In the fall of 2019, we were approached by a construction company (customer) that needed to develop a mobile application for managing a “smart” home. Considering our experience in building SaaS Platforms, mobile applications, and integration with IoT devices, we have decided to discuss possible cooperation. We have collected the basic business requirements, have identified the elements of a smart home that we planned to integrate, and built a Proof-Of-Concept (PoC) to demonstrate its operability. SaaS platform based on a service architecture, interaction of services through REST requests, special protocols (MQ, Redis) and a database (PostgreSQL), and IoT cloud for controlling the controller and smart home devices based on Ajax Systems.
Having demonstrated the feasibility of technical implementation, we drew up a technical assignment, signed a contract, and started the project. We managed to implement the architecture and UI of the mobile application, registration and authorization in the mobile application via SMS, the display of objects, chat, integration with the payment gateway, and deploy the WEB administrator interface. Right about that time the customer started to change the scope of the project. It started with a new contractor who offered to replace an agreed on IoT controller with an internally built IoT solution. Then a newly-hired consultant began to add third-party management systems like BMS, EMS, elevator management, video calls, booking systems, ACS, service management, etc. to the project. This new multi-level architecture from 3 dozen disparate systems, as well as the lack of further funding for the project, halted the project’s original concept implementation.
According to the State Statistics Service of Ukraine, there are 32 408 registered housing Co-ops in Ukraine. Let take a mental note of this figure as we will return to it in a little while. Local council appoints its managers to housing Co-op should they being unable to do it themselves. There were around 140 housing cooperatives created every month in Ukraine. Should the rate stay the same it will take about 100 years to create housing cooperatives within every apartment building!
Information systems for housing and communal services (ZhKhH – abbreviation used in former soviet union countries) are divided into several main types:
The primary Housing Cooperative expenses are salaries of its head, accountants’, janitors, plumber, and electrician. When it comes to IT systems, 1C is considered to be a “must-have item”, on the basis of which almost anything can be implemented. To be more specific: 1. Automatic download of residents’ payments from any bank or terminal. 2. Income credits for specific services and months specified by the user. 3. Automatic or manual distribution of prepayments (by months, services, and suppliers). 4. Till services: fiscal registrars, checks printing. 5. Building’s actual maintenance costs tracking. 6. Residents polls (ballots, vote counts) 7. Resident’s personal online portal. 8. Entering meter readings via the Internet, invoices (receipts), and viewing outstanding balances, etc.
Having spent a lot of time developing a custom solution for the customer and incurring financial costs, we decided to focus on the release of our own product Clever Home https://bit.ly/3n5qdN3 aimed at increasing the interaction effectiveness between housing co-op and its residents. The team developed Resident’s Mobile Application, Administrator’s WEB Application, IoT Platform and Restful API for integration with smart home ecosystems. Our sales efforts weren’t successful.
Developing a White Label solution for construction and management companies, you have to do custom development, since the business requirements and systems with which you need to integrate differ substantially. A very long, typically 6-9 months sales cycle enables implementation of only a few projects per year given limited sales resources. While trying to create a mass SaaS platform, we faced the classic chicken and egg dilemma. In order for a resident of an apartment building to start using the application, an administrator needs to exist and create an object, fill in the information and start accepting applications. The administrator is not interested in doing this, given the limited quantity of potential users, hence a vicious circle arises. At the same time, it is obvious that a mobile application that simplifies communication between residents is not mandatory or represents priority for housing co-op. Moreover, communication sometimes can be implemented within existing IT systems. Assuming total automation and the penetration rate at 30% the system creates roughly 10,000 housing co-ops.
Thus, given the large number of competitors and healthy level of ambition and technological acumen, we project gaining 10-15% market share representing 1000-1500 housing co-ops. Even if co-ops manage 2-3 houses (which is permitted by law), with a tariff plan of 15-20 USD per month per house, we can get MRR of 27,000 USD after 3-4 years of operations.
It is worth mentioning that over the course of the last year, several similar platforms (ProDom, DAKH, My Dim Online, DZHEK, idom, osbb365) appeared on the Ukrainian market. Both Web platforms and mobile applications for interaction between apartment owners, housing co-ops and management companies. The functionality of the above mentioned companies is more or less the same: chat, task manager, polling system, financial module, integration with smart home elements, CCTV, access control systems, an entry barrier etc. According to the available information at the time of writing this article none of them has so far been able to boast of any achievements.
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