Herry Pudjianto, founder of Rent Tycoons tells us about the revolution in the sharing economy.
First of all, how are you doing in these COVID-19 times?
Herry Pudjianto: Apart from gaining some weight and higher cholesterol levels, I am doing fine. Further, I also would like to use this opportunity to thank Singapore Government for their proactive measures in combating Covid-19, making pro-business policy, and regulating a “safe environment” for the people to resume their economic activities.
Tell us about you, your career, and how you founded Rent Tycoons.
Herry Pudjianto: To be honest and without sugar-coating, I am a lazy person. Unlike other persons that you had interviewed, my life is pretty much boring and totally uninspiring. I spent at least 15 years’ worth of professional experience in various industries, from biotech manufacturing, food processing, phytopharmaceutical, investment, mining, and commodity trading.
From those experiences, I met many smart people in my life, and their stories are instigating me to jump into an entrepreneur journey. However, due to my laziness in nature, I was a bit hesitant to start. In 2011, I met a couple who had the idea to leverage underutilized assets at home and monetize them into a side income. The underlying idea came from the fact that 80% of Singaporeans are living in the apartment, and one single block of apartments consist of at least 90 households.
Imagined, how many underutilized items do you have at home? Multiply that by 90, and in one area within 200 meters radius, we have an average of 3 to 4 blocks. Secondly, Singapore has a space constraint, and each household may not have sufficient storages to keep those items. Third, we live in a clustered neighborhood, but we barely know our own neighbor; how to cultivate the spirit of community and help each other?
Rent Tycoons was created to offer some solutions to those issues. We made the renting process easy, secure, and fun. Since inception, despite lack of marketing efforts, we have seen tremendous growth in user registration year on year basis. We had witnessed one owner who generated S$10k in a year by renting out her household items from a picnic table, plastic chairs, ladder, drill, and other stuff. Some are getting to know their neighbor better and become good friends.
How does Rent Tycoons innovate?
Herry Pudjianto: We initiated the business model from a Peer-to-Peer (P2P) short-term rental marketplace, where we provide owners with an online platform for them to rent out their items online. From those items, we curated and classified them into categories and sorted them based on postal code. Our potential renter is able to search the item based on their proximity to their home or office. Some of the item(s) may be located in the same area or building, and it could be your next-door neighbor too.
Over the years, we are also inviting brick-and-mortar businesses to participate in our platform because it boosts their online presence by posting their items on our marketplace. Each year we have to fine-tune the processes, payment gateway, user interface, mobile accessibility, and regular content updates. What we do may not be innovative. Other companies overseas may have done something similar; however, we are proud of what we had achieved so far, what impact we had done in our community, and many competitors had adopted a similar concept, which is a sign of business validation to us.
How does the coronavirus pandemic affect your business finances?
Herry Pudjianto: As an asset-light company, the immediate impact is mainly on the revenue and income, not so much on the expenses. During the Circuit Breaker (lockdown) period, it is difficult to get manpower, and the logistic cost is increasingly getting expensive as the service provider needs to put extra effort to clean and sanitize the items. In 2020 as most of us spent a lot of time at home, it gave me time to think and streamline the business processes making it as lean as possible. In our back-end, we re-model our relationship with other vendors from client-vendor to client-partner.
Did you have to make difficult choices along this journey, and what is the lesson learned?
Herry Pudjianto: In the mid of 2020, it was the period where we have to decide, either to continue this entrepreneurship journey or to wrap it off. Because we did not have visibility on how long this pandemic will last, many events were canceled until further notice and whether our business plan was still relevant.
It was our family, friends, and some of our loyal customers who have reminded us why we started Rent Tycoons. Any other businesses out there were also affected by Covid-19. Rather than abandoning the ship, we used this event to revamp our system and cut down the operational cost even further. This was where we had to convert our full-time IT engineers into a part-time basis, using our own transport to assist customers, and cut down any unnecessary expenses.
The lesson learned was:
- Remember why you started this journey; that thought will keep you going in the tough time.
- Your pillar of supports not just comes from your family and friends, but your customers too.
- During the difficult time: regroup, plan, prepare and execute; there are better days ahead.
How did your customer relationship management evolve? Do you use any specific tools to be efficient?
Herry Pudjianto: Despite the fact that we put some simple infographics on the website and animation on how it works; nevertheless, our business model is not clearly communicated to the customers. Some of our customers see us as a rental shop, especially the older generation, where they are still relatively new to the concept of a P2P online marketplace. In the first few years, we were focusing on consumer education and assurance about safety in the transaction.
As more players enter into the same space and more customers are getting familiar, we are focusing on user experience. This is where we use past transaction data for rental prediction patterns, optimizing the search result, reservation system, and integration of payment gateway. Our relationship had shifted from education to service-oriented whereby focusing on convenience, speed, and safety. In the near future, we keep investing in technology to improve our system across the platform (web, desktop, and mobile devices).
Did you benefit from any government grants, and did that help to keep your business afloat?
Herry Pudjianto: As mentioned earlier, the Singapore Government has been very generous in making pro-business policies, especially during Covid-19. As our company is not heavily impacted by the Covid pandemic, we did not apply any of those grants; there are many other companies with heavy manpower and those in essential services which need government grants more than us. Currently, most of Rent Tycoons’ expenses are self-funded from our business operations.
Your final thoughts?
Herry Pudjianto: The entrepreneurship voyage is not always smooth sailing. Never be complacent, prepare for the unexpected and stay focused on the mission. Covid-19 changed the consumer’s behavior, product category trend has shifted, and mobile devices are commonly used nowadays rather than a desktop; what do we do about it? As a platform and service provider, we also adapt and upgrade our infrastructure to meet those changes and demands. Be versatile and quick in making a decision, and ultimately, you need to stay relevant in the market.
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