The project details the journey of an on-

demand home services provider,

Taskbob which started operations in
2014 by launching their services in
Mumbai. Taskbob was not successful in
scaling up its services and eventually
had to shut down operations in January
2017. Objective of the project is to
outline the reasons for the failure of the
service provider and also detail the
marketing lessons to be learned from
the story.

Analysis of
Failure of
Task Bob
SMPDM

Nidhi Shah – 34C;

Padma Priya – 35C;
Sagar Nemani – 44C;
Sanket More – 46C;
Sonali Jindal – 50C;
Varsha T V – 54C;
Sarosh Pandey – 42K
The write up has been divided into several parts detailing
the following aspects:
❖ Consumer segments which the service provider aimed to target

❖ Pain points related to their service and also the churn rate and expected

LTV of the consumers

❖ Analyzing the market in which the service provider operated

❖ Funding received by the company and details of the usage of funds

❖ Reasons for failure of the startup

❖ Marketing lessons to be learnt

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INTRODUCTION
The on-demand home services market is characterized by thin margins, lack of quality trained
blue-collar professionals and lack of transparency in pricing. These are the major aspects which
Taskbob tried to address with its offering. In this pursuit, it launched its services in Mumbai first
with an aim to replicate a similar model in other Tier-1 cities. Initially, the company was successful
in acquiring a decent customer base with a high retention rate. Some feedback which the business
received were high prices and in some cases regarding sub-optimal quality of service. In the
following year, the company acquired a rival startup, Zepper, operating in Bangalore. It was a
move to tap into the ever growing in-market population of Bangalore. The company was also
successful in raising subsequent rounds of funding.

Taskbob is a start-up by IIT Bombay and IIM Ahmedabad graduates (ex-McKinsey, ex-Nomura
employees) with a vision of creating happy households. TaskBob facilitates instant, high-quality
home services for customers, while driving higher productivity for servicemen. They aim to
revolutionize home services in India by addressing three of the biggest customer pain points:
delays, poor quality and lack of price transparency.

Taskbob's headquarters is located in Andheri (E), Mumbai, Maharashtra. Taskbob generates

$36.1K in revenue per employee Taskbob's latest funding round was a Series A for $4.5M on Feb
2016.

Taskbob was involved in a huge cash burn in order to sustain their operations and as the market
was characterized by thin margins, it couldn't make profits in a highly competitive and fragmented
market. Scalability was another issue which they were grappling with. With over a year of
successful operations in Mumbai, the company couldn’t replicate its success model to Bangalore.
Lack of scalability and profitability led to investors losing faith in their business which eventually
resulted in a lack of investors for Taskbob.

Eventually, the following statement was released by the founder in the media regarding the
shutdown of Taskbob’s operations:

"Even though, we could create a significant difference in customers', service providers' and teams'
lives, a solid business is created only by building scalability and profitability. And to achieve those
in a low margin business and in a tough external market proved unexpectedly daunting. More
than what anyone could have expected," he said.

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Customer cohorts: 25-35 years of age,

1. Millennial looking for excellent service at affordable rates

2. Working professionals looking for a quick solution

3. People who have just moved into the city needing a trustworthy one-stop solution

One of the problems people face in India is the fragmented blue-collar services with lack of
services and price transparency. TaskBob simplifies this task of catering to the Sec A group from
the upper-middle class and aspirational millennial in the Mumbai region by providing them with
consistent quality home services. The services providers here are well trained in their training
centers. According to Mr. Khare, People don’t mind paying extra amount if they are convinced
that the amount provided is transparent and fair in terms of the quality of the services offered.

Cohorts are designed based on consumer behavior and the secondary surveys which are made
from the reviews and Glassdoor website.

Cohort 1: These are the people who are always on the phone, exploring something new and if
they find the offerings which are affordable enough, they don’t mind trying the services/product.
The best part of this cohort is that they can become your regular user having the highest
frequency.

Cohort 2: When a couple where both of them are working and come home late in the evening,
the only time that they get to spend together is during the weekends. Disappointment level is high
when they have to do the daily chores on the weekends. These are the people who don’t mind
spending a few extra bucks so as that they can spend time together

Cohort 3: People who have just moved into the city, are unaware of the cleaning and home
services provided. The only source of information in such cases is word of mouth or the Google
search reviews which can be fudged. These customers can be tapped well if the brand stands for
the best service. That’s what TaskBob was selling, A promise for high quality.

Products and Services Provided: Home Cleaning & Maintenance services

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The way TaskBob differentiated itself from the main competitor UrbanClap was by coming up with
a focused approach of catering to only cleaning segment.

