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The healthy house of brands | Aanan Khurma @ Wellversed
327 Plays2 years ago
Not one to fit into the corporate straitjacket, Aanan kept experimenting until finding his calling in consumer health with his brainchild, Wellversed. Wellversed is a house of brands which are digital native with an online first sales strategy. The startup has 40+ brands in its kitty and it achieved this feat with just 3 mn dollars in funding!
Read the text version of the episode here.
Read more about Wellversed:-
1‘Full stack wellness’: Indian brand Wellversed on ‘owning the ecosystem’ to understand the consumer
2.How Wellversed is Planning to be a Unilever of the Wellness Category
3.Creating a universe of modern-day health and wellness products
4.Wellversed’s vision to make wellness accessible to all
5.Wellversed Acquires And Scales Consumer Health and Wellness Brands To Build A House Of Brands
Recommended
Transcript
Introduction to Anand and Well-versed
00:00:00
Speaker
I am Anand Karma. I am the co-founder and CEO of Well-versed. Well-versed is an e-commerce roll-up for digital-first wellness brands.
00:00:21
Speaker
There are some people who are just not built for the corporate world, and Anand Korma is one of them. He kept experimenting after graduating from IIT Delhi, building multiple products and start-ups in the next decade before he found his calling in building an e-commerce company that is focused on improving consumer health.
Journey from Corporate World to Startups
00:00:39
Speaker
In this episode of the Found a Thesis podcast, your host Akshay Dutt talks to Anand Korma, the founder of the held e-commerce start-up, When Worst.
00:00:48
Speaker
Wellwurst is a house of brands which are digital native with an online first sales strategy. Today, Wellwurst has 40 plus brands in its kitty and it's achieved this feat with just $3 million in funding. Stay tuned if you want to learn the secret of their amazing road journey and don't forget to subscribe to the family thesis podcast on any audio streaming app.
00:01:16
Speaker
After BTEC, I joined a startup. A demand of the startup was not very clear. It was working on different things, providing web development services, doing some edtech stuff, and things like that. My heart didn't really lie in that kind of uncertainty. I joined it out of
00:01:41
Speaker
There's this aura that got created in those early days that, you know, startups are cool and all that. So I just joined it out of fullness. It was not a very, very calculated decision. So we were a group of people, you know, trying to do a bunch of different things, trying to figure out how we can generate revenue and things like that.
00:01:57
Speaker
I did that for five, six months and I realized that this is not really working and something systematic has to be thought
Innovation in MedTech
00:02:04
Speaker
of. At this point, I took up a job in an MNC company called Edison as a software engineer. I had software engineering skills and I thought, let's just monetize it during the time that we think of what needs to be done.
00:02:17
Speaker
In my college years, I had spent third and fourth year working on health tech projects. I also incidentally happened to do a six-month internship in Massey University in New Zealand in my third year.
00:02:36
Speaker
And we created a lab on chip device. It was an electronic innovation for doing, you know, blood cell separation on a very small chip. So instead of having huge centrifuge that, you know, separate blood cells, you could do it on chip.
00:02:52
Speaker
the Theranos promise. Yeah. So it was, it was called back in the day, it was called lab on chip devices, right? So there was this huge hope that eventually will develop labs that can fit into, you know, single chip and all that.
00:03:08
Speaker
We managed to do something that we managed to separate white blood cells from red blood cells on a chip and through a process called dielectrophoresis. We were one of the pioneers in that. We also published a research paper. It's a 7L research paper that got published. That kind of arrangement that we created on chip is still being used today.
00:03:30
Speaker
So when I did this six months stint, which was a very unstructured thing, I started developing this huge gravitation back towards healthcare. This is something where my heart really lies. And after joining an MNC and working there for six to nine months, I again went back to the field of health tech and I joined IIT Delhi as a project scientist in a lab that was trying to develop medical devices that were
00:03:58
Speaker
more economical versions of products that have already been created in the US and Europe. So India has a huge problem of not having, you know, at-par medical devices and all that. And the major problem is the cost because there are so many features in these devices that are developed for the Western world, not required in India. Those devices are not being imported just because they are so costly. So we wanted to develop stripped down version of those devices. And that's how I came to be in IIT Delhi, you know, for a year or so. Yeah. Which device were you focusing on?
00:04:28
Speaker
So we were developing a device called the Plasma Arden Coagulator. So it uses Arden gas to create a cool temperature plasma that can reduce or eliminate lesions in your gastrointestinal tract. So that was the device that we were working on.
00:04:45
Speaker
Tell me something, why couldn't Theranos commercialize or build a commercially viable product? This is slightly diverging from our main topic, but since you're from that background, I'm just curious. There are certain limitations in terms of diagnostics. There are certain limitations in terms of cost of testing.
00:05:12
Speaker
time of testing, accuracy of testing. So bringing all those together and then implementing them into a system where there are critical time constraints. So if the efficacy of test is not reliable, it's not going to get adopted into the medical system. So that's why within the given time constraint and the given efficacy constraint,
00:05:38
Speaker
senior professionals or veterans would want to defer to reliable methods. And that is why innovation in the Medtech series specifically is slower. So there are, you can say, generations of people who have been trusting certain devices and certain methods for, let's say, 20-30 years and they're not just going to shift immediately until the efficacy is proven. So I think it's all about delivering the promised efficacy within the promised time frame and developing that trust already.
00:06:07
Speaker
You can't move fast and break things in medtech, basically. Incidentally, what happened was I got selected into a program in Stanford. It's for the Stanford Biodesign Fellowship. I got selected into that program because we were developing these medical devices in India. There was a collaboration between Stanford and the Indian government to support health tech innovation and stuff like that.
00:06:33
Speaker
So, as a part of that program, you know, you spend part of your time in Stanford and part of time in Indian hospitals. And what we could see that there were so many great innovations that doctors have already developed, but the adoption is very slow because of systemic changes.
Challenges and Reflections at Handsure
00:06:47
Speaker
So, for example, let's say there's a batch of medical students who have been trained on certain technologies.
00:06:53
Speaker
On the first day or first year of their jobs, they want to prove their worth. They don't want to do anything wrong. They don't want to take risks. So they'll rely on methods they have been trained on for those five, six years of medical training. Okay. So what came out of this Stanford fellowship? Like any kind of product innovation or what was the focus of it?
00:07:17
Speaker
So, you know, me and my team, we developed a device for preventing, you know, hospital acquired infections that spread from one patient to the other or from, you know, caregiver to patients or, you know, so spreading any kind of cross infection within the hospital environment, right? And it was a company came out of that entire endeavor. It was called Handsure. And that company got funded by Microsoft Ventures, Johnson and Johnson. So there was a huge promise because infection prevention
00:07:47
Speaker
is a huge thing within the medical domain. Very ill understood, but a huge thing because you are losing a lot of lives to secondary infections, not to the primary condition. After Covid infection prevention, it's now a very big thing, but I think this was 10 years back when we started the company. This was 2013.
