on a monthly basis and get access to discounted medicines, delivered to their homes. The product also offers a customised experience to help the patients manage and monitor their condition”.
With WhatsApp as the distribution engine, Digi-Prex has lowered the barrier to adoption of a digital channel for healthcare without the need to build a standalone service.
Launched in 2019 Digi-Prex now has thousands of customers using their services. Primary healthcare is a fundamental need in society & personalised care is ever so important. Digi-Prex raised 5.5 million dollars to focus on partnerships with physicians & pharmacies with the ultimate goal of scaling the service across India.
WhatsApp as a Platform.
Some startups have taken WhatsApp to the next level as a platform that serves others. People are seeing beyond the curve as to what a communication platform can enable. Similar to what WeChat is in China, I believe WhatsApp will be for the rest of the emerging markets provided there’s a native payment system. It is already happening in India & slowly beginning in Brazil. It is no coincidence that Facebook is testing WhatsApp Pay in both countries.
source: Florian Lemke.
Nevertheless, some, seeing beyond the curve are building now. People like Sonakshi Nathani & Ashutosh Singla, founders of Bikayi, a WhatsApp based E-commerce platform that creates tools to help small businesses manage & run their stores from WhatsApp.
How this service works:
“Select a plan to create your online catalogue which can be shared as a website, WhatsApp message, images, video and pdf. Add your payment details on your website. The Payment Gateway is set up instantly by just providing UPI ID or Bank details. Take Unlimited orders, enquiries on 0% commission”.
Basically what Sonakshi & Ashutosh at Bikayi are doing is taking the existing Whatsapp for Business & expanding it by integrating features such as payment, analytics & more personalization through a customizable digital storefront.
Bikayi has been experiencing quite a bit of growth in its 18 months of existence. The startup has 25% month-on-month user growth & 125% month-on-month revenue with over 85 000 merchants signed up.
Some lessons from India:
Proof of Concept requires minimum technical ability, just ingenuity.
No/low-code solutions are a good way to start.
Leveraging WhatsApp for distribution might work for startups looking to solve problems in South Africa’s poorest provinces.
Mobile is a powerful tool for commerce.
& Most importantly, start with what you have.
If WhatsApp decides to move to the WeChat model & become a mobile platform ( & I believe they will), opportunities will arise for mini-programmes; the ability to build unique products on top of WhatsApp the communication product. Innovation will be democratized & low-cost solutions will be distributed efficiently to remote parts of the country.
I might be too much of an idealist. Have a good week.