The Hindu Business Line : Tech is still buzzword…

It is not easy to find many who are cheerful during the current downturn. But Challa Sumedh Reddy is different, despite being in the real-estate industry, as a technology player. He heads ValuePROPS.com, which aims at integrating online real-estate resources with the real-world needs and real-estate agents.

Our conversation, during a recent interaction, predictably veers around the slump in property prices, but quite reassuringly, I find Sumedh passionately holding on to the need for practices that are transparent and fair, in the industry.

And we also talk about how technology is making an impact on the Indian villages. He should know. A first-generation entrepreneur from an agricultural family in Kurnool, Andhra Pradesh, Sumedh is a graduate in science, who began his career by trading livestock to a global retail player in Bangalore. His site speaks of an intelligent system to help make online real-estate searches easier and more relevant and informative, while at the same time sharing its income with users and agents, so as to ensure growth and profit maximisation for everyone concerned. Interestingly, there is also a commenting system for every property listed, so that “users can upload comments for properties they have viewed, making it easier for other users to find helpful information quickly.” I continue my interaction with Sumedh over e-mail.

Excerpts from the interview:

What got you interested in working up a technology solution for real-estate?

The reason for developing ValueProps and involving technology in real-estate is because of my technical (computer science engineering) background and the previous online hotel booking venture.

Real-estate has always interested me because of the kind of energy and the feel of belonging it gives every person. Isn’t home where the heart belongs? Every person is interested in a home, but if you try to understand the needs of the buyer, you’ll find that every property and person is unique in a way.

The reason, therefore, for incorporating technology with real-estate is to benefit the user with the integration of the real-world with the virtual one. For example, maps on the site assist in understanding the exact location of the house, in relation to other places such as hospitals and schools in the neighbourhood.

Technology in terms of what could be offered on the mobile as well is something that would take the property solution to the next level.

Are you planning to make further investments in your tech offerings?

Yes. We are primarily a tech company and we are looking at launching the group portal soon named, MyValueGroup.com, with verticals devoted to property, matrimony, careers, travel, auto, and health.

Your earlier venture was about online hotel bookings. How do you see the hotel industry and the online bookings field today?

The Hotel industry has many dynamics at play, such as location, type of space, budget and the clients catered to. Hotels have to be extremely specific. And there has to be a huge market research without which you might have a great hotel and great location but it might not click as the pricing was not right. Also, the demand, which was up in 2007, began to gradually come down and now in 2009, hotels say that they are doing okay if they manage to break even with about 50 per cent occupancy. So it is not a great time for the hotel industry right now, but I guess there are ups and downs in every industry.

Also, having been in the online hotel booking portal, I find there are some key big players right now who are fighting for the same travel space. With the airlines cutting off their commissions for the travel agents, they are more stressed to earn their commission from the hotels.

As an entrepreneur, what is your advice to those keen on launching their start-ups? Is tech still the favourite choice?

I think currently a lot of people directly jump into a start-up and start looking for funding. But this is the time when people have to see that they have to generate the revenue and also profitability for their ventures before they step out and look for investors. Also, it is important to consider the kind of investor who is investing in your start-up. So, look at the terms that the investor is going to specify when he is investing and the exit period for him. Remember, we don’t know how the next two years will be, and also the fact that funding is not easy in the current market.

Tech is still the buzzword, as there is still a large space for improvement on the innovations and the services that can be offered with technological expertise.

How do you see Web 2.0 impacting the existing real-world business models?

Web 2.0 is the most talked about enterprise solution because it is extremely cheap. And it promotes e-commerce so much that everyone wants to get into e-commerce whether they have real-world business models or not. On the other hand, if someone has a real-world business, ranging from selling car tyres to books, Web 2.0 enables him to reach out to the whole spectrum of buyers. The buyer can make a choice, compare and visualise what he is going to buy, with the convenience of sitting at a single place, and within a few minutes. Integration, therefore, of the real-world businesses with the online-world is great for every entrepreneur who is looking at selling the product or service to a wide range of consumers, to reap the benefits of both the worlds.

Your views on the relevance of Open Source to cut costs.

I think recession time leads to a greater interest in Open Source because it is available freely most of the time. Also, it a good way to start up with a small capital on technology, because capital plays a major role in how long you are going to sustain in a start-up. Even for a big enterprise, Open Source makes sure you cut costs and sustain longer.

You are of the opinion that India may even bypass the online era. Can you elaborate on this?

The online market is at about 50-55 million right now but when compared to the mobile market, which is at 280-300 million, we know we could have another case of avoiding legacy systems. The reach of the mobile is at about 23-25 per cent as opposed to about 4-5 per cent for the Internet, so we could actually be a non-Internet country and be a mobile country when it comes to the masses. The various languages, quick communication and the cost of handsets make mobiles the common man’s device. We already see a lot of content that is on the Internet being served on the mobile phones as well because the mass is in the mobile space.

Does online marketing hold the potential to offer start-ups the promise of kick-starting their ventures?

I think there are different ways of marketing any product; and marketing as such is a huge investment for any start-up. Online marketing is where there is value for money for sure and you know how many people are actually coming from a particular Web site because you have advertised there. That is a big plus to look at, but the print media should not be ignored because of the readership, and almost all the information, in terms of articles, is authentic. It can thus be a big decision to go for online marketing or print media or TV commercials. My advice is that marketing for a start-up can begin with online marketing and, based on the revenue you get from there, you need to look at other media as well for marketing.

dmurali@thehindu.co.in

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