00:08:08
Speaker
you know, the adoption within the industry and you know, we also fell victim to the adoption of the devices within the medical setup. So, I think we commercially, we had access to all the funds, you know, we had access to all the hospitals. Commercially, we weren't able to make it very successful, I would say. It was partially implemented in several hospitals like Forte, Max and things like that. But commercially, I won't say that it got, you know, completely sucked into the system.
00:08:35
Speaker
So you were like a co-founder here in this company or like what happened here? So I was the primary founder in this company. The way it worked is that when you're part of the Stanford Biden fellowship, you get exposed to a lot of problems that need solving. And that is the entire purpose of the program. So they systematically train you in Stanford's d-school ideology of
00:09:02
Speaker
coming up with innovation, developing products and things like that. At the same time, you're getting exposed to systematic environments where the problems exist and you try to identify the size of the market and then try to solve those problems. The aim is to create entrepreneurs that then go ahead and try to solve those problems. That's how it came about to be. I was really excited to be part of Handsure because
00:09:28
Speaker
You know, just losing someone or losing your loved one to a secondary infection, which is completely preventable, right? So yeah. So like, this was like a funded startup. You raised funds also. And okay. So like, essentially you're saying the traction was not enough and hence you kind of shut it down or like what happened?
00:09:49
Speaker
So, what the mistake that we made was, we raised VC funds early in the life cycle of the company before understanding the growth trajectory of adoption of the product. So, what happened is... How much did you raise? So, we just raised around 1.5 million dollars as seed funds. Not a lot. So...
00:10:09
Speaker
What happens when you run or you jump on the VC treadmill is that you have to show growth numbers. Otherwise, even if you have a great model that eventually will get acquired or adopted, it's not going to work. So, there is a lot of high degree of pressure on you.
00:10:26
Speaker
So, I think that's the mistake we made that, you know, we shouldn't have raised those early capital, although it sounds fancy, you know, and those were the earlier days of when VC capital was flowing into India and all that stuff. So, it was exciting that, you know, we would manage to raise funds. We were one of the few companies that raised funds such early in their life cycle, even our product was not fully functional and things like that. So, yeah. So commercially, the growth trajectory didn't seem VC-fundable at that point of time. And, you know, eventually the product got absorbed into
Philosophical Shift and Life Extension
00:10:56
Speaker
and Johnson. Commercially what happened was once it was clear that we won't be able to raise subsequent round of capital, we won't be able to raise a series A because of the growth trajectory. So Johnson and Johnson decided to adopt the technology within their system. I'm not sure if they are exactly using it or not, some part of it they are. So we weren't able to, we shouldn't have probably gone the route of venture capital for that particular company that early in its life cycle. That's what the learning was.
00:11:24
Speaker
So, J&J bought the IP for it, basically. Yeah, yeah, correct. Okay, got it. Okay, so then what? So, yeah, so then it's from that point onward that, you know, something interesting started happening in my personal life also.
00:11:43
Speaker
So, you know, on a personal or a more philosophical or a spiritual level, I started getting obsessed with the thought of death and the thought that, you know, eventually our consciousness won't exist. I think this is a thought that comes to every personal mind, especially, you know, let's say just before going to sleep or, you know, for me, it's...
00:12:01
Speaker
highly exaggerated because I feel that thought or I get that thought several times a day. So every time something great happens, you feel like eventually it's going to go away. And every time something very, very bad happens, you feel like it doesn't matter, it's going to go away anyway. When that company was in the process of binding of that company,
00:12:26
Speaker
There was a huge part of mine that was obsessed with this thought and I started doing a lot of research into what people are doing around life extension, health span extension and whether human race will eventually be able to be immortal and things like that. Wasn't that one quick question yet?
00:12:45
Speaker
Was it that failure to build that company kind of like really made you re-examine life and made you realize how futile everything is and made you more philosophical? Like a lot of people become poets and philosophers after a heartbreak. Was it something similar?
00:13:05
Speaker
So, it's interesting that you mentioned that because there was a certain degree of high in the lifestyle that we had when we were building that company. We had raised funds, we were in the US, we were in Europe for a few months, we were in Israel for a few months.
00:13:21
Speaker
So, I think it was a certain degree of professional hire that we had and then we came back to India, the company did work out really well. So, obviously, like the thoughts may have been instigated through that failure also. And incidentally, I took a poetry also after that, although, you know, I've been writing earlier as well, but I just took a poetry systematically. So, there was a lot of this philosophical spiritual change that was happening in me around, you know, what is the meaning of life and what is the
00:13:48
Speaker
What is the meaning of death per se? I found it to be a very unfair proposition that we were brought into this world without having agreed to this arrangement that your consciousness will be there for a while and then it just seems to exist. So, I didn't consent to that. So, it's a non-consensual arrangement.
00:14:03
Speaker
unfair arrangement. And this is where I started doing a lot of research on what people are doing around life extension and especially immortality, whether we'll be able to live perpetually or not.
Founding Well-versed with a New Vision
00:14:12
Speaker
So I found that people are taking two to three directions. So there's one direction where people say human biology is capable of living up to 120 years of age. So their aim is to
00:14:26
Speaker
you know maximize the health span so to say so that you can live up to 120 years of age without having any ailment and in the vitality that you have as a youngster right so that is one of the approaches and they say that dying is part of spirituality so we'll just extend our health span to 120 years of age and we'll die you know no harm no fault. Second approach is where people say
00:14:50
Speaker
human lifespan can be extended within its existing biology. And this is this who would have thought of Ray Kurzweil, who is now the head of technology at Google. Google recently acquired a company called Calico. Not recently, it's been five, six years now. They acquired a company called Calico that is specifically working on a biological life extension.
00:15:09
Speaker
and the capability of biology to live perpetually already exists. So, we have certain kinds of jellyfish that are immortal. Our cells, like sperm cells and egg cells, they have perpetual lifespans. So, within cell biology, there are mechanisms that allow the cell line to live perpetually, but due to some evolutionary pressures, the gene structure is such that the cell automatically destroys itself.
00:15:35
Speaker
So, this is the school of thought that believes that, you know, we'll eventually become immortal in this biological form, unless we are exposed to physical trauma. Then there's the third school of thought where, you know, people like, let's say Elon Musk and, you know, Dimitris Kovand, people like these come in who say that, you know, they'll be immortal, but that immortality will be digital, right? So, our consciousness will eventually be transferred onto a digital medium. That digital medium will be
00:16:02
Speaker
powered perpetually by let's say star energy and protected physically by certain mechanisms and things like that. So, I found all of this very exciting and I want to be a part of generation that eventually ends up living perpetually and I think
00:16:18
Speaker
Even both biological and digital immortality although a lot is being talked about them in a lot of different circles and people claim that will have immortality by 2014, 2015, 2016. I believe that it's going to happen sometime in this century. So, my aim is to first to extend my health span so that you are able to live up to 120 years of age because, you know,
00:16:40
Speaker
When you are living, it's not just about living, you also have to have experiences, right? So, my approach is that, you know, maximize your health span in the next 10 years, you know, you develop that lifestyle, you have that financial freedom, and that is why we are creating Wellverse because the aim of Wellverse is to extend or maximize human health span, right? So, I'm going to work 10 years on Wellverse till 2030, and then the next project is going to be either biological immortality or, you know, digital immortality, working on, you know, one of those things, yeah.
