Bridging india’s digital divide through frugal innovation

Rahul Chowdhury, Subba Rao NV and Anand Tater, a team of professional entrepreneurs, having a successful record of building and managing businesses from various sectors got together to bridge the divide in our country. The trio started Reboot Systems in October 2012 with an angel investment of 2.5 crore.Hyderabad-based Reboot Systems offers refurbished computers, laptops and IT peripherals at affordable prices to the common man of the country for whom owning a computer is still a distant dream. The company also wants to tap the huge consumer market where the customers want to own computers at a very low price for day-to-day activities.

Talking about the business idea, Chowdhury says, “India has a huge second hand and black market for selling computers, where the quality and warranty is never guaranteed for the buyers. But, the buyers go to these markets to get the products at low price points. The idea of the business is to reach and serve these common people across the country. We aim to offer these products at low prices without comprising on the technical quality and warranty. In terms of look and feel, the customers will not find a difference between a new laptop and a refurbished one (almost like new).”

These products are priced anywhere between 50-60 per cent lower than the market price of the new ones. Although, there is a huge CSR angle to the idea, Chowdhury says Reboot is a for profit business. The business had decided to use brick and mortar model to reach its target customers. “In India, people especially in Tier-2 and Tier-3 cities, doubt the credibility of second hand or even refurbished goods online market. This pushed us to open stores across the country with a franchisee model to expand quickly. We want to expand to 200 stores in next three years from existing 10 stores in the country today,” he says.

Rahul was inspired by Ratan Tata’s idea of frugal innovation (Nano story). The team aimed and has built the franchisee store at a price of `1 lakh. The company has decided to put these stores in the hands of entrepreneurs who believe in their motto, that is ‘taking technology to the common man’. The company has faced many challenges in building the business. Rahul says, “After sales service is crucial for business and building it though out the country is a tough task. We also did not want to invest heavily on building this service network and neither wants to undermine the importance of it. To solve this service issues, we have started a unique replacement model for any repair. If the customer sends his laptop/PC through a courier; we will replace it with a new one and send it back to him.”

The company is also partnering with educational institutes. “Today, we sold our computers to over 120 schools and reach out many educational institutes over time. This will let the students to have an option to choose the product they want at cheaper points. In the US for instance, almost 26 out of 50 states in USA have made it mandatory for schools to only buy refurbished products. In turn, using these products will benefit the ecology by generating less e-waste and burning less fuel.”

In terms of supply, he says, “A personal computer has a decent life span of 8-10 years if used in proper office environment.

A rough usage can decrease limit its life to 5 years. However, many companies replace their devices after three years after taking depreciation on their products. Generally they tend to dump this to scrap collector at less or almost no value. We are associating with these companies as their asset disposition partner by paying up to five times to these used products as compared to what they get from scrap collector. With this partnership, they are also playing an important role to make technology reach the common man and also help them to save trees, gasoline and thereby reduce carbon emission.”

The company is planning to go for series A round of investments to raise 25-50 crore to build on e-waste unit, increase product offering and for heavy marketing and advertising. It has stores in Dilsukhnagar and Ramanthapur in the city. The company’s ultimate objective is to offer a laptop for Rs. 9,999 and a PC for Rs. 4,999.