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What Does It Take to Scale a Hardware Startup in India? Amit Gupta (Yulu) Has the Answers
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"We have zero customer acquisition cost with a hardware business."
This seemingly impossible statement from Amit Gupta reveals a counterintuitive truth: asset-heavy businesses can create stronger competitive moats than asset-light ones. While Silicon Valley preaches software scalability, Amit proved that owning physical infrastructure can lead to supply-constrained growth where customers queue up for your product.
Amit Gupta is the Co-founder and CEO of Yulu, India's largest shared electric mobility platform with 45,000+ vehicles facilitating over 80 million rides and 20+ million monthly deliveries. Previously, he co-founded InMobi, one of India's first profitable unicorns valued at $1+ billion, where he drove global expansion across 70+ countries and helped build a $200 million revenue business. From mobile advertising networks to electric vehicle fleets, Amit has mastered the art of building category-defining companies in completely different industries.
Key Insights from the Conversation:
👉Asset-Heavy Advantage: Physical infrastructure creates defensible moats that digital competitors cannot easily replicate
👉Supply Constraint Strategy: Being supply-constrained with high demand beats demand-constrained growth models
👉EBITDA vs EBIT: Understanding the financial progression from operational profitability to full profitability in asset-heavy businesses
👉Purpose-Built Design: Custom-designed vehicles for commercial use achieve 10x better unit economics than generic products
👉Regulatory Arbitrage: Strategic product design around regulations (sub-25kmph) expanded addressable market significantly
👉Second-Time Founder Lessons: Technology focus vs business expansion - applying learnings across different industries
👉Zero CAC Achievement: Network effects in physical infrastructure leading to organic customer acquisition
Chapters:
0:00:00 - Introduction: From Family Business to Tech Entrepreneur
0:18:32 - Early Career: Software to Banking to Startups
0:26:36 - M-Khoj: SMS Search to Mobile Internet Pioneer
0:49:22 - InMobi Success: Building India's First Profitable Unicorn
1:07:21 - Glance Innovation: Lock Screen Revolution Within InMobi
1:17:37 - Yulu Genesis: Personal Traffic Frustration to Mobility Mission
1:25:28 - Product Evolution: Bicycles to Electric Vehicles Pivot
1:39:14 - Technology Deep Dive: IoT, Predictive Maintenance & Security
1:51:52 - Business Model: Asset-Heavy Strategy & Unit Economics
2:12:14 - Scaling Strategy: Direct Operations vs Franchise Model
2:24:51 - Second-Time Founder Wisdom: Key Transferable Lessons
#ElectricVehicles #SharedMobility #StartupIndia #Unicorn #AssetHeavy #Hardware #IoT #UrbanMobility #Sustainability #SecondTimeFounder #Entrepreneurship #TechStartups #MobilityTech #IndianStartups #VentureCapital #Scaling #ZeroCAC #SupplyConstrained #RegulatoryStrategy #PhysicalInfrastructure #EntrepreneurAdvice #startuplessons
Disclaimer: The views expressed are those of the speaker, not necessarily the channel.
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Transcript
InMobi's Journey and Early Influences
00:00:00
Speaker
So we were the first investment in India from SoftBank and we were the first unicorn in the country, profitable unicorn to be precise. Wow. We were fighting with not Indian companies, were fighting with global companies, Facebook, Google, they were our top competition.
00:00:18
Speaker
We will make sure as a strategy we will remain supply constrained. We do not want to be a demand constrained company. If I can go back in time machine and fix one thing, I would have spent more money on
00:00:38
Speaker
it.
00:00:46
Speaker
So Amit, welcome to the Founder Thesis podcast. i want to understand what were the early influences in your life which some way shaped you to become an entrepreneur at an age when entrepreneur word was not there, right? It was businessman when you became an entrepreneur. So but tell me how that happened. What were those early influences?
00:01:12
Speaker
So first of all, thank you very much, Akshay, for hosting me to your podcast. It's a pleasure to be here. Your question is very interesting, by the way. And the answer also lies that this whole entrepreneurship was called businessmen.
00:01:28
Speaker
And maybe my roots, so where I come from, I come from a business family. So saw my my father, my cousins, so people around me, they're all businessmen.
00:01:40
Speaker
And as it happens in a small town, so I grew up in Kanpur. So we had a shop and some industry set up. I saw from childhood days that how do you buy something, make something and then sell it to consumers.
00:01:55
Speaker
building their trust, the value of relationship, the value of commitments. And those were the time where digital payments were not there. only what you have committed is, is is as they say that, the value of your words. Juban.
00:02:12
Speaker
because everything Not jugar, but your value of everything. So saw from very early on that word. And interestingly, you know my family, everyone, so they were all educated, but none of them basically have stepped out of their family businesses.
00:02:31
Speaker
So for me, it was a new thing when I told my parents that ah let me go do a little bit more complex stuff than just doing a commerce degree, which was kind of a norm in our family.
00:02:43
Speaker
And with some hesitation, they were like, okay, go. oh And then I got into IIT, although it did not happen in one attempt, it happened in second attempt.
00:02:55
Speaker
um But my parents were very supportive, especially my mother. And then four years so in college just passed like ah flick of your eyes.
00:03:06
Speaker
and then now you got job offer again the pressure came from the parents or father why are you going they're not paying you much those days 2000 the was close to three lakh rupees 3.5 lakh And my my family, my Tao Ji and my papa were like, hey, I'll pay you more.
00:03:30
Speaker
OK. To join the family business. Because you need the need. you know you You are needed. That's how you go families our businesses in India are being kind of taken care of. Somehow, a part of me and supported by my my mother indirectly ah you know yeah there's no harm in you going, figuring things out.
00:03:51
Speaker
And then come back. You know you always have this. So with that assurance, so I said, OK, let me go explore. And I made that that joke. Oh, DDLJ, is Simran, that, Papa, let me know something before you. with me, I also gave the same gyan, same to my father ah that, you know let me do some work. And you know what? I'll come back.
00:04:16
Speaker
so Calls after call, you know every time you visit, you have been asked same question. Somehow you dodge the ball. um And yeah, so I started enjoying life, which ah life which is You were in software, like your career.
00:04:36
Speaker
My first job was in Aditi as a software developer. The job I liked from a value perspective, but not like me becoming a developer. So I changed gears. and I'll talk about that later.
00:04:48
Speaker
But NetNet, I was actually very fascinated about ah building business. ah when the concept of entrepreneurship was not there.
00:04:59
Speaker
But clearly, my early days, my family, what I grew up with, there was certainly a dream or aspiration to be doing something on my own, aka entrepreneurship.
00:05:11
Speaker
So that's the response to your question. How did you change gears from software? So from this software, yeah. so I mean, just take
Career Transitions and Startup Experiences
00:05:20
Speaker
me through the journey. i yeah One thing was very clear.
00:05:23
Speaker
Because it's 2000, you're seeing.com, you're seeing so many things. And clearly, and I'll not say I was visionary, but I was smart enough at least to understand that technology has a big role.
00:05:37
Speaker
And when I say technology, I mean the software part. So clearly, when you see word around, you were seeing that how things are changing because of that because of the technology and the word will not be same.
00:05:51
Speaker
So while I appreciated that part deeply, but I could not imagine and see myself writing set of quotes. And back in 2000, there was no Gen AI, which could have developed the quote for me.
00:06:05
Speaker
I would have probably a software engineer if Gen AI was there, but there was not the case and copy, paste, find, replace. I was like, no, this is not my word. So two things very clearly. The technology is important for this transformation. The new world will be far more technology oriented.
00:06:22
Speaker
But I'm not the person who's going code for the rest of my life. So that made ah a kind of a career change. And I moved to Citibank. in Delhi, where my job was as a product manager.
00:06:36
Speaker
And then, as you know, the banking or BFSI was going through transformation. Every part of it was being digitized, every part of this being transformed to technology. So I ended up working with the technology arm of Citibank, and I was a part of their financial business.
00:06:53
Speaker
So Citi Financial to be precise. And that was so some of the best time of my life where I was close enough to the technology, not coding, but I was able to take a business problem, solve it.
00:07:06
Speaker
This is how you automate things. And I was very fortunate to work with back then the MD, Mr. Jay Kumar, exceptional visionary leader, very high reputation in the industry.
00:07:21
Speaker
So He basically picked me as a part of the team, which was going through not just the coding part, but intelligence part. So i ended up being part of the team, which was kind of building far more intelligence layer for credit scoring, for risk scoring, ah for a bunch of business intelligence.
00:07:41
Speaker
So I implemented the entire backbone for that for Citi Financial. And back then, ah again, there was an important, interesting opportunity came to work with a set of founders based out of Bay Area.
00:07:56
Speaker
And they're all Stanford and IIT. So most of them are Indian, but all IITs and Stanford, particularly. So they said, you know come over, work with us. So I kind of moved back to Bangalore.
00:08:09
Speaker
worked with them very closely for three years. And it was very interesting that on literally week two, my manager, whose name is also Amit Gupta for some reason,
00:08:21
Speaker
really loved, you know, and a thorough gentleman, very intelligent, very sharp, Berkeley and IIT Delhi combination. So he came to India ah just to spend time with me and then kind of kind of do an orientation for me.
00:08:36
Speaker
And he asked me, hey, Amit, what's your plan? I said, oh, three years from now, I will be turning 30. ah thirty And I've promised myself that I will be on my own. So he was like, dude, what are you saying?
00:08:49
Speaker
ah You are sitting with me a week two of your new you new journey and you're talking about three years from now and you'll be leaving me. Are you out of your mind? I said, no, I'm not of out of my mind. by it But you know what? You also become an entrepreneur.
00:09:02
Speaker
ah How can you stop someone else? He said, yeah, point taken. No problem. So I actually had just way too outstanding time in that company. Start up trying to disrupt the auction oh marketplace and very good deep engineering they were doing.
00:09:20
Speaker
B2B procurement. It was actually a management platform. So back then, Aditya Akshay, it was eBay, which was the platform of choice in the US for anyone to buy anything e-commerce.
00:09:35
Speaker
And eBay, there was a concept for bidding. So when merchants were listing their products, they have to go through certain lifecycle. Amazon was just popping up, Yahoo Shopping was there.
00:09:47
Speaker
So these merchants needed some tool to broadcast their listings on multiple platforms and complete the entire journey with a customer.
Founding and Evolution of InMobi
00:09:56
Speaker
So that company actually had a very interesting platform for that.
00:10:00
Speaker
So it was a B2B, you can say it was a B2B platform, but more for of their own online e-commerce business management. And fast forward, the so I worked with them in the strategy team, did lot of things related to intelligence data. So I owned a lot of things and built lot of trust because ultimately I had a very 360 review.
00:10:26
Speaker
They will come to me for problems. Okay, this is not working out, that is not working out. And me being a that data nerd, just go put myself layer a business you know view on that and able to come up with the right set of recommendation and also looking at the past looking future so had exceptional time i enjoy you know my time over there and then my three years journey with them almost happened and i said okay
00:10:58
Speaker
I don't know what I'm going to do, but I want to be on my own. So this is the time where I moved out of that company called Andley and it started a company in BI space.
00:11:10
Speaker
So before Inmobi, I had a almost six-month journey with another startup called Analyticsworks. where the whole idea was to build ah platform for BI, the work which I did with Citibank, a portion of the work I did with this startup.
00:11:27
Speaker
And as I was building this company, my batchmates, my friend a dear friend Naveen, who graduated from his MBA, and he started thinking about moving to India.
00:11:41
Speaker
And then we were like, OK. What was Naveen's background? Naveen Biver, he worked for McKinsey and then he went to HBS. So, yeah, so he completed his his MBA program, ah returning back from the U.S. after trying something in the U.S. And he understood that probably India is far interesting opportunity than the U.S. So he came back and Earlier, whole idea was that, okay, i will help you. I'm running this startup. I can also help you.
00:12:13
Speaker
But then we realized that, hey, you know maybe working together will be far more fun. So that's how you know I came together. and then another friend, Abhay, who is an IIT Kanpur connection, one year junior. But we did a lot of things together and the campus days.
00:12:29
Speaker
So Abhay, myself, Naveen, ah we came together, raised funding from Mumbai Angel in Bombay. um half a million dollars. And then Mohit, who knew Naveen from his Bay Area days, he also joined hands.