00:17:10
Speaker
Okay, so you started well versed immediately after handshake was getting shut down. Yeah, the product was called Handshore. Handshore, sorry. Yeah. So, it was a long journey. It was a nebulous journey, right? So, after, you know, Handshore, I started a brand called Fine Superfood.
00:17:38
Speaker
with zero understanding of starting consumer brands, you know, had no understanding in food tech or food tech supply chain. So, you know, fine superfood was, you can say, a hummus like product or if you can say it was a superfood chutney of source, right? So, you consume it with your Indian food and all your nutrition deficiencies are taken care of. So, it was that kind of products.
00:17:59
Speaker
Fairly novel in those days. This was 2014. Pre-Zomacto, pre-swiggy era where distribution was a major challenge. And the only way to go about distributing perishable products of 20-day shelf life was to go through retail outlets. So I had zero understanding of food tech. I had zero understanding of creating consumer brands. I had zero understanding of, you know, offline distribution, right? This was a product which, this was like a refrigerated product. It needed a cocktail.
00:18:25
Speaker
Yeah. So, this was the product that I used to consume for myself. Like I told you that, you know, I started dwelling on extending human health and so I had started radically, you know, changing my own lifestyle. You know, I was totally into anti-aging techniques, breathing techniques, you know, or yoga and all. That is obvious. And, you know, I radically changed what I used to consume and all that stuff, right?
00:18:52
Speaker
So, have zero understanding of how to build this brand and all that, but still we managed to scale it to 20 lakhs per month kind of revenue, which is not a lot, but that was first. What was your go-to market then? Obviously, it could not have been e-commerce. Today, probably people would have started with that, but you must have gone through offline stores, which had like a...
00:19:17
Speaker
Yeah, so it was a very Jogado go-to market. So we had a website built on a Wix kind of a platform where the consumer could just click a button called order now and it was connected to WhatsApp. So the user would be routed to WhatsApp and then we had a WhatsApp chat, we had their numbers and all that stuff. So that was the primary way that we started it. But then we started targeting properties where we used to supply in bulk and it's
00:19:45
Speaker
used to be distributed from their canteens. So what happened, luckily for us, was that I immediately came to know that the kind of operational hurdles and the kind of operations that I would get into is not something probably that I would be able to sustain. This was getting manufactured in your kitchen.
00:20:08
Speaker
So, we had taken up a place. Eventually, you know, the volume ad which we were using, it was not, we were not able to manage it through our kitchens or our places, right? So, we took up a dedicated space for that.
Experiences at 1MG and Consumer Insights
00:20:20
Speaker
And all that was happening and I decided it was an offline distribution. So, incidentally, what happened was, there was a brand called Satchviko, which is now a consumer brand.
00:20:34
Speaker
Back then, they had restaurant outlets across India to serve Satchit food. This is like a franchisee model. They were operating the restaurants themselves.
00:20:49
Speaker
they were operating the restaurants themselves and their aim was to bring sattvic food to modern day consumers and this product fit into their magnet and you know they acquired it on a revenue sharing basis so they were able to scale the sales to about 2 to 0.5x and you know we were getting royalties out of it so
00:21:09
Speaker
I think it happened. Luckily for me that they acquired the product because, you know, one, it gave me financial freedom, you know, and it gave me a lot of time to think about what I wanted to do next. And, you know, after this, I joined one MG as a product manager. This was like a IP licensing, like you licensed out the IP to them and they will continue to pay you a percentage of sales and they would be like displaying the product on their two customers who worked into the restaurants.
00:21:40
Speaker
So this was I would say the first stint that we had with consumer brands and I told myself that I won't do consumer brands after this. And it seems very funny in retrospect because now we are building a company that operates a portfolio of consumer brands.
00:21:58
Speaker
So, that's why I thought I gravitated more towards digital products. Manufacturing is a very hard thing to pull off. There are a lot of operational challenges. There are a lot of working capital cycles and things like that. So, that is something, you know, it seems a lot more like, you know, what traditional businesses do. So, that was the mentality back then.
00:22:30
Speaker
So, I came in touch with Prasanth, Tandana, you know, Bhadav Agarwal of 1MG at that point of time and they, although it was a digital pharmacy, 1MG, but they were also working on a doctor-patient consultation piece which was very small when I joined their team and I thought,
00:22:49
Speaker
Why not take that up? Because most of the queries that they received in the early days of that platform were related to wellness and not specifically health queries or disease queries. People are coming to them and saying, you know, sexual wellness issues, hair loss. And so everything within the wellness ambit was there. So that was the maximum volume of queries that we were getting. So we built out that entire platform from very early
00:23:17
Speaker
So, when we were doing around 1 lakh consultations a day, that was the kind of volume that we were able to achieve. But it was a combination of free consultations and paid consultations. The paid consultation percentage was very small.
00:23:34
Speaker
And several conversations are very small as well. It would last only six to seven message exchanges. But nevertheless, I worked on that product for 14 months, I think. And the insight it gave me is the kind of wellness problems or wellness issues people have. And there was a repetitive pattern that you could see around what people are not able to do. And what we were able to understand from that was
00:24:04
Speaker
Before I come to your learnings from that, this consultation was like a face-to-face consultation or it was like a chat consultation? It was digital. It was on chat. It was a chat platform.
00:24:18
Speaker
Like, no, not like a video conferencing. So we had started audio back then, but video chat was still not available at the point I knew the company. I think they have added that feature now. And they were like, they had employed on payroll consultants, like the physicians or whatever subject matter experts who were like,
00:24:41
Speaker
So it was a blended model where, you know, we had some physicians and some doctors and some nutritionists on payroll. And then there were some who were third party, who were allocated jags and that were to be resolved within a particular tat. And what was the goal then? Like, why were they giving it out for free? Like, was it like a freemium that you can get a short consultation free and then you pay? Or was it like it was driving sales of their other products?
