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Resilience & Taking Risks | Tonmoy Shingal @ Mettl
156 Plays5 years ago
“You can’t change what the market wants, you can only serve what the market wants” - Tonmoy Shingal.
For this week's Founder Thesis episode, we sat down for a conversation with Tonmoy Shingal the co-founder of HF-tech SAAS platform, Mettl. A tech solution that changed the way organisations hire talent.
We talk to Tonmoy about the genesis of Mettl to its stupendous growth to finally being acquired by Mercer & everything else in between. This has been one of the most exciting entrepreneurial journeys we’ve heard so far on this show - and how could it not be? Mettl’s stakeholders got a 7x on their investments as they exited!!
Here are the key takeaways from our discussion:
- An 80/20 approach towards enriched learning.
- How to find your life’s calling.
- Raising funds for the startup & the two types of VC investors.
- Adapting your product as you grow to achieve the right product-market fit.
- Scaling by being frugal on marketing spends.
Recommended
Transcript
Introduction to Founder Thesis Podcast
00:00:02
Speaker
H.T. Smartcast You are listening to an H.T. Smartcast original.
00:00:24
Speaker
Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
Journey to Founding Metal
00:00:38
Speaker
Hi, everybody. This is Donmar Shingal, one of the co-founders at Metal. We started Metal in 2010. It's an HR tech SaaS company. And we ran it for eight plus years. Before in 2018, we got acquired by a Fortune 500 company called Mercer.
00:00:53
Speaker
So imagine that you are the recruitment manager in a large company like TCS or Infosys. You probably need to hire thousands of people each year. Till a couple of years back, this type of hiring used to be pretty manual with applicants writing out tests, a panel evaluating the tests and shortlisting people and so on.
00:01:17
Speaker
Overall, this was a very painful experience for both the job seekers and the companies that are hiring. But thanks to startups like Metal, now the hiring process requires half the time and effort and has become 100 times more efficient. Today, Akshatat is speaking to Konmoi Shindel, the man who digitized and transformed the business of assessments with his venture, Metal.
00:01:47
Speaker
Even though Tonmoy belongs to Marwani business family in Kanpur, he had no ambitions of being an entrepreneur as a young man. Here's Tonmoy talking about his journey into adulthood after joining IIT Kanpur. So IIT is like an extremely strong
00:02:11
Speaker
canvas where people who want to really go deeper into one space and really do academically, stellar job, there is infrastructure and, you know, environment to do that. So I got to discover a lot about myself. One thing being that, you know, what are the right career areas for me to focus on, whether it is higher studies, whether it is, let's say, you know, doing a job right away. So those, those things, you know, over a period of time became clearer as I progressed.
00:02:40
Speaker
So you know when i was in my third year what became happening to me that pursuing business is something you know from an academic standpoint was something which was i was more inclined towards instead of pursuing engineering so i i thought maybe i'll you know do a job somewhere and then eventually after a couple of years do my MBA and seek a business role so this was this is how at least in my mental makeup thing shaped up
00:03:06
Speaker
And then this was also 2002 as a year where I
From Engineering to Business
00:03:11
Speaker
graduated. But this was a pretty bad year for the economy. You know, 9-11 had just happened.
00:03:16
Speaker
A lot of job offers were withdrawn, companies chose not to visit campuses, and even at IIT Kanpur, in that year, only as low as 40% of the batch got placed. The average salaries were obviously low. People were even willing to work for as low as 78,000 rupees a month back then. So luckily I got through Texas Instruments. It was a technical job. It was as technical as it can get. But I thought it's a good, pretty good place for me to park myself.
00:03:46
Speaker
Okay. And so what was your career there like? So I was initially hired as a design engineer into one of their chip design teams. So Texas Instruments is one of the iconic companies in the semiconductor space and their businesses primarily to design and build chips. So chips, you know, one of their divisions was wireless LAN. And this is again, 2002 era where wireless LAN
00:04:14
Speaker
had gone through a couple of iterations of getting productized and delivered, but it was still not mainstream. So in fact, my first project was to work on the first Centrino laptops which were being made in the market, so which were Wi-Fi enabled laptops.
00:04:31
Speaker
So we worked on, you know, I got to work with some hundred plus extremely smart, talented engineers who designed the first, let's say Centrino laptop capabilities for protection instruments. So, you know, soon thereafter, I think Intel launched the Centrino laptop series and I was like, wow, this is something which I just, you know, it just felt like unreal that like a month back I was working on something which seemed like pretty obscure, that something which we worked on will hit the market, et cetera.
00:05:00
Speaker
But here we were just a few weeks or months later that we had a product that we had worked on to work with and see functions and all of that. So it was quite incredible. So then initially when I was hired as a design engineer, my job was typically to test the modules which were designed by other engineers.
00:05:23
Speaker
And I was focused on the security 802.11i, which was all the cryptography and encryption modules, all the security built-in features in wireless LAN. And then I had a brain wave of redesigning a module, which one of my colleagues was doing in a much smarter way. So I thought, you know, we really don't need to design it in this way. And if we redesign it in some other way, then we can, you know, save a lot of
00:05:51
Speaker
cost and efficiency into the chip, which is where even outside my core work area, I built a proposal. I really sat through it and designed how we can go about it and came out with a blueprint of if we redesigned this module in this way, then we could save millions of dollars for the company. So I presented the same to our management and they were extremely well supported and soon I was put
00:06:19
Speaker
in charge of that project and then in fact got to also file for a US parent for that effort. Did this like put you on the fast track at Texas? So that's a good question and that's a tricky one.