00:12:44
Speaker
So four of us started off journey of what that back then was called Mkhoj, trying to build a search on mobile phones, on SMS. When you raised that half a million from Mumbai Angels, you pitched Mkhoj to them. Yes, Mkhoj, absolutely. And we were like, change the world, look at India, and and this is Google of India and and and whatnot.
00:13:07
Speaker
and What was m code the M-code? What was the pitch? Pitch was that you can search on your mobile ah using SMS. So you send a query. Pre-smartphone error.
00:13:18
Speaker
It is a pre-smartphone error. And you send a query on a short code. If you remember, India times 888. So we ended up acquiring 5 times 5. So 5, 5, 5, 5.
00:13:29
Speaker
so five five five five and And then you send a query, some results will come. And we're trying to basically do a local listing and expand it to something else in the future.
00:13:42
Speaker
oh Idea was cool, but... and just This is what Jastail also, like Jastail was doing it through calling. Copy-paste. I will not say copy-paste, but that they got also inspired.
00:13:54
Speaker
That rather than people calling, they also implemented the same thing. But we were very quick to understand that you know content plus ad was a model that with every content.
00:14:07
Speaker
I'll also send you an ad. So started sourcing ad from local neighborhood. And then with the rise of Groupon and the limited space, what you can actually get on SMS, we basically thought that maybe we just do a deals model.
00:14:24
Speaker
So the search became only deals. So rather than showing or just saying that, oh, you can do a general general purpose search, we were like, OK, you search deals on us.
00:14:35
Speaker
So that model also kind of ah created some excitement. And we ended up going to, and we were all, by the way, in Mumbai, we were asked by our investors that you ought to move from Bangalore to Bombay.
00:14:48
Speaker
ah the butheto But in retrospect, it was one of the best one. oh So we were the city of opportunity, a city of dreams, which is Mumbai. And I started getting a lot of these deals.
00:15:02
Speaker
Those days, Groupon was very popular and bunch of Indian companies. Snap deal. alert Yes, smart deal, God knows what all. And then ah ah we actually had a mega plan. you know we have a We need to have a big bang announcement.
00:15:15
Speaker
So um you know we kind of got some pool of capital. We said, OK, we'll do an activation campaign. ah There's a very big mall in Mumbai called Infinity Mall in Malad area.
00:15:29
Speaker
So we ended up going and doing an activation. We convinced every store owner that we will transform your life. We also went and even met um Mr. so Biani that we will transform your retail business because of M quotes, your sales will go up by 20%. So we built some billion dollar idea and pitched it.
00:15:50
Speaker
and And God knows what all. And then a lot of money went into that activation program, like lakhs of rupees, which was kind of crores and crores in today's term. And the lift in sales was insignificant. It was decimal place.
00:16:07
Speaker
And the worst part is the moment one week of activation was over, there was no recall. And we realized that you know people are not learning your way to search on feature phone and that to their ability to do something meaningful.
00:16:22
Speaker
And that to the remembering your short code. And then there's ah there ability to for you to track the success. All of that was kind of failing apart. And then we saw the rise of oh the whole mobile internet.
00:16:37
Speaker
And back then it was called WAP browsers or WML. So there was a technology behind that. So same Nokia, Motorola 4 used to have a browser where people were doing something.
00:16:49
Speaker
And we started thinking that, you know what if we do not the SMS, but do mobile internet, even if it's not feature. It's not smartphone, but there is a Blackberry happening, there bunch of things happening.
00:17:03
Speaker
And when we tried that, advertisers started loving it, and we never looked back. So we did pivot from oh ah search platform to a deal platform on SMS to mobile internet.
00:17:16
Speaker
And then smartphone happened and everything became history. And in this journey, we also changed name. the It was content plus ads. The content kept changing from listings to deals.
Expansion, Challenges, and Strategic Investments
00:17:30
Speaker
When you became a Like a mobile ad What was the content then?
00:17:35
Speaker
Like by the third iteration? We were trying to search for a Chinese restaurant in Bandra. The content was where I can buy this shoe. The content was so cricket score. The content was where the content was give me a joke.
00:17:50
Speaker
So this is on mobile browser. but No, no. This is all on SMS. That was, okay, it stayed and on SMS till when? like When you moved on on the mobile internet. So those days, what was the content?
00:18:03
Speaker
There were new sites. So there were actually ah people were browsing news. ah There were also cricket score once again. So Crickinfo was, for example, big thing. there were lot of mobile content.
00:18:15
Speaker
So a lot of wallpaper, ah games, mobile games, even on little small phones, there were games on Nokia phone. So all of that those contents people were actually looking at.
00:18:28
Speaker
And then we were able to go to those WAP owners or site owners and say, give me this real estate. I'm going to show a banner ad or a text ad. And so this was all display ad if you understand the technical part and we started doing a revenue share, build an ad network on top of it.
00:18:46
Speaker
So on one side there were advertisers who were willing to place their brands and on the side they were publishers. And even back then there was a money ah which a group M of the world because everyone was like, oh, mobile is the next big thing.
00:19:00
Speaker
So they will invest some money and we will be able to create a landing page. So all of that we can think of ah we were doing. Because it was so ah very trackable and very unique, we were able to actually get good ROI from an enterprise lens.
00:19:17
Speaker
And then mobile content advertisers. So people who were selling premium games, premium ringtone, they also became natural advertisers. So you know ah someone wants to download this game, this this song.
00:19:33
Speaker
ah There was an operator billing. ah So back then, there was no PTM. But Airtel will have a billing. So there was an ecosystem behind that. And we started- VAS services. VAS services, correct. great VAS is value-added services, like ringtones, et cetera.
00:19:50
Speaker
And we were very quick to also expand this business model to other parts of the world, especially the Southeast Asia. So publishers were same because the same content was also happening in Indonesia.
00:20:04
Speaker
Same content will happen in multiple parts of Southeast Asia and so on. So we said, OK, Mr. Publisher, you are giving me this space for del for India. Why don't you give it for Indonesia as well?
00:20:16
Speaker
And advertisers are also OK. Can we get some some money for that? So built the business. It was a very interesting play. Most of the company in India, as you know, they start you know selling it to the US.
00:20:28
Speaker
But for us, we went from east to west, where our first market was Asia, followed by Europe, and then we went to Africa and then the US at the last. time Okay, fascinating.
00:20:39
Speaker
um By when did you decide to go oxford outside India? Which year was that? So I would say that first year was all figuring things out. M-Coach, first year was all M-Coach. Six to nine months was even um figuring out that SMS is not the right form factor.
00:20:57
Speaker
And this was 2008 when we got this PMF for mobile internet. And I would say that 2008 late was a time when we ah ventured into Southeast Asia from a market.
00:21:12
Speaker
OK. Fairly, ambitious and aggressive team, I would say, ah to go out of India that early. like Within months of finding PMF, you decided to go outside India. what i mean How did that happen?
00:21:30
Speaker
So... Good question. I think call it the team which has got a reasonably good global mindset. So Naveen who lived US, so no no no problem, even with my journey with my other startups.
00:21:49
Speaker
ah Yeah, so you've started seeing the word, you know, it's not like you're you are looking at India. And i would say city of Bangalore, particularly where you meet people,
00:22:00
Speaker
Everyone has one leg outside of India. So there was never a mental resistance that we had to build business outside of India, which was one good part. But why not US but Indonesia and Southeast Asia was more about actually call it a strategy and call it also some of the market insights.
00:22:23
Speaker
So our same publisher were on the call. They will say, hey, I also have this user base in this country, that country. Are you interested? And after, to and going to Indonesia is very easy, as you know, and and from India, you don't need a visa.
00:22:36
Speaker
You just get visa on arrival or Singapore, very easy. So talking to an advertiser base, would you be interested Mr. Rex? Why not? Okay, you don't have to do anything. You just have to just open up your APIs.
00:22:50
Speaker
uh and you book so one can run an ad in indonesia in india and in in malaysia thailand so in no time without additional tech investment or bd little bit of bd but that's it so you started seeing the goodness of your work uh without too much of breaking the wallet or breaking the bank and uh yeah so that's actually happened so mindset was there And openness was there and also opportunity came asking, knocking door that, hey, ah would you like to do this? And were like, why not?
00:23:25
Speaker
ah That half a million from Mumbai Angels was enough to sustain you? Not at all. Actually, half a million we blew up in our first business model itself. ah Just stories around we not having money as early as 2008 years two thousand eight almost ran out of money ran the company on our personal credit cards uh after exhaust money ah and you also had employees like you had salaries and we had employees had yeah payables offices and expenses so yeah we we managed to save ourselves from one almost near death and some interesting story and so little how did you save it like
00:24:12
Speaker
No, just just survive, as I said, ah from our spouse's money, our own savings, and our own credit card, and and God knows what all. And everyone you talk to in AVC,
00:24:26
Speaker
ah which was not a very established ecosystem back then, they will say no. That, hey, dude, what are you doing? don't understand. i think that But somewhere, Naveen actually went to US and met Ram Shiram, who heard of a story. And he was like, yeah, I think this is something which I believe will happen.
00:24:48
Speaker
ah He sits on Google's board and has got problem with them. Some excitement in what we were doing. He got very aligned. He said, OK, let's do it.
00:25:02
Speaker
And after that, Ramshiram sent us to Klanner Perkins, oh whom they've invested together. And then they invested money and posed that to him.
00:25:14
Speaker
So if I'm not wrong, they invested $7 million. dollars And this was in that 2008 period when you were going to Indonesia? This was 2008 period. OK. okay okay So that was that that's how things actually changed for us That was a game changer. Like 7 million for an Indian startup would have been like front page news almost. It was a big news.
00:25:38
Speaker
Actually, you know, no one gave it a damn back then. Because startups to start with was not a big concept. It was an alien ah concept. And then yeah no one cared. Actually, I don't remember how many people or how many people.
00:25:56
Speaker
PR rush. But it was a good deal for Inmobil for sure, where we said, OK, now we have some more muscle to our own ambition.
00:26:10
Speaker
And quickly scale the business to more countries, raise one more round from same investors. How much was that next round?
00:26:21
Speaker
I think, if I'm not wrong, $8 to $9 million. dollars And which year? I think one year later. okay So don't hold me because I don't think of it. I'm looking at ballpark numbers. That's OK. Yeah, yeah, yeah.
00:26:33
Speaker
And then a big milestone happened in 2011 late when Mahasasaan came. ah They invested $200 million dollars in Mobi.
00:26:48
Speaker
Wow. OK. What was your revenue by then? What scale were you by the time SoftBank came? Again, very ballpark. I'm not going to hold you on anything. sell you later.
00:27:00
Speaker
I don't remember, that to be very honest. ah Must be in some 50 million, 50 million-ish revenue. 50 plus. Got it. Okay. but Somewhere in that. Okay. Understood.
Technology and Competitive Strategies in Ad Networks
00:27:11
Speaker
And ah oh why did SoftBank show interest? They saw, and by then we had a global business. We had business in a lot of Asian countries.
00:27:25
Speaker
We had business in China and thriving, US, Europe. So we were able to establish o ourselves as a company who actually has fairly good handle on technology.
00:27:38
Speaker
And everyone was seeing an emergence of mobile internet like crazy. And Masasaan running SoftBank, He also was on the epi epicenter of all disruption.
00:27:51
Speaker
So as you know that he bought, he got Yahoo ah Mobile was big and he was seeing everything happening in China. So Alibaba, everything, mobile internet.
00:28:02
Speaker
So he was, he had a vantage point where he was seeing things just crazily exploding. So he actually, interestingly, when we were raising capital, we were raising not too much of capital, we were like 50, 60 million dollars.
00:28:18
Speaker
But when Naveen met Master San, he said how big it can get. And Naveen was amazing, by the way. He had a bigger plan ready.
00:28:29
Speaker
So he said, you give me this money, i will do this. And there was a deal done, literally six weeks money in the bank. Wow.
00:28:40
Speaker
procedure That is 24 hours. ah So we were the first investment in India from SoftBank. And we were the first unicorn in the country.
00:28:51
Speaker
That 200 million round was a unicorn round. A profitable unicorn to be precise. Wow. So we were making money, growing brick.