00:25:09
Speaker
during the chat, like with the nutritionist, the nutritionist might recommend a product that they would buy from Tata 1MZ or 1MZ. So my understanding was when before joining the company, I did very deep research into how people buy medicines offline. And typically, you know,
00:25:25
Speaker
old behaviors die hard and this is what we learned from our first company where we weren't able to scale commercially very well, right? So, I was very wary of not building anything that doesn't support consumer behavior, existing consumer behavior, right? So, the existing consumer behavior can be replicated from offline to online but it can never be changed completely, right? So, it has to be some function of existing behaviors. So, when I was doing my research prior to joining 1MG, what I discovered was
00:25:54
Speaker
A lot of medicine buying happens on suggestive advice, not specifically prescriptive advice. So, there are two classes of medicine buying. One is hardcore prescription where the doctor will also tell you where to buy the medicine from because that is the way they meet their commercials. Second is where people go to a chemist and say, what should I do? And the chemist will say, buy this. So, what I understood was that
00:26:21
Speaker
In India, the Indian audience is very wary of paying for consultations, right? They have no problem even if, let's say, the drug prescribed to them is a thousand rupee drug, right? If you include the cost of consultation within the drug, they have no issue with that, right? So, that is the behavior we want to capitalize on and my idea was to
00:26:40
Speaker
you know keep the chat concentration free and we built an integrated platform where let's say if the doctor starts typing a prescription right let's say he is to type that you have to take 10 second mole there will be a drop down on the doctor side where he can just you know click paracetamol and the user will then see a buy now box within their chat screen so we built a hyper integrated experience for the user within the chat
00:27:04
Speaker
which is not possible on WhatsApp because WhatsApp, they will say, this is drug you need to buy. They will take it to chemist and all that stuff will happen. So it was a hyper integrated experience. And that is the way we want to begin. You are amazing. So essentially that offline pharmacy and pharmacist as an advisor behavior, you were making it slightly like better quality advice, but that's similar behavior. You were translating it to online. Yeah. And more credible and more credible.
00:27:30
Speaker
Right. Got it. Okay. Okay. So what were the learnings from that? Like what did you learn when running that product? You were talking about that when I interrupted you.
00:27:39
Speaker
Yeah, yeah. So, you know, fundamental learning was there are two categories of consultation that we saw. One were, you know, hardcore healthcare consultations where a particular person has a disease and, you know, they'll have to both undergo certain procedure, whether it's pharmaceutical or surgical, whatever, right? And then there are other categories of where people have non-critical health issues, but that is impacting
00:28:04
Speaker
them emotionally. Let's say they're losing their hair or their skin is deteriorating or they're gaining weight or their blood sugar level is not allowing them to consume the food that they want. My learning was that especially being a proponent of health stand maximization, I didn't want to go to the disease route. Let's say if there's a zero point
00:28:29
Speaker
Below the zero point is disease people. Above the zero point is you have to maximize your potential. So, I wanted to remain above the zero line and address the wellness issues more rather than the disease issues. And within that ambit of wellness issues, what I saw was that there was a lot of
00:28:44
Speaker
suggestions or a lot of information, but very few ways for people to actually adhere to that advice. So, just to give you an example, let's say a diabetic person goes to a diabetologist, they say, okay, my sugar level is this and that, whatever. The first thing that a diabetologist is going to say is, stop eating rice.
00:29:02
Speaker
Now, that is the piece of information that is of zero utility to that person. A person who has consumed rice their entire life, telling them, stop consuming it, it's not good for you, is no good advice. It's not going to help them because now there are two things going to happen. Because of that ingrained behavior, that person is going to eat rice anyways.
00:29:22
Speaker
earlier, that was just damaging his or her physical health. Now it's also damaging his mental health. I have done something wrong. I've done something which doctor told me not to do. So this was, I think, core learning that a victim from those kinds of consultations that if you want someone to change something, you have to enable that change. You just can't tell them that, you know, you do this, right?
Well-versed's Brand and Product Strategy
00:29:45
Speaker
Or let's say, Jacob every day at 5. That is no good advice. Not very useful. Things like that.
00:29:52
Speaker
Eventually, when we were tinkering with ideas of how to address wellness in general, our primary aim was to be able to address behavior change. And we didn't want to create products where people say they are now quit everything and start eating this. So, we had to facilitate existing behaviors.
00:30:11
Speaker
diabetes, thyroid, PCOD, obesity, these were the issues. The wellness side of these issues were the ones that we were trying to address. What is PCOD? Polycystic ovary disorder.
00:30:33
Speaker
So, what we realized was that most of the people know what's good for them when it comes to eating. Everyone knows what good food is. So, all this advice going on is just circular recycling of information. Don't eat this, eat that, don't do this, do that. Everyone knows what's good for them. The problem is not...
00:30:52
Speaker
knowing what's good for you, how to adhere to that on a long-term sustainable basis. And this is when we decided that Velvers has to stand for creating products that enables these behaviors. So instead of telling a diabetic patient, quit rice, you have to make rice that
00:31:09
Speaker
they enjoy eating and you know it doesn't impact them in a negative way and that's how well-best came about to be and again unfortunately or unfortunately in the domain of consumer brands which I you know specifically wanted to stay away from and on top of that
00:31:25
Speaker
Because we were creating products that were so unique, we had to again get back into manufacturing. There was no manufacturing, no part-track manufacturing was willing to produce the kind of products that we were doing at smaller scales. And this is when I met my co-founder Aditya Seth, who was the manufacturing and supply chain expert. And that's how our partnership started. What's Aditya's background?
00:31:47
Speaker
So Aditya comes from a 10 year experience in supply chain, specifically food products, but he has very specific experience in getting work done from third party manufacturers, contract manufacturers, quality assurance, all legal compliances, things like that. So actually getting stuff done on the ground.
00:32:06
Speaker
Once a food technologist and nutritionist have created a composition for a food product, how will it go into manufacturing procedurally so that you can produce it at a cost that allows you to sell it and things like that. And which company was he working in? He had his family business only.
00:32:25
Speaker
Okay. It was a family business. Yeah. Yeah. Like they were like, like setting like an unbranded kind of a product. Yeah. They would be to be suppliers of large scale, you know, food products. Yeah. Okay. Okay. Got it. Okay. So you put your job and started looking for a co-founder or like, what's the sequence in which stuff happened? So sequence was, you know, slightly convoluted that, you know, uh,
00:32:55
Speaker
I used to do these design thinking workshop. So, I'll just give you a brief background. So, Aditya obviously was working in his family setup and you know, he was expert at manufacturing in QH. But, parallelly, he was also doing an industrial design degree because he thought that, you know, eventually he'll get into
00:33:11
Speaker
designing specific manufacturing equipment. So, he was doing industrial design, right? And within 12 months, I decided that I'll take the leap and I'll start a new company. And there was a two-month period when I was at one MG, but I was still thinking about what to do. In this period, I was doing design thinking workshops, trying to train people on the Stanford Design School process, what we had learned. So, we were just organizing design thinking workshops.
00:33:37
Speaker
And Aditya happened to be at one of those workshops. And that's how we met. And he was discussing that, I'm doing industrial design to create equipment that can manufacture products. And so it seems energetic and we started hanging around and it was still very nebulous. We didn't know that we'll end up doing these. In fact, the first product that we created was
00:34:01
Speaker
So, we thought that, you know, Indians are very fond of Namkeen and, you know, you have high calories, high fat, high carbs. So, that is something that needs to be replaced. So, that is the first product that we created. But then we gravitated more towards staples because we wanted to be more center of plate kind of, you know, company than, you know, peripheral products.
