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From Consulting to Building FMCG 2.0 | Shantanu Deshpande (Bombay Shaving Company)
310 Plays3 years ago
"Today's D2C brands will become FMCG giants of tomorrow." Shantanu Deshpande shares his conviction that the direct-to-consumer wave is creating the next generation of major Fast-Moving Consumer Goods (FMCG) companies, challenging established players by building brands directly online.
Shantanu Deshpande is the Founder and CEO of Bombay Shaving Company. He left a successful consulting career at McKinsey & Company to launch his venture, building it into a 100 Cr+ D2C brand in the men's grooming space. Backed by strategic FMCG giants like Colgate-Palmolive and Reckitt, Shantanu aims to build Bombay Shaving Company into a 1000 Cr hair removal business for both men and women. He holds an MBA from IIM Lucknow [cite: Page 2 of Profile (5).pdf].
Key Insights from the Conversation:
- The Leap: Why Shantanu left a stable consulting career, inspired partly by his father's entrepreneurial journey.
- D2C Strategy: Building a brand online involves relentless experimentation and "a thousand small passes" rather than silver bullets.
- Customer Focus: The humbling journey of realizing you must build products customers want and be present where they shop (online marketplaces, offline stores).
- Strategic Funding: How Bombay Shaving Company secured investments from McKinsey partners, Fireside Ventures, Colgate, and Reckitt, leveraging these partnerships beyond capital.
- Omnichannel is Key: While starting online, building a truly large FMCG brand in India requires a strong offline presence.
- CEO's Role: Focusing on setting mandates, communicating vision, ensuring financial stability, and building culture.
- Future Vision: Expanding aggressively into women's hair removal and the strategic considerations around potential acquisition.
Chapters:
- 00:00:25 - Meet Shantanu Deshpande: Founder, Bombay Shaving Company
- 00:01:20 - Early Life: Growing Up Abroad & Returning to India
- 00:04:06 - Engineering, IIM Lucknow & College Life
- 00:06:52 - Journey into Consulting: The McKinsey Story
- 00:19:13 - Why Leave Consulting for Entrepreneurship?
- 00:24:55 - The Idea & Founding of Bombay Shaving Company
- 00:34:21 - Early Strategy, Naive Optimism & Learning Crucial Lessons
- 00:40:30 - Fundraising Journey: Fireside, Colgate & Reckitt Partnerships
- 00:53:52 - Building the D2C Stack & Capabilities
- 00:57:31 - Defining the CEO's Role & Setting Mandates
- 01:04:14 - Product Expansion: Men's Grooming to Women's Hair Removal
- 01:08:09 - Future Vision: Aiming for 1000 Cr & Acquisition Thoughts
Hashtags:
#FounderThesis #ShantanuDeshpande #BombayShavingCompany #D2CIndia #FMCG #StartupIndia #Entrepreneurship #IndianStartups #DirectToConsumer #Branding #MarketingStrategy #ScalingBusiness #VentureCapital #StartupFunding #MakeInIndia #MensGrooming #BeautyTech #Ecommerce #BusinessPodcast #Leadership #Strategy #IIMLucknow #McKinseyAlumni
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Transcript
D2C Brands in India: Future FMCG Giants?
00:00:00
Speaker
Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour.
Journey from Consulting to Entrepreneurship
00:00:32
Speaker
D2C is the flavor of the season in India but the opportunity for creating generational brands is very real and today's D2C brands will become FMCG giants of tomorrow. Leading the pack in the men's grooming market is Bombay Shaving Company which counts FMCG giants
00:00:52
Speaker
like Racket Bankisa and Colgate Palmolive as its strategic investors. And its founder, Shantanu Deshpande, is truly a gifted strategist who left a well-paying consulting job to create an FMCG brand that is today worth 100 crores.
Life in the US and Returning to India
00:01:09
Speaker
Listen to Shantanu, decode the growth hacks and the mental models that helped him scale up so fast and become the leader of the pack in his space.
00:01:20
Speaker
So I was born in Dallas and my father was in TCS for a really long time. So from 78 to 93, 94, he was in TCS and for three, four years in another company. So he was actually, he was a part of a small team that set up a lot of the TCS offices in the 80s in the US. So I was born in Dallas and he was part of the Dallas office and we were in Boston for a few years. We were in New York for a couple of years.
