Muval, a removals startup, has achieved an impressive feat by generating $1 million in revenue within a mere 12 months of its establishment, all without relying on a single cent from investors.
Co-founded by James Morrell and Mahdi Chardi, Muval operates as a platform that connects available space in removal trucks with individuals in need of such services. Morrell shared with StartupSmart that the idea took shape when Chardi, who had extensive experience in the removals industry, grew increasingly frustrated with the inefficiencies he observed.
Morrell explains, “Trucks often traveled interstate with empty space or operated at less than maximum capacity, resulting in significant waste.” This situation meant that customers were paying for entire trucks even when they required only a fraction of the available space. Recognizing the potential for improvement in this system, Morrell and Chardi embarked on the journey of enhancing efficiency.
In July of the previous year, Morrell and Chardi dedicated themselves full-time to developing the startup. Since then, Muval has successfully served over 1,000 customers and generated a remarkable revenue exceeding $1 million.
Morrell expresses his delight at the outcome, stating, “Achieving seven figures in revenue during our first year has surpassed our initial expectations. We are immensely proud of this accomplishment.”
Once bitten, twice shy
In the early stages, the co-founders did contemplate the option of securing financial backing. However, Morrell, being no stranger to the entrepreneurial scene, approached the matter cautiously.
Having co-established another startup previously and having relied on venture capital funding for that venture, he was apprehensive about treading the same path once again.
“When you raise money, you become tied to a specific trajectory of growth,” he explains. “You have to meet investor expectations, and it places a tremendous amount of pressure on you.”
According to Morrell, his previous startup was “built from the ground up with funding in mind.” They managed to secure “a few hundred thousand” dollars in seed funding, achieved some initial successes, and even gained entry into a prestigious incubator.
However, their good fortune was short-lived.
“Eventually, the investor funding dried up, and the business lacked the necessary revenue to sustain itself at that point,” Morrell recounts.
Although his former business partner continues to work on the project intermittently, both of them had to seek alternative sources of income, and progress on the company came to a halt.
“That’s the risk when you base a company solely on investor funding from the outset,” he adds. “If the funds run dry and you haven’t reached a stage where you’re generating revenue or profits… then you’re left in a bind.”
Relationships matter
External funding is not completely ruled out this time around, contrary to previous considerations. Morrell and Chardi have extensively discussed the possibility and even prepared a pitch deck, although they never got around to utilizing it.
However, Morrell points out that with Muval, they realized that a typical startup approach might not be suitable for their industry.
“We’re not a startup that has introduced a completely new method of moving houses, disrupting the industry,” he explains.
“We still depend on the importance of building relationships and forging strong partnerships with removal operators.”
These operators are well aware of the impact a new technology-driven player can have on an industry. Nobody wants to experience being “Ubered.”
“They are understandably skeptical of a tech company entering the scene and jeopardizing their livelihood,” Morrell acknowledges.
“If we were to raise a significant amount of capital and make a big entrance, we wouldn’t be well-received.”
By bootstrapping, the startup has been able to leverage Chardi’s existing industry relationships and gradually build trust, demonstrating that they are there to support and improve the operators’ businesses rather than undermining them.
“We have developed features and technology that address their specific needs and have taken them on a journey step by step,” Morrell explains.
Morrell emphasizes that Muval’s impressive revenue is evidence that the startup is effectively solving a problem in the market. He acknowledges that most startups wouldn’t consider $1 million in revenue in their first year as slow growth.
“It wouldn’t be far-fetched to assume that someone with financial resources could enter this industry, onboard hundreds of moving companies in the first year, and generate much higher revenues… but I’m uncertain how the industry would react to that.”
A great position to be in
Morrell, the co-founder of Muval, has indicated that the company might consider raising funding in the future, although the likelihood of this happening before next year seems low, given the upcoming busy Christmas period.
With their focus set on potential acquisitions and establishing partnerships with Australian software providers in the removals sector, the co-founders are determined to expand their startup. Morrell expresses the need for financial resources to facilitate this growth, stating, “Having some money to do that would be great.”
The current situation is viewed positively by Morrell, who remarks, “It’s a great position to be in.” He believes that raising funds when they are genuinely needed is crucial and emphasizes the importance of being able to do so on their own terms.
Furthermore, Morrell highlights the investor perspective, stating that they are unlikely to support a startup that appears desperate for cash. Recognizing the savvy nature of investors, he adds, “If they sense desperation, they will swiftly distance themselves from the opportunity.”
The best way
In order to propel your business towards success, one of the key factors is to ensure that your founding team possesses essential core skills, according to Morrell.
“It’s crucial to have a technical individual or someone with development capabilities on board; otherwise, you’ll be reliant on external resources for development and design,” he emphasizes.
“That’s my contribution.”
Additionally, Chardi brings valuable complementary skills in sales, along with extensive sector knowledge, Morrell adds.
Secondly, Morrell suggests that startups need not feel compelled to have every aspect automated and fully operational at the time of launch. Founders often fall into the trap of believing that “everything must be automated and technologically advanced right from the start,” Morrell notes.
Instead, he advises building what you can initially and then supplementing any gaps with your own time and effort.
For example, even though Muval offers an automated checkout experience, the founders still rely on traditional customer service through phone interactions to drive a significant portion of their sales, Morrell explains.
“Although it’s an area we plan to address eventually, we didn’t prioritize it from day one.”
Ultimately, Morrell encourages startups to consider bootstrapping if it’s feasible for them.
“It would be fantastic to see more startups taking this approach, not necessarily selling a significant portion of their companies upfront, but rather focusing on achieving tangible milestones,” he expresses.
“I understand that it can be stressful,” he acknowledges.
“Some people may not have the same starting advantages as we did, and sometimes raising investor capital is the only option.
“However, if you have the opportunity, in my opinion, it’s the best way to go.”