MBA and Personal Growth Journey
00:06:35
Speaker
In fact so at TI then while it was a very innovation led company it was and I thought you know I've done a remarkable innovation but I was a much
00:06:46
Speaker
Among the 80 odd people who were hired in the same year as I did, I was, I think, one of the last ones to get promoted. When the next, the first promotion cycle came, which was available for top 10 percentile of the cohort, again, I was skipped. Then the next cycle, so I was then told that, okay, you know, you did well, but you know, some people did better. So next cycle came, which I think was available for the bulk of 70% of
00:07:12
Speaker
the people again i was kept so so then you know it was as if my world sort of fell apart that you and you know among those eighty people i don't think not more than three people would have filed for patents or done some at least in at least in my definition such remarkable work so till that time i
00:07:32
Speaker
quite enjoyed. I also sought longer term career at Texas Instruments. There have been a lot of cases. I was working with people who are 15 years, 20 years, 30 years into the company. TI seemed to be that kind of a company where once you join, you just continue there forever. But this thing rocked my thought process and made me realize that
00:07:54
Speaker
My core goal was to do my MBA. So after three odd years at Texans when this thing happened. And in the interim, you know, I'd given Kat, not really hoping or focusing on it, but somehow with the stroke of luck, I got a call from a few AIMs, including IAM Bangalore, which I did convert and which is what I took up. So how was the two-year period at IAM Bangalore?
00:08:20
Speaker
Oh, it was actually pretty remarkable. In fact, when I entered AMP landlord, I was already four years into the job. When I used to then look back at IT, IT seemed to be like a lost opportunity for me. So when I used to reflect back at IT life, while it was pretty good, but I think nothing meaningful I could make out of those four years. So people who were focused on accounts, a couple of my batch mates, they had come out with a new theorem.
00:08:49
Speaker
In four years, when I completed my BTEC, they were already PhDs and they have children by their names. There were people who were doing stellar work by doing master's PhD. So I thought, you know, I need to be more purposeful when I enter Bangalore. And my purpose was, I defined my purpose that, you know, I need to
00:09:08
Speaker
do 80-20 ACADs which is focus 20%. ACADs don't get carried away on ACADs as much but deliver 80% of the results and spare bulk of my time for other activities just to have a nice time and just to make it memorable. In fact, IM Bangalore time was quite incredible. I sought
00:09:30
Speaker
an internship in investment banking. I got an internship in JP Morgan in New York, then picked up the courses the way I wanted to. In my second year, I thought I should get some work opportunity with World Bank. I did apply to an NCR professor who was working on a critical project on World Bank. I timed it.
00:09:51
Speaker
that with my exchange program when I was going to France. To my luck, he accepted. It was a paid internship and I got to work on critical world development project on the technology sector. Then I thought, how would it be like working for a VC fund? Again, I applied. I got it.
00:10:15
Speaker
I worked for one of the top Indian VC funds, then I thought I should work for one of the hedge funds to see how is it like working there. At Am Bangalore, I became Am Bangalore's volleyball captain. I represented Am Bangalore at a few places, a few other times. While it may not be a big thing, it's a small thing, but professionally, where I used to be, I really moved much ahead in that dimension. It was quite incredible.
00:10:43
Speaker
So on sports front, on internship and work front, then I applied for exchange program, then got to travel quite a lot, friends. It was also quite enjoyable. I couldn't have asked for more. And then towards the end, despite global banks, Lehman Brothers, and so many others, because of the economic crisis falling down, I could get into a Boston consulting group, which is one of the most ever top jobs.
Career Setbacks and Entrepreneurial Aspirations
00:11:14
Speaker
So at least those two years were sort of a fair detail run for me. So in 2008 you got into BCG and then how was that experience like? So BCG joining was at an era which was
00:11:32
Speaker
a pretty troublesome economically. And on top, I joined Boston Consulting Group in Belgium. Now, financial crisis in 2008 originated from the US. But back then, basically, US and Europe were extremely well engulfed into the crisis. The day I landed in Belgium, I think in a week's time, one of the largest banks also declared bankruptcy called ING.
00:12:00
Speaker
And so it was, I think, very larger economy was in a pretty troublesome time. I came from like emotional, sort of seemingly professional highs in the last two years. Eurozone was going through a negative economic growth and projects for companies including BCG were probably hard to combine. So I, you know, after like just six months, in fact, less than six months of my being at BCG,
00:12:28
Speaker
I was let go and this was in early 2009 like what happens with any dream run right when you fall down it's a steep fall it is sometimes back breaking so it was a pretty steep fall jobs were pretty hard to come by in the way the let go happened was pretty unnerving for me you know on top I had sort of a
00:12:52
Speaker
somebody I was going to get married to in an arrangement, marriage route, that also fell apart. Because you lost your job. I don't know exactly. Unrelated. Could have been unrelated. I don't know exactly how this happened. We were only deciding the dates, things were fixed, but finally it fell apart. Around the same time, I broke my ligament of my ankle, which is a third-degree ligament.
00:13:20
Speaker
So for another year, basically, I could not walk. And third, obviously, I lost my job. And this was in the backdrop of a financial crisis. So jobs were extremely hard to come by. While people did offer support that let me help you find a job in Belgium itself, but then I thought maybe it's a good idea to come back to India and look for work. So for a good time, I applied. I started looking for jobs.