00:34:22
Speaker
So that's how it happened. So what was that Navkeen product? Tell me a bit about that. Did you actually launch it or that was just a prototype you made? It was just an experimentation. So I think we created 10-15 products before we finally centered on doing staples.
00:34:42
Speaker
And this was the time that we also realized that a single brand cannot cater to a lot of people. So wellness is like religion. Everyone wants to reach God, but everyone has a different ideology of how to reach God. And you cannot enforce one ideology on a different set of people. So we knew early in our life cycle that if we have to maximize human health span, if we have to maximize wellness,
00:35:09
Speaker
we'll have to end up creating a Unilever kind of a structure where we have several brands and they are doing innovative products and they're centered on different wellness ideologies and that's what we're doing now. Okay, amazing. So, tell me about that, you know, that actual launch journey, like launching the business, the product, the go-to-market.
00:35:32
Speaker
So, you know, as like foreign proponents of the school thinking, we very well knew that we have to experiment and find the product market first before we do anything. So just to give you an example that our company didn't even have a website and we were already doing, I think, 35 lakhs per month kind of a sales. Our primary go-to market was Amazon, right? And we were doing
00:35:56
Speaker
hyper-amount of testing in product compositions, in feedbacks. Back then, Amazon used to provide you numbers of customers. So, we could think directly to customers. So, all that has been restricted. Now, you don't get customers from Amazon.
00:36:12
Speaker
created products, we listed them on Amazon. At one point of time, we had 50 products listed on Amazon. Some of them were selling, some of them weren't selling. So that helped us get a large amount of feedback on what's working, what's not working. Both from the search perspective, what are people searching for? What are the products we're searching for?
00:36:33
Speaker
And what are the kind of products that people come back to? So there are only two critical parameters to create a brand. One is whether that product is searched for or not. Second, if a person has bought that product, whether he'll come back or not. So those are the two things or two pillars that we were critically trying to understand. And then we narrowed down the product.
00:36:54
Speaker
Which in a way could be summarized as like the total addressable market and like the long term, like what is the lifetime value of a customer for that product or like repeat behavior. Okay, interesting. And what were these products? Like give me some examples and how did you get them manufactured? These 50 products, you said you had up to 50 SPUs at one point of time.
00:37:18
Speaker
Right. So what we had done was we had set up an R&D lab specifically for crafting these food products on a lower scale and Aditya was the one who was working on it. These were products like low-carb flours, snacking products or oil-free products and things like that and some supplements as well.
00:37:42
Speaker
Initially, everything that we did was under the well-versed umbrella, but slowly we started segregating them into different brands. So, all low-carb products became consolidated under keto phi. All vegan products became consolidated under Ovego. All diabetic products got consolidated under Diamock and things like that.
00:38:07
Speaker
Okay. And like in those Amazon experiments is where you realize that you want to focus on staples instead of snacks and all.
00:38:14
Speaker
So yeah, that was it. So staples have a high repeat rate, right? And frequent repeat rate. So that's why we stuck to that. And what we thought was that even if we do side of the plate products, they'll be separate brands. So we do have a brand called unsnack that is dedicated to snacking products, right? It's called unsnack because snacking is something you do mindlessly. So it's a mind, you know, mindful consumption of product. So we do have that now. And now we are not, so now,
00:38:41
Speaker
The way our model works is that we want to become a conglomerate of wellness brands in different categories, not just food, right? So, we have puncture food and supplements, we have skin care, hair care, we have, you know, fitness equipment. So, these are the three, four categories that we have entered on. So, the aim of the company has now shifted towards maximizing wellness for these brands in a Unilever style.
00:39:06
Speaker
Give me some timelines here. When did you launch and run these experiments on Amazon? When did you decide that this is going to be our first line that we will focus on and so on? Were you funding it through savings or were you doing raise funds? Tell me about that also.
00:39:24
Speaker
So, we started in 2018. So, all the tinkering was ongoing between July 2018 to, you know, September 2019. September 2019 was when we raised our first angel round of 34CR ratings. Prior to this, you know, it was being funded through my savings.
Growth and Financial Strategies
00:39:44
Speaker
and there was a person from Unilever Govindrajan. So, he was a Unilever guy and he was himself had some lifestyle issues. He was a diabetic and he was the one who gave us 25 lakhs in a convertible note just to experiment. Just try things out and all that. So, he was a strong proponent of the company.
00:40:07
Speaker
So, we tinkered for one year and that is how we came about the structure that will have to build it in this style of separate brand and separate products. And we were able to raise the seeds down in 2019.
00:40:19
Speaker
That was for setting up manufacturing or spending on marketing customer acquisition. Did you manufacture in-house? How did you fix supply? What was the way to do supply? Initially, a lot of what we did was manufactured completely by us. We set up an extension to our R&D lab. We had taken up a dedicated space for manufacturing. We had blue-collar workers. All that was going on.
00:40:48
Speaker
What we learned was that a lot of companies that do contract manufacturing, let's say, take an example of Koka Vula. Koka Vula contract manufactures all their products. But the entire procedural know-how from R&D, what the composition of the product is to how procedurally it will get manufactured has to be done by the company and then implemented
00:41:11
Speaker
through a third party. So, the third party never does any procedural innovation or production innovation. So, all that has to be done in-house. So, what we realized was that all this procedural know-how will have to be created in-house and that's why the first manufacturing that we set up was in-house only and now that we go to third party, we
00:41:30
Speaker
not only transfer or the IP to them to manufacture, but also the procedural know-how. We know which machines they have to use, the procedures they have to follow, the SLPs they have to have done, the quality assurance processes they have to implement. So everything has to be given to the third party to implement. They are just there, you know, it's just like a franchisee models or manufacturing. Got it. Okay. Okay.
00:41:51
Speaker
And Aditya had these contacts with third-party manufacturers. Otherwise, somebody new to the field would have had to really spend a lot of time in convincing them to follow your processes because you were not a known brand. Why would a contract manufacturer really agree to your terms and conditions? And maybe they would have had some minimum order quantity restrictions which would have probably made it unviable for you.
00:42:18
Speaker
Like Aditya, I guess helped solve a lot of those supply issues. Yeah. So I think what, so traditionally, you know, how companies operate is that they will do, let's say nine to 12 months of, you know, consumer understanding and, you know, product development and then launch, you know, one to two products and, you know, then they'll put all their marketing capital behind that product to scale it at any cost rates. And that's how
00:42:46
Speaker
A lot of that is intuition based and experience based and all that. So what we realized that we didn't want to follow that approach. We wanted to follow because wellness trends especially at this time are changing so fast that you cannot anticipate everything on the ground. How the needs are evolving, what the customer really want and all that.
