Case Study: How Perkbox Changed Their Business Model Three Times to Find Success
Following the motto ‘team happiness delivered’, Perkbox believes that exceptional workplaces start with happy employees. It’s building a culture around this principle, married with a sharp eye for market demand, that has helped the business grow from a two-man-band to the rapidly expanding 250-employee-strong company that it is today.
Founded in 2015 as the brainchild of Saurav Chopra and Chieu Cao, Perkbox (external link) has transformed the face of employee engagement with an innovative staff benefits platform – now number one in the market and used by over 7,000 companies across the UK.
Setting out, their mission was to provide a service that would help small and medium enterprises (SMEs) grow and succeed, though employee engagement wasn’t their original focus. The duo began their venture in the realm of stationary sales and B2B lead generation, before adapting to market needs and developing the Perkbox model in 2015.
So, what are the secrets behind Perkbox’s success? CEO and co-founder, Saurav Chopra shares the secrets behind the Perkbox story, the challenges they have faced and the risks they have taken to get where they are today.
Success doesn’t always come the first time around
The key to new-business success is identifying a gap in the market and using this to develop a USP that will differentiate the product or service from competition – easier said than done, right?
For Chopra and Cao it was a matter of ‘third time lucky’ when it came to developing a USP that would get their start-up off the ground.
The business partners pivoted their business model three times to avoid potential failure (formerly Huddlebuy in 2011 – a Groupon-inspired platform offering businesses discounts on stationery and printing, and then a B2B lead-generation agency), before ultimately developing the Perkbox model. In fact, it was during their time as a lead generation business that they spotted the opportunity to introduce tech to the employee benefits realm.
“There are so many B2C start-ups focused on consumers, but there’s a really big opportunity to help SMEs and start-ups grow and succeed by creating an online B2B platform,” explained Chopra, “we saw a huge opportunity and it was something we were really passionate about ourselves, having worked in start-ups and SMEs ourselves.”
Don’t be afraid to adapt to market needs
Of course, shifting the direction of their business was a huge gamble for the pair to take, but no success comes without its challenges.
Fortunately, Chopra and Cao were in the privileged position that – thanks to their good credentials from global corporations like Yahoo, Amazon and Microsoft – they had investors who were betting on their business capabilities, rather than the concept itself. That being said, they still had to sell the idea to stakeholders and essentially, begin the business from scratch, which took adaptability and capital efficiency.
Explaining the challenges Perkbox faced when starting up, Chopra said “the biggest risk was creating a platform to help SMEs grow and succeed, because back then everything was focused on consumers – you have to convince the investors it’s a big opportunity”, adding that by finding a niche “you don’t have a model to get inspired or learn from, so you have to create everything from scratch.”
Are risks worth taking for the potential pay-off? In short, it’s all about weighing up the risk level vs. the opportunity. Risk management is something that all businesses must grapple with, in the early days as well as in their maturity. Chopra explained that when going into business, you have to accept that not all gambles will pay off, but from the losses, there are lessons to be learnt.
“One of our key values is to try, test it and make it happen. This is a culture that thrives off tests and learnings. We don’t know the answer – the only way you find an answer is by testing it”, explains Chopra, “to kill off an existing business which is profitable (previously Huddlebuy) is obviously very high risk, because if it doesn’t pay off it will really hurt. But it paid off really well, as we are now number one in the market, have a huge customer base, and are going to be taking the brand international.”
Key learnings from starting Perkbox
Starting a business is a huge learning curve. As an entrepreneur looking back at where you started, there are always going to be things you may have done differently in hindsight.
Chopra’s advice for start-ups is to “really focus on the mission and values of the business as early as possible. By doing it early, you get the right people along with you on the journey, for the right reasons – individuals with the same motives and passion.”
When you take the first step to taking on employees, those initial hires are a particular risk, as they have the ability to either help accelerate the business or become a financial burden. Growing too fast too soon is something that start-ups should be wary of, as it can simply burn cash if the business is not ready for expansion.
Secondly, he says that “every start-up, in its early days and as it grows, should celebrate small wins. Entrepreneurs are ambitious people who set big targets, forgetting to appreciate the small wins they’re having along the way – these are really important for team members and themselves, to keep motivation high and bring the team on the journey.”
With the right people and the right protection, big risks can lead to big wins. Hiscox start-up insurance aims to encourage ambitious entrepreneurs to pursue their mission and make bold choices, ensure that your venture is protected from the get-go.
Business never comes without risk, but the success, growth and profitability of Perkbox perfectly demonstrates that sometimes it’s worth taking a plunge into the unknown – after all, they found success after scrapping two previous business models.
There’s a lot to be learnt from their progressive concepts and the culture they have built. Risks don’t need to be regarded in a negative light, and rather seen as a ‘test’ or a learning curve, to guide the direction of the business.
At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.