Maksim Kamaltdinov is a serial entrepreneur with several projects behind his back. But the recent one became very successful even though the market seemed tricky. We sat down with Maksim and talked about his growth hacks.
What inspired you to start a powerbank rental startup Recharge.city, and how did your experiences in Asia influence your decision to launch a power bank rental service in the U.S.?
Maksim Kamaltdinov: My active lifestyle was the main inspiration behind starting Recharge.city. As someone who constantly needs to stay connected for work, I rarely do something without a smartphone in my hands.
On average, I use my phone for about 15 hours a day, and by the seventh hour, the battery would often be running low.
This made me wonder, "Will I have enough charge for an important online meeting, or will I have to reschedule?"
No matter where I was, whether strolling in a park or having lunch with friends at a restaurant, I had to carry two smartphones, which was quite inconvenient.
It was during my travels in Asia that I came across a power bank rental service and decided to give it a try.
So, was it a lean startup? Did you bootstrap?
Maksim Kamaltdinov: Absoulutely! I immediately realized how cool and convenient it was, and I was super inspired by my idea.
On my way back, I delved into researching similar businesses, studying company reports from recent years, successful and unsuccessful case studies, and the potential for development.
That's when the idea of launching such a business in the United States came to me, and I ordered the first 500 stations for myself in New York. I was doing almost everything by myself at the very beginning.
Why New York?
Maksim Kamaltdinov: This city gives you [the] incredible opportunity to try and fails fast or to take off fast!
It is a perfect market, where, as I thought, people wouldn't even think twice if they were ready to pay for such a service.
I was right: New Yorkers took the power banks and used them because it was incredibly convenient and fulfilled their crucial need for low battery anxiety.
When a customer spots our station at a café, they scan the QR code from the app, rent a power bank within a few minutes, and return it to any nearby station while continuing with their activities.
There's no need to sit by an outlet and wait for your smartphone or personal power bank to charge. Time is precious, and for many, their entire lives are on their smartphones.
Within just one year, we have installed over 1,000 active stations in New York with nearly 3,000 daily rentals.
Sounds like you grew pretty fast. What marketing and growth strategies did you use to reach new users?
Maksim Kamaltdinov: I think, it's the idea + fast implementation + team effort. First, we introduced people to a cool idea they hadn't thought about before.
This applies to both regular users of our service and partners who have our stations installed.
Second, when reaching out to potential partners, we specifically targeted Manhattan, highlighting the benefits of time saved for their employees who are frequently asked about chargers, and the passive promotion of their locations through our user app.
Our app generates additional traffic for their businesses because people find the closest locations via [the] Recharge.city mobile app and can discover new places that way.
Third, we did our best to make it as easy as possible for the customer.
Also, the installation process for our stations is simple and efficient, requiring only 15 to 30 minutes, and they are delivered ready for immediate operation.
How did you attract users?
Maksim Kamaltdinov: Most of it is just word of mouth and proper communication with our partners. Ensuring the convenience of our users was paramount, which is why we strategically positioned our stations across the city.
This ensured that individuals could return rented power banks without being limited to a single location.
Additionally, we implemented a successful strategy by encouraging staff at partner establishments to demonstrate the devices to visitors and provide a brief explanation.
This approach effectively validated our hypothesis for growth.
Through careful planning and placement, we strategically installed an optimal number of stations in key locations.
This deliberate approach resulted in rapid growth in rentals and a significant increase in user acquisition within a short period.
Moreover, we were delighted to witness business owners advocating for our product to their acquaintances in various regions.
Not only [did] this demonstrate that we successfully met their needs, but we also exceeded their expectations, further solidifying our position in the market.
Did you use discounts to attract more users?
Maksim Kamaltdinov: First and foremost, it's worth mentioning that we always offer a complimentary smartphone charge when using our stationary charging stations.
So, you can bring your "dead" device back to life for free. This charging time allows users to respond quickly to messages or install our application while their devices receive a partial recharge.
We have conducted a thorough unit economics analysis, considering the specific characteristics of the market, and determined a reasonable average cost of $5 per day.
After all, it's not more than a cost of a cup of coffee, and I often humorously remark that both provide a "charge."
The rental duration is flexible, allowing users to choose any amount of time. The longer the rental period is, the higher the daily cost will be, and the funds are automatically deducted accordingly.
That is why some users opt to purchase the power bank outright for $99, which also generates significant revenue for us.
If we crunch the numbers, each station generates an average income of $5,973 per year with a rental cost of $5.
This means that the initial investment will be recouped within the first six months, even when installed in establishments with moderate foot traffic.
It's crucial not to set the rental cost too high, as we want to encourage loyalty and foster growth in the region.
However, if the establishments have high footfall and customers with significant average spending, our franchisees have the option to adjust the rental cost accordingly.
Based on our calculations, investing $9 million in Chicago to establish a critical mass of stations would result in approximately $35.6 million in revenue within a year and around $180 million over five years.
These figures are transparent and form the foundation of our business expansion model, which we can visually present in our investor presentations.
Our focus extends beyond generating substantial revenue and expanding rapidly into new locations. We also aim to give as many people as possible the opportunity to experience our service.
That's why we frequently offer free charging hours in New York, allowing visitors to recharge their devices and return the power bank at a nearby location.
This approach attracts additional organic and highly loyal customers, leading to repeat business and increased lifetime value (LTV). However, this practice may not be feasible if the city only has 70-100 stations.
What was your biggest challenge?
Maksim Kamaltdinov: When it comes to the most significant challenge we've encountered as a rapidly growing startup, it revolves around reconciling my own perfectionist nature. I've always strived for order and excellence in both: my personal and professional life.
However, working in a startup environment necessitates the understanding that everything cannot be flawlessly organized. It's crucial to accept average quality or performance in certain areas.
The key is to maintain momentum and keep progressing.
When it comes to Recharge.city's expansion plans for its charging station network in New York and other cities and countries, our primary objective is to establish ourselves as a SaaS (Software as a Service) startup.
We take great pride in our software and aim to lease it on a large scale to other prominent players in the industry.
Additionally, we offer rental stations for sale to individuals interested in launching this business in their city, with affordable investments ranging from $3,000 to $100,000.
However, we recognize that these investment amounts may not be sufficient for [the] rapid saturation of a specific region. As a result, we actively seek franchisees who are willing to make more substantial investments, starting from $5 million.
In return, we offer attractive and unique conditions, along with a fully established infrastructure to support their ventures.
We have created an environment where our partners can easily plan their profits and development milestones, empowering them to choose strategies based on their investment capacity and available time.
The beauty of our IT business lies in its scalability, as it can be easily expanded. It also facilitates effortless monitoring of processes through our application and provides round-the-clock support.
Even franchisees are not required to hire additional staff, including those who opt to purchase only a dozen stations through our website.