founders' perspectives

Startups in Times Of Crisis Vol. 10 with Avtoikonom: Automotive Industry On Hold… But What About Car Maintenance And Digital Services?

Alexandra Kozbunarova22. April 2020, 10:22

Avtoikonom Co-founders Todor Gigilev (l) and Emil Stavrev (r) both come from the software sector and have been running businesses for years. Gigilev is CEO of the software development company Dreamix, and Stavrev is responsible for HP's supply projects in EMEA. © Trending Topics

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Which startups won’t make it and which will go out of the crisis as winners. Events industry, travel, leisure, real estate, hardware, are the hardest hit sectors. Yet does it apply to the startups in these industries? Do tech startups stand the chance of losing the game for not having the financial resources to sustain, or will make it because they are flexible and adaptable? We ask founders from the most affected sectors.

Fewer cars on the streets, revenue drop, closed plants and lowered expectations throughout the automotive industry, less demand for oil – these are some of the hot topics related to the COVID-19 crisis that is beginning to unfold. While the carmakers and car dealers are among the hard-hit businesses, this is not necessarily true for car maintenance companies, especially digital ones.

For instance, last week Ford Australia announced its response – vehicle pick-up and drop off service, of course, including disinfection. Customers can book a service online or directly with their local dealer who will then go to the client and pick up their vehicle and take it back to the Ford center for service. This is not a completely novel solution, it’s only quite useful at the moment. And in Bulgaria there’s a startup doing the exact same thing, well, it offers a platform for every car maintenance business where its services could be booked.

Avtoikonom was founded in 2016 by Emil Stavrev and Todor Gigilev with the idea to improve and simplify the way people and businesses maintain and service their vehicles. The main product of the company is a mobile app that connects a car owner to a professional driver who would pick up the car, service it and return it to the owner. The company doesn’t offer breakdown assistance services but rather regular maintenance of cars. So far, the app has been downloaded 7.6K times and 4K+ services have been purchased through the platform which is working with over 80 car maintenance service providers and leasing companies. Many of the users use the platform to store and manage all the documentation of their vehicle digitally, which is a free service. Avtoikonom charges a fee for pickups (around €15), everything else is paid separately to the respective servicing company. They also offer a subscription model. We talked to Emil Stavrev about how the startup is currently doing.

What are the major challenges Avtoikonom is experiencing right now?

The financials is the biggest one. Since the start of the lockdown, we’ve experienced 80% drop of services purchased by end-users. But luckily our B2B business model has proofed quite successful and right now we rely on it as a cash cow, bringing money.

Not least, ever since we’ve started the business we have been applying all the hygienic measures that are now required as a standard for every customer. We were sometimes laughed at, but now it pays off as the whole process was in place and this was not a challenge at all.

How long do you think will the effects last?

Short-run it will be quick and fast! The current market situation is phenomenal since warehouses are full of goods and stock, supply chains are operational, manufacturing is stopping here and there, there is money, no scarcity of any kind besides masks and basic medical supplies, but only because demand has dropped and personal values have been rearranged and prioritized. I believe that people’s behavior will change and this will lead to changes in the global markets in the long run with more responsibility towards ourselves, planet and others.

What was the company’s immediate response?

To ask the team and employees how they feel about the situation and do they want to continue to operate or to stop, what are their health concerns, taking into account the risks underlined every day by the authorities. The collective decision was to move forward and continue to work. We moved forward operating and promoting our services and quality, but as I said customers behaviors and values have changed.

Prior to the crisis, Avtoikonom was on its way to close the first international deals and start expansion. Can you tell us a bit more about that and also what’s the state of the negotiations right now?

On hold internationally. We were negotiating with clients in Spain, Greece and Austria, and were quite close to deals and launching in these markets. Yet, ever since the lockdown, all this is put on hold, as companies throughout sectors are now focused on the short-term measures needed to survive. At the same time, on the local market, we receive requests for franchises – this is the same model we applied in Varna, and now more cities are about to come. We are also moving forward with a second white label solution and a third corporate partnership and service offering, and a fully new user experience mobile app.

Have your roadmap and strategy changed due to the COVID-19 crisis? Are you thinking about new products and services?

We were ahead of our time when we started, and we still are. We are more focused now on full digitalization and removal of paper.

Are you now focused on short-term survival or the long-term game? How are you balancing it?

Our game is on the play and we are quite happy about it, although not with its full potential, so saying that our focus is mainly in Long term games. We now see that corporate partners and clients who have been postponing digitalization efforts have suddenly started accelerating these projects realizing the value of digital services.