00:43:07
Speaker
So we wanted to apply that ideology of B-School that, you know, we'll fail first, fail fast, and, you know, we'll see what's actually working on the ground. So the way our non-traditional lab setup helped us was that we were able to create a large number of products at a lower volume and experiment with them. And, you know, we could churn out a product in, let's say, two weeks and shut it down in another three weeks. So it was a five-week cycle of knowing this for each one of the workers. Wow. Amazing. Okay. Amazing.
00:43:36
Speaker
How did you understand the trends and decide that let's try this product? It was a combination of objectivity and subjectivity. We were part of a lot of groups on Facebook, Quora, even WhatsApp groups and all that.
00:43:59
Speaker
You know, broad macro trends, you could get to know from the kind of keywords that are being used. Let's say plant-based milk is being used a lot or things like that. So you get to understand a lot of different trends. And then you use those keywords that you have gathered subjectively. And then you do detailed research on, let's say Amazon pie, you know, Google trends and, you know, SEMrush and all that to understand their search volume and what's actually happening from an objective part of you. What is Amazon pile?
00:44:27
Speaker
Amazon Pi is a tool that gives you access to certain data points. Amazon now gives you access to a lot of data, like since the last five, six years. It's like user analytics of Amazon customers. At a broad level, you can access those user analytics. Correct.
00:44:50
Speaker
And Amazon charges for this or they just like... I think it gets facilitated to what the account reaches a certain size that you have access to that. Okay. Interesting. Okay.
00:45:04
Speaker
And so once you figured out that let's say plant-based milk is a trend, then you would go about trying to get some minimum inventory done and then list it and then see if it was selling and then get feedback from the buyers. How would you get feedback? Because now Amazon doesn't share numbers. So it was based on the ratings or like how was it?
00:45:22
Speaker
So, in the initial days, we did get access to the numbers. So, that's how you should do it. And by the time, so Amazon just stopped this, I think couple of years ago, by that time, we had our website in place and you know, if you go to wellverse.in, all of our brands are listed there. So, to the end consumer, it seems like a marketplace of a lot of different brands, right? And
00:45:44
Speaker
So we, so although the volume of sales that we do through wellness.in is around 15% of our total sales volume, but that is a decent enough size for us to reach out to consumers and know what the feedback of the product. Right. Intelligence comes from this.
00:46:00
Speaker
Yeah, so within our growth strategy, we never project well-versed.in to become very, very large because the GACs are higher for websites and the kind of delivery experience Amazon or Instagram and DICE can provide. We cannot provide because we sit on top of third-party logistics space. But that for us is a way to understand consumer pulse and consumer insight and structured sensory feedback from the users and people.
00:46:28
Speaker
Okay. Okay. Okay. Interesting. And so tell me, like, you know, once you place that angel round of that three, four crores, then, you know, what was the trajectory after that? What kind of monthly revenue were you seeing? You said you hit like 30, 35 lakhs. By when did you hit that? And how did that progress? And what is it today? Like the journey in terms of your numbers?
00:46:49
Speaker
So, I think when we raised the seed round, we were around at 45 lakhs per month of revenue. And, you know, I think after that, COVID hit in 2020. So, this was September 2019 that we raised the funds. And, you know, COVID, we saw a spike in certain products, but some of our products had been shut down as, you know, lying within non-essential category for some months. So, there was, you know,
00:47:16
Speaker
4-5 months was slightly turbulent and we hovered on 60-70 lakhs per month kind of a revenue and that was ongoing. By the time, I think July 2021, we were at one CR per month kind of a revenue and from there, we raised another round from Jubilant Foodworks. It's a public limited company that invested in us.
00:47:40
Speaker
And from that point onward, we have scaled very fast. We were around at 4.5 CR per month kind of revenues.
00:47:55
Speaker
When it comes to high risk investment, which is what investing in a startup is, typically VCs who invest, it's not very frequent for a publicly listed company to invest at such an early stage. I mean, they would typically come in once the business has reached a certain scale and they feel that with their distribution muscle, they can scale it up. But what was the reason here for Jubilant to invest?
00:48:18
Speaker
There are two to three different reasons. One is that, you know, we are slightly more stable as compared to other startups, you know, the kind of thing, although we are trying to address new wellness needs, but from a fundamental DNA perspective, what we are doing is a stable business. It's not that it's either win all or lose all. It's not that kind of a market. So essentially that kind of stability is there that the company is not going to shut down. Right.
00:48:44
Speaker
And you're focused on products which have repeat purchase. So that revenue stability is also there. Correct. So what we understood fundamentally was the value that they found in our team was twofold. One is what we understand fundamentally is that
00:49:01
Speaker
No brand can be built without two things, right? So, there has to be some degree of innovation within its supply chain. So, you cannot just pick up products from China and start selling it and build a brand on top of that. That is not possible. Some degree of supply chain innovation happens even with product like Micromax or that are directly being lifted from China. That is the price innovation, right?
00:49:23
Speaker
And second is that you address a new wellness niche but with repeated syntax. So, you're not mindlessly trying to scale a brand like a tech company. It's a tech company and consumer brands have to be based differently. A consumer brand is like a child and a child takes nine months to get born. You can't just force feed it and grow it.
00:49:45
Speaker
So I think those are the kind of value they saw in our team and from a strategic perspective, they are building an entire ecosystem for modern day, you know, and do my brand use cases. I think that's where the synergy was. Okay. Amazing. Okay. Okay. Got it. Yeah. I guess you.
00:50:02
Speaker
did not necessarily need to build a very strong brand to generate sales. I mean, people would anyway be buying unbranded auto, for example, or so on. So that need to spend a lot on brand was not really there at the initial stages till a certain level, I guess.
00:50:21
Speaker
So, what we feel is that product market shift has to happen before the brand market shift has to be worked on. So, you cannot build a brand story and expect a non-product market shift product to sell.
00:50:38
Speaker
primary school, secondary school, college kind of a structure. So, a student has to pass through primary school for it to go through secondary school. So, we see there are three distinct phases of brand building. In fact, there are five, but I'll just talk about three. So, the first is product market switch. Whether the consumer is searching for what you have listed or not, if the search volume is sufficient or not.
00:51:00
Speaker
Second, if the user has bought your product, whether they are buying it again or not. So the product market price comprises of these two things. The second is the product channel fit, whether you're selling it through the right channels and from a P&L perspective. So you have to take into account what your CAC is, what your distribution cost is. And if the P&L doesn't support it through that channel, you can't sell it. So just to give you an example, let's say you have a 99 rupee product.
00:51:27
Speaker
You cannot sell it through Amazon.in. You have to sell it through Amazon Fresh because the kind of distribution margin that you pay to Amazon is not going to enable your product to sell. So that is the product channel fit. And the third is your brand market fit. So what is the broad ideology that the brand is centred on and whether it's going to resonate in the future as well or not. Interesting. And what are the other two? You said there are five.
00:51:58
Speaker
So post that, then you have, you know, you know, mass communication channels, and things like this. So once you cross certain scale, you have offline distribution fit, mass communication channel fit. So these are the two phases. Okay. Okay. Whether you advertise on Facebook or you do a TV ad or you do a print ad.