00:13:48
Speaker
And I don't know if you have some recollection of that time, but jobs were extremely hard to come by. I mean, for one opening, there were like probably hundreds of applications. I think we school graduates were pretty much available in access. And yeah, I mean, I stationed myself for some time in Delhi, in Mumbai, even elsewhere. But all I could land up is at best is interviews with recruiters, the placement consultants, and not even getting a final interview call with
00:14:17
Speaker
somebody so uh so it was you know amidst the sort of emotional laws health flows and financial laws so this was sort of that time and when things don't get going uh i think uh it was a fairly sort of a downtime it was a depressing time at least you know probably the lowest time lowest point of my life uh and which is where uh you know i got a lot of time to reflect back
00:14:41
Speaker
on myself and my parents were also getting a little worried because I was being from a Marathi family, you know, there's a certain age you get married and I was exceeding that and you know, how old were you at this time? 2009 I was 29 and then you know suddenly from a good dollar salary, one of the top jobs from college from so to say in the let's say
00:15:07
Speaker
a hot property to a completely junk bond which nobody wants to invest in. The prospects that I met back then, the first conversation used to be, what do you do? What is your salary? How much property? What is your bank balance? It was a good reckoning time for me to think about who am I and what exactly do I want and what is it that I should be doing. Back then, basically, I realized that
00:15:34
Speaker
I am from a Marwadi family. Somewhere, being an entrepreneur, doing my own thing was the thing for me. It was not because of the love for money or financial success. It was because probably, being a Marwadi and an engineer, you wanted an open space to express yourself creatively and your engineering mind into building something of value and repute for somebody else in the company. I realized that
00:16:02
Speaker
probably whatever objective function i was chasing was a plastic one for me you know trying to maximize money and financial gains in the short term if i may say attractive distractions so because you know if you're like imagining yourself that you have to go to the airport to catch a flight on the way you get you see an amazing side where a lot of rasmatas is happening there's a there's some you know free booze we find
00:16:27
Speaker
going on and they say it will be the time of your life you will just come spend some time here you know back then when I joined BC I chose to abandon my goal and join the retractive destruction so it was not bad at all
00:16:42
Speaker
But did you really have that goal to do your own business? I mean, was it really like a clear thing in your mind that yes, or was it like, I mean, you know, 60% of people who pass out from college think that they want to do a business, but most of them have that as a like a faint goal and very few would actually have it as a strong goal. So what was the case with you?
00:17:05
Speaker
It's a good question and the way i answered that for myself back then was i reflected back in my life that while at DI, there were automatically some startups i kept ideating on. In fact i joined in some sort of an advisory capacity to some software companies were trying to build some basic software for manufacturing setups so much so that
00:17:30
Speaker
few of those people were staying in our own house and I was trying to help them in some way. Also back at I Am Bangalore, I tried my hands.
00:17:40
Speaker
building something. So, you know, also a few of my role models that I also reflected back, they may not be financially super successful. So there was one super boss I had called Mr. David Karnad in Texas Instruments. So he's also from IIT Kanpur and he also tried several of his startups and entrepreneurship during his career. So he was
00:18:05
Speaker
I was pretty good friends with him. He seemed to be the go-to guy for any sort of discussion while he was fairly senior. He was super approachable, one of our very different managers or bosses.
00:18:44
Speaker
What did you attempt in IAM Bangalore? I was attempting to build a startup which
00:18:50
Speaker
looked at power consumption. I felt that if we can optimize our power consumption and become a leader in that, we can also not just deploy this technology in India, but even outside India. If we look at it by 80-20 rule,
00:19:05
Speaker
80% of the power being consumed by 20% of the establishment. Even within those establishments, there would be 20% of the gadgets and places which will be guzzling a huge amount of power. It's just that nobody probably would have looked at it from a critical angle and looked at the choice of solution sets available and how to go about it. This was just an idea. Did you actually try to implement but decided, okay, not right now.
00:19:33
Speaker
I think I was only doing it because I probably had a keen interest like a hobbies hobbies plus approach with sight of the shore in mind so while I want to swim in the open ocean but I always chose to swim with shore nearby that I have a fallback option. I thought you know with BCG's job gone and things being hard to combine you know what is it exactly that I want.
00:19:56
Speaker
I felt that joining organized corporates is not something which suits my skill set and my ability to really make any mark there is next to impossible. Also from a productivity standpoint, typically in your organization there would be a lot of engineered work which is not
00:20:15
Speaker
You're just doing that work, not from by producing something or making anything efficient. In fact, I, and I read this quote that ships are safe in the harbor, but that's not what ships are made for. So, and that quote had a pretty strong impact on me and my decision making. So, uh, you know, at that time, uh, when I was getting more time to reflect and without any job and no job in the site, I said, you know, who am I? I mean, yes, I did. I can't put, I came, I graduated from, I am Bangalore. Do I have the potential or do I need to be in the backdrop of a top notch?
00:20:45
Speaker
like a VCG or a Microsoft to make a mark for myself. I thought that what am I chasing? Is it money? But then thought about what will I do with this money? Do I want to sport Lamborghini? Do I want to own a house at Malabar Hill? Or what is that exactly I'm trying to chase? So it seemed that whatever I wanted in life is not money-led goals. So then I thought, then what is it?
00:21:12
Speaker
i'm trying to be relevant by using microsoft or it or that you decide by stop brand names i realize that if i indeed have some skill and talent then i should be able to do it even without any of these and
00:21:31
Speaker
And that is what I realized is my focus, is my goal, that I don't need money. I don't need to be relevant. I'm okay. I'm poor. I'm okay. If I meet my alumni group after 20 years and everybody's sporting a Lamborghini and mansions and palaces while I stay in a rented, pretty average place.