00:01:47
Speaker
We were in Florida for 3-4 years, so we stayed around the place. And then in 1997, he was offered a job in Puna to be CEO of Tech Mahindra, which at Tech time was a very small Mahindra group IT company. This was around the time when IT was slowly starting to pick up. And Mahindra had British Telecom as a sole client, and he was asked to come in and lead that business. So in 1997-2004, he was there.
00:02:15
Speaker
But it was a good job, my grandparents were getting older and my parents were like, okay, my kids are getting older, so let's go back. That was, I had a decision my brother and I were absolutely against because for me, India was all about summer vacation, just coming back to India summer vacation and so on. And I was, you know, right, if you have cousins or someone who comes from US every other year, they dress differently, they talk differently, they're always, they're always the weird, unique types. And I never felt at home in India, even though
00:02:45
Speaker
You know, this is family, but my brother and I were very unhappy about the move back. I think after a year or so, we were fairly comfortable. Okay. Okay. And so like, what had you thought, you know, during your teen years that you will go back to the US and study or you were like, pretty much settled into India? No, actually, my brother and I joined a very, very traditional school in Pune.
00:03:15
Speaker
We became young, we were Indianized fairly quickly. The US became a distant memory. We acclimatized to India very well. I continued to hold the US passport. But going back to the US has never been an option.
Education and Career Choices
00:03:33
Speaker
My brother on the other hand for education, he was at IIT Bombay, then he did his PhD from Stanford and has been an academic and is now working at the hedge fund in the US.
00:03:42
Speaker
His interest did not allow for a professional pursuit in India. But for me, India always is option number one. And other than maybe a couple of years in the US, I don't think I will ever think about saying that. India is a very exciting place now. True. So did you also pursue the path of engineering, like your brother and your dad? Absolutely. So between my brother and I, he was a lot more academically smart than I was.
00:04:12
Speaker
I did try for IIT, didn't make it, went to an IT math course, did my computer science. I was a fairly sharp kid. In the sense, I knew how to clear my exams and do well, but was never an engineering enthusiast. It was just something that kids who are good at mathematics and science would do. So that's why I did it. But beyond that, I knew that I wanted to do something more. So then finally I came, I was like, OK, fine. I want to start thinking about management as a post graduate option.
00:04:41
Speaker
So CAT became a really good, a CAT, GMAT, you know, stuff like that was what my final year in engineering was all about. Okay. How were you in the engineering? Like, you know, were you like a focused on studies or were you like a outgoing extrovert types? Yeah, I was an outgoing, I was a very outgoing, very extrovert. I had a, I lived in a hostel, so I had a lot of friends.
00:05:08
Speaker
I'm the kind of person who identifies and associates with my community slash my institution very quickly from an identity standpoint. So for the four years I was at NIT Nagpur, I was a proud NIT Nagpur alumnus. I was a proud student. I was a member of the college football team, so it became a very big passion for me. I was the sports secretary of the college, so building a sports infrastructure became very important for me.
00:05:37
Speaker
And when I went to IAM Lakhna, for example, IAM Lakhna was not at the same level level of M Daba Bangalore calendar. I mean, the New World Institute and so on. But I always felt that I got involved with the fest that IAM Lakhna when I felt our fest should be bigger in sponsorship and size than all the others. And then when I joined McKinsey, which was like a big deal for me because McKinsey doesn't recruit so many people from L as they do from the others. I felt that Lakhna should do well in McKinsey and then
00:06:07
Speaker
You know now now I'm a proud McKinsey alumnus and I feel that McKinsey is so I'm the kind of person who kind of really associates with the institution that I'm a part of And yeah, I was I was a footballer. I was you know, I was a fairly exotic kid I used to have I had a motorcycle so you know naturally just moving around the city was a lot more fun I was I was very very very very happy four years ahead. I made my best sense there
00:06:35
Speaker
And straight after NIT, you got into IML. Yes, I gave my cat in my final year for short. I was six years of hostel, like back to back. So you wanted to get into consulting, like, you know, you're now in the FMCG space and a lot of people during B school have like, you know, the most popular are banking FMCG consulting. So what was it that you wanted to do?
