Why PhonePe wants to become the UPI warlord?

Welcome to the 28th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 95,300+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more

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PhonePe, PayTm & Google Pay keep fighting over UPI share.
Housing.com is back into the house rental listings.
Urban Company wants to scale salon as a category.

No one will ever make money on UPI transactions.
Housing will make hardly any money with agent subscriptions.
Same story with Urban Company.

Why all the rat race then?
Short answer → The same reason why bakery shops sell milk.

Long answer.
Let's take the bakery example.
Bakeries hardly make money on any milk purchase.
Speak to the corner store and you can validate.
Milk purchase drives the most important thing. "Daily frequency".
Frequency allows bakeries to sell other stuff with a much higher margin than milk.

For PayTm, Google Pay the same logic extrapolates.
UPI allows them the chance to create a daily frequency use case.
The end game for most of them is lending $$, data & selling D2C.

For Housing.com, there can be a dedicated post.
Housing exited the rental market and then realised they lost the most important thing - Frequency. God knows who made this decision. I wish them luck. Rest is history.

For Urban Company, salons drive the recurring monthly frequency.
They hardly make any money on a $4-$10 AOV product.

Insight
Frequency is your best friend.
Create products/features that allow you to increase frequency.

Ask yourself → How can you increase frequency of your product?


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