00:21:53
Speaker
I realized that I could hold that conversation without being embarrassed about it. I provided I chase and do something which I really wanted to do. And when I turn 55, when I look back to my life, whether or not I had money, at least I would be satisfied that every day of my life I'm doing something which I really wanted to do. Be it playing sports, be it whatever. So that sort of gave me that courage.
00:22:17
Speaker
So I thought, you know, what kind of a ship am I? Am I the ship who's supposed to be in the docks, you know, will be trying to party and enjoy and post? Let's become a restaurant, become a museum, or should I am I meant for sailing the high seas, amidst the storms and maybe eventually get battered and bruised?
00:22:37
Speaker
in the process so you know i summarized all this all these flashes of experiences with them all together and define myself that this is what i really want i want i'm not driven by money i'm not driven by fame or designation i really want to start something and that is a great canvas which will where i can apply myself to create something useful and meaningful for for the society i mean either for consumers or for businesses to do something which which is a real challenge
00:23:07
Speaker
business problem.
Metal's Evolution and Market Pivot
00:23:08
Speaker
So how did you end up starting metal and tell me about your co-founder as well? Metal basically happened in 2009 mid when we started we were known as industrial training services private limited so we started as a training come so we thought that what you know there have been
00:23:24
Speaker
in India in the last 4-5 years. While industry was growing, industry needed top quality and trained
00:23:40
Speaker
but then what were being produced by these care to and below schools were not adequate while students needed jobs. Industry needed to hire trained skill people, but then somehow there's some divide, there's some gap which needs to be fulfilled.
00:23:55
Speaker
And the current academic setup is probably not able to do that. So we thought we build industry-linked trainings for these college graduates. We started with B-School trainings. So we picked up some top six, seven, eight hot industries where they were the most bulk of the jobs. And we interfaced with the industry experts, identifying what skill areas would they like B-School graduates to be having. And so we defined and designed those trainings to deliver it to those colleges. We thought either... So who is we here? Who are they?
00:24:24
Speaker
with you doing this. So I started with a friend in industrial training service development. Her name is Vandita. She is a wife of one of my closest friends called Kethan who is my eventual co-founder at Metro. So Vandita and I, Vandita was running her own food startup. She was also interested in education. She had good
00:24:44
Speaker
connects in the education space. I knew them for the longest time. And so while I was looking for a job, I interfaced extensively with them. We shared common goal of doing something in the education space. We built this plan. We realized that there could be a pretty reasonable market opportunity. We thought that we'd start deploying these trainings physically or not. So having a physical industry expert going and delivering these trainings, then eventually make them online and remote completely. So something about
00:25:20
Speaker
How did you do the sales? I mean, I imagine sales would be like the toughest thing to get a business started to get the revenue flowing in.
00:25:42
Speaker
nationally correct should happen. So I had sort of a little bit of disconnection with the rest of the world or the way the world functions. Your mindset was if the product is good, people will buy it. You know, why wouldn't people take a training or buy a training when they're paying several lakhs to be school, right? Just for hanging around there without learning any job. If I'm
00:26:01
Speaker
getting them really top-notch industry experts to deliver trainings in industries which are pretty hot, who are recruiting. So why won't colleges or students buy it? And so, you know, we would make at least maybe 100-200 trips to from Gurdhana to Greater Noida to the v-school hub. We just got one sale done. Which college was it?
00:26:24
Speaker
this this was called sharda university so this came surprisingly pretty early but none of the other colleges you know took the bike and we were they kept making us go round and round in circles that come some other time so then we realized that eventually that this is not working it is not flying after like you know running it for eight to nine months we were in terms of our commercial traction right where we were in our first week so surprisingly in the first week itself we got sharda university done but then
00:26:52
Speaker
Let's say after one year of trying to sell hard to various different colleges, I remember going to Allahabad. I remember making several trips to Hyderabad. But no sale came by. There was zero, completely zero traction. And the colleges said, you get jobs soon. I don't care about training.
00:27:11
Speaker
So that sort of thing sort of failed our business model and around that time we started getting several requests for that hey you while you're saying you do trainings can you do assessments instead because this is what we are interested in and we started getting few companies to say that we are we'll be keen to hire people from any university or any college provided you can assess the candidates and give it to us can I use some of your assessments
00:27:36
Speaker
And which is where we pulled in Kate and my other co-founder which is who's one that has been and one of my college mentors Navin Navin Tiwari who's the founder of in Moby Navin has been a great support and help of Florida metal journey and so we pulled him in and we I dated on that this is at least not working out what can we do next.
00:27:55
Speaker
So based on our conversations with companies, our own experiences in companies, while I was at TI, while I was at BCG, while Kethan was with other companies of different size and scale and industries, we felt that the company's ability to really hire and define what exactly is required in the successful candidate is very, very
00:28:16
Speaker
broken so when I was a TI I was just sometimes pulled into interviewing people I had no idea what to ask them and TI was a pretty matured robust company in different processes so we felt that you know there has to be some science behind assessing people and which is currently either in academics and can we pull that out and offer it as a product to companies through assessments and again you know Naveen
00:28:42
Speaker
brought his own perspective that a lot of education is happening online, right? Assessments will begin to soon follow. So when people are getting educated online, so they should be also find getting assessed online. So we felt that there is for
00:28:57
Speaker
various different consumer needs. There are systems and platforms. So if somebody wants to watch a video, there's a YouTube. If somebody wants to have emails set up, there are several platforms available. But assessment, which will, for humanity, emerge like a big need. For 7 billion people, we assess that there'll be at least 100 billion odd annual assessment situations. So we, as students, young professionals, have to go through either a lot of practice tests, high-stake tests for various needs and purposes.