00:07:04
Speaker
So, yeah, that's a good question. I did not want to because I did not even know what consulting was when I went to be school. It's insane how little I knew about the management world when I entered. And I was one of only seven freshers on a batch of 350. So other people, they were like our average experience of three or four years. So people around me kind of worked to figure out what they wanted to do and so on. Two things happened that I think one is I got a job.
00:07:32
Speaker
My internship was at Nokia during my summer. And Nokia at that time was 2010. So Nokia was run like an FMCG company. It was 17,000 over the top line. And just owned like fly. So the top management ship, Kumar, Vini, Taneja, all of these
Insights from Nokia Internship
00:07:53
Speaker
are ex-believers guys. So top management was all ex-believers, it's category. So it's OK, why did the phone company was run like FMCG?
00:08:00
Speaker
Yeah, and it will give you questions. I mean, the only phone banner and logo you'll see all around the country was probably Nokia at that time. 100% everyone had, it was 100% market share business. And I remember April 7th, my internship started. And my first week there, there was the 31st March was financial year closing, right? So there was the party for the sales team, which I was a part of. So all the top sales managers would achieve their target.
00:08:28
Speaker
The top guy was given Honda City, so it was a big deal, right? And the guy on the top, I think was Vijay Vada or one of these places, had achieved like 700% of his target. And I caught up with him over a drink and he was like, it's not like I did something 7x more. It's just that our phone sells so much. But this is the peak, right? Because after that, within two years,
00:08:49
Speaker
Nokia had started falling significantly compared to Samsung and some of the others. Yeah, I think around that time the sale had happened, like 13-14 only, I guess, the sale to Microsoft. Correct, correct, correct. So by the way, I got an offer
Diverse Roles at McKinsey
00:09:04
Speaker
from Nokia to join full-time. I was simply convinced that I want to join Nokia as a sales manager and I love the place and so on. When the final month arrived,
00:09:18
Speaker
I was allowed to apply for companies that come before Nokia to the campus. Or maybe one or two. I had an option to apply to two companies that come before Nokia to campus. If I get through those two, that's good. Otherwise, I have to take the Nokia off. So obviously, consulting comes first. So McKinsey, Boston Consulting Group, by Che Goldman, all of these companies. I chose McKinsey and Boston Consulting Group because those are the
00:09:45
Speaker
I felt I was a better consultant than I would be a banker and so on. But I was still not very keen to prepare for it. I was not even sure I would want to get shortlisted. I had gotten shortlisted by BCG in the summer and I had a horrible interview problem. I had one interview night. It happened in the afternoon and I have been out there to get the offer. It was very painful. I always felt that consulting was way outside my league. I'm not fit for it.
00:10:13
Speaker
At that time, I really started liking this girl in my batch. I had a big crush on her, and she was very supportive. She said, why don't you have two options? Why don't you apply? She also had a PPO from a bank, but she wanted to get into consulting. She said, you should apply. I was like, I will, but I don't think anything will really happen out of it. She said, no, no, you apply. You'll be really good.
00:10:42
Speaker
You're good with words. You're a sharp problem solver. And then my grades are not good enough. And you know, I had a bad BCG experience. I'm sitting on the door. So, I'm going to do it and I'm going to prepare. So, you know, let's prepare together. And I was like, okay, that's a good one. I didn't do it, right? So, I applied and I got the shortlist. I didn't get one from BCG, but I got one from the beginning. And I was like, I was one of those guys who on my CV, they not even put my academic degree, but not a minute.
00:11:09
Speaker
So the shortlist itself was a surprise. But I was like, cool. Now that I have shortlist, my desk will prepare. We got all the shortlist. So the academic was much, much better than I was. And I used the month to really work hard on my case preparation and interview prep. And it's a fairly intense process. And as the preparation happened, actually, I realized I'm really good at it. I was really good at it. Surprisingly good at it. Towards the end, I still remember, distinctly remember, the date of 28th of February 2011 was my process.