Consumer proposition: TaskBob facilitates instant, high-quality home services for customers while
driving higher productivity for servicemen.

Customer pain points: delays, poor quality and lack of price transparency

II. Market analysis of the startup playing in,

Consumer-Category-Competition Analysis for
TaskBob
TaskBob was started in 2014, along with a few other on demand home services apps such as
UrbanClap, Fixofy etc.

In a sector that was highly unorganized and in dire need of a shakeup. With the rise in smartphone
penetration in urban areas of India and a pressing need for quality services by trusted and skilled
professionals, it was a lucrative market to enter.

It is estimated that the market was worth 100 billion in 2014, and experiencing rapid growth due
to access to internet and a rapidly growing middle-class population.

This highly disorganized market, held an opportunity ranging from $100 Bn-$400 Bn in 2014. The
estimated size of home services is around $400 Billion per year. There were 220 million + internet
users in India and more than 50 Million + doing online shopping.

According to startup industry tracker Tracxn, the home services industry in India was growing
rapidly with about 69 startups founded in 2014 alone. Players included HouseJoy, Zimmber,
near.in, taskbob, Mr. Right, Findyahan, Urbanpro, Urbanclap, Doormint, Hometriangle, Qyk, and
many others which provided home services like plumbing, painting, electrical service, laundry,
pest control, in health and wellness for e.g. physiotherapists, yoga instructors, in tuition and hobby
Classes for e.g. dance, music, zumba, maths, to events e.g. mehandi artists, photographers, and
birthday party planners. The range of services provided varies from six to 1000.

The primary aim of the startup was to address three of the biggest customer pain points: delays,
poor quality and lack of price transparency. It wanted to be the one stop solution for all the home
and beauty needs of an urban customer and provide a hassle free and convenient lifestyle. It
started in 2014 and unlike its competitors, who were scaling up fast to other cities, it went against
the tide and stuck to a single city- Mumbai where it wanted to test it model. In 2015, Housejoy
was in 11 cities while UrbanClap was in 5 cities and both had plans for expansion while Techbob
was testing the economics of its model in a single city, Mumbai.

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Taskbob founder felt that fulfilment, not discovery, is the real problem in India’s local services
space. With this in mind, they were more focused on supply and fulfillment issues rather than
plain demand aggregation. Their was to build a service that provides quality and is trustworthy.
When they first set up shop in 2014, they sought to keep the service hyperlocal and in Bombay
itself.

Taskbob’s focus on unit economics was a different model than the prevalent model at the time as
its founder wanted to control the entire customer chain. Taskbob had a repeat booking rate of 70
percent and wanted to maintain 90 percent of all the ratings between 4 and 5 stars. This was to
be achieved by training their merchants on customer basics and other elements of service culture.

Taskbob selected only top 10-20% servicemen it interviews. Further, it invested heavily in training
them and also provided an in-house “merchant app” to make the service assignment and
completion amongst them operationally efficient, quicker and seamless.

While UrbanClap operated a marketplace model — which gave it scale of 20,000 service
providers across 75 categories and Housejoy went beyond basic services — covering tasks as
diverse as electrical/appliance repairs, beauty and fitness, TaskBob maintained a firm focus on
more standard services like cleaning, handymen and drivers. In 2014-2015, Task Bob claimed
800 to 1,000 bookings per day and it planned to increase that daily figure to 10,000 over the
following year.

In Nov 2015, Taskbob acquired the Bengaluru-based startup Zepper.in, its rival startup.

Taskbob, like its rivals mainly focused on the urban population in big metros. Most of the queries
that came its way were also from Tier-1cities.

Customers:
The target that Taskbob aimed to serve was the urban, millennial population that was tech savvy.
They were exclusively available only on mobile app, this was done deliberately in order to reach
out to their audience more effectively.

They targeted the segment that wanted a hassle-free and convenient manner to address their
household issues and were not happy with the unavailability of these professionals.

Taskbob aimed to be the one stop destination for these customers to address all such needs, by
providing a standardized experience by trained professionals. They were carrying out the
Uberization of home services in a manner of speaking.

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III. Funding
Since the setup of the company in December 2014, the founders Ajay Bhatt, Khare, Abhiroop
Medhekar and Amit Chahalia had raised more than 5 million USD in funding from IvyCap Ventures
and Orios Venture Partners.

This Mumbai-headquartered start-up ran various funding rounds during the year 2015 to 2016
during which they raised a total of USD 5.8 million. The first was their Seed Round and then a
Series A round.

