Business Case Study: Porter
Business Case Study: Porter
Business Case Study - Porter : Taking Over The Logistic Space In India
We’re living in a developing nation that still needs to grow and improve in various sectors. There is still a lot of work to put in. Apparently, logistics in any country defines how efficient the country is. The cheaper and quicker the logistics are, the country is ranked even better.
Developed nations like the USA and China spend almost 8 to 10% of their GDP on logistics, whereas our developing nation, India, spends around 14% of its GDP on logistics, which is definitely a matter of concern.
Today, let us talk about Porter, an intra-city logistics company.
Start-up of Porter
It was founded back in 2014 by Pranav Goel, Uttam Digga and Vikash Choudhary, and its current investors are Sequoia Capital, Mahindra Group, Lightrock, Vitruvian partners, LGT Lightstone, Kae Capital, Innoven Capital and Tiger global management.
Let’s go back to their time when they were working at JP Morgan in Mumbai in 2013. They were stunned by Uber and how it handled the problems that were present in the commute. Uber was barely available, and if they were, the prices would be so high, and similarly, the same problem would be faced by the logistics sector.
They legitimately talked to 500+ truck drivers and understood the problem that they were facing along with small businesses. They were badly getting around 1 to 2 customers a day. They were only at 30% utilization of their vehicle.
This is exactly where it came into their minds that if Uber can bring about such a change, why can’t we do that with goods?
This led to the birth of Porter, they left their jobs and started working towards it.
Initial Stage
During the initial stage, there were just two people, Pranav and Uttam. They divided the work roles between them. While one would stay connected with the truck drivers, the other would talk to the small business owners. Initially all their work was done by them through their phones. The moment they would get a lead. They would connect them to the truck driver. When the work started increasing, the options they had were not sustainable anymore. This is where the third founder, Vikas, came in.
When they started it there, the only pitch was “Book from us. We are 20% cheaper.”
And guess what? Their pitch actually worked. We could see it in the graph in less than a year, they had around 500 business customers and almost had a monthly revenue rate of around 30 lakh and that too just through the help of their website. They did not have an app for it. As the market was growing, they had all the required things: they had enough money, they had ideas, customers, and whatnot. Now, their only focus was on building things better and much stronger.
Porter App
After a year, in 2015, they launched their app. Since the business was going well, things were getting better. They got the idea of starting up intercity services, but this is where they started facing problems. Their business was only running in Delhi NCR and Mumbai at that particular point in time; their intercity work was still going on. There was still a lot more work that needed to be put into it, and without giving it a second thought, they jumped to the intercity part, but this sector already had a number of competitors that had good names, for example, Delhivery and FedEx.