00:29:25
Speaker
And the number could be as high as 100 billion. But there's no de facto system to host and provide a digital infrastructure to conduct these tests. So we thought that we can create a super great technology system to do assessments. And so this is mid, late mid 2010, which is when we realized that it is now a very technical product.
00:29:46
Speaker
So that's when we started metal. We thought that what youtube is for videos we want to be for assessment. So anywhere globally, anyone wants to use assessment and have a system to do assessments should come to metal. And that's how basically metal started. How did you get the revenue going in the new Aftalden?
00:30:04
Speaker
oh yeah so this this is another complex thing so i would say we were extremely naive to look at assessments as a consumer solution so when we started metal we were like what youtube is for videos metal is for assessments but we realized that you know youtube is a very consumer product people primarily
00:30:20
Speaker
watch it for passive learning and entertainment. While it may seem extremely commonsensical at this moment, but back then we were very stupid to think of metal as a consumer product. But that is how we started. We raised some capital.
00:30:41
Speaker
How did you raise capital without any kind of MVP or anything like that? So again, I would say my life is a series and string of serendipitous events. This also being one where we went to some of our family and friends and they were pretty kind enough
00:31:02
Speaker
We had a business plan which was completely in shambles. We made some 15-20 pitches to our friends or family members who were in some capacity to invest. Luckily, there were 6 people who chose to buy it into our store.
00:31:20
Speaker
In fact, I'm still pretty cordial in touch with them, all of them. And when I meet them, I ask them, how do you invest? A lot of people are very frank. They're in fact friends, college, you know, batch mates. They said, you know, we plan to invest. So we chose not to look at your plan. It was completely shitty. We just invested in you guys. I mean, we felt that you, you guys,
00:31:46
Speaker
When you are focused on something, at least hard work and ability should not be a reason why you will not be able to do anything in that. And how much did you raise? So we raised around 50 lakh rupees back then. And this you used to develop the product.
00:32:02
Speaker
Because both Ketan and I, we had a personal issue that we were both non-technical. None of us could code at least post-MBA. We had to hire a few engineers. Because this new focus of metal was
00:32:22
Speaker
engineers to build a product and which is basically what this money was used on but again you know this only could help us make some basic MVP of sorts in place not the revenue so revenue eluded us even after building the first version of the product again you know
00:32:40
Speaker
Soon thereafter, we made the MVP. We met Blue Menchers founders. In fact, they had just set up their fund around that time. I remember meeting Sanjan Karthik calling them to Park Plaza in Kurga and our office was very close by into a basement. So while Sanjan Karthik, they were insisting, you guys, please come to, please let us come to your office. But there was no washroom in the office. I mean, we felt that maybe it's not a wise idea to call them there because it's
00:33:08
Speaker
functional setup. Having a washroom is important then we did not have it. So called those guys they insisted that we want to really see your office so we took them there and then you know they liked us they soon thereafter committed an initial seed round. What did they commit to? They committed to the B2C business plan?
00:33:29
Speaker
They definitely felt a need. This is a growing upcoming need and there's no one de facto system. So there's a wide space, there's an opportunity for a company to become one. After raising the first angel down and then this seed commitment came by in seven, eight months. So this was early 2011 and they committed around 1.6, 1.7 crores. And then, you know, somebody told us that there's an eminent psychometrician by the name of Dr. Singh.
00:33:59
Speaker
India, who's just come back from the US. So we reached out to him as well on LinkedIn, just randomly. And surprisingly, he also was very keen to invest in metal. So along with Bloom and Dr. Porenjasinghe, we stitched up a seed round. And early 2011 is when we got a fresh cash injection in the company. Again, we stayed in on course of metal being a system for consumers.
00:34:25
Speaker
We toyed with the idea of can educators come on the system and build assessments? Can we preload some assessments? We talked to some publishers. Whatever assessments are there at the back of your books, et cetera, can they be made online? But then, you know, moves were a big thing then reached out to them if they can integrate with us for the assessment. So, you know, we kept thinking that, you know, wherever assessments should be needed to be used, can we power those assessments?
00:34:52
Speaker
So in the quest, we built a pretty feature rich, robust, stable assessment system. What you built was the engine, but not the content. And by content, I mean the actual tests. Absolutely. So yeah, I mean, we tried the various channels with various types of players, educators, educational companies, but then even HR.
00:35:14
Speaker
HR's of corporate so they said you know we really like it so i think it's pretty feature rich and this is what we want so but we we want assessments we don't want the assessment system so this is you know a classical issue of a product market where you go to market with a with an assumption about a product that would be there again there's no let's say no voice
00:35:35
Speaker
clearly which tells you that this is not a great product market for you and you you know you will start hearing voices you you start hearing things like hey we don't have this requirement today come back after one month after five months there may be some fake assurances some initial good conversations but not leading to anywhere and they're just getting you longer so
00:35:55
Speaker
That's where we built the entire conviction about exactly what is going on. At least I realized that this is not a really good market to be in. From where we were, which is what YouTube is for videos,
00:36:10
Speaker
we've metal will be for assessments we changed it to that we want to be the survey monkey for assessment so we realized that the consumer side at least in our business is not required because people all by themselves will not like to come and take assessment once you have people who built assessments there may be some takers
00:36:30
Speaker
will engineer them themselves. Again, we started a quest on going to educators and see if they could start using our system. While all these experiments and iterations kept happening, the one constant thing kept happening is money every month became lesser and lesser and lesser. What was your headcount like by this time, by 2011, when you were pivoting from B to C to B to B? So I would say we were around 15 to 20, 15 to
00:36:57
Speaker
around that time. And these were mostly software developers or you also had sales people? 70-80% were all software. They were one ops person, one more sales person. So we kept focused there, but we realized that we soon run out of
Strategic Challenges and US Expansion
00:37:12
Speaker
funding. And that's when we realized to begin a fresh series around rates. Although we started clocking some bit of revenue, we cracked a couple of deals with Cognizant and a few other larger companies.
