Hi everyone This is Rahul Chakrapani
We have all seen crazy advertisements on tv and social media every day
where Rahul Dravid KapilDev and other famous people are doing something very fresh and new.
Yes, it’s all about CRED today. the New sensation in India.
The revolutionary Indian fintech company that made billions within a few years
CRED
2 years ago in 2019, the cred was started in India as a small startup like every other startup.
within two years of period, the company have made a 2.2 billion valuation
How come it is possible?
How to scale a company and value 2 billion within 2 years?
youngest Indian startup to reach the milestone of a billion-dollar company.
But did you know that
in 2020 alone CRED had a loss of 360 crore rupees and got only 52 lakh rupees in total revenue?
it means a 492% loss in the year 2019 alone
for every 1 rupee, they have generated, They have spent 727 rupees on it?
to get that sale, that is the expenditure in marketing for CRED.
how so much funding happen with Cred even if they lose money like this?
what’s happened with Cred?
What was Kunal Shah strategy for Cred?
Did you know that so many other companies are operating like this
Jio, Ola, PharmEasy all are operating in the same fashion in India
So let’s try to understand what they are trying to do in Business.
if we can check the business plans of these companies
we can able to understand one thing
all of these companies were working on only one thing in the Indian Market
The behavioural design of the society
it means anticipation of behavioural designs(change) maximises their ability to become a billion-dollar company
behavioural design of the society (anticipated change )
happens in different steps according to all these billion-dollar company business plans.
This process will happen in a few Steps
1 identify a problem
2. designer system to fix that problem
3 . money game (investment )
4 . induce the uses within unbelievable offers
These are the most common steps for all this kind of business plan
Let’s examine this :
Let’s take an example of jio
when starting in 2016 In India, internet access ability is the main problem
to meet that problem jio was launched (mobile internet)
for this purpose, only Reliance Build a 1.5 crore worth infrastructure only for jio
2016 jio launched
with impossible offers
free sim card, free call, free internet
Offers are like too good to be true offers.
Then what happened
to millions of Indians who Went onto the roads.
Stand in the queues and both the jio sim & jio phones.
Jio has done it maximum to maximize the numbers in sales.
Maximum they have sold their SIM cards.
after the heavy investment in infrastructure,
jio have lost 31 crore rupees in 2016 only
Now let us talk about Cred
Anyone who used to use any credit cards in the past can able to relate with me very fast because using a credit card is s pain in our country.
As customers, we don’t understand what is going on with our credit cards?
Getting a credit card and using it is also the biggest pain.
It is so sophisticated from their terms conditions to repayments
cred was founded on the three pain points of credit card users in India
1 . hidden charges
2. late fees due to forgetfulness
3. extra interest paid to the company’s
This is where CRED comes with an extraordinary business plan
To solve all these problems with their technology and system
After launching CRED in 2019 they have gone like this
Massive cash burn and offers after offers
Massive offers to the customers who signed up in CRED
Up to 1000 rupees cashback and even flight tickets and a lot more
etc are on credit card payments by using CRED.
And the offers list goes on and on and on. today CRED has 30 lakh credit card users.
Within 2 years today, CRED have 20 % of the total credit card premium users in their custody in India,
In a short period, they are gonna gain a lot of customer base in India very fast
The process
Phase 1
incentives to the customers
For getting the customer base into the business,
customer needs to stay in this business for a long period
So that companies can able to make money later.
Phase 2.
Habituation
like in the example of the Jio launch
jio Sim offers free talk time, free data and a lot more
Like that in the case of CRED, a lot of issues was in the credit card segment
CRED simple to use cred stopped using conventional methods statement hidden charges terms and conditions and clauses
For their traditional credit card uses they have no idea where their money is going save the money is loading from some materials.
Phase 3
new normal system
reversibility ( going back to older state )
Let us take an example of Google Maps
This generation doesn’t even bother about any Landmark or street address for anything in their head
because they have Google Maps
finding a way to another place is just an easy task
We don’t have mental space for remembering any place, street, address, landmark, etc in the brain today
because of Google Maps
like CRED users don’t have to remember.
the due date
late fees due to forgetfulness
CRED can solve all issues related to credit cards
Ola Always solved the problem of no need for searching for a taxi on the road. Taxi will come to you.
Jio was solving the problem of internet access ability in India
it changes the behaviour of the consumer.
Like booking a cab paying a credit card bill.
people have that experience of using this beautiful system,
then they don’t want to go back. To the old traditional method.
So what will happen they will never go back.
They will stay in the new normal.
Phase 4
profitability
status the gold mine for any startup business
Like we have seen in the case of jio
Initially, they faced a loss of 31 crores then
jio was profitable after 1.5 years 504 crores
in 2020 Jio had 5562 crores in sales.
When it comes to Karad Karad is a gold mine.
customer of CRED t is the richest 1% of the country,
The people who is having a credit card or multiple credit cards these people are the ideal customer for any top brand in India,
they have a solid income source they might love to spend expensive purchases too,
so the future of CRED is so good.
FUTURE
In the future CRED can be a cash app or a money management app income tax filing app or the system for any sort of this category
Even they can use their customer purchase data. To use it like show them interest-based ads
Moreover, they can act as a bank for the top 1 % Of peoples
The sky is the limit as of now for t Kunal Shah
