The Winner of the TIE Khudee business plan competition is “We Care, They Care” from CBM Karachi.
As I briefly mentioned earlier, WCTC wants to set up Professional daycare centers for working families who would like their child to be taken-care-of well.
I want to talk about them from three perspectives:
From the perspective of their business premise
To be fair, the need they have identified may be valid. I say “may” because it wont be validated until working mothers agree to give their children to strangers in a day-care center. Once someone agrees to pay for these professional services then the presence of demand will be validated – the size of it is something else.
They might have done more research to realize that there are already many such centers available – atleast in some neighborhoods within Lahore and some families who run this in Isb. Its not socially accepted enough to become a national thing but if a working mother asked their reference network they might be able to find something.
Also, even building a very large-scale day-care center with a city-wide brand doesnt really need VC funds or angel funds. You could probably try to find SME funding through the SME Bank or SMEDA and set up a small functioning unit and bootstrap from there – you can get up to Rs.1.5M for viable local-focused plans through that.
Still, all in all, the model on the face of it describes a legitimate professional service – no quarrels there.
The problem I had was in other perspectives:
From the perspective of their model as an investment pitch
At TIE, one of the judges mentioned that their model (building out 5 daycare centers in 6 years) was not exciting enough to attract big funding, and it wasnt unique enough to discourage competition, and not disruptive enough to scale rapidly.
My addition on this is that the team did not demonstrate adequate depth of knowledge of their model. Depth of knowledge about the model comes from actually trying this model in the market – not just as a class project, but
actually quitting your job and trying to build out a dream.
Specifically, its the following types of questions that will be answered with an actual demonstrated pilot:
- Can families in PK overcome the social hesitation of trusting strangers in daycare centers with your kids?
- How will you be able to build this trust at the start when there are no references?
- Can this really be a professional service that you can charge for?
- Is a professional psychologist on-staff really needed, or would other types of professionals (elementary teachers etc) be more useful?
- Will psychologists even agree to work in such a facility? How many have agreed to work as soon as your facility is ready?
- How will we ensure child-safety from kidnappers that could connect with your support staff? What type of checks do you plan to make before hiring support staff? How much of those checks have you tried out already – which of those didnt work and why, and how are you adjusting your plans now?
Despite what some may believe, the answers to these questions dont come after funding – actually quitting your job and starting something for 5-6 months — i.e. gaining some experience in the area — does help you answer them.
Even if you cannot demonstrate proven experience through your own startup, your experience in your career, choice of profession etc will help you answer those questions.
E.g. if you want to build a software for book writers, then it helps if you’re an author yourself — the pain points youve gone through in your past companies or experiences all help to shape your future.
This is why it is hard to build a case for a pure student project without field experience for investment.
This is also why I’m always particularly disappointment when — say — an engineer with 7 years of experience in say Reporting Systems development — jumps ship and builds a startup that does basic PHP projects or some other completely irrelevant thing.
From the perspective of their service
This is where I have some very serious concerns.
Are they actually serious about building a day-care center that has a live-video feed recording of their children that gets pumped into a website that you can log into and view?
Somehow I cannot come to accept that mentors like Umar Saif and Monis Rahman who were guiding the final 30 in workshops did not tear them apart into itty bitty pieces on the potential privacy and security backlash of this.
Do I really want daily status reports prepared by child psychologists about the toddlers, or would to know that the kid was happy and adjusted with the other kids at the center?
Would I want a center thats run through tight processes like a prison or a place or warmth, happiness, flexibility and care?
Again, this is highly subjective but personally with their product in the way it is right now I would think about keeping my kids far away.
So whats the future of We Care They Care?
They have SEED money from two sources now, and should have plenty of time to test and fix their product. But moreso than that even if their product remains highly defective there is still a good chance that it will work out, but it may have nothing to do with their product or business.
There are certain businesses that have inelastic demand in this country. E.g. in Lahore – you can open up a restaurant anywhere and it will be successulf… you could be selling burnt tire remains for all I care – but as long as the food’s given a fancy brand name like “screecher” your business will work.
Similarly, it seems like there are just so many kids and so many concerned parents out there wishing their best, that anything and everything with children also works… you can sell 4-page reading books for Rs.200 here to lowest-income households, exploit thousands of children that pay to study from sub-standard higher-education institutes in every nook of the country, and it would work… businesses around children have nearly inelastic demand.