00:29:02
Speaker
Do you agree with that decision to take more money? You but were planning 50-60 million. Instead, you took 200 million. and Does that that's too much money harm a startup?
00:29:13
Speaker
yeah So if money comes at the right valuation, then whatever quantum is coming, you should welcome. So one good part is when Masa Saan offered us more money, he did not oh he did he did not actually shortchange us on the value, so which is one good part.
00:29:38
Speaker
And hand on heart, we thought we have a good plan. ah there was no oh There was no you know plan to just blow the money.
00:29:49
Speaker
So just to be very clear. At the same time, when you get a lot of money, then call it your ambition or call it a balance of your focus and ambition.
00:30:04
Speaker
I think these are the tricky points. And if things go as per the plan, then you feel good that okay, you know, my ambition, my plan, things actually happened the way you thought things with your sanity of your mind.
00:30:20
Speaker
And then there are things which do not go as per the plan. And when you are building a new category, there are way too many unknowns in the markets where you have not been, not even as a tourist.
00:30:34
Speaker
So you are going in the country ah to start a business and you're already hired people maybe remotely and then imagine to that kind of pace. So i I can say that now in retrospect ah that maybe too much of money oh also led us to do multiple things.
00:30:57
Speaker
But if you go back to the classic wisdom that focuses everything, um yeah, less money would have forced us little bit more. To be focused. And if you ask me, you know, what is the right answer, I actually will say it's very situational.
00:31:15
Speaker
Because if you have a good resource at your hand, then your ability to do what is possible is also there.
00:31:26
Speaker
So as long as you're not doing stupid things of just blowing money like it's not yours, then it is not good. But as long as you are putting on things which can create value, then it is okay.
00:31:40
Speaker
So, in Mobi's case at least, ah we believe that we did the right decisions. If I can go back and change, I will not change the funding amount.
00:31:55
Speaker
I will change the allocation of that money to more on tech and lesser on the business expansions. So if I can go back in time machine and fix one thing, I would have spent more money on tech and less on business expansion.
00:32:13
Speaker
That is the only thing I would have done. Yeah. So that's the answer to your question. So. um Okay. Extra money is fine, but oh yeah, you need to allocate it properly.
00:32:26
Speaker
Right. The tech doesn't sound very complex to me. you I mean, ad serving technology, you are like, help me appreciate why you feel tech needed more investment, why the tech of an ad network is complicated.
00:32:43
Speaker
You know, what are the nuts and bolts of an ad platform? How does it work? Sure. So I think for you to appreciate that, you have to go back 15 years back, 20 years back, actually.
00:32:54
Speaker
And back then, you know, building a platform with a response rate of 100 milliseconds is a non-trivial part. Right. Ad request comes, you have to go back.
00:33:06
Speaker
And the reason is, if you don't respond back, the at the right ad, by the way, then the publisher page, who has been opened by a user, will take forever to load. So now you have far more sophisticated technology.
00:33:20
Speaker
You have CDS across the across the globe and a lot of content delivery network. um delivery okay Okay.
00:33:31
Speaker
okay But more than that, the compute which you have to do very quickly, there was no Amazon, by the way. There was no AWS. No cloud. Imagine that you have to create your own AWS and to do this business, all optimization, fail-shape systems.
00:33:48
Speaker
So Mobi had its own data platform team. What you have been given on a platter today, you have to build that. So the cost of starting a company, like M-Coach days, we had to buy our own server, host it at a data center.
00:34:07
Speaker
So those were the days. So imagine that you have to not only build a data platform, deal with massive amount of data, billions of ad requests coming.
00:34:18
Speaker
You have to pick it up, response back in a matter of 100 to 150 milliseconds. If you don't do that, you lose that opportunity. and then optimize the algorithm for better ad effectiveness to better monetization, fraud detection, build a data platform so that when the same device requests for the next time, there's a history which I have got.
00:34:43
Speaker
All of that has to happen in real time. So it was ah very, very complex exercise. Today, you have chat GPD. You just type something. You know you have this answer.
00:34:56
Speaker
But back then, it was nothing. So you are building your own quote unquote LLM. You are building your all of that. ah you are building. And if we would have spent more time, you know, we would have on technology, we would have created far more ecosystem um between the ad networks. So basically you have, if you look at the ad networks value chain, there's a network which is doing the demand and supply auction, but there are also demand side platforms, supply side platform, data platform, a bunch of things which basically come and play together.
00:35:31
Speaker
And those investments back then would have made us far more stronger. And you know the DNA of the company would have been 80, 90% tech and 10% sales.
00:35:45
Speaker
But when we were scaling the business, we were more sales and then the technology. And we were fighting with not Indian companies. We were fighting with global companies, Facebook.
00:35:57
Speaker
Google, they were our top competition. So imagine if you are not putting the money where the actual, you know, the the real war is happening, ah you will be marginalized.
00:36:09
Speaker
And while in movie has done really, really well, but look at what Facebook and Google with ad business, their trillions of dollars company. And we clearly had a shot. We were ahead of the time. We were almost right on the time at this whole ecosystem development.
00:36:26
Speaker
So very proud what we have been able to do ah with whatever limited resources. But yeah, things could have been very different if we had made our technology a bit more aggressively.
00:36:41
Speaker
and Right. but Because you're competing against Silicon Valley companies who would have put in a lot more engineering bandwidth. ah Right. Okay. ah what What are these DSP, SSP data platforms, which you said are part of the ecosystem in an ad network?
00:36:56
Speaker
Yeah. So what happens in an ad, there are two major components. One is advertising. So for advertiser to feed the bunch of ad campaigns, they can come on your interface to it, but they prefer what they call demand side platform.
00:37:12
Speaker
So using one interface, they can feed into a Google system, Inmobi system, and Facebook system, and so on. Because they have a they need a common interface to look at the campaign's performance, manage it.
00:37:26
Speaker
So if you do not have a demand side platform or you don't have those pipes, then you have a demand liquidity problem. Same way you have publishers who are the website and the app owners, and they use what they call supplier side platform.
00:37:42
Speaker
So using that tools, they can manage their monetization, they can do ad quality, lot of things. So you have to play with that. And the data platform is basically sits with both advertisers and the the suppliers, the the publishers who are just enriching every ad request.
00:38:04
Speaker
And did so this game is all about targeting. So when you're using digital advertising, you're not saying just do it. You're know not painting the town red or spraying and praying, as we say in our word.
00:38:16
Speaker
You are saying, hey, I want to target someone who lives in Tokyo, who is this age, who has interest in music, and blah, blah, blah. On the basis of that, you basically target. Now, one thing is situational, what you are doing, but one thing is your history.
00:38:33
Speaker
So if you have been to a music site, then I can tag with your device ID that Akshay is a music buff because I know he has been to these music sites and hence he is a good consumer for me.
00:38:49
Speaker
versus situational that you are on Spotify and trying to run an ad on Spotify. But that is not good enough because you are not spending time on Spotify, you are spending time on like 20 sites or apps.
00:39:00
Speaker
So that data platform is basically kind of a wisdom where they are able to create history for every device, what type of ads you have clicked, that story sits with Inmobi that you have shown interest in this kind of ads.
00:39:15
Speaker
So when I have a request coming from your device when you are browsing someone else's app, I know what ad to show. Because at any time, I have an opportunity to show you one ad from a pool of 10, 20, 30 ads.
00:39:31
Speaker
So which ad to show? Because that's where the auction happens, where your happiness, monetization, advertisers' interests, everything come together. So it's a very complex objective function where a lot of things happen.
00:39:46
Speaker
ah This data platform is a separate independent company like DSP, SSP? There are companies who are you know independent companies ah who are just doing one thing. They go not only take your data, but they take data from lot of places.
00:40:03
Speaker
They aggregate that, they put it together. Just to give you an example, ah every lat long, ah tells you something. So there are companies now who are saying that this this particular lat law is not just in the context of let's say Tokyo, Ginza, but you know Ginza is also high street.
00:40:24
Speaker
It has got a lot of high end real estates. But this particular place is not just a store, but it's Louis Vuitton. So if someone has gone there, it means XYZ. So ah they augment the data, they make sense out of that.
00:40:39
Speaker
And there's several you know such examples. So there are data platforms who sell data either on a subscription basis or ah or a transition level.
00:40:49
Speaker
And then every business, as I said, advertiser, publisher, even ad networks, they have their own data platforms. So each one of them, they start building a kind of a history and build intelligence on top of it.
00:41:04
Speaker
So they third party data platform platforms and providers. You can you know hook and augment your intelligence. And then everything is basically every. So this whole business is all about data.
00:41:17
Speaker
all about the intelligence, just what you have got, and it results into better or effectiveness of the ad campaign. The advertiser is giving the data that these are the users I want to target or the ad networks algorithms decide whom to target? who Who's the consumer of this data?
00:41:34
Speaker
So at a macro level, the ad the advertiser says that i need a person who lives in this metro city he has got these five traits so depending on the platform of choice they will say that these are my filters so why for example facebook became so popular because facebook had users data of their gender where do they live what type of things they follow, and things like that.
00:42:03
Speaker
Google search did not have that in the beginning because there was no place where you were telling that I am a male lips. And that's why they got bunch of things so that they started knowing about you.
00:42:14
Speaker
So it is a ah very core to either the ad platform or the advertiser but advertiser historically they know that this has worked for me and they are also able to augment when they are sending the ad campaigns they're also able to send some more data points that give me xyz but advertisers do not have access to the user data They're just saying, give me this, distance this, this.
00:42:43
Speaker
So they're asking, they're pulling. But the publisher side or the ad network side, they have a lot of wisdom about the user side. And that's where the matchmaking happens. OK, OK, understood.
00:42:55
Speaker
ah This data is linked to a person? Like there would be ah a profile of a person saying that this person ah lives in Tokyo and shops at Louis Vuitton and listens to and has a Spotify membership, for example?
00:43:11
Speaker
So depending on who is the you know who is the person behind that, so yeah there will be some profiling for sure. So for example, Google ah knows quite a lot about you about yourself. That's why they became so big, because they see you on YouTube. They see you on multiple things.
00:43:30
Speaker
Google Maps also gives them. But just to be clear, I think almost every company, ah they follow the data privacy very, very seriously.
00:43:41
Speaker
So while they will tell that they will expose ah when you are browsing by the way, some of their site that I have a person who is right now doing this particular activity on my site.
00:43:53
Speaker
Do you have an ad for me? So there's never a scenario where the advertiser can do a surgical selection of Akshay. But they will say, hey, give me someone who has been to Louis Vuitton and XYZ.
00:44:07
Speaker
So yeah, this is possibility. But none in no circumstance, they will know your data. unless you go click on an ad and fill your information.
00:44:18
Speaker
So that level of data privacy is there. But most of the time um it is linked with what Google said is an ad ID. ah So there's an ID.
00:44:30
Speaker
If you are using ah Android phone, you will see this. Go to setting, you will find there's an add ID. On the Apple ecosystem side, there was an Apple ID. There was some ID, not Apple ID, ah which was a unique identifier.
00:44:45
Speaker
ah In the browser world, they were using cookies, but in the app ecosystem, there's no cookie. So it got developed for you know attribution purpose. lot of things happened in the ecosystem as the ecosystem was maturing.
00:45:01
Speaker
Okay. Okay. Okay. How does an ad network earn? like Is it a commission? It's a spec commission. Yeah. So they take a commission from ah the payout which they have to give to the publisher.
00:45:16
Speaker
Okay. Is there a some ah additional money you can earn if you are more successful? Like, does success determine how much you earn? Are there different models? Like, say, just for viewing an ad, you get something, but if someone actually clicks on the ad, you earn more, you know, things like that? You mean the the ad network making more money or the consumer making more money?
00:45:39
Speaker
No, the ad network making more money. Like... So ad network, most of the time, they have ah you know a percentage commission in most of the cases, unless they are doing a success-based campaign, which they typically don't do.
00:45:55
Speaker
So they are very clear pass-through. It's like Uber, um any third-party platform. So they say, you make $100, I'll take $15, and everyone OK. and every everyone is okay okay so I think if you ask me who gets who can make more money, it's a publisher who actually the owner of that property.