00:37:26
Speaker
So, by this time, you started creating a test also. Yes. So, in the quest for business, you know, we started doing discussions in requirements, which we used to earlier say no to. So, we started taking these projects. So, we imagined that
00:37:41
Speaker
you know the market of assessment is like a highway you know in the context of good car let's say it's nha let's say if i am stationed somewhere in sector 50 i want to run my car with 50 kilometers per hour or 80 kilometers per hour but internal roads are not letting me do that i need to somewhere reach nha and if there is current infrastructure doesn't lead you there to yourself have to build it so either you know the market is like that that you know companies are willing to create their own assessments
00:38:08
Speaker
and so those roads are built where you could reach that highway then you can be on your own and you know define that this is exactly what i'll do but if not then you will have to build the roads you will have to facilitate that business by doing extra bits so just by making nh8 with no connection doesn't mean cars will start running on build the internal road
00:38:27
Speaker
to let the cars get feeded into the highway. So that was the analogy or we thought that we need to let by building these additional services, service packets to facilitate business commitment.
00:38:44
Speaker
we were close talks with Wipro, a few other companies and that was an opportune time for us to also start raising more capital and also rethinking about our own business that what exactly, at least survey monkey for assessments is also not working out. So then we reimagined ourselves as a HR tech SaaS system because we needed extremely strong assessments
00:39:08
Speaker
assessment capabilities
00:39:37
Speaker
the sky.
00:39:39
Speaker
One realization came is that you can't change the way what market wants. You can only serve that what market wants. Which is where we got to assess what different customer and product feedbacks from different customer categories we were getting and to define where are the well-defined market, where we could garner more revenue and go deeper and build expertise and start selling more active
00:40:03
Speaker
We incorporated all that in our business plan, switched it to few funds is when Calari gave us a term sheet. Although just before that we went through our own crisis. So two of the top technology folks, the senior most and the second senior most. Second senior most was also one of my juniors from IIT Kanpur and the senior most was our CTO back then from IIT Delhi. So they on the same day quit.
00:40:29
Speaker
giving us 15 days notice. While we were constantly trying to reinvent ourselves, this is the last thing we wanted. We were actively looking to raise money. It was also a big jolt into our plans.
00:40:45
Speaker
and money was soon running out. We pitched to several funds. We got several no's. We got few yes's. In fact, just two yes's. Kalani was one of them. So we met Vani. Vani quite liked us. We could enthuse her with our plan and she could see, you know, this is a distinct definite need of the market. So, you know, at least what I've realized is in the VC space in India, there are two
00:41:13
Speaker
professionals in the VC industry were either bankers and consultants who entered this space and they're like trained professionals so you know their characteristics are distinctly different from entrepreneur led VCs. The difference is one I think the realization the
00:41:28
Speaker
the intuition of where there's business and where there is not. So typically, an entrepreneur let VC, you know, they go by a gut call, whether there is a business, there's a real market need or not, wherein a lot of professional VCs like to get data and a lot of more validation, etc. You know, these are relatively small spaces, interact spaces, and it is very difficult to furnish any sort of data. So we got into so many conversations with potential VCs back then.
00:41:56
Speaker
All of them said no, but Vani being an entrepreneur at VC, she by her gut realized that this is indeed a market, investible market and she liked us and finally the term sheet came by. Again, we were running behind time because due diligence was going on, we didn't want to showcase any weakness so that there's no sort of back negotiation with us on the field terms.
00:42:20
Speaker
but the money was fast running out so again out of serendipity somehow we were able to get the money wired and like two days before the final salary day when we were we were able to honor the salary commitments again it was a pretty stressful times you know again also because two of our extremely key members left on one single day and again money was hard come by so finally
00:42:43
Speaker
It was a serendipitous moment and we got a very welcomed message from the HDFC bank that there is a new credit to your account. We could keep counting the zeros and it just felt very real and unreal. How much did you raise in that round? Back then we raised $4 million but the dollar was 55 rupees.
00:43:06
Speaker
Which year was this? This is 2012 mid. Okay. So then what happened after? So again, you know, 2012 mid, when the money came, we could professionally build, you know, larger teams, we could have a much bigger tech team. We started hiring more salespeople. We started hiring, you know, more marketing people of cereals. But again, you know, every space sort of plays differently. So there were certain revenue projections, which are
00:43:34
Speaker
fairly steep, we thought we should be able to achieve them. Again, the market understanding, market dynamics of relatively markets which are being formed is something that comes only experientially. So the more you think about that this should be a rational decision, but actually it is not in so many cases. So we thought that this is a great chosen market for us, but we realized
00:43:56
Speaker
over time that HR is a back-end function, it's a cost function, it's a function which not too many companies like to invest too much on and traditionally maybe the decision makers take time, take their own sweet time to make decisions, budgets are tight, there is a lot of scope for negotiation and then also we experienced
00:44:15
Speaker
credible competitors who started coming to our market. So there were two companies, notably aspiring minds and four cubes, which started with doing something else. And in fact, there was potential synergies and partnership possibilities with them because we were up your play B2B to provide assessments and they were consumer focused to help colleges, college students getting placed. Assessing them was one of the many steps they used to do.