It raised the last round of funding in February 2016. In this funding its main competitors were
UrbanClap and HouseJoy. While TaskBob had to be shut down, its competitors UrbanClap which
has been recognized as the fastest growing start-up in India which also helps customers hire
trusted professionals for their service needs and HouseJoy which is an online service provider
managed to stay afloat.

TaskBob secured $4.5 million which is around Rs 30.8 crore in Feb 2016 in Series A funding
which was led by IvyCap Ventures along with the existing investors Orios Venture Partners and
Mayfield India. The start-up had raised $1.2 million in April 2015 which is Rs 7.5 crore in seed
funding which was led by Orios Venture Partners along with participation of Mayfield India.

In the home service space, there were around 150 players and TaskBob was one of the top
players which secured Series A funding. TaskBob followed a different approach from its
competitors UrbanClap and HouseJoy which raised 25 Million USD and 23 Million USD
respectively while operating in multiple cities. HouseJoy had its base in 11 cities while UrbanClap
operated across 5 cities. In contrast to this TaskBob operated in only 1 city i.e. Mumbai and still
managed to raise Series A funding. Unlike the other players, it wanted to prove the economics of
its model first in Mumbai and then expand to 4 or 5 cities quickly in a short span of 18 months.

TaskBob was expecting to raise an amount equivalent of Rs 14 crore in the second tranche from
IvyCap Ventures in Nov 30 2016 which it could not raise. This lack of funds meant that the startup
could not survive more than 2 months and ultimately had to be shut down.

Date Amount Investors

April 2015 $1.2 million Orios Venture Partners, Mayfield India

February 2016 $4.5 million IvyCap Ventures, Orios Venture Partners, MayField India

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Usage:
TaskBob used the funding raised to expand its presence in multiple markets while also keeping
its focus on product growth along with innovation. It also evaluated strategic acquisition
opportunities. It acquired Zepper which is home services start-up based in Bangalore. This was
a merger in which TaskBob absorbs all the assets of Zepper and Zepper then ceased to exist.

The startup had raised this amount with aims to scale to almost 10,000 order per day in just 18
months. They also planned to dominate new markets by trying to replicate their proven “Mumbai
model” in the top 4-5 cities.

A part of the funding was used with a focus to improve or perfect the services offered instead of
just adding on more services. They also followed a “full stack” approach. This indicated that
TaskBob planned to control the complete supply chain and not outsource. This vision of TaskBob
meant that it had to invest in the training of its merchants on customer service.

They invested in the best technology and hiring the best team in the market. It first expanded
within Mumbai and then planned to expand to other cities.

Some of the funds were also used by the operations team. They ensured that extensive lead
generation was done to identify as well as on board well qualified technicians. They were also
evaluated on their ability. TaskBob also made sure that only the top 10 percent of the blue collared
workers were offered to the users.

Money was also invested in the training of the servicemen in various areas like vocational skills,
customer delight, technology, process and soft skills. To reduce the last mile issue, TaskBob also
invested on data collection, automation and analytics to minimize the human interventions at each
level.

The funds were also used in advertising expenses to bring in more customers which it needed to
expand to new areas.

Since TaskBob was focused on ensuring quality technicians as well as planning to scale up, it
required a lot more funding and the thin margins in this sector did not generate sufficient revenues.

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IV. PAIN POINTS, CHURN RATE & CUSTOMER
LIFETIME VALUE

Although the churn rate was low for the Taskbob (30%), as per the sources, some of the reasons
from the secondary research which were found to be are:

“Services not up to expectations”

“Price point was high enough”

The main issue in such business cases is the subjectivity of the service delivered. As per Mr
Khare, such dropouts are supposed to happen at the early stage of customer acquisition but the
only part where they can improve on is to provide a consistent training and a perfect
communication reducing the expectation mismatch.

For every 100 customers who came into the pipeline, they were able to return 70% of the
customers in. Their growth seems to be slow because of the restricted model but the retention
rate was good enough to generate a comparatively good LTV. Assuming that one service takes
up Rs. 1000 and a person is retained for the 70% of the time (service took minimum twice a year),
the present value of future cash flow can be estimated Rs. 15000 per customer for a span of 5
years. Based on this if they are able to take on a customer base of 18000 in a span of 2 years,
then the cash flows seem to be on the healthy side. The NPS that the TaskBob had was almost
90% which showed great consumer satisfaction and a tendency towards brand loyalty.