00:46:15
Speaker
So how can he make more money? He can make more money by having more usage of the app. So instead of having 1 million active users, you have 10 million active users, your money-making machine becomes 10x bigger.
00:46:28
Speaker
Second one is that because your audience are so good, you are attracting high quality ads and the engagement is good, the closure rate is good.
00:46:39
Speaker
So what happens that while someone pays on a click basis most of the time, but ultimately from advertiser, they are looking for the quality of the user. So the system works in a manner where they know that this particular app is giving better conversion rate.
00:46:54
Speaker
And if you fast forward, that is also an LTV that this particular app or audience is giving me far better conversion rate and higher LTV. I am happy paying 2x of the money which I am paying elsewhere.
00:47:08
Speaker
So sooner or later, the high quality app with good quality audience in the background will be far more valuable. And hence, the publisher will make money not only just because of 10x bigger, but at the unit level also, he will end up making more money.
00:47:28
Speaker
So this is a science and the math behind that. And this is decided through a bidding, like like people would... Bidding, this is a loop, a feedback loop that you gave me 1000 users, post acquisition, oh you know, how many of them did a transaction, what has been their LTV.
00:47:48
Speaker
So it's all maths, all science. ah This data flows between the ad network and the advertiser, like the LTV data. Okay. Yeah. yeah See, the moment you have interacted with an ad, then you know you have that data.
00:48:04
Speaker
And how you have that data? Typically, you'll be transported to that particular ecosystem, aka, let's say, they their own mobile site. right When you are on their mobile site, you have their device ID or ad ID, whatever you call.
00:48:17
Speaker
and a bunch of things. And over the last 10 years, ecosystem has become very mature. There are lot attribution tracking partners. ah they They know what you have done on their site.
00:48:31
Speaker
They're able to matchmake that you came, you signed up, you did this transaction. So everywhere, the funnel, ah the quality of the funnel, oh so a lot of maths.
00:48:43
Speaker
Okay, fascinating. ah In this ad network market, now, you said Facebook and Google were like the kind of people that Inmobi is competing against.
00:48:55
Speaker
Facebook is a place you go just to advertise on Facebook properties or Facebook also does this like a working with supply side platforms and aggregating publishers? Yeah.
00:49:07
Speaker
Yeah, so ah they all, by the way, have both. So they're called ONO. So when you advertise on Facebook, it's not just Facebook, but also Instagram, and a bunch of things they have got. And they have third party publishers as well.
00:49:21
Speaker
Same thing is true for Google, where they bunch of their own properties, ONO they call, and then third party publishers. So because you have- ONO is like owned and operated, I'm guessing, or so something.
00:49:33
Speaker
OK. So you need one reason for advertisers to come to you. And back then, I don't know the current statistics, but Facebook and and Google properties put together, they actually used to command almost 35% the time.
00:49:49
Speaker
So that is the dominance they have got. I don't know the current numbers. But back then, one third of users time on phone, they were on these two properties.
Transition to Glance and New Ventures
00:50:01
Speaker
And then when you have this much of aura and and the pull, the advertiser will come to you and they say, hey, you know what? just one tick mark you want to want me to run on similar audience on different sites and from your side yes why not you know anyway i'm here for getting more customers so that worked really well for them and this was by the way one more reason ah why Inmobi ah you know did not have that advantage.
00:50:29
Speaker
Inmobi had this disadvantage of not having an ONO. So everything in our case were all third-party publishers. So that was an handicap for sure.
00:50:41
Speaker
Okay. okay So why would an advertiser need to go to a demand-side platform? Why wouldn't they directly go to a Google or a Facebook platform? So they see small advertisers, they they they do.
00:50:55
Speaker
Because when you are using a DSP, you also have to pay for that platform. But imagine you are running campaigns on five different interfaces. So not only the likes of Google, Facebook, or Snapchat or Mobi, but you're also running campaigns on very high quality select publishers where you have a relationship with. So they will go run it on NFL, NBA, because you know this is my target audience.
00:51:22
Speaker
So you cannot just go and deal with everyone's interface. You want to see one interface, run it, and then your own data, to your wisdom. It's impossible for you to integrate with everyone.
00:51:35
Speaker
So when you have one interface which has got deeply connected it ah budget management, intelligence, layering, So it just becomes easy. And especially in the context of Western world, where every person who has to be intelligent, by the way, because dealing with a lot of data, you cannot put five people for five interfaces.
00:51:57
Speaker
So you have rather one person who is managing it all, reporting, optimization, tracking, attribution. So there are a lot of work. So that's why someone uses DSP. Okay.
00:52:09
Speaker
Okay. Okay. Understood. Okay. So... it You know, ah how did your role evolve ah at InMobi? Yeah. So M-Coach days, ah I was just trying to get all of these merchants to give me the deals.
00:52:26
Speaker
oh And then when mobile internet happened, ah it was all about publisher acquisition. So I was bringing the supply. My co-founder Abhay was bringing demand.
00:52:37
Speaker
So he will go to agencies, agenciess advertisers. And then there was a stage where, so these two things have to match. I can go get random supply and Abhay can go get random advertisers, which are never meant for each other.
00:52:53
Speaker
But it will be Naveen who will be always figuring it out that how do you you know bring the demand and supply at the same level so that we make money. So we took a decision of having ah revenue and operations head.
00:53:09
Speaker
So I took over from head of BD to head of revenue and ran the function for some time. ah Post that, my last two and a half years, I... Head of revenue would mean that advertiser revenue you were responsible for. Like you had a...
00:53:29
Speaker
team of salespeople under you who were going both and alliances. Yeah, and alliances. OK, you were doing both. OK, demand and supply both. OK. Yeah. And then, you know, Abhay moved to Europe for some time.
00:53:45
Speaker
ah We saw opportunity to grow the business and one of the founders to be there. And he almost played. he He was wearing a hat of head of Europe. And then ah while this whole thing was happening, then we took another decision.
00:54:04
Speaker
I went to US wearing my hat of head of North America. Abhay took over as a head of revenue. He moved back to India. And then ah I also started ah working on Glance.
00:54:18
Speaker
So we're trying to figure out a monetization model for telcos and handset makers. So that led to be building Glance and Glance is one product which sits on your lock screen.
00:54:33
Speaker
Very fascinating. And this whole thing came from the pain point of in Mobi does not have its own O&O. And in Mobi does not have the depth of the data, what Google and Facebook have.
00:54:47
Speaker
So the whole idea was that, okay, if you cannot be a Facebook and Google, what else you can be? Where you actually have a depth of the data, time of the user.
00:54:58
Speaker
And lock screen, to your surprise, on an average people... interact with 200 times per day in fact that number has only gone up in china that number was c5400 per day so we thought why don't we replace the lock screen with some interesting content and while the idea was cool but how do you become a lock screen that idea was not easy to implement.
00:55:25
Speaker
So we built up a product and then we were sure that it cannot be a way where I go to a consumer and say, ah you know, you download my log screen. And there were, by the way, businesses or the companies who were trying to do that.
00:55:39
Speaker
But the experience was very, very lousy. and then no one is paying any money so they will actually do very shady advertisement and very very very very broken so almost feel like that hey this phone is such a piece of crap so uh we ended up going to samsung xiaomi where we said that hey you know the same board boring lock screen we can make it far more interesting engaging and we have this platform so spent almost one year in in convincing samsung
00:56:13
Speaker
ah who was very, very experienced first company as as all of us know. And we showed that and we proved that this product will only increase the premiumness and it's not basically going to take away you know your users' happiness or NPS score.
00:56:29
Speaker
So went to Korea multiple times, worked with the headquarter team, met with their CEO, bunch of interesting things happened and then convinced Xiaomi oh to put Glance on their phone being sold in India.
00:56:45
Speaker
And then post that we never looked back. oh I transitioned out by the way after doing these three, four important deals to start Yulu.
00:56:56
Speaker
But post my you know departure from Inmobi, Glance became a company. It became a unicorn company. so Peter Thiel's company fund invested and then Google invested and then Jio invested so glance is also now very valuable one of its own kind in the world just like in Mobi we created a category glance is also a category and very very powerful
00:57:27
Speaker
a very, very good example of oh thinking from first principle, the stakeholders you need to get on your side, do a great job on technology, user option, and then create something value out of that.
00:57:46
Speaker
So yeah, so that's kind of in Mobi and then Glance and then stepping stone into Yulu where I was turning 40, just like my 30-year milestone promise. yeah i Let me ask you one question about Glance before we come to the 40 milestone.
00:58:03
Speaker
um What is the data that Glance is giving you? So you are serving, for example, ah cricket score. on glance, which kind of also is like full circle what M.Khoj started with.
00:58:19
Speaker
So you're serving cricket scores and a bunch of other things. How do you know what, ah like how do you understand the user better through that? like Is there ah heart there that people like something and therefore the advertising can be more targeted or like how do you understand the user?
00:58:34
Speaker
Sure. So first of all, because you're sitting, you're deeply integrated with the OS, every piece of data actually goes through you. ah What is being used as a is a question mark.
00:58:50
Speaker
You know, right now, I'm not saying that, but at the same time, I know Glance is not misusing any such data. That's point number one. But we actually started understanding the user behavior because they were interacting with the lock screen content vary very frequently.
00:59:11
Speaker
So to start with, when you are setting up Glance, you will be asked that, hey, what all categories you are interested So there are like 10 plus categories, food, travel, tech, politics, sports, lifestyle, travel, whatever.
00:59:25
Speaker
On the basis of that, you are being shown a very beautifully curated content on lock screen and then there's an interaction button. So on the basis interaction will like zoom in to the content and show more details. Learn more, show more.
00:59:38
Speaker
You will be shown a video, you will be shown a text, you shown something. So that itself is so valuable because to start with, you told me that, hey, I love food, I love travel.
00:59:48
Speaker
And then within that, we started knowing your deeper preference. And then same like add... I use the same technology to to do the content prioritization.
01:00:02
Speaker
So I know if I have plenty things to show you, which one to show you at that point of time, there was an algorithm. And one more beautiful part is unlike the ad network business where we are only sending one small piece of you know banner or or text here we are sitting on the device so if you have heard of concept of edge computing where the device itself can do some interesting things to just personalize your experience far better so we leverage our strength by sitting on the device to show you the content which is really really good
01:00:41
Speaker
And ah so that was basically how things evolved. And then post that, some of the content will be advertorial in nature. So without you know compromising on UX or the relevancy.
01:00:55
Speaker
So glance was very different in in ah in a thesis that from day one, it was very user-centric. So we'll never show you something which is not contextual or not useful.
01:01:07
Speaker
So with this approach, you will see less at, but whatever you see, we believe that it is really, really you know important for you.
01:01:18
Speaker
And with that, ah we were able to build the trust. With that, everyone was happy because the the mobile handset makers who were inserting glance, they were basically making money.
01:01:31
Speaker
Inmobi was making money because there's an ad money coming from the advertiser. And user was also very happy because then they're seeing the stuff that really, really matters.
01:01:42
Speaker
This was white label? I would know that this is Glance or I would know that this is Samsung's. No, as a Glance. So it's not white label. When you look deeper, it will say Glance.
01:01:55
Speaker
In the case of Xiaomi, it says Glance.
01:02:01
Speaker
There's an MI co-branding. I don't remember what they exactly say. But there's a co-branding which happens there. Okay. Okay.
01:02:12
Speaker
So now Glance is live in multiple countries, not only India, but Indonesia is a big market, other countries in Southeast Asia. Now, even the US, Glance has 5 million users as we speak.
01:02:26
Speaker
So a bunch of interesting things are happening over there.
Birth and Evolution of Yulu
01:02:30
Speaker
And is this typically more in budget phones? Because I'm assuming… No, no. Except for the highest end of Samsung device, every phone actually has glance.
01:02:42
Speaker
Okay. So, it is actually increasing the premiumness, not taking it away. So, that has been the case from day one. Okay. Okay. Fascinating.
01:02:53
Speaker
it yeah So the US number of 5 million sounds low if it's there on every Samsung phone. It just recently got launched. Ah, okay. I think it's, so I think less than two quarters.
01:03:07
Speaker
Maybe the second quarter if I'm not wrong. Okay. Okay. Okay. So, you know, there would be some sort of average click-through rate. Say, for example, Google might say that, okay, 5% of ads get a click.
