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They say on the market that you shouldn’t take a step again even to achieve momentum. However, in the business world there may be the idea ‘pivotar’ (or ‘pivot’, in English), which contradicts that saying for good. Pivoting is altering your authentic business model , modifying and optimizing the key actions of your organization to obtain higher profitability and have a extra sustainable and environment friendly progress.
It is no surprise that many entrepreneurs attain some extent the place they want to pivot. Sometimes a business grows very quick and gross sales stagnate, then it’s time to make profound modifications to proceed.
In different instances, after a while working, the entrepreneur realizes that the thought shouldn’t be actually that worthwhile or presents challenges that he can’t face, and he has to rethink.
That was simply what occurred with Mubit , a Mexican startup that was initially referred to as ‘the Airbnb of storage’, however had to radically change its business model in order to develop.
How did Mubit work earlier than?
The firm initially from Guadalajara, Jalisco , started as a platform to join individuals who wanted a spot to retailer issues, with homeowners of out there areas: warehouses, premises, workplaces, garages or an empty room inside the home.
In an interview with Entrepreneur en Español , Pablo Palomar , founder and CEO of Mubit , recounted the obstacles that made the authentic model untenable.
“First, the numbers did not give, that simple. What we made was a small commission of 15%, and the rents were quite cheap. So operating costs and expenses grew, but not profits, “ explained Palomar.
“On the other hand, houses and offices are not made to store things. We also had no control over storage spaces or what customers kept, “he added.
Under that scheme, they had a lot of trouble ensuring that customers found adequate spaces to store their items.
“People seek to have their things in specific areas and do not want to pay for a space larger than they need, or smaller, because their things do not fit,” says the founder of Mubit. “It can be very complicated, especially the security issue: both people who keep other people’s things worry, and also those who store their things in someone else’s place. That creates a bit of friction. “
In December 2019, Pablo accepted that things were not going as expected , and began to plan the change of business model.
Restart a business in the midst of a pandemic
“We started from scratch again, because the whole page was no longer useful to us,” said Palomar. The new Mubit scheme was fully implemented in January 2020, unaware that the Covid-19 pandemic was looming.
“With everything and that it was a difficult year, we had good growth. From the first month we saw a drastic change in billing and sales, because we also helped many people in the pandemic ”, says the businessman.
Pablo remembers that when the confinements started, many college students returned to their cities of origin, however they might not take all their issues. “Instead of paying for an residence, you pay a less expensive hire with us,” he says. “The identical with the workplaces that closed, as a substitute of paying 40 or 50 thousand pesos for a spot or an workplace, as a result of right here you pay a hire of 5, 8 or 10 thousand pesos.”
The businessman claims that the health emergency helped his company a lot. “It was a necessity that remained in the market, it helped us and particularly the shoppers to decrease their bills and prices.”
Same brand, different concept
“Before, if you had a space, a warehouse, an office, you could rent it with us, like an Airbnb to store things. That scheme has already disappeared, we no longer have anything to do with that business model, ”explains Palomar, who is a lawyer by profession and decided to follow his dream as an entrepreneur.
Now, Mubit offers a comprehensive storage and collection service that, from their perspective, is much more convenient for customers.
Instead of being intermediaries in the rental of private spaces, the company acquired its own huge warehouse to store all kinds of objects. This is located in Guadalajara, Jalisco, so Mubit’s operations went from covering the entire Mexican territory, to being only local. While this can be seen as a setback, the founder says it has turned out to be much more profitable and now sees greater potential for growth.
Mubit’s operation took a radical turn, although they keep contracting online, now they offer to go to the home for the things that are going to be stored. Its team of professionals is in charge of making a digital inventory with photos, packaging the objects and carefully transferring them to the winery. There they will remain in an assigned space, with 24/7 security to guarantee their integrity.
Credit: Courtesy of Mubit
At that time, an account is created for each customer on their website , from which they can control inventory, payments and billing. In addition, if the client needs to take something out, he only has to place the order from his account and the company takes the requested items to the address indicated, on the specified date and time.
Thus, the client no longer has to go out to look for a warehouse, worry about packing things or transporting them on their own.
Payments can be made on a monthly basis, either by electronic transfer, deposit in a branch or at any Oxxo, or as a recurring direct debit to the credit or debit card.
Pablo highlights that another advantage is that the client only pays for the space they occupy, no more and no less. “For saying, when you have 10 beds saved and pay 3,000 pesos a month after which determine to take 5 beds and now you occupy half the area, the following month you’ll pay a a lot decrease hire,” he explained.
Present and future of Mubit
With the change, the company reports an average monthly growth of 17% in billing . They currently have more than 150 active clients and some 20,000 items stored in their warehouse, with a capacity of 4,000 cubic meters.
Last March, Mubit was one of seven Latin American companies selected by investment firm 500 Startups for its acceleration program. This consists of a capital injection of $ 60,000 and a 16-week course.
Pablo Palomar is confident that an upcoming round of funding will help them expand to other cities. He plans to open his next winery “by the finish of 2022” , though he has not but determined in which metropolis in the nation will probably be situated.
“The biggest challenge is to grow faster and accelerate all the goals we have. It was really a ‘pivot’ of a business model that did not generate one that seems to be very profitable and with high growth ”, concludes the businessman.