Phaxmo. A platform for collaboration and business discovery within the diamond industry, powered by a state-of-art price prediction model engineered in partnership with Rapnet. Phaxmo empowers merchants to effectively forecast, monitor, and evaluate diamond pricing dynamics enabling them to make data-driven decisions and stay ahead of market trends.
In May 2020, I started building Phaxmo in collaboration with Vikas Gupta. Allow me to elaborate on the various experiences, insights, and challenges encountered during the development of Phaxmo.
The digitization of the diamond industry poses a unique challenge, as the sector is characterized by a lack of tech-savvy businesses and resistance to change. However, the circumstances surrounding the COVID-19 pandemic presented an opportunity for digitization efforts to gain traction. The industry operates on complex financial structures, such as debt chains and compound interest, and trust-based collaborations. In the face of the pandemic, businesses sought to avoid further leveraging by lenders, leading to a collective effort to sell stock at discounted rates.
The diamond market also has a broker-led structure, where a trusted broker facilitates deals between businesses. Historically, brokers have relied on in-person visits to clients to assess their stock holdings and facilitate deals. The digitization of the industry has the potential to streamline and automate these processes, increasing efficiency and reducing operational costs.
Launch Day
Thanks to my father's expertise as an established diamond merchant, with a base in Mumbai and operations in the Middle East, I have received abundant mentorship and insights into product strategy. Heeding his advice, our initial product offering was a straightforward directory of businesses and their products, featuring a simple search system for discovery.
Day 45
Subsequently, we implemented a feature enabling businesses to upload their daily demands, thus facilitating communication between buyers and sellers. The demands were then mapped onto the businesses' feed based on their inventory stock. At this stage, we had enrolled over 100 businesses on our platform. Revenue generation had not yet commenced.
Day 90
With over 300 businesses on our platform, we sought to expand our user base to a minimum of 1000 businesses. To achieve this goal, we deployed the price prediction feature that generated a substantial increase in sign-ups, totaling over 60 within a week. The appeal of AI technology was evident as users were drawn to the platform solely for the price predictor feature, but remained engaged due to the presence of incoming demands. This outcome was deemed a positive development.
Day 150
By this time, our platform had enrolled over 500 businesses, and we had launched a secure end-to-end encrypted chat system that enabled communication between businesses or could be moderated by a certified broker. Despite numerous complaints about the accuracy of the price predictor, we devoted substantial effort towards refining the algorithm. Although revenue generation had not yet commenced, we were in a favorable position due to the growing user base.
Day 180
We received an acquisition offer from Kiran Gems, which was compelling due to the substantial monetary value involved. Given our maturity and considering the offer, we elected to sell the project.
Key Takeways:
- Importance of Early Monetization: It is critical to introduce a payment model from the outset to validate product viability. 10 paying users hold greater value than 100 non-paying ones.
- Equal Emphasis on Marketing and Product Development: While building a great product is crucial, marketing efforts are equally important to drive user acquisition.
- User Feedback: The team was consistently focused on product development, resulting in a lack of capacity to offer personalized support to users. It is imperative to pay attention to customer feedback as they can serve as a valuable product insights and source of referrals.