01:03:21
Speaker
Uh, And I don't know. These are just numbers I'm throwing as examples. How does glance click-through rate compare to a Google click-through rate or YouTube or a Facebook click-through rate?
01:03:32
Speaker
like I actually honestly don't know the numbers okay at the moment. but there When you were there, like how did it compare to other platforms in terms of? Far high because ah you have the only thing you are seeing.
01:03:48
Speaker
And if the content is good, you interact. So... Okay. This... I mean, this conversation so far does help me understand a bit about why... ah companies would want to acquire social networks because that the acquiring social network is then the ONO for like, say, a Google acquiring or a Facebook acquiring WhatsApp.
01:04:12
Speaker
These are just ways to increase your ONO and make yourself more valuable. ONO, your data. Data is actually still very powerful part. Okay. Okay. Fascinating.
01:04:22
Speaker
ah So now let's come to the 40-year milestone. So you were nearing 40 and you had... a done those big alliances to get glance off the ground. So what what was the trigger then?
01:04:38
Speaker
As I said, promise to myself, just like 30 years become entrepreneur, 40 years retire. Oh, really? OK.
01:04:50
Speaker
And imagine you are almost like a bullet train speed, life moving, globe totter and whatnot. ah the high of building glance and whatnot.
01:05:03
Speaker
And then you're saying, hey, retire, chill, mountain, maybe beach, forest. None of that they sounded, it it felt like a great idea, but after two, three weeks, you know, probably boring.
01:05:17
Speaker
It's almost like someone living in New York City and or Tokyo for that matter. You say, hey, live in some village, remote village. And how will you feel? Cannot. So ah same thing happened with me.
01:05:30
Speaker
I thought 40 years, oh ah retired yeah taking a chill pill probably is ah is the right way to do. But somewhere, Yeah, that thought after fast forwarding, you know two, three weeks from for more one month ah was not resonating. I was not able to imagine myself and then ask, you know, what else? What else? with Which I will regret when I'm 50.
01:05:55
Speaker
So this whole thought of. So you quit in Mubi and then you did the soul searching or this was in parallel? This was when I was like 35. thirty five ah okay Okay. But okay but yeah the decision was never about that I will quit in Mubi.
01:06:14
Speaker
But the wish was that, okay, I'll retire. Okay. But retirement was not an option. Or taking a chill pill was not an option. Let me say that.
01:06:27
Speaker
Because you need not to retire from your own startup. oh You can always take a backseat. But the thought somehow was not going well in my own mind.
01:06:38
Speaker
Then I was like, okay, you know, if you ah really want to do something, what is that thing you will regret not doing when you're 50. So I was like, okay, oh soul searching, talking to a lot of people, and that okay, if this is not what I, if I let's say build 10 more year glance,
01:07:00
Speaker
um will I be feeling achieved or or or will so will there be something else which will be nagging me so found out that there is I think desire or willingness to do something good for society and what can I do with my limited skills my knowledge and started thinking of problems oh and then you know if you have been to Bangalore ah People joke that outside of your spouse and your girlfriend problem or your boyfriend problem, the next big thing people talk about is traffic.
01:07:41
Speaker
And i thought, let me solve for traffic, let me solve for air quality, which is becoming worse in India. So that's how Yulu was born. oh We thought that we'll make mobility clean, green, sustainable, easy, affordable.
01:07:58
Speaker
All of those nice adjectives, almost like having a very wild, honestly very beautiful dream. that all of this So yeah, put yourself for the next couple of decades or whatever and and fix this problem. So that's how journey with Yulu started.
01:08:16
Speaker
Why Yulu? Where does that word come from? So Yulu actually came from oh couple of previous wisdoms. So wisdom number one was that when we made, ah we took M-Coach as a name and we were building the business outside of India.
01:08:36
Speaker
Southeast Asia, people were very forgiving. They're like, okay, M-Coach, no problem, M-Coach. When we started going to Europe, ah they will freak out. They say, what's your company name? What's your company name? What does it mean? They can't say Khur anyway. They cannot say Khur. They say M Khoy and Khur No Khur variation.
01:08:55
Speaker
It's almost like a gynecologist. If you ask someone to write it, you know how many variations you will get. So same way, M Khur's name, beautiful name. You know, we are very emotional about it.
01:09:07
Speaker
But somehow Western audience, Chinese audience, they were not like very happy about it. So we said, okay, we need a simple name, easy name, which everyone can understand. So we basically found out in Mobi.com, good name and the.com was available.
01:09:24
Speaker
We quickly buy it from a secondary marketplace and then in Mobi. And in Mobi was easy, international. It was also fairly gelling well.
01:09:35
Speaker
ah with our thesis, there was an India International IN, Mobi was mobile. So it worked really well. Simple, sweet name, help us with a global expansion.
01:09:46
Speaker
So when we were doing Yulu, then at least one wisdom that your name has to be simple. It cannot be ah some complicated name which people don't know how to take.
01:10:01
Speaker
And then just like in Mobi, ah In some shape or form, we do see a future Yulu beyond India from partnership perspectives, you know goodness, business, whatever, oh stakeholders for that matter.
01:10:19
Speaker
So we were looking for a swot and short and sweet name. And we also wanted that name to be bit more peppy because don't you don't want a boring name.
01:10:31
Speaker
You wanted a ideas short name. You also wanted a name which ah should not offend. Sometimes their are names in some other cultural context, they actually not a good meaning.
01:10:44
Speaker
So we didn't want that. And last but not the least, can you get a dot com? So we started writing all of those. And also, idea came from likes of Yahoo and some other peppy names.
01:10:58
Speaker
So started writing whatever fun names started writing. And unfortunately, you cannot go with an English dictionary name because every English dictionary name, there's always a company. All of them are taken. So you have to find something which.
01:11:11
Speaker
So after some hit and trial, we kind of got two, three names. And Yulu was one of that. Yulu.com, while we do not own it, but we know there's a secondary marketplace where we can buy it.
01:11:26
Speaker
So the seller, when I checked last time, they wanted $100,000. Oh, wow. Okay. which is Which is some money, but maybe at some point, you know, it will be a kind of a change.
01:11:38
Speaker
Credit card.
01:11:42
Speaker
So that if yeah yeah if really we if you really you know want to access a very good, that Yulu.com should be mine. I can buy it. But except for.com, we had ended up buying everything, which is, you know, and then we ended up using Yulu.buy as a company official handle. um And then we also checked what does it mean really?
01:12:04
Speaker
So should not off offend someone. But in this whole journey, we found out ulu actually means ah simple in one of the Chinese languages. So we thought that we're solving a complex problem with a simple solution.
01:12:19
Speaker
So that name resonated quite a lot. There's also a similar word, Kholzulu, Z-U-L-U, that uu which is a language and a tribe in Africa.
01:12:32
Speaker
So we thought that we are building a new tribe of people, believers in sustainable mobility. So from that angle also Yulu name sounded pretty good. And yeah, so easy, fun, young, short, dot com means something truly relevant to our mission.
01:12:52
Speaker
ah Yeah, that's how your name came into picture. OK. ah You raised about $2.5 million seed round. I'm assuming this would have been pre-launch. What was the pitch?
01:13:05
Speaker
Yeah. So we ended up raising, Akshay, $7 million dollars in our seed round. OK. oh yeah So yeah we we had more money more demand for our shares than what we wanted to dilute.
01:13:19
Speaker
so but yeah The advantage of being a second-time founder, like you have already built two unicorns. So actually, it was so not so complicated.
01:13:30
Speaker
As you can see, second-time founder, oh that was helpful. ah The NFN Mode believer, in this problem statement and also the founding team not just me ah we were very lucky to have a very compelling and very good founding team so RK Mishra and Naveen we basically have done good things in life so I would say we were a very mission oriented team, very determined who can think first principle, who can build categories and also here for the long run.
01:14:09
Speaker
So what you hear in the ecosystem, people take shortcut, sometime a broad shortcuts, sometime ethical shortcuts. you know We are very, very mature from from all of these aspects.
01:14:24
Speaker
So Yeah, so we we did get money. And the pitch was, we'll solve this problem. And then no like you would have clarified how you will solve it, right? Like what was the initial?
01:14:37
Speaker
Yeah. um And just like our M-Coach days, so you know the first billion dollar idea was bicycle. Being inspired ah you know from quite a lot from European world and China.
01:14:50
Speaker
Yes. Did not work. Just like M-Coach days, six months, my reality was on our face. Same way. These were like pedaled bicycles or like battery powered? Pedaled bicycle, which designed, built by us with a collaboration from one of the Hero Groups company.
01:15:08
Speaker
Beautiful product. People loved it, but they were not using it for commute. They were using to go for their morning fitness run. They will use it for evening ice cream, eating affairs.
01:15:22
Speaker
So it was more leisure product, fun product rather than the commute. So we were very clear that you know we should not change the DNA. We should not become a fitness company.
01:15:33
Speaker
We should remain ah mobility company, commuter-solving company. So being true to the ah our own core state mission statement, we decided to actually flip our platform or the product of choice to electric.
01:15:49
Speaker
So that was a transition from bicycle company to an e-moped company. but When did that transition happen? This happened the ah late 2000.
01:16:01
Speaker
Actually, from a product launch perspective, 2019. But 2008, mid, we were very clear that ah this thing is not going to make us achieve our objective, what we are looking at.
01:16:15
Speaker
ah What was the... ah The mechanics of it, like people can go to a specific Yulu point and pick up and then drop at any other Yulu point. That that was how it worked?
01:16:28
Speaker
Precisely. Just like what you see in Tokyo, you have those red-clared bikes. And same way, you know basically pick up from one location, drop it to another. And we were able to get those spaces by the city authorities.
01:16:41
Speaker
Just for example, city of Bangalore, we had 3,000 such spots where you pick up and drop our bikes. ah See, in Tokyo,
01:16:56
Speaker
people have more civic sense. I imagine it must have been like there must have been a lot of leakage in the assets in India.
01:17:09
Speaker
So, answer is yes and no. oh While we were building this business, and I think in retrospect, we running bicycle, which is far cheaper than an electric bike, in hindsight, was a great decision.
01:17:24
Speaker
Because even that asset was being vandalized, being lifted, being stolen, by bay and as a matter of fact, our first theft happened on third day of going there.
01:17:38
Speaker
So it's not like, you know, yeah. And but if you look at the world, you know, talk about San Francisco, you talk about Singapore, you talk about Paris, every city went to the same shit. So it's not like we were alone or our people are so bad.
01:17:55
Speaker
But those low cost mules, low cost bikes ah made our technology and our operation very, very solid. So we learned the tricks of the trade, how to prevent our assets from being vandalized, being stolen.
01:18:13
Speaker
um And when we were transitioning to electric mobility, the rate was far lower. In fact, we also become far better in making sure that there's anti-theft products.
01:18:25
Speaker
We also took some interesting design decisions. One of the big ones is that our bikes actually if you steal something has no commercial value. Everything is very unique. So what we say, we use a purpose-built bike.
01:18:39
Speaker
where everything is built for shared mobility. So not only it is durable, but also if you steal my tire, you cannot use it elsewhere. Steal my my seat, okay, if it is of no use.
01:18:53
Speaker
And even battery, like you steal it, it is of no use to you. And only person who can give you money is the scrape vendor. We also ended up becoming friends with every scape vendor in the city.
01:19:08
Speaker
So if you end up going to there, most likely they will we will know. And we'll also surprise, which is not a intuitive, our cities actually have way too many CCTV cameras.
01:19:22
Speaker
So the bike is set up with GPS. You do something, you take it, there will be location trail. You'll be you know basic leaving and I will catch you. And we have created our own bike marshals.
01:19:35
Speaker
We have, every city has their own, so their own mobileer private police. With our collaboration with the city authorities, the police department also helps us. So what we made sure that just like it happens everywhere, there's an implication.
01:19:51
Speaker
So you basically did something wrong to my bike, then there will be implications. And implications can be as low as that we giving you a warning, to we taking penalty from you, to we handing over to you to a police department, where they will give you nice hospitality for for a week or two.
01:20:12
Speaker
And then you come out, and then you tell your friends that it's not worth it. So this feedback loop of you will not be spared oh was well accepted and well understood.
