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How a tech company re-engineered the beauty and wellness industry 'Resolution to expand global presence'

By Sunil Pol

Opinions expressed by Entrepreneur contributors are their own.

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Entrepreneur India
Sudheer Koneru, CEO, Zenoti

Launched in 2004, the cloud-based enterprise management software Zenoti was an initiative of Dheeraj and Sudheer Koneru, who co-founded Latitudes Health Club and Tangerine Spas, a chain of fitness centres, spas, and salons in Hyderabad.

During their wellness endeavour, the duo experienced first-hand difficulty in running the venture seamlessly. This was due to lack of reliable and easy to use software that supported the whole eco-system of operational tasks in a spa and salon.

Furthermore, there was no affordable software available that supported the needs of a multi-location chain. This personal experience gave the Konerus an intimate understanding of the growing challenges of the industry, which made them go back to their roots in enterprise software and introduce ZENOTI (formerly known as ManageMySpa).

In an exclusive conversation with Entrepreneur India , Sudheer Koneru, CEO, Zenoti unveiled the tit-bits of their venture and future plans. Have a look.

DNA of the business

Zenoti is cloud-based enterprise management software designed to completely digitize the daily task management of spas and salons. The idea behind this product is to assist spa and salon managers, owners to effortlessly run their businesses and concentrate on providing an impeccable service.

The platform enables its users with appointment scheduling, inventory management, employee management, and customer relationship management. Zenoti provides its customers range of tools, which enhances the managerial capabilities of the enterprise, be it a multi-location enterprise or a single outlet.

Funding process

Zenoti raised US$6 million in Series A from Accel Partners in July 2015. Prior, the company was funded by the four Co-founders. Accel Partners' Shekhar Kirani joined Zenoti's Board of Directors and said that Accel mainly invests in companies with strong founding teams and products that serve high-growth markets. His stated , "We believe that Zenoti is at a pivotal point in its growth trajectory and has all the competencies to become the leader in its space. We're excited about the momentum the company has experienced so far and the growth of the wellness industry globally."

With major Indian salons and spas on board including; Enrich, O2 Spas, Kaya Skin Clinic, and B:Blunt among many others, and customer base across 32+ countries, Zenoti's Co-Founders were confident in their ability to execute quick growth.

"We have a established product that scales for large businesses and has been able to dominate multiple markets. With Accel's insights and investment, we're poised for rapid growth," shared Koneru.

Funding details

The cloud-based Zenoti has raised $6 million from Accel Partners in a Series A round in July 2015. The investment allowed the start-up to accelerate sales and marketing globally.

Koneru said "As a SaaS solution, our product is already designed to scale and serve a global marketplace. Now our ambition is to reach a wider global audience. Also, as a part of expanding our mobile product offering, we launched Take5, a consumer app for spa and salon appointment scheduling in September".

He further noted, "We plan to raise a Series B in early 2016 and use the funds for broader global expansion."

Bring major change in current ecosystem

Zenoti has been instrumental in a number of spas and salons to scale various locations and expand quickly in geographically dispersed regions. Some clients have expanded across cities within India, while others are expanding beyond international borders.

"Take 5 is a consumer app that we recently launched. We expect Take5 to dramatically change the beauty and wellness landscape," said the CEO.

My take on online retail

Sudheer said, "Online retail has been catching on since the late 90s and is clearly growing. In an economy like India, online retail has become so popular in the last 5 years that it is driving malls and local retail stores out of business."

Zenoti enables wellness enterprises to open an online marketplace for retail sales. So, if customers like certain products that were used during the service, they have the option of purchasing it either online or at the outlet itself. This improves relationship with customers and keeps them coming back. Online retail also provides the enterprise a more organized way to keep track of their inventory.

Gaining competitive edge

Koneru said, "When we first launched Zenoti about 5 years ago, we came across various t global players in the market. Today, we are highly recognized among spas and salons throughout the country."

Revenue model

Zenoti is a SaaS solution and as such, we offer our services through a monthly subscription to our clients.

"We have three plans, which differ in monthly subscription cost and feature set. Each plan was designed to address the needs of a business based on their size and stage of business. For example, a business with 3 service providers would fall into the Start plan, which offers core capabilities like a CRM to manage customer lists, automation tools to get customers more often, appointment book and billing system," said Sudheer.

A business with 1 location and 15 service providers would fall under our Grow plan, which provides more operational support and helps boost productivity, reduce shrinkage and boost business with features like inventory management and rich marketing capabilities. The enterprise plans for large single location businesses as well as multi-location chains, and includes our complete feature set.

"We do not lock clients into a contract; rather they pay a monthly subscription fee. This puts responsibility on us to ensure our clients see significant ROI, in which case we retain them on a regular basis.", he added.

Each plan includes hosting services, support and training as well as email credits.

Overcoming challenges

"When we first set out in 2010, the major challenge was convincing customers regarding the benefits of running their business on the cloud, with other various advantages. The other obstacle was to help them move their various operational aspects which were in silos, and depended on individual tools, to a centralized system," said he.

To overcome these challenges with strong service delivery, the company has a thorough on boarding process, and exceptional customer support. It is one thing to build a powerful solution, but without proper education and awareness, the adoption of the solution can fail. The duo had been able to drive increased adoption through constant communication and engagement with our customers.

Geographical presence

Zenoti has over 5,000 customers on board across 32 countries and has 7 offices across the globe including UK, UAE, Malaysia, Philippines, and Indonesia. In India, Zenoti's clients spread across the entire tier I cities, as well as, some tier II cities across the nation.

Pricing strategy

At this time, we are not planning on changing our pricing model.

Scaling up the venture

"We are constantly improving our solutions. In fact we do a monthly release, which incorporates client feedback and requests, as well as innovation driven by us. We are expanding Zenoti's presence across the globe. Take5, our mobile app that connects people with quality salons and spas directly, is a natural extension of the Zenoti platform and will evolve very quickly," shared the CEO.

Future plans

Elaborating on the future of the company, Koneru concluded, "We are embarking on an exciting new journey in the consumer space. With Zenoti, we have built a trusted brand and a network of salons and spas across India. We have also gained an understanding of the key goals for beauty and wellness businesses."

Tips to aspiring tech startups

"It's important to understand the business very well. Each industry has its own unique challenges, historical ways of observing and doing things, and as with any business, it's important to respect the way the people in the industry work," added Koneru.

(With inputs from Niharika Verma)

Sunil Pol

Correspondent, Entrepreneur India

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