Pak Wheels and Control of a Mindset

Two car listing websites aka startups have raised money. First, from TechJuice:

CertCars, one of the 16 startups in Batch 5 that pitched on Demo Day held at The Nest i/o on May 23, received investment from to grow their business.

They don’t have a proper functioning website so it’s hard to tell what they are doing different—if at all. Second, from TechJuice again:

CarFirst is not like other buying and selling vehicles platforms in Pakistan. It is buying the cars and then instead of selling it to general audience, it has created a wing of strategic partners who buy these sold cars.

Kudos for trying something different but there are more questions than answers here. First, it’s not clear who the strategic partners are and how they are incentivized to stay with CarFirst. Second, this requires a lot of capital and even if you have enough to start things off it’s questionable how long you can sustain it. Cars are expensive. Also, I don’t understand why you want to limit yourself to your partners when you have already done the heavy lifting i.e. buying the car outright. And perhaps most importantly I am yet to understand the business model.

In a totally different universe, Apple introduced HomePod last week. The product looks good but what’s fascinating is the framing Apple used to introduce it. From Stratechery:

The long-rumored competitor to Amazon Echo and Google Home was, fascinatingly, framed as anything but. Cook began the unveiling by referencing Apple’s longtime focus on music, and indeed, the first several minutes of the HomePod were entirely about its quality as a speaker. It was, in my estimation, an incredibly smart approach: if you are losing the game, as Siri is to Alexa and Google, best to change the rules.

Calling it a Siri Speaker, as rumored, would have been playing on Amazon’s surface. Calling it HomePod and making it more about home music and less about home assistance, Apple has changed the playing field. As Ben Thompson pointed out the framing is smart. It allows Apple to control a mindset i.e. what home music should be like. Pak Wheels, by virtue of entering into the market a decade earlier, controls the mindset of where to buy/sell used cars in Pakistan. While you can make a better product, it’s very hard to change the mindset.

Pak Wheels is one of those handful startups that is more entrenched into its user’s life than it is in the startup community. You have to be a follower of the tech ecosystem to know about CertCar and CarFirst. But I know people who have no idea about startups being a thing in Pakistan and yet they know where to go if they have to sell/buy their car. And that’s mindset control. While you can convince people like me to buy your product because it’s better, luring an average user is not easy. Just to be clear none of the above two has a better product

So how you compete with Pak Wheels? You don’t. I mean you can but you will fail if you start from the obvious i.e. a car listing website. You can however if you start from things that are not obvious. Like studying a typical Pak Wheels’ user. Finding the pain points they have? And figuring out a couple of problems they face while using Pak Wheels. Every horizontal business model creates an opportunity for a vertical one and vice versa. The way to compete with Pak Wheels is thus by targeting a niche and owning that particular mindset. Not by creating another listing website.

And certainly not by aligning yourself with mystery strategic partners.