00:44:45
Speaker
So the post-12 era post-raising funding, we tried to build a market. We also started talking to co-cubes, for example, to partner with them. But then they were also contemplating to enter our market. And therefore, we were also tempted to enter their market. And I think this is one of the best or most important strategic moments for us. So while they were reasonably well established in their own market, we both Caitlin and I, we looked at, we put
00:45:14
Speaker
potential impending strong competitors who could already reasonably successful in their own markets and could flow that capital back to our own market. What was CoCubes market and how was it different from your market? So CoCubes and aspiring minds were primarily a consumer company. Their primary purpose was to help college students getting placed and assessment or pre-assessment was one of the tools.
00:45:38
Speaker
So they took a prior student charge that was their revenue model. Yes, they facilitated companies to come digitally to the campuses, do a talk, upload notes, maybe do chat sessions. They were I think number one and number two players in that field. We chose to be a B2B company primarily.
00:45:56
Speaker
we were tempted to see if we should play in that market. But what happened was both Kethan and I, we studied that market deeply. We realized that aspiring minds and coaches were as companies held older than metal and they had let's say
00:46:12
Speaker
number one number two positions realize that the whole market opportunity itself was not very large let's say if there are five lakh students who are graduating from meaningful tier two tier three schools and tech schools in india all you could all you could let's say charge to them is maybe up to even a thousand rupees is a 50 crore market opportunity in the consumer space where you know it is so costly to do customer acquisition reach out to the customers these companies were already doing i think eight to ten cores like that
00:46:42
Speaker
they had tough time in maintaining their own revenues and it did not make sense for us to really enter this market and because even if we had a magical power and we move the magic band and we win this market all we could become is a at best a top 50 crore company you know it didn't seem very exciting at all and you know we chose to be a pure play B2B company and build our business grounds up you know this also became one of our selling points that we are a very neutral B2B only company
00:47:10
Speaker
because for companies were sensitive about the quality of people.
00:47:17
Speaker
best in class to do that intelligence bit and we don't have any incentive any other side to get students to play. Pushing one college over another. You know when we raised a city in 2012 we were we did you know maybe less than 80 thousand dollars as our top line at a 55 rupee dollar and then then we did while we grew the business I think
00:47:42
Speaker
by three times. Maybe three, three and a half times a subsequent year and again three times a year later. But we were far away from our projections and we were thinking, what are we doing wrong? We therefore then reached out to several of the experts in companies in the industry.
00:48:02
Speaker
with related to internet for example we met some Northree experts let's say if you know you look at India and if a product company has been successful in you know delivering a sizable business it has been Northree.com so we reached out to them to their experts to understand how they have scaled their operations their business and you know we we got quite intrigued by their approach and how they used to
00:48:30
Speaker
scale up their sales effort, how they do an account-based mapping. They used to look at their entire market, which was India, as buckets of revenues. Let's say you imagine a map of India, which was
00:48:47
Speaker
which had, let's say in the first year, five buckets of revenue, which is, you say Delhi is one bucket and Mumbai is one bucket and top cities, top five cities are five buckets. The subsequent year, they'll split it into two or whatever, three, that now Delhi has become three buckets. So Delhi will become Delhi, separate Noida, yes. And so, you know, appropriately, such division will happen in Mumbai. Maybe they'll split
00:49:15
Speaker
the accounts by that this is account management team, this is net new team. So they started, you know, that approach really was pretty intriguing and insightful for us. And so yeah, I mean, we did one of these two things, both of these two things. So one is we also started looking at our market in the same way that we started mapping what these revenue centers in India are like.
00:49:44
Speaker
and how we can subsequently, every few cycles of revenue, we can divide that into and create newer buckets and put suitable people in them with the right accountability and responsibility to fill that bucket with more revenue.
00:50:00
Speaker
international ramp-up strategy? How did you go global? While we chose to stay in the HR tech space and in the ed tech space to sell a high-stage assessment platform, but what we realized eventually is that the market size of India is limited and we couldn't become a billion dollar company just by focusing on India.
00:50:24
Speaker
because it's a B2B market in India's nascent and small, at least for our product. And so, you know, quickly in hunger of, you know, expansion, and because of some positive signs in 2014 from the US, when we cracked our first $600 or $1000 deal from the US, we thought that maybe what
00:50:46
Speaker
whatever effort we are doing in India is if it is focused on the US then we could garner maybe 10x more revenue or more with same or even less effort. So while it was difficult to get a 20 lakh cheque from Cognizant and it required 10x more effort but signing a $600,000 deal from a no-name company
00:51:09
Speaker
unnamed company in the US was possible to do it on phone and that sort of excited us and we cycled it back to the board. They were also excited. They said that the US is like by far the 100x bigger market and we need to set it up. We invested one close to a million dollars in the US.