V. Failure
Taskbob was a venture that offered hyperlocal professional services to customers with the simple
objective of “making households happier”. The Mumbai-headquartered venture ran three funding
rounds in April’15, February’16, and May’16 respectively, and successfully raised a total of USD
5.8 million in funding. Eventually, Taskbob began growing at a respectable rate and showed
promise of success. Over their two years in Bombay, they served over 1.5 lakh orders for local
residents.

In 2017, the company had envisioned serving up to 10,000 orders per day and expand to the
other metro cities in India. However, bad news rolled in on 19th January. An internal
communication sent by one of the co-founders – Aseem Khare said that:

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Eventually, the following statement was released by the same founder in the media regarding the
shutdown of Taskbob’s operations:

Reasons for Shutdown

The following were the major reasons for Taskbob shutting down shop:

1) Lack of Funding Inflow

The company was expecting cash flow of Rs. 14 Crore to be coming in November 2016.
This would have went on to sustain the venture for two more months. However, the funding
failed to come and this ultimately went on to ultimately tip the company over the wrong
edge in early 2017.

2) High Cash Burn

TaskBob tried to combat it’s competition by acquiring Zepper, a Bengaluru-based home

services startup to enter the city with a stronger position w.r.t. Its competitors. It also spent
a lot of cash, trying to combat the marketing efforts of competitors with heavier wallets and
bigger backers.

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3) Lack of Revenues

Taskbob provided local services with low value to their customers, such as plumbers,
electricians, etc. So, even though they were getting customers for the services they offered
but the margins were low and hence, it was hard to earn money from doing such business.

4) High Competition

The on-demand services segment saw a lot of competition from 2015 onwards, with the
emergence of players such as UrbanClap, TimeSaverz, LocalOye, HouseJoy, et cetera.
This divided the market heavily, limiting the customers per venture on a heavy scale.
Secondly, this spiked the marketing and ad spends heavily as the competition led to higher
bidding on keywords between brands.

5) Tough Category

Quality assurance has always been a challenge in the on-demand home services
segment, especially while scaling up. Taskbob’s CEO Aseem Khare had acknowledged
the same as well at a previous point of time. As he said - “Fulfillment, not discovery, is the
real problem in India’s local services space.” However, Taskbob was unable to walk the
fine line between scaling up, quality assurance and razor-thin margins that come with the
category.

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VI. Marketing Lessons
Like any other startup vying for consumer mind space, task bob also tried to market itself on the
social media for its cost-effective alternative, without burning huge chunk of budget on traditional
marketing techniques

a) Referral Marketing: Taskbob adopted referral marketing to pull in more consumers into
its application through offers and positive word of mouth. Was it a success is the biggest
question? It did get them consumers for what the campaign was worth. It was the lack of
viable business model on what to do with the consumers hurt them more.

b) Content Marketing: In times of various brands trying to clutter the digital space, only truly
engaging content stands out. Taskbob, did the same. Being based out of Powai, which
was the market test ground for its services, it engaged in content marketing to local sites
which specifically focus on Powai

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c) Feedback Videos: Feedback videos are an important part to induce positive word of
mouth about customer experiences to potential new consumers. Task bob has done this
in the form of “Task Bob Talkies”

d) Digital Media Agency: Taskbob has hired a digital media agency “Fruitbowl” to create
awareness campaigns for the same. The agency has designed a campaign on “Don’t
Drink and Drive”

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VII. Critical Review and Summary
Taskbob was forced to pull down its shutters because the funding required to sustain the venture
wasn’t enough and fresh funding was not forthcoming.

Now, for a company that received its first funding within 6 months of opening and then received
two more within a year, it was surprising that it suddenly broke into the bank. They not only had
80 employees to sustain (which consequently had undergone a massive round of layoffs) but they
also had 3000 servicemen who were dependent on them.

What also didn’t help was that by this point, competitors like UrbanClap were up ahead by a mile.
They were raising funding and had a strategy planned out that would help them scale more
aggressively.

The theory which would best explain the shutdown of Taskbob is-

A business needs either of one thing to sustain operations -

1. High frequency - Customers should buy a product/service regularly. Example -

Kirana store.

2. High margins - If your product/service doesn't have High frequency then the
margins should be high. Make good profit on what product/service you sell.
Example - Luxury cars.

So, from this theory Taskbob was unable to increase margins. As Taskbob business grew they
tried to increase margins but they saw a fall in the frequency of customers at the same time. So
in the end they had to shut down their operations.

The company showed promise over two years and then shut down overnight. It puts things into
perspective as to how volatile the startup space can be and how a plug can be pulled on the
biggest ideas almost immediately.

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