00:11:39
Speaker
21st, 22nd of February was when McKinsey came to campus for an event. And they do like this. For the whole month before the process, they come to campus, they do workshops, all of that stuff. So they came and I remember one of the guys there who was ex, I am Lucknow. I said that, you know, sharing a lot of good things about you and we might put you in the interview list, we might bring you first in front of the partners and so on. And I was like, cool, my reputation was kind of gone. And like, even like toppers from the shortlist were like,
00:12:08
Speaker
calling me up and saying, hey, Shantanu, can we get an hour of prep time with you? Which is like, never happened for the two years there, right? So I was fairly confident going into the bathroom. But yeah, so she got into BCG on that day. And I got into BCG. And we are happily married today. So you know, all well. That's quite a love story. Yeah. We started dating around, like we started dating during that week because
00:12:38
Speaker
I think we've the prep time and there's just so many distractions. She'd gone for student exchange, so she's not in India for a while. And then she came back and then we prepped. And I think once the placements happened and then we had like a few months before we joined, that's when we had like some breathing time. And, you know, before we left campus, we kind of, uh, formalized that, you know, we not formalized, we were like, okay, fine. Are we like, you know, what do we tell our friends? And, uh, it was good because consulting was great because
00:13:06
Speaker
You fly in on Monday and you fly out on Thursday or Friday and she had the same gig. So Thursday, Friday, we will kind of fly to similar locations and kind of, you know, the firm sponsored our initial courtship. It was great. Wow. Okay. So like, what was the best location at McKinsey for you? Bombay. I am from Poona, right? So my parents are in Poona, so I took Bombay. I never did a Bombay project. I always did stuff outside Bombay.
00:13:36
Speaker
My first year was in, you know, therefore my second year was in Orissa. I did a lot of work in Delhi. Saksi was located in Delhi. So my 2014 was when they got married. So 2013 and 14, I took a lot of Delhi based projects. I did insurance, cement. I did a couple of projects in Bangalore. I did a couple of projects outside India. I did one project in Mumbai. What was the typical mandate that you would get?
00:14:03
Speaker
improve our profitability or like what was it say? So McKinsey's a very like McKinsey as a firm attaches a team of four to five people at the very top of the organization right and I served like my first job was to increase zinc production in a company. My second job was to reduce the cost of product cost of procurement for coal for power plant. My third mandate was to was to create strategic plans for five years
00:14:33
Speaker
for a heavy engineering business of around 18, 19,000 crore top line. Then I had to do learning and development for insurance agents for a life insurance company. How do you train agents? Play of 13,000 agents, how do you train them? So it's very diverse. I then did a cement sales transformation. This is a company in India selling cement. How do you increase the output by 20% in terms of volume?
00:15:04
Speaker
How do you use price levers, branding levers? It was really interesting problems across the world. My last project was agriculture. Pesticides, insecticides, vedicides. How do you brand them? What kind of molecules do you use for the Indian farmer? So it was really interesting. I had a blast. I always felt like I was the dumbest person in McKinsey Road. Very smart people, very sharp.
00:15:34
Speaker
I think a job was tailor-made for someone like me. Four to five months in a project, rigorous problem solving, very analytical, and then your bosses keep changing. You keep learning from new people, new clients, new environments and so on. Oh, brilliant place. I think five years at McKinsey would be like 15 years at any other place from an intrinsic building standpoint. I kind of look at my five years and think about
00:16:02
Speaker
a lot, I don't know whether it's a good thing or not, but a lot of my the way I think, the way I plan, the way I do things professionally is guided by the way I learn to do things that I can do. So basically, you learn to think big right from day one as an entrepreneur, if you are coming out of a consulting company, I guess. I think so. So there are two, three kinds of people at became there. I don't think consulting
00:16:29
Speaker
is great for entrepreneurship to be very honest. I think from an internet standpoint, it is good because it creates amazing networks for you. It teaches you how to talk to board management, shareholder management, financial analysis, et cetera. It does very well for you. Problem solving, it really teaches you how do you structure a problem, how do you break it down, et cetera. I think the issue with consulting, where consulting and entrepreneurship kind of conflict from a requirement standpoint is,
00:16:58
Speaker
I think the consulting world teaches you to analyze a little more than needed. And here's what I think is maybe risk taking slash judgment driven decisions. You know, sometimes you feel that things don't make sense, but in your mind they do, right? Entrepreneurs need to follow instinct a lot on a lot of things. You can't keep waiting for the perfect data to
00:17:25
Speaker
You need to take calls. Consulting doesn't give you the comfort naturally to do. The consultants are fairly conservative people that way. But a lot of founders who scale fast, I have seen, have a consulting background.