00:52:18
Speaker
So it goes through a systematic five stages, right? First is product market rate, product channel rate, brand market rates, you know, offline distribution rate, and then mass communications rate. Yeah. Okay. Can you talk to me about your portfolio brands and for each one, tell me where they are in this life cycle and what is their percentage contribution to your overall top line?
00:52:39
Speaker
So what has happened is that we have done something very interesting. So I'll have to talk about that before I can give you that detail. So when we were creating all these brands and we see a lot of different wellness niches bubbling up and they have to be addressed. What we realized was that although the approach is really great that you have to create a Unilever style of consumer brands, you cannot
00:53:07
Speaker
develop all the products on your own because you know developing a product market fit product and you know fine tuning it takes time energy backwards and all that right so although the innovation has to be there but everything cannot be done on our own right so we thought of decentralizing this entire process of product creation and how we did that was we created a program called the well-versed accelerator
00:53:31
Speaker
What it does is that since we excel at digital distribution, we open our expertise of digital distribution out to all the early stage wellness starters. Once you are part of the wellness accelerator, your product will be listed on Amazon, Flipkart, Zepto, Instamart, all these channels through Wellverse, which means your product immediately gets a very high visibility and we get
00:53:55
Speaker
access to what products are working, what are not working. So, the structure that we have now created is that we accelerate brands in their early lifecycle, we understand which brands are working and we eventually acquire some of those brands. So, all the product market innovation doesn't have to be done by us, although a lot of support is provided by our team, whether it's trademark support, supply chain support, R&D innovation, lab testing, whatever, a lot of that is done by our team as well.
00:54:23
Speaker
So we have kind of created a unique decentralized structure of finding product markets with products and then pouring brand capital on top of that. So right now, if I talk about major brands, so we have a revenue of around 4.5 CR, which is contributed by around four major brands. Yes, 4.5 CR is annual revenue. Last year, money revenue. Okay. Correct. Money revenue. Amazing.
00:54:51
Speaker
So, you know, so four major brands are, one is called keto five, which was one of our first brands and you know, it's a low carb lifestyle product. Right. Then we have, uh, stuff like that. Yeah.
00:55:06
Speaker
So it's Loka Bata, Loka rice, Loka spaghetti, stuff like that. Then we have a brand called Zero Sugar, which is a natural competitor of sugar-free. It has no artificial chemicals. It's completely crafted from maltroot and stevia. And it tastes exactly like sugar. It's one of the fastest growing products because
00:55:28
Speaker
You know the sentiment that sugar is bad is percolating very fast within the community and you know This product is an actual one-to-one true one-to-one replacement of sugar. So, you know Going back to the ethos of zero behavior change. So it doesn't have any aftertaste like sugar-free It doesn't have any carcinogenics like aspartate or things like that, you know So that that's one of the other brands then we add this is sold as what as a granules powders pills Yeah, it's granules. It's like sugar. Okay. Okay. Amazing
00:55:57
Speaker
We have a brand called UVShit, which is clean daily use supplements. So, let's say it's a protein alternative to whey, it's a vegan alternative to omega-3 and things like that. So, clean alternatives to all daily use supplements.
00:56:16
Speaker
And then the fourth brand is called Velkor. It's an advanced supplements brand centered on energy for athletes, energy for high performance, physical activities and stuff like that. So, these are the four major brands. I may not be able to comment on the exact distribution, percentage distribution, but that's broad. Maybe you can edit that part out as well, where I said this.
00:56:40
Speaker
How do you find brands slash founders to accelerate? You would need a fair amount of effort on that. VCs typically have a team which is dedicated to doing that deal sourcing. How do you do that?
00:57:01
Speaker
So we have a dedicated team of seven people that is specifically working on this. So now what's happening is that, so let's say earlier we were setting up an entire R&D team, that had peri-cell support for manufacturing as well. So now as that manufacturing support team reduces, that is being consolidated into the accelerator team. So you have a core R&D team that excels at creating great products.
00:57:27
Speaker
supported by an accelerator team that identifies great brands. So, this R&D team provides know-how to these accelerated brands of how to create great products. On top of the marketing insights that we get for these brands that, you know, these products are working, these are not working. So, you need to focus on these products, right? So, we have dedicated seven people's team, you know, that is constantly profiling all channels for new brands. When I say new brands, these are brands who have reached the sales of 3 lakh per month of sorts, where, you know,
00:57:53
Speaker
They have at least done something. They're serious about what they're doing. They're not just, you know, listed their product. And this is the, so I think that makes it relatively easy to identify brands because you're looking at listings on various platforms. So like you're able to flag, okay, this is a new brand is trending. Okay. Got it. So I think we have 10,000 brands that are logged in our database as of today.
00:58:21
Speaker
Okay, so this is how they identify and then what happens like do you take equity in the exchange for the actuator? Do you give them funds in addition to the know-how and market access or like what is the model there?
00:58:38
Speaker
So, the model is evolving. The initial model was very simple where we opened up our distribution expertise to these brand in exchange for a very small commission that we charge them. So, that was the model. But going forward, as we are setting up a dedicated capital pool for these brands as well. So, we will consider investing in specific
00:58:58
Speaker
of these brands, you know, where it will invest early on, even at the acceleration state. So, it's going to become a Y combinator style of our model where, you know, we'll invest in large number of early stage brands, but also provide them operational expertise. So, the risk with early stage investment is that the expertise does not exist within a team. And that is where most of the funds are squandered away because they are not pulled towards, you know, in the right places.
00:59:25
Speaker
So the aim is to be able to eventually facilitate both early stage capital and early stage expertise and help them grow faster and either acquire them at one point of time or make them independent, investable entities so that they can grow on their own and own equity in them. Okay, amazing. So how many such brands have you incubated and what are some of the promising ones in that that you may be thinking of acquiring?
00:59:54
Speaker
So, I won't be able to take names but right now, we have around 40 brands that are in the acceleration phase and demanded for us is that they have to positively impact human wellness. One, second, they found a degree and the seriousness about the outcome they want to bring in the world. Then, we train them on the ideology of building brand love, repeat rates and all that stuff.
01:00:21
Speaker
What kind of scale have some of these brands seen? Post-joining the accelerator, what has been the success rate, the impact of joining the accelerator?
01:00:31
Speaker
So typically, we are able to scale a brand from 5 lakhs per month kind of a revenue to 35 lakhs per month kind of a revenue in the stand of nine months. Typically that is what we have been able to do that for 35 to 40% of the brands. And at this stage, either we'll try to make them ready for investability where we'll make them or connect them to the right investment partners.
01:00:57
Speaker
or this is also our sweet spot to acquire the brand as well. So, let's say a brand is doing 40 lakhs per month, we have failed in the profit whether we want to acquire it or not. So, we'll either make an acquisition offer or help them raise funds and then, you know, take some advisory equity in them. Okay. So, wouldn't you need a lot of fundraising yourself to really fund your acquisitions?