01:20:27
Speaker
say well understood. Fascinating. Fascinating. OK. As a result of that, our theft and evangelism rate has been below 1%. In fact, 0.6% to be precise, which is lowest in the world.
01:20:40
Speaker
Lowest in the world. So that's how we have solved and and walking the talk from the seven years. Amazing. Amazing. Amazing. like ah did you ah So when you decided to move to electric vehicle, um was it to buy electric vehicles from existing manufacturers which are customized for you? Was that the plan? Or like how did you like what has what's been the journey there?
01:21:07
Speaker
Sure. So we were very clear that what is being built for end consumer will not work for this business model. so we were very empty off the shelf product and the wisdom came from bicycle wisdom came from other markets so we ended up you know kind of putting together the specification and went to some large oems as you can imagine they're all known suspects and this type of product was not existing so our friends in japan they they said come to us in 2025
01:21:46
Speaker
we will give you a product. And this is 2018. So they had this roadmap for 7 years, very assertively. And then we went to every fence in India.
01:21:59
Speaker
And everyone is like, okay, give me specification, give me this much of money. We will make it for you. We'll take a couple of years. Our problem was, first of all, we don't have 2 years, we'll die.
01:22:10
Speaker
And we also don't know what to build. We had this you know, mr that these are the problem, but we don't know the solution. And they're like, oh, give me specification, otherwise I don't know.
01:22:24
Speaker
So we're unique situation where we need a vision partner rather than a manufacturing partner. And in that journey, you know, one of our oh investors, they got us to, we you know, got us to meet Mr. Rajiv Bajaj, or Bajaj Otto.
01:22:40
Speaker
And I went to meet him and shared this whole opportunity vision and what are we looking for and he was like great this looks awesome so ram shiram jandi you saw in in movie days i think rajiv vijaj is another ram shiram for yulu who saw ah great potential who saw know some pairs of glittering eyes who wanted to do something very interesting and very big, bring transformation to mobility.
01:23:13
Speaker
And that's how he said, okay, we'll well will help you. But you know what? We'll take some time. So what to do? So we ended up going to China. where electric mobility is not a new subject.
01:23:27
Speaker
They've been doing it for 20 years. And we were able to find the you know some models which were not same, but we were matching what we needed.
Yulu's Strategy and Market Adaptations
01:23:36
Speaker
So by working with them, oh they were able to customize something for us.
01:23:41
Speaker
And then we bring it to India. And with the help of Vajaj, they set up an assembly plant for us. They assembled an area for us, did little bit of customization, and then we launched the product.
01:23:56
Speaker
So you were importing the kit, or like, it's called, I think, semi-knocked down, completely knocked down. like I would say, yeah, it was a bunch of components, because making anything from from from scratch cannot be done overnight.
01:24:11
Speaker
So you have to invest two years. In the case of Bajaj, we did an opportunity to just copy paste things but he said no let's learn from whatever no we have got and then we will create india's first vehicle which is a purpose built built for scale built for our country made in india so we basically e and in fact ah more than us even Bajaj, Mr. Bajaj and his R&D team, they were very convinced that this product does not exist and it requires different amount of mindset.
01:24:53
Speaker
So just to give you a sense, two-wheelers are known for moving people, as we all of us know. They're also being owned. We are actually making the first time a vehicle which used for commercial.
01:25:07
Speaker
And that too given to the strangers. So the complexity of the product is different level. It is not you basically making a Chetak or a TVS or an Activa.
01:25:20
Speaker
So that mindset where you are you need something to blow your field, you need a tractor, you cannot use your car and vice versa. So it's a very different mindset.
01:25:32
Speaker
it has not It was not being done before. So that's why we took a far more fundamental approach of building the platform. from scratch so that we build a great product which is a product market fit for this use case and for this market.
01:25:49
Speaker
Okay. The market itself changed, right? Your early hypothesis was like say office commute. and Yeah. So why did you change that market and what is the market? How did it change? When did it change?
01:26:03
Speaker
sure so i will not say it got changed i would say it got expanded and why i say so so we move basically we rolled out these first generation miracle bikes electric bikes and then business started growing like crazy unfortunately covid happened our core user base who were using it for an office commute that went to zero and then covid was starting to get normalized We started seeing our user base coming back because some of them had to go to work, not everyone was working for a tech company.
01:26:39
Speaker
Some offline people also had to use. And we were the only company in in the city who was allowed to run mobility service. So COVID protocols allowed, did not allow a taxi, auto rickshaw, buses to run.
01:26:55
Speaker
And the reason was ours was self-riding versus everything else was a driver driven or there was a co-passenger. So in three months, we were able to get back to the pre-COVID numbers, ah which was fascinating.
01:27:09
Speaker
But at the same time, we also started seeing one more phenomenon that our bikes are being used by the gig workers. So in India, 85% people don't have bike, they don't have driving license.
01:27:22
Speaker
And then due to COVID, everyone was clicking button, getting their food, grocery, medicines. So there was a huge demand for bike like ours for some gig worker to become a delivery partner for likes of a Swiggy Zomato.
01:27:38
Speaker
And then In the beginning, we were like, hey, wait a minute. and What is this use case? Why we are seeing a peak of usage at 12 noon? Because 10 AM, everyone is ah at their office.
01:27:50
Speaker
And ah knowing from the market and some friends telling us that, hey, I saw a Zomato guy on your bike. And we're like, what?
01:28:01
Speaker
We made it for a Dell laptop on the back. OK. okay So we were in a dilemma and we were like, okay, ah this looks interesting, but you know what?
01:28:13
Speaker
Is this a big pain point? Can we create value? And after some, I would say to start with emotional struggle, we we were very, very convinced that this phenomena of people clicking a button for the service and the product is not a COVID phenomena.
01:28:34
Speaker
It is here to stay. And once we reconciled that fact in our head, we actually fully committed to that category. And then not only we actually launched one more product, which was our second generation product, which i which was built for better safety, comfort, and also the battery swapping was done at the station and all.
01:28:56
Speaker
So we ended up building a new platform, far better product with an ecosystem of battery swapping. In the first business model, the battery swapping was done by us at a Yulu zone by my own guy.
01:29:10
Speaker
But in this case, the bike stays with the gig worker. they bring bri And I would say that COVID led us, this new customer, where we said, okay, not only the air pollution, but traffic, but also improving livelihood.
01:29:28
Speaker
So that became our third mission statement. and then pose that we never looked back. And with the rise of food commerce, hyper-local delivery, and now of late, quick commerce, that use case has gone up significantly high to an extent that out of 45,000 vehicles, what we have got today, 40,000 of them are being used for the purpose of movement of goods.
01:29:54
Speaker
So this has become so big and we see a good future for the company. by not letting go the previous business model, but we have not grown because the the goodness and the impact and the scale what we get on putting it today on moving the goods is far higher.
01:30:13
Speaker
And we are like, OK, we are and not so emotional, but we also have to be wearing the right hat. So the monetization period is faster. You make more money and there's a market to be built.
01:30:26
Speaker
So we are kind of going with the right flow. rather than being just saying that, oh, I will just stick to this. So that business is running, but we have not added you know new addition to supply.
01:30:39
Speaker
So you have a separate bike for office-goer category and separate bike? Same bike, two avatars, if I may clarify. They're almost like a Karan Arjun. oh you know It's almost like that.
01:30:51
Speaker
Built on the same platform. They just color different, and and we just name it different so that consumers know that this bike is for them for office commute.
01:31:01
Speaker
This bike is for the the delivery people to use it for hyper-local deliveries. Okay. So, which then brings me to, you said you need purpose-built vehicle for commercial use. So, commercial because it's being used for delivery. So, therefore, it becomes primarily a commercial vehicle.
01:31:20
Speaker
um And these delivery workers have their own specific needs. And then you also have a need for ensuring that it is not stolen um because it's being driven by someone who's renting it rather than owning it.
01:31:34
Speaker
ah And Most delivery workers don't have licenses. So how did all of these come together in a design? Give me some like feature list, like this design was determined by this.
01:31:46
Speaker
Sure. So from day one, you know we kept our vehicle specification to that standard, which is well-defined in India. In fact, all over the world, including Japan, that if it is below this threshold, you don't have to worry about.
01:32:04
Speaker
the legal aspect of the bikes. In fact, this is bicycle. It's like a speed limit. Speed limit, motor power, and the weight. okay If your maximum is 25, motor power average is 250 watt, and there's a weight limit of 60 kilogram, then this is called non-motorized vehicle.
01:32:24
Speaker
And under which it is exemplified for registration, exemplified for license, and and things like that. So we leveraged that because we we understood that part, that someone who needs a ride from a metro to Eulostation 2 or some place, they are not going to carry their helmet.
01:32:42
Speaker
In fact, very interestingly, Japan, which is very conservative in terms of the safety, when they were launching the e-bike program, shared e-bike program, even they took off the requirement of the helmet.
01:32:57
Speaker
oh from that usage. Same way you know we understood that is not going happen. If it is vehicle which is built for business as usual case, then you need to have a DL, which 85% people in India don't have.
01:33:12
Speaker
They know how to ride a bicycle, and they can use Yulu very easy. They are not carrying helmet when they are commuting. Impossible. So, we keeping this form factor actually help us strategically in in getting the good user base on our side.
01:33:30
Speaker
but What are some of the other things? So, these like the weight, the engine power, these features were decided by the ah the regulatory norms. What are some of the other features that were decided by other requirements?
01:33:42
Speaker
So this is actually the legal part, which makes it bicycle. But post that, you need the the right height so that a lady or a female who is five and five two So it is not very tall. It's right size.
01:33:58
Speaker
It's also, by the way, one-seater because the moment you have two seats, The weight, the motor power is not good enough to carry people. Other things are swappable battery.
01:34:10
Speaker
So rather than you bringing the scooter for the charging, you just swap the battery. um Other thing including this is anti-theft features. So all the fasteners, lot of things are oh built for anti-theft.
01:34:26
Speaker
There also anti-abuse system where you throw the bike ah very harsh on some rough surface, nothing will happen. You throw it to the water, nothing will happen.
01:34:39
Speaker
oh ah you You did all this testing, like destroying bikes. There's no key. ah So everything is keyless. So it's actually every part has been thought through ah from that lens that it is for a commercial use case.
01:34:56
Speaker
It's not built for usage, it is built for abuse. So ah different design thinking altogether. Fascinating. How is it keyless? So what happens, Akshay, in this case, there's actually a lock.
01:35:11
Speaker
But that lock is operated by the app. So just like your remote control on your car, right you're not in inserting the key anymore. click a button, it opens. And that concept was there even on our first pedal bicycle.
01:35:24
Speaker
Even our pedal bicycle had no key. It was an IoT lock. You click a button, the lock will open. And we kind of use that on an ongoing basis. What all data do you get from the bike? One data, of course, is like lord the log. company We get oh almost 100 milliseconds.
01:35:45
Speaker
Wow. two hundred data points every hundred milliseconds well And it is a location, health of battery, engine, motor, vibration, the bunch of sensors out there.
01:36:01
Speaker
There's a lot of edge computing that happens on the IoT device. and But the most powerful data is actually the location data, which you actually get hold of from the system.
01:36:15
Speaker
And how does this data help improve the product? So actually that is the, you can say secret sauce, but essentially speaking, to start with the asset safety, we know where the bike is and if something happens, what to do.
01:36:33
Speaker
We are also able to use it to do lot of preventive maintenance. So in the classic case, when you use your you you buy your car, it is written that at 5,000, these things will be changed, at 20,000, this will be changed.
01:36:50
Speaker
And you know at a usual level, it is okay. But when we are running this business, every extra spare which you have changed ahead of time is a cost for you.
01:37:01
Speaker
And the things which you did not change in time, it will amount to a breakage. And breakage actually is very, very costly. Not only the spare, but you have to bring it to the workshop.
01:37:12
Speaker
You also lose money on that day because you are being paid every day. So it's very costly affair. So we have now a very intelligent system which is able to predict ah the life of a natural component for that context.
01:37:27
Speaker
Just to give you a sense, my my shock observer has a lower life in Bangalore because of was our roads are far more bumpy and it has got better life in city of Delhi which has got better roads but at the same time my city of Bombay has got lot of rusting going on because of the ah the the coastal climate so every component and then there are components which are far more lower life in Delhi because of the excessive heat
01:38:00
Speaker
So every component of the bike has a different lifeline in the context of a different city. So imagine you using some standard parameter. Either you will be over conservative or you will be losing things.