Founding Bombay Shaving Company
00:17:43
Speaker
Yeah, so yeah, they do. I don't, but I don't, I think it has more to do with the overlap of excellent schools than it is to do with the fact that they work because they're consultants.
00:17:55
Speaker
I just feel like really good people from India end up going to IITs or IAMs or, you know, SRCC or whatever. And then those real then really good people of those really good people get selected into McKinley or DPG or whatever. Right. So now you suddenly have the like the cream there. You get the cream to go and do something, whatever it is.
00:18:17
Speaker
whether it's being an entrepreneur or whatever, the chances of them doing it well will be much higher than the chances of an average person doing it, who's not from a pool of excellence. Plus, the investor's willingness to back is also much higher. You take the 100 people who are selected for the IIS for India this year, and you tell the 100 people, what are the chances of IIS doing well? The chances of them doing well is very high, because anyways, you are not expected.
00:18:44
Speaker
it's a very high pool of excellence. So I think it's more bad than consulting. But yeah, I think consulting also gives you access to promote a lot of consultants, especially partners are very close to senior founders of large multi-billion dollar businesses. They're very close advisors to them. So they tend to see how they think, how they decide, how they believe in leadership teams. A lot of those things come in very handy. How did you end up
00:19:15
Speaker
leaving consulting for an entrepreneurial venture. So two three triggers. I think 2004, my dad was 50 years old, 49 years old. To be very honest, I lived a very luxurious and privileged and rich childhood, which was very well endowed. But my dad sat us down in 2004 and said, hey, guys, I'm going to go into Nagpur.
00:19:44
Speaker
And Yash is now finishing his 10th and is fairly independent and will do well in life. So I am not going to put aside any money for an education. Do you guys want to go to the US? And we both said no. I don't need to put any money for the education. We have bought a house. Your mom and I don't need a lot. I'm now going to become an entrepreneur. So I did not inform other men. So I said, what does that mean? You're like, look. I mean, you won't believe. You actually told us how much he made at Techmind that I see.
00:20:13
Speaker
This is how much I made. He comes from sheer poverty. Actually, my dad had his first three siblings and the mom. My father passed away when my dad was seven and my dad was the oldest of the four siblings. The other was even smaller. And my grandma was on a government teacher salary. So that's how they lived their life. Then he went to Bixbalani, then IIT and then joined TCS. And then when he went to the US, he very started stealing the world. He comes from nothing.
00:20:44
Speaker
And he sat us down and he showed us the salary and how much we have saved, what are the ration rates, all of that. So now he said, I'm putting in this much 20% of my savings into a company and I'm starting up from now. And I'll introduce him as his co-founder who was a professor of computer science at IIT campus. And he said, I'll introduce you to Praveen. But now we will not be able to go on international vacations. We have a cut down on some of our spending.
00:21:12
Speaker
except also, are you guys okay with that? And my mom was very comfortable. Like my mom is one of those Abusan type people. Like you put her in a one-room kitchen with like 4,000 rupees a month of, she will manage in that also. She's very happy. So she said she also was very excited. And my brother and I were so excited by this whole thing because that meant that dad would be home a lot more, you know. It just meant that he, I did not realize for us, his job as CEO was very demanding. So he would like be out of who now half the time.
00:21:42
Speaker
come home late in the night. We missed our diet. So we were like, great. So he set up an office inside the house. We had like a big whiteboard and everything. And until they were like five, six, seven people, they used to work all over our home, which is amazing. And this was like a software company that he set up. So he set up this company called Mojo Networks, which at that time was called Aitite Networks. Aitite was a Wi-Fi security device business. Basically, they would put devices
00:22:10
Speaker
to secure any Wi-Fi network which had sensitive information on it. So think about any defense building or any bank which has sensitive information. They will put the Pentagon and the US, for example, as airtight devices on it. So they basically build Wi-Fi security. So they sold their business in 2018, 2019 to Arista Networks.
00:22:39
Speaker
My dad doesn't want my brother and me to get complacent about life. So he's very, very particular. He said we have a family lawyer for many years. My dad, obviously, because he would travel a lot, he had made a will. And every year he would make my brother and me read as well.