01:01:20
Speaker
So, since we operate on a hyper-financial-engineered model, so to say, we have access to large sources of debt capital that are able to power our acquisitions. And since these are contributions to CM2-positive businesses, we are able to power a lot of our acquisitions.
01:01:47
Speaker
So, we will raise the next round as well. But it has to be done at the right valuation, at the right dilution. So, I think a lot of people, especially in their younger ages, they value
01:02:03
Speaker
equity capital more than debt capital whereas it should be the other way around because equity you are diluting unnecessarily. If something can be done through intelligent financial engineering you should do it via
Future Goals and Market Intelligence
01:02:14
Speaker
that route. So some of the greatest businesses have been built totally without equity investments. Players like Zoho and all they have built it completely without investment. So that would have been the aim. Obviously we operate in a hyper-competitive market so equity financing is required when you need to push.
01:02:32
Speaker
We don't want to power our P&L through equity financing. Equity financing should only finance specific brand building activities and tech development activities.
01:02:48
Speaker
Help me understand what is the kind of financial engineering that you have done here. Typically, here's my understanding of how D2C brands would access debt. Typically, it would either be bill discounting where, let's say, if you were to get paid for what you sold after 30 days, you can take 95% of that today. So, invoice discounting would be one.
01:03:12
Speaker
Or there could be something like, say, revenue-based financing, where companies like Club and all offer that they'll give you a loan and every month a part of your revenue goes towards repayment of that loan. So what is the process you are using?
01:03:27
Speaker
So typically we use two approaches. One is the traditional RBS where the growth of a brand can directly be powered through RBS because it's the CM2 positive business. What is CM2 positive?
01:03:43
Speaker
So contribution margin too, which is everything you are left with after subtracting cogs, logistics, marketing, returns and damages and discounts. So if you just seem to positive business, you are able to perpetually grow it through RBF because you have access to that kind of stuff. And RBF is revenue based financing, just for instance.
01:04:04
Speaker
So for our own brands, we try to maintain a contribution margin to of around 20%, which means they are easily be able to be powered by revenue-based financing. For acquisitions, our acquisition work is that for a 40 to 50 lakhs per month revenue brand, HCM2 has to go to 20% first and then only will acquire it. Second, the payout doesn't happen all at once. It's distributed over several months while in the background, the supply chain integration is taking place.
01:04:34
Speaker
And all that CM2 margin that you extract on the brand goes into repaying the debt. And that kind of financial engineering enables you to take money directly to acquire the brand and you don't have to dilute your company for equity finance. Amazing. How did you figure this out? It's the first time I have heard of this and it is such an intelligent approach to scaling up.
01:05:01
Speaker
Yeah. So, I think it's not unique. So, it happens in, I would say, serious businesses and slightly older businesses all the time. So, people are powering a lot of their activities through intelligent debt and that's how they run things.
01:05:19
Speaker
Amazing. I need to talk to more serious business. Okay. Amazing. So let's talk a bit about the future now. As a group, what kind of target do you have? Like say by 2025, what kind of you do you want to hit? What channels do you want to be present on? How do you see those channels contributing? What's the road back? I want to do a bit of future giving.
01:05:47
Speaker
I'll start with the revenue roadmap first. So our target for financial year 26, which is by March 26, we should be able to do an ARR annualized revenue run rate of $1 billion. So that is what our North Star metric for the near term is. So we have to become a $1 billion company in revenue by March 2026.
01:06:12
Speaker
Quick question here to understand what is the meaning of $1 billion. What are some other FMCG companies in India that would be more than $1 billion or around that level? Just so that I understand what $1 billion means.
01:06:25
Speaker
So Mensa will also soon become a $1 billion revenue company, top-line revenue. Then you have traditional players, like whether it's Imami, Mariko, these HULs, Vondelis and things like this. So Imami would be doing how many billion dollars?
01:06:44
Speaker
I don't have the exact number on me right now, but it would be much more than 1 billion. Amazing. So tell me about your architecture, your headcount, how are you managing the business?
01:06:59
Speaker
Right now, we are around a 125 people company and we are broadly split into four divisions. The first and the driving engine of the business is obviously the e-commerce excellence where we excel at selling across all the e-commerce channels. You can call it the distribution team. Then we have a team called brand building.
01:07:25
Speaker
does everything from designing brand communication, writing content about the products, creating social content, interfacing with celebrities, everything related to if distribution is the skeleton, brand building is the skin.
01:07:40
Speaker
Then we have a third team which is the supply chain. Everything from research and development, quality assurance, interfacing with contract manufacturers, ensuring that the product reach the consumer in the right format and all that stuff. And then the fourth team is
01:08:00
Speaker
It can be clubbed with everything else, but it's mostly around consumer and business insights, where you have internal business intelligence and external business intelligence. External business intelligence is about SKU-wise, day-wise movement of SKUs in certain geographies. So, getting that kind of granular insight and external business intelligence is about what's going around the world, how are the trends moving and things like that. So, those are the four broad divisions.
01:08:25
Speaker
So the internal business intelligence helps you do your demand planning, your forecasting, and therefore provide information to the supply chain that how many SVUs to be produced and what is the product makes sense, stuff like that. Yeah, so internal is about what's working and why it's working, right? External is about what could potentially work and why could it potentially work.
01:08:50
Speaker
Okay. Give me an example of the why here, like something that you figured out through the intelligence team. This is why something is working.
01:09:00
Speaker
So, we recently, in one of our brands called Velcore, we launched a product which is a pre-workout. It's a non-stimulant based pre-workout. Most of the pre-workout products that are in the market have caffeine, taurine and all these chemicals that give you a hyper buzz and a hyper kick but they crash your energy in the long term.
01:09:23
Speaker
So, the external BI team would study the overall market of athletic supplements first. They would segregate it in the CAGR. So, pre-workout, intra-workout, post-workout. How are these market moving? And then they will superimpose that on top of social trends.
01:09:42
Speaker
What are the kind of problems caused by these existing products? So, caffeine addiction, taurine addiction, stimulant addiction is one big problem that is cropping up within athletes and causing crashes. So, these are the kind of broad trends that helps the brand team to then decide what product potentially could be lost and how the brand would be positioned.
01:10:06
Speaker
It's not a system. I think it's a very nebulous process. There's no linear path to it, but we are trying to build structure into it. Right now, we have processes where we'll gather this information, condense this information, then do more research, condense this information and all that stuff.
Conclusion and Audience Engagement
01:10:26
Speaker
Trying to bring structure to this chaos. Did this product work and did you figure out why it worked or did not work?
01:10:34
Speaker
So, this product is working really well because the sentiment of addiction-free energy, which is what our positioning was, is working well within the ethnicity. So, clean energy is on the rise in the last 6-7 years and this is the sentiment we capitalized the product on.
01:10:56
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.