01:38:14
Speaker
So this is another thing. ah And then bunch of things happen, by the way, way too many things. So there's lot of optimization. We go back to our our partners, say that, hey, can you make this better? So every component gets better and better over period of time.
01:38:34
Speaker
And with that, our bike life, which is built for 70,000 kilometers, four years, is only going to go up. Lesser downtime, lesser repair maintenance, higher customer NPS,
01:38:47
Speaker
and everything is basically just makes things exponentially better oh in this case. Okay. Okay. ah So, you know, how how does the distribution of it work? Like you still have your owned and operated Yulu points?
01:39:04
Speaker
Yeah. So for our ah business model one, which is moving people, we have created 300 meters density, Uluzone.
01:39:17
Speaker
So every 300 meters is a Uluzone. But for the goods mobility, which is moving goods, we have created what we call Ulu centers. And the first one, most of them are given to us by the city authorities and the private entities free of cost.
01:39:34
Speaker
So almost 98% of those spots are given to us free of cost. But these Yulu centers where we are using them to ah to get a customer who can pick it up, they can also bring it back if they want to swap the bike or get the bike repair or return the bike because they're having you know two, or three days off.
01:39:56
Speaker
And they have a workshop, there's a person. So it's almost like a hub where there's someone who can help you, assist you, knowing the more about the bike and they can help you with the bike issue, et cetera.
01:40:10
Speaker
They're all managed by us, owned by us, so we parent, oh and these are basically hubs for Yulu. And the second infrastructure, what we own and run, it's a battery swapping points.
01:40:23
Speaker
And that operation is being run by a separate entity now, which we ended up building with Yuma. ah with Magna in the US. So it's called Yuma.
01:40:35
Speaker
So Yuma is battery as a service entity where the gig workers go. They get the battery swapping done in less than one minute and they and then basically they keep on going.
01:40:47
Speaker
Okay. And these battery centers are also owned and operated? They're also owned and operated, majority of them. We're also trying a franchisee business model for both Yulu and Yuma.
01:40:59
Speaker
On the Yulu side, there are cities where Yulu is not directly running. oh So cities like Kolkata, Kochi, there are local entrepreneurs who basically have said that I'll take Yulu bike, use your technology, and they pay us money for that.
01:41:16
Speaker
On the Yuma side, certain cities they don't run. So they are using Kofu model, where it is run by the assets are owned by company. but it is operated by someone else.
01:41:29
Speaker
So within the city where there's a where there's a place where we have oh still our own of our own places, so they go co-locate their charging systems in those premises and there's a business model for that.
01:41:45
Speaker
But for all practical purpose, you can say ah good 90-95% of both businesses are owned and operated at the moment. Okay. the So, you're saying the driver typically is not having the behavior of pick up, do your deliveries and drop, but he actually keeps the bike with him.
01:42:05
Speaker
Yeah. Because they also need to go to their home, which is also you know a pain point. So, it helps us because in that case, we don't have to solve for tens of thousands of bike storage in the night.
01:42:19
Speaker
And it gives me no leverage. um And also the accountability of the bike. You know, if we say you drop it here tomorrow, he's trying to figure out his own sheep in the herd that weighs my bike number one, two, three.
01:42:35
Speaker
And if you let him pick anything, then a lot of anxiety will happen whether I'll get bike or not. And the accountability that if something has gone wrong, then who is accountable for that?
01:42:47
Speaker
So this way, there far better accountability. He knows that if he misbehaves with a bike, at least someone will ask question, what happened to this seat? What happened to this light?
01:42:59
Speaker
So they take care of the asset at least better versus just freehand and just leave it like this. Okay, interesting. How do you incentivize this behavior? Like, do you charge a monthly fee instead of daily or what?
01:43:13
Speaker
No, we do actually charge daily fees. They typically prepay us for a week and they typically renew the pack because their payout from this gig platform is one week.
01:43:26
Speaker
So, they don't have a lot of money. They come, they pay us close to 200 rupees per day and they keep on renewing the pack. And when they need, let's say, a day off or a couple of days off, they can come and return the bike at Yulu centers.
01:43:43
Speaker
And when they want to take it back, they come back and move on.
Battery Swapping and Mobility Solutions
01:43:48
Speaker
So the ah Yuma business, why do it separately? ah like like Do you get a lot of other bikes also in that? Or like is it largely currently the battery swapping is largely for your own vehicles? Yeah.
01:44:02
Speaker
So currently if you ask me, yeah Yulu is the largest and significantly oh most of the volume. At the same time we do see that battery swapping in India will will be a big business knowing everything has to be electric as you know we have deadlines for 2030 as the market is progressing there will be lot of oh commercial and personal use cases.
01:44:30
Speaker
And we believe that we having a network where we are one of the customer, but there also others, will help bring down the cost. So Yulu will not only have a better, denser, and cheaper network, but more than that, we are also able to create value.
01:44:49
Speaker
So Yulu has decent equity or shareholding in Yuma. So when Yuma is growing, there's also additional value creation for Yulu shareholders. So it is done for both ah short to midterm, but mid to long term value creation lens.
01:45:07
Speaker
there There used to be a debate, I remember reading in newspapers, e etc., about which is the better way to go, battery swapping or charging, fast s charging. Has that debate been settled?
01:45:20
Speaker
oh Answer to your question is that it is not singular answer. It is actually very nuanced. So it's all about the use case.
01:45:31
Speaker
So if the use case is that, you know, for a personal, let's say, car user, I'll come to the two wheeler in a moment. My use case is I have two cars. ah For my my city travel, I typically go to office 20 km, 30 km, 40 km, even airports 50 km.
01:45:51
Speaker
So my 200, 300, 400 km battery pack is good enough. I don't care. i I charge at my home most of the time. And then on a rainy day, you know if there are some points in the city, I'll go and charge.
01:46:05
Speaker
But the same car, when it is used as a taxi, is doing 200 kilometers, 300 kilometers. Then you do need fast charger because you don't have a privilege of ah charging for eight hours.
01:46:19
Speaker
And you also need them at the area where you don't, not the area where you live, the place where you work. So for the same car, the answer is different because of the use case.
01:46:31
Speaker
Same thing is true for two-wheeler where, yeah, you're my car. You just have to go to office, small here and there. one in ah Once in a blue moon, you do need plug it, no problem.
01:46:42
Speaker
Even leave it, come in an auto. But when you're using it for commercial use case, then you don't have time. And many a times, these gig workers who live in a different community, their ability to charge the scooter is next to impossible.
01:46:58
Speaker
They cannot take the vehicle to their rooms. So what is happening for commercial use case? Battery swapping is the way to go. Now, this is a from a lens of someone owning the vehicle.
01:47:12
Speaker
Now, from Yulu's perspective, let's say you can say, no problem, I will charge it for you. I'll provide charger. So first of all, Yulu would have to set up fast chargers.
01:47:23
Speaker
Where? At those commercial areas where these guys are moving. This is humongously expensive. For you to acquire fast charger ki le power,
01:47:37
Speaker
and then you putting the the parking system will make you bankrupt. Versus me, my ability to put a small unit where I can charge 60, 70 batteries per day from not so fast or not so powerful or or fat pipe of electricity.
01:47:54
Speaker
Because fast charger also degrades your battery. very fast. So that's not economically viable and also safety risk just to also not that lose that part. So it is a not a good idea for company like Yulu to do a charging system based thing for two wheelers.
01:48:12
Speaker
So not good for end consumers, ah not good for Yulu and our company's time. So that's why swapping is the way to go. for anything commercial.
01:48:23
Speaker
More importantly, the vehicle form factor is smaller. Then swapping is very, very good. The moment you go for the bigger battery packs, let's say in two-wheeler, then you cannot just lift A 4 kW battery pack, you cannot, like it is impossible.
01:48:41
Speaker
So if you look at what Ether is doing, Jetek is doing, TWS is doing, they have a fixed battery pack. But who were they selling it to? They're selling it to people like you and i Use case, 30, 40, 50 kilometer tops.
01:48:55
Speaker
But when it goes to the gig worker, they do 80 kilometer, 100 kilometer, 150 kilometers. They don't have time. So for them, swappable battery is the way to go. Okay, okay.
01:49:06
Speaker
ah Why did you choose to ah sell to gig workers instead of, let's say, being a logistics company which is selling to a Zomato? like You could also have told Zomato that I will ah be a logistics partner for you. and ah the gig worker then instead of paying you gets paid for delivery. that that Like there are companies doing that kind of model, like moving and I think that zip a couple of these, I think they are on that model if I'm not mistaken.
01:49:38
Speaker
ah So what is the reason for your choice to um not go after the end payer of like say Azomato who's eventually paying these gig workers, but instead monetize the gig workers?
01:49:53
Speaker
So let's see this question from the lens of three stakeholders. ah To start with, let's see this from the gig workers lens. ye So let's say we are doing a model where we are telling the gig worker where to work, ah which is quote unquote B2B.
01:50:11
Speaker
I go deal with Swiggy Zimato, I say, okay, I'll send my guy. ah The gig worker ah actually is just because he does not have a bike. is coming to you and doing what you are asking him to do.
01:50:24
Speaker
He is not happy. This place of work, what you are sending him may may not suit him. The hours may not suit him. And there is way too much of micromanagement. If I hire him on a fixed salary, then God save me because he will say,
01:50:41
Speaker
sir beatti yeah bandov yeah for their Getting anything out of that is impossible. And if he is a gig worker, then He can leave you anytime whenever he has a bike or has a better opportunity.
01:50:57
Speaker
And this is the life from the gig worker lens. So he is better off. His pain point is not how to make money because he also knows I can download Swiggy app and start earning money.
01:51:11
Speaker
And the moment he sees that a company like Yulu is giving him lesser money, he will leave you next day. ah Okay. The moment he has sorted the bike.
01:51:24
Speaker
From the eyes of a Swiggy Zematos, Zepto, if you look at it, what are they doing? They're also a logistic company, by the way. Yes, they are a logistic. They have built a three-sided marketplace.
01:51:35
Speaker
On one end, they have a restaurant owner. On the other end, they have gig worker. the third end, we have someone like a consumer like you and I. The moment they use this clutch of outsourcing one side, which is fairly fairlyly fragmented,
01:51:51
Speaker
then they lose power of their platform in the long term. And suddenly, you know the power of two-sided marketplace and three-sided marketplace, etc. So there's a physics behind that. I'm not going to do that.
01:52:04
Speaker
But this is your power. There's virtuous cycle that makes you bigger and bigger. So from their lens also, they owning the relationship with that gig worker directly through their app is far more valuable and of importance.
01:52:20
Speaker
Imagine me coming and saying, hey, I'm giving you this guy, but he's not my guy and blah. Really, someone is making money. And this someone is making money is either going into my pocket and it's being taken away either from the gig worker pocket or from the platform.
01:52:36
Speaker
So they don't like it. They hate it rather. And this entire journey from Yulu's lens now, yeah, I will actually you know inflate my GMV or my revenue.
01:52:48
Speaker
But you know what? The entire gig worker payout part, it is 100% pass-through. The moment I deduct even 10 rupees, he will say, dude, I am leaving.
01:53:01
Speaker
And he will leave. And he will be working with me till the time he does not have his own bike. Right. So that is going on in his head. The second part is, I become a manpower company.
01:53:15
Speaker
Dignified manpower company. I can call myself whatever shit. but I am bloody a manpower company and if we ask when we never wanted to become a fitness company do I want to become a manpower company?
01:53:29
Speaker
answer is hell no so we are a true mobility as a service company where our customer and hence my god is gig worker we empower him with mobility as a service where we believe this entire layer requires very very deep engineering innovation and lot of work to be done.
01:53:54
Speaker
So we basically are not buying off the shelf stuff and say dude you figure out your life. We are saying we will give this tech where you have 100% uptime, affordable and sensible mobility option and I empower you to work with a grocery guy or but a food guy or a whatsoever guy.
01:54:14
Speaker
You are the king. Now he has a better negotiation although will not say negotiation, but at least he can do one thing. He cannot negotiate with platform, but he can always leave them.