00:23:01
Speaker
For the last two years, he has not. So I'm assuming that he is there and when the time is right, you please let him know and yes, no, what needs to be done. That's pretty much where it is. I think that lifestyle has not changed and my sense is it's a significant amount of, but I think for someone who built a business of 15 years,
00:23:26
Speaker
he was CEO of Techminder right and he started a company at 50. 50 to 60 is when CEOs maximized their financial gain. He was going to be made CEO and he could have been a CEO on other companies. They built Techminder from a 40 crore business to like 800 crore top line business and almost taken them public and then so on. So I think he was
00:23:48
Speaker
fairly ambitious at risk. For me, that was my dad's journey and seeing it so close for my young age was a big driver for me to do this. The second thing, I think Bikini pilot is amazing for the first four, five years. It starts becoming a little bit about partnership. How do you make partner? Why your clients? Stuff that is not fundamentally about client service. And that became a little boring for me.
00:24:16
Speaker
which partner are you associating with or what's your practice and stuff like that. So, and the third thing was that I met like two of my, two people who are really respected at McKinsey left for like startup jobs, right? So one guy went on to become the CEO of Flipkart, one guy went on to become CEO at Mentra, Anand and Zaki. And I was like, these guys made senior partner last year and now have now left.
00:24:43
Speaker
What's the point? If you work hard and you become a senior partner with amazing salary and respect enough and then you leave for start of then what's the point, right? So that was the third trigger. I think the fourth trigger was a friend of mine in the US had interned at ARRI, which that was an amazing men's grooming brand today. Good men's grooming brand out of the US. And he told me that, you know, look at this Dollar Shave Club video and they're taking on Gillette and this and that.
00:25:11
Speaker
All right, that's so cool. And I started thinking about this. Also, a very good friend of mine and Bombay at the time was a brand manager at Axe. So he and I would talk about men's grooming and how Axe is getting killed by a fog. So a lot of things started happening in 2014, 2015, which kind of, you know, told me that I want to build an FMCG brand. Well, FMCG was always a love. Like, it was something I always felt that actual Nokia, Proctor, Colgate, Wreck-It would be where I would build my career.
00:25:41
Speaker
until between we happened. So I felt like I had the chops, the intrinsic, the interest, the passion to build something. And I felt building a brand for men made sense because there weren't many around. Beauty was something that was far more indexed in women than it was in men. But over the last 20 years, we know that men have started wanting to look good a lot, especially after social media.
00:26:10
Speaker
life casting, you want to be right right on tinder, you know, your profile picture, you want to go to stuff on Instagram. So you don't like to two guys never talk about grooming, it's just socially unacceptable. But three girlfriends are very comfortable talking about lip color or hair, shampoo or any I love, I love your cheeks. What moisturizer do you use? You'll never hear a guy tell his friends, he was a very close friend, you do till daddy was here.
00:26:37
Speaker
So you need a brand there to tell men, because it has started becoming important for them, but like socials, why do you want to play to their answers? So all that put together, I felt that it was time to start Bombay Shaver now. Was there a certain amount of naive optimism, you know, let's start an FMCG company. I mean, it just sounds naively optimistic. Yeah, so I was on naive optimism. I felt like a consultant, I kind of figured out
00:27:07
Speaker
Is the market large? Yes. Are the margins good? Yes. Is the internet a place where you can start creating brand stories? Yes. How many months did you spend researching this thesis before you took the plunge? Probably. It was not a research chamber. It was illuminating in my head for a year and a half or so at least. I felt there was a good way to build a men's grooming brand in India.
00:27:37
Speaker
Here's the way to do it. There are multiple approaches, right? So fall approach was in a category like deodorant, which is very cluttered and totally square the pure differentiation through the proposition, which is, you know, art so spray, no, no gas, right? And just build an offline brand, which is a brilliant and marketed on television. You need a lot of money for it. You're not able to raise that kind of money up front because no one will see it. I had no credit. So then I have an FMCG operator.
00:28:07
Speaker
So the other approach was, enter a subcategory where you can build a certain amount of premium brand equity, and then use that equity to then launch another subcategory. So then he said, okay, that's the way we will do it. We take on the biggest subcategory, which is shaving, and then take on gelatin, raisins, and glaze.
