The brains behind the UAE's first marketplace for certified cars are setting their sights on regional expansion
Dubai-based marketplace for pre-inspected and warranted used cars, CarSwitch.com, provides consumers with a 200 point inspection online, a valuator based on real transactions and staff to guide them on insurance, financing and the transfer process, all free of charge. So far, it closed a $1.3m seed-round investment and an additional $1m round to fuel the business before its series A round at the end of 2018.
Co-founders Ali Malik and Imad Hammad tell Arabian Business how they managed to create – and sustain – a successful start-up, and what comes next for the consumer-centric platform.
Why did you develop the idea of CarSwitch given it is such a competitive field?
We’re both avid fans of used cars – as long as they’re still in good condition, of course. We feel they’re much better value for money. However, as executives strapped for time, we realised there is little transparency on the condition of the car, no standardised benchmarks to gauge a fair price and potentially sketchy characters on the other side. That’s basically when CarSwitch.com was born.
Do you have any expansion plans for the service?
Yes, we have two new products on the way. One enables car sellers on a tight timeline to get an instant cash offer right off their login portal at any time. It allows them to advertise their cars to end users, who will pay more once they find them, but if the seller runs out of time, they can click a button for an instant dealer cash sale. Second, we now feature brand-new cars that consumers can compare and inquire about on CarSwitch.com. We also have several new features launching, including the ability to set alerts, price drop notifications and make an offer online. We are now also servicing Abu Dhabi and Sharjah, and will soon expand to other regional markets.
Do you find digital businesses more or less costly to set up as opposed to traditional businesses?
Digital businesses are rarely purely digital. Even the earlier players like Google and Facebook have considerable capital investments (think data centres) and rather sizeable teams. The advantage comes in their ability to scale quickly and across the globe, through fairly centralised operations that remain efficient. Comparing that to traditional brick-and-mortar businesses, they would require incredible presence, which is capital intensive, to reach similar scale.
Our cost structures are not that different from brick-and-mortar businesses, as the cost advantage in rent is arguably offset by investments in technology.
If you could go back in time, what is one thing you would have done differently with CarSwitch?
Hindsight is always 20/20. Standing here now and looking back, we could have been more aggressive. Running a start-up is like the Olympics of risk taking. You feel you already took a risk by launching the venture but then when you’re running it you’re trading off large uncertainty every day.
We could have invested earlier on, and grown at even faster pace, but at the time, the risk felt too great.
Have you seen changes in consumer behaviour?
We’ve seen fluctuating behaviour over the last few months. Near the end of 2017, consumers rushed to beat the introduction of VAT. Early in 2018, we saw consumers hold back a bit on large purchases as they adjusted to the new world order. Since then, in recent weeks, it feels things are heading back to a steady state.
What keeps you motivated?
Times always feel tough in this type of environment. There are several big breaks in between that give a deep breath of air before climbing the next hump. The roller coaster can be emotionally exhausting, and having an awesome co-founder is the only way to survive. Beyond that, continuing to fight the fight keeps us distracted during tough days.
Entrepreneurship sounds glamorous to many people. What is the untold part about running your own company?
Being an entrepreneur is like playing a competitive sport. There are challenging times and decisions with surmounting pressure and a ton of responsibility. When you’re winning, it’s more fun to be in the driver seat, the striker, the point guard or the quarterback. But, there’s nothing fun, or glamorous, about a crash and burn.