00:51:30
Speaker
local people so we ran that office for like a year you know you know how us people are fairly expensive maintaining an office with people's health insurance and you know services serverance packages are pretty expensive so you know for our to our surprise negatively you know the entire close to a year of effort in the u.s by doing enough amount of
00:51:53
Speaker
Also, marketing which was palatable for a company of our pockets and size. Still, there was absolutely no commercial traction in the US. So, nothing trickled down to anything revenue. This was like the Sharada case all over again. This was the Sharada University 2.0.
00:52:14
Speaker
But how it was different from Sharda University is it was Sharda University 200.0 because it drained a million dollars into an already financially struggling company. And we had to honor and meet a lot of commercial and severance commitments. And so we bought off, let's say, four million dollars we raised. We lost a million there with zero top-line impact. And so we had to shut down the US office and relook
00:52:41
Speaker
at the whiteboard that we were running out of money and and so we reached out to funds see if you know we can get a top-up we can play some new round of funding this is 14-15 timeframe and quickly we realized that there was you know minuscule to
00:52:59
Speaker
Negative interest to find the space anymore and we quickly realize that we need to be completely on our own so either we plan to shut down or we need to reinvent ourselves because there will not be any external injection of funding so that is where you know what can i get
00:53:20
Speaker
Eight odd months of runway left, we started focusing on the bare essentials on just scaling up the revenue bit, what it takes and cutting down everything, which was not business additive. So all our decisions used to be like,
00:53:39
Speaker
can you find out what the ops can you find out a lot of that is these moments sort of made you realize you get an opportunity to really brush up your sharpness and get focusing on things and the only things that matter.
00:53:55
Speaker
That is when we stopped the US plan completely, stopped all the flap which was there in the company in the sense that we were spending a lot of money in marketing of the tune of $40,000 at its peak a month. The number of leads generated by marketing was
00:54:17
Speaker
you know, was adding up to the business of, I think just $1,000 or maybe even less. So we just completely, whatever discretionary spends, whether like PR firms, et cetera, we just slashed all that. We made the participation in the events zero. So.
00:54:34
Speaker
and we focused completely on a very sharp lead gen based marketing which is extremely measurable. This is where the realization of how to look at sales
00:54:51
Speaker
while understanding the Nokia.com model came by. Yeah, Nokia also doesn't spend much on marketing. Right, right. We also became extremely frugal into marketing. So from our $40,000, we had scaled our cost base to around $8,000.
00:55:07
Speaker
seven to eight thousand dollars and which was primarily only salary cost of a few people and then yeah I mean we started doing the sales experiment with quick iterations and we deployed wherever things were working and roll back features and experiments where it was they were like quick small startup experience
00:55:28
Speaker
experiments within the metal umbrella to try and toy with newer business avenues. So we focused every energy, every part of the company into just one focus area, which was to grow metal, to grow the assessment space. And I think this was the turning point of metal.
00:55:47
Speaker
In 14-15, doing our top line of 7 odd crores with our cost base of 18-19 crores. The year after, we tripled our revenue by slightly reducing our cost. This was also a time when one of our extremely hustling key members said, who was a part of the ops team, said, enough is enough. I'm not going to work anymore.
00:56:09
Speaker
and either I do sales or I do nothing and I'm out. So it was a tough call to let an Obscai do sales.
00:56:18
Speaker
a stellar ops guy. But we again did that experiment and he did not make us repent that a bit. And very soon we could start garnering more and more business. And again, we deployed more marketing dollars there. It also started getting more fruits. We set up a pretty reasonable size inside sales team. And then very soon we started having maybe 1500 to 2000 customers
00:56:49
Speaker
So when you were a company making enough money that you didn't need funding, why did you agree to get acquired?
Acquisition by Mercer and Future Plans
00:56:58
Speaker
What was the thinking behind that? See, it's a very good and a tough question.
00:57:04
Speaker
So we realized that from let's say three to five years and beyond, let's say four years and beyond, we will start seeing stagnation. It could come even earlier because of the recession. And therefore, this is something which from a long-term continuity perspective may not be very attractive. So we realized that can we become a
00:57:30
Speaker
$100 million company? Probably, yes. So we were doing already $10 million of top line. Can we become a $20-30 million company? Probably, yes. But can we become a $60-70-80 million company?
00:57:48
Speaker
little questionable, right? We need to somewhere reinvent something. Market forces were not right. And here, there was a pretty systemically pretty good offer on the table. So we felt that yes, I mean, this has a lot of merit. It also gives us an ability to reset our lives. So there has been our work, you know, workplace fatigue, being in a startup and through its roller coaster journey, it's always a tough work setting.
00:58:17
Speaker
What do you see the next 20 years like for you? I think my calling is to do is I'm a ship who's made to sail the high seas is what I've realized and I've just come out of a battered voyage where completely blue is broken down and I found a small treasure. I can spend it to repair myself, do a bit of merry making but my calling has to be back to the high seas again.
00:58:44
Speaker
I mean what it means to me is to start again and this time around obviously as long as the end state is same whether I have started or somebody else has started doesn't matter but yeah I would like to join or be a part of a startup who's doing some incredible stuff and play some you know some interesting role there so yeah
00:59:08
Speaker
That was Thornmoy talking about his journey of scaling up and eventually exiting from metal. If you think you have an idea for a tech startup that would intrigue him, then write to us at hello at the podium dot in and we'll get you a chance to pitch your business idea to Thornmoy.
00:59:30
Speaker
The Founder Thesis Podcast is a production of ThePodium.in. Subscribe to this show on your favourite podcasting app. And next we hear from Hari Krishnan talking about how he built great learning into one of India's largest tech companies.
00:59:52
Speaker
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01:00:27
Speaker
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