01:54:25
Speaker
He can switch loyalty. And from our side, we also enjoy that because this structure is also structurally is also strategically good. Aswikizamato cannot say tomorrow 10% cut and I have nowhere to go.
01:54:40
Speaker
So today, they cannot exercise a pressure on me on the pricing side. ah And they love us because we are also making them look better.
01:54:52
Speaker
We are also making them far more powerful. And any company, any founder you talk, for them, the third-party logistic company is only used for the cushion, is only for that last 10%.
01:55:08
Speaker
So we are better off playing in that 90% time market versus a 10% time market where I'm trying to forcefully push my buy to the throat of this poor guy who is dependent on me.
01:55:21
Speaker
So we have actually created a far more transparent and fair ecosystem for all the stakeholders. And our valuation is the mobility.
01:55:32
Speaker
but Enough and more levers for us to make money and be fair, transparent to the other parties the way they want to do work. So that is the reason. oh And I know this question is being asked, particularly every meeting.
01:55:47
Speaker
Actually, VCs or some investors really love that, oh, you should be to be a B2B company, you know what, blah, blah, blah. Demand is given on the platter. And we are like, you know what?
01:55:59
Speaker
This country is supply constrained. Demand comes to me free of cost. So we are a zero-cac company. Wow. We are supply constrained. And, you know, why do we bother about a GTM when I am getting a goodness of a B2B demand?
01:56:16
Speaker
And I work with all of these guys very closely, ah literally as a very strategic partner. But, yeah, the money comes from the gig worker who is the actual person who is taking the mobility and he should pay.
01:56:30
Speaker
So, right now, there is no such thing as competition for you because you're saying you are supply constraint. If you were able to put another 10,000 bikes in the market, they would be lapped up.
01:56:41
Speaker
yeah fifty but Yeah, we can double without blinking. Wow. Okay. oh yeah So, by like what do you think? By when will you hit that stage where then you start feeling competition?
Financial Strategies and Future Outlook
01:56:56
Speaker
ah I don't know. This question is both good and bad. And the straight answer is also good and bad. If I remain a monopoly, I will certainly love it.
01:57:07
Speaker
no ah At the same time... ah Currently, are you the only organized player doing this or there others? Fortunately, we are the only company of our size and scale.
01:57:19
Speaker
Sometimes people get confused that, oh, you are Zip, but we are not... whatever as a service. We are very in a different category. We are a company solving for a problem of mobility.
01:57:31
Speaker
So we are very unique. But yeah, we do have ah folks whom do we compete directly and indirectly. So there are folks like small street players who will buy off the shelf product, send their scooter to some other charging station, give them home charger.
01:57:46
Speaker
We have models like Zip and all. But don't get me wrong. Everyone is doing what they think is a value. And I don't think so their thought process is wrong.
01:57:58
Speaker
But you always have some vision of the company and the future. We have chosen to be far more technology-oriented company than just revenue gathering company without, by the way, value creation.
01:58:11
Speaker
So we we think that market will evolve from here. But clearly, anyone who is not looking the the the vehicle at the center of the strategy they will struggle for sure uh the reason being you know if you have multiple types of asset their upkeep becomes a pain point uh this is a running engine so the brake fire will go that the nut and bolt and the light and the horn and if you have multiple fragmented assets uh it will come and bite you and your
01:58:51
Speaker
Downtime will be very high and and the business model will not work. So you do need a very strategic thinking and design and then execution on that at the center of that.
01:59:04
Speaker
And then a lot of things around that modes, data, technology, efficiency. So who can come and do this? oh Yeah, it can happen. I'm not saying that we will remain like that forever.
01:59:20
Speaker
At the same time, today we do not know anyone with that chops and that long-term thinking. oh So I know it's not a good answer and people hate me for that.
01:59:33
Speaker
oh But today we do not know. But I believe that because the market is so big, there will be you know some founders who will figure things out.
01:59:44
Speaker
And there will be few backers who will say, yes, this business model is working. Why don't you double down? So sooner or later, you know, there will be a few more companies, ah maybe with different playbook, but at least using some of the good things what we have learned and done.
02:00:02
Speaker
And these are like public wisdom is not like hidden in some secret kitchen. So but someone has to just play it out. And yeah, there's an opportunity for sure.
02:00:13
Speaker
ah So why are you supply constrained? you ah From what I can see, you've raised north of $100 million. dollars You have Bajaj Auto as a strategic investor. So therefore, oh like your ah supply should not be a challenge?
02:00:31
Speaker
Yeah. So what happens when you're playing a long game, Akshay? and The profitability matrix does not look good. Second thing is, ah you know you are today an asset heavy model.
02:00:45
Speaker
So money does not get poured into yourself. So you have to achieve certain scale profitability matrix for you to get money at the right price point. So either you use equity, which comes with its own set of you know ah my milestones, or you use debt.
02:01:05
Speaker
And in the past, because we were building a new business model. People did not know for how many years, for how many kilometers a bike will be going, how much money you will be making. so we we didn't have data.
02:01:19
Speaker
And large pool of capital happens when everything is proven. Unfortunately, that's not the case. And then by giving to the stranger, this use case, so many things, which gets clouded.
02:01:30
Speaker
So while there's a huge market, but money is not given to you on a platter And I'm actually referring to the sensible money at the sensible price point.
02:01:41
Speaker
I don't want to go raise money at 20% interest rate. oh We do not have such margins in India, at least at this moment. So we had to wait with all patience and also make sure that the bike is far more stable.
02:01:55
Speaker
And then you double down on that. But the story will change dramatically. oh ah over next three years or couple of years where we cross a couple of milestones and we've been given far more access to the capital.
02:02:11
Speaker
Most of it is non-dilutive in nature and then you grow like crazy. But even then, we will make sure as a strategy, we will remain supply constrained. We do not want to be a demand constrained company.
02:02:26
Speaker
It's better for us to be demand always surplus and supply constrained. As it happens in any airline business or hotel business, you look at it, this is a hard thing.
02:02:38
Speaker
Whose book it is sitting, different point. But that whole thing has to get monetized. and monetize with the right amount of IRR or right amount of utilization rate giving you the money.
02:02:50
Speaker
So yeah, it is a product which has got a cost of holding the cost of service. It's not like a you know a sleeping thing which does not conserve any energy or fuel.
02:03:03
Speaker
So we have to be mindful. So that is my answer. you So you will see a far bigger Yulu over next three years and exponentially a growth journey from here onwards.
02:03:17
Speaker
But we will supply constraint and we have no comms in saying that. The milestones that you want to hit, are they business-related milestones? These are basically profitability.
02:03:28
Speaker
These are profitability. We turn EBITDA profitable. The next big milestone is EBIT positive milestone because that gives us ah infinite leverage in terms of getting right amount of money at the right price point to growth market.
02:03:45
Speaker
And the demand is just crazy big. you know We just touched the surface of solving for one use case. There are five more use cases which we will go unlock and the market is humongously large.
02:04:00
Speaker
What is the EBITDA and EBIT difference? How does that help you? It's just our business. Our bike has certain life. So it's not like you have, see that when you are putting up a factory, when you buy the machine, the machine is good for 10, 20 years.
02:04:17
Speaker
ah build a house or build a hotel is good for 50 years but in my case the bike I buy has only life of these many months or years so for me to keep on going without raising equity the bike has to produce enough and more IRA to pay its own EMI so it's almost like my cost of goods and my cost of goods has to be basically the the bike which is also kind of deteriorating with time so it has to pay its own emi so difference between ebitda and ebit so ebitda we are generating enough margin to take care of my hq cost so we have a 240 member team engineers bd people so today my revenue minus all opex minus my sgna is more than zero i was able to
02:05:12
Speaker
I was okay with that because earlier I was using money from my equity pool. I did not have to pay anyone an EMI. But in future, when you also have to pay an EMI, then you also have to earn the interest cost and the cost of basically depreciation essentially.
02:05:31
Speaker
So that is basically the EBIT where you are paying to the lender, you are paying to your your stuff from your revenue and and and and your margin. Okay, and understood. and So essentially the cost of replacing a bike or buying that cost is... Got it right.
02:05:47
Speaker
but Okay, understood. Do you plan to continue with like raising debt or you also want to raise more equity? and So we have to raise all sort of capital.
02:05:59
Speaker
In the past, we were only relying on equity capital. And from last ah year, year and a half, We also raised debt, certain debt, around $15 million dollars just to buy assets.
02:06:11
Speaker
But there was a ratio of equity to debt for the governance reason. As we move forward, because we have it now, EBITDA profitability, we actually can go a little bit more aggressive on debt.
02:06:24
Speaker
But you still need some money in the bank as a balance sheet support. Because when debt guys give you money, they need it's like you know your you your margin money. right So you have to keep money in the bank all the time. and that is a equity capital and then another unlock will happen when it is an ebit or pat posture state where you just go really really large so here from now the composition of the bike which we are buying for growth equity debt and lease finance will flip it will become more lease and then some debt and then very little equity
02:07:02
Speaker
Okay, okay, okay, understood. But none of these line atoms will be zero, just to be clear, because each one of these type of money come at different cost of the funds and has got certain limitation.
02:07:14
Speaker
And it's good, basically good governance for you to be not greedy on these matters. Okay. ah What did you do different at Yulu as a second time founder? How did your first experience shape some of the decisions here? You know you might have got some learnings, some mistakes you didn't want to repeat.
02:07:35
Speaker
I can tell you what for sure we were replicating. oh Certainly, it was a new playbook, new product, new, everything new.
02:07:47
Speaker
You know, people laugh at me that how come you were doing mobile internet. So from mobile to mobility, there's lot of similarity, but there's absolutely different word. So we had to write the playbook again.
02:08:01
Speaker
And, but at the abstract level, clearly, you know, we knew that a big company, or the long-term value creation will happen when you have sorted the people part and then the product part and then profit so the three piece in that stock order so got great founding team great core member team people culture those softer aspects which typically people don't talk about they were the bedrock of our decision we were never having a FOMO
02:08:34
Speaker
ah we were very very first principle. So when market was going through petrol scooters, they were going some all vanity exercise, even your question on B2B and B2C2B.
02:08:46
Speaker
All of these are very first principle thinking. We had courage to build the stuff which was not there. So from parking infrastructure to battery charging, consumer habit, policies, entire tech, all of that did not exist.
02:09:02
Speaker
We built it. So building for long, What was not done should not worry are you. Like, glass was never done. We did that.
02:09:13
Speaker
In Mobi was not there. We kind of crazy enough to do that. So there were a lot of belief system, which was like, you know if you're building for long, these are the components.
02:09:24
Speaker
And yeah, government is not or someone else will not build it. And one very important formula, your value creation is directly proportional to your value addition.
02:09:34
Speaker
So you very better add value. Don't just collect, make make some value matrix without value addition because value creation will not happen otherwise. And then strong governance very, very traditional old school related to profitability.
02:09:53
Speaker
People used to laugh at us. Hey, dude, what are you saying? We are like, no, we that's what we want to. So we are very old school in those fundamental principles.
02:10:05
Speaker
And I think I've done well. We are seeing people with lack of focus, some shortcuts, as I mentioned, either financial or product or sometimes ethical.
02:10:16
Speaker
We don't advantage. you know, COVID happened, for example, not a single person was let go. ah We have gone through two or three near life deaths. oh But never ever, we basically had to let go people.
02:10:32
Speaker
And we believed in that theory. oh under On the sites, which I've told you that InMobi also did not happen. We were all very young.
02:10:43
Speaker
ah We did make some mistakes, as I said, technology versus business expansion. oh Yeah, there were a lot of things which we kind of figured out during InMobi's journey.
02:10:57
Speaker
A lot of things got replicated here. Like the fact that you have zero CAC. This is clearly a... People again laughed at us. This is clearly it like the learning from Inmobile. You come from advertising. but Why are you so anti-advertising? I said, no, no, I'm not anti-advertising, but I don't need it.
02:11:15
Speaker
I know the best product and the best companies gets built by user reference, not by throwing the ad, shoving that in their throat. So, yeah. So those good first principle thinking and learnings were very helpful all the time.
02:11:32
Speaker
Fascinating. Thank you so much for your time, Amit.