How squeaky brakes created a new start-up
How one bad experience led an entrepreneur to launch 'Scout My Car'
Sometimes an idea for a start-up comes to a young entrepreneur on their current job, during a brainstorming session or during a random uneventful moment in time.
For Alexander M. Kappes, the idea for his start-up came when he was stuck in traffic in a car with squeaky brakes. "I bought a sportscar and what I realised very quickly after buying the car, but not during the test drive, was that my brakes were very very squeaky," he explains.
A quick garage visit had technicians saying that they had no idea what caused the sound, and it was only during a second garage visit, after the sound got unbearable, that he learned that there were tears in the brake disc. It became apparent that the previous owner of the vehicle had taken the car out on the racetrack, and this meant that the brake discs needed to be replaced. The cost of the replacement quickly went into thousands of dirhams, and Kappes says that if he had known that this was an issue earlier when buying the car, he would have negotiated further on the price.
The experience left a lasting impact on Kappes, who began to explore ways of saving car buyers from suffering a similar painful experience. Together with Omar Benseddik as his co-founder, Kappes launched Scout My Car on August 1, 2016. The online service caters to interested car buyers and helps them make a decision on their purchase by providing them with a full car inspections report.
Citing his own car buying experience, Kappes says: "Today, with a service like Scout My Car, you can avoid such unfortunate experiences because you are making your decision based on a complete unbiased car report."
Doing the ground work
Speaking on how the start-up went from its idea phase to conception and then operations, Kappes explains: "We did a lot of surveys; we were out there walking into car dealerships and asking people about what are some of the things they look for when purchasing a car - especially used cars. In a country like the UAE, there are lots of opportunities to buy some very cool cars, and there are very good deals to be found as well. People here feel they can realise their dreams when buying a car, yet there is always a certain degree of hesitation when buying a used car."
Kappes further elaborates: "You ask yourself, how can I tell if the price I am paying is fair? Does the car run smoothly? Are there any immediate issues with the car that I might need to deal with? And, of course, the question that almost everyone worries about - will I have any problems with the car in the near future?"
This is where Scout My Car's operational model was born. "We thought to ourselves, is there a way for us to answer these questions by providing a service online? Right now, we have a partnership with car garages, and are working with three of the best ones in Dubai," he notes.
Currently, Kappes says the team is focused on proving their concept. Once ready, they are prepared to take the service to the next level by expanding to other emirates and even into the wider GCC. The team is also going to be looking at offering other services and packages.
"I think that everyone in the Middle East has this concern when buying used cars, so we definitely see a market for it," Kappes notes. "We know for a fact that as we scale up the business, we will be facing a whole new set of obstacles. The biggest challenge for us was taking an offline service and translating it to an online model, and then making sure that we have covered all the possible inspections that a person may be interested in having done on a car. We also needed to have a lot of partnerships with the original dealers of the car simply because of how much information we are required to have in preparing our report for the buyer."
Kappes also highlights the importance of knowing the market. The sizeable expat population in Dubai means there are a lot of people who might be in the country for only a few months and are looking to purchase a car to make it easier to get around, he explains. Many of them might not have a family member or a friend to turn to for advice on where or how to purchase a car, or even if the deal they are getting is fair.
He also revealed that car owners in Dubai change their cars a lot more often than owners around the world, and that this equation of new cars being bought and old cars being traded would be very beneficial to their business model.
"The average age of people owning a car in Dubai is around three years, so there is a lot of rotation going on in the market, and this is where we see our greatest opportunity," Kappes reveals. "Our surveys also revealed that the number of men and women visiting a classifieds section for cars is almost the same. However, women prefer to go to a dealership since they feel they get better service and more information about the car, and they are almost always accompanied by their brothers, fathers or husbands. Our service can help interested female buyers by making this whole process much easier."
Asked about the investment that went into the business model, Kappes reveals that the main investment went into purchasing and creating a website and then in subsequent marketing plans.
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