Overcoming Challenges and Strategic Shifts
00:28:25
Speaker
And then once you build an equity there, okay, just great guy, great design, very premium product, great experiences, then you can give up the license to play multiple other categories. So that we would kind of build in a different way.
00:28:37
Speaker
And you decided from day one to be like a D2C online brand or you wanted to have offline also? No, I am a believer that Indian retail is built offline sustainably, right? Sure, you can get initial traction first 5 crores a month, 3 crores a month, 4 crores a month is covered depending on the category and the penetration of the category you can build some scale online.
00:29:08
Speaker
But if you really want to be a household brand, and our investors, for example, are Colgate-Pomolos or Wreck-It-Bakey, two of the most penetrated household brands in India. For me, that was the aim, and that is the aim you want today. I want the Bombay sharing company to form in every house in India that someone is sharing. I can't do that by too D2C or EcoBoss. Sure, I can get eyeballs by marketing on Facebook and Google and building a fantastic D2C experience.
00:29:37
Speaker
But the end goal always will be to capture a shelf in a store and to capture every shelf in every store. If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple podcasts and subscribe to the show.
00:30:10
Speaker
So how did you get this off the ground? This is something which needs a certain amount of upfront money in the product. You need to spend in developing the product. So did you put in your own money? Did you raise funds? Tell me about the launch. Both, both. So I quit McKinsey in August, end of 2050. And my exit from the firm was kind of, you know,
00:30:40
Speaker
I'm a very emotional kind of guy. Like I said, I'm attached to institutions. So leaving the firm was not an easy decision or an easy process for me. I owe the firm a lot. Even today, I'm a faculty at a lot of their trainings. Whenever they need help on recruitment, I'm always there as an alumnus. So I exited the firm over
00:31:09
Speaker
many month period where I had detailed long chats with a lot of the partners who are my mentors, my bosses. And the good part about making these, every product is different, right? So by the end of five years, you have worked with, I had worked with like 50, 60% of the firm partnership by then, at least one or the other project. All right, so every conversation, and I was a high performing guy there, like the firm invested in you for the first four, five years, they let you do what you want to do.
00:31:37
Speaker
At that point, once you start becoming a partner is when you start paying back to the firm by bringing in clients and so on. I was leaving after they had invested, but I had not given back. So for the firm, they were also not very happy about the choice. But the amazing thing, the partners were so cool. They finally said, look, you're not walking away from the firm. You're walking towards the dream of yours, and we will never hold you back. In fact, tell me how we can be a part of your dream.
00:32:06
Speaker
And 23 McKinsey Partners invested in Bombay Shaving Company when I was leading the firm in a principal agreement that, hey, I'm writing your check. Let me just come back. Someone wrote for 15 lakhs. Someone wrote for 50 lakhs. Someone wrote for 30 lakhs. I said, OK, I had principal investment approvals for around 4 crores. I have put in another 60 lakhs of my own.
00:32:33
Speaker
So I had a cool kitty. So this was all the approvals that had happened before I launched the company. So I launched the company. Then we got all the money in. And then I had a cool 4.6, 4.7 grow kitty. And then, you know, brought in three of our first three folks, Raunath, Rohit, and Deepu, into the company. We want to head our brand, want to head our product development, and want to head our supply chain and product.
00:33:04
Speaker
That's how we got it. And then we, we, we divide our razors. We call industrial diviners. We understand the procurement of shaving creams and shaving balms and aftershaves and gels and everything. We, once you go deep and you start talking to people, it's not that complex. It's just a matter of doing it better. So it took us six, seven months. But good bad is, good bad is not very expensive. To take a product off the ground is not very expensive.
00:33:32
Speaker
But don't you need a certain minimum order size for a vendor to really develop something for you? Our first order was I think 5000 Chevy dreams. Each of them was for 24 rupees. 24 into 5000 is a lakh. 1.2 lakhs. But initially 1.2 plus some testing, vesting, stability, certification. 1.5 to 2 lakhs.
00:34:02
Speaker
No, you can get the product in the warehouse. You will have to spend money on building a website, etc. But it's fairly reasonable. Okay, okay. How many, like, you know, what inventory did you launch with, like, when you started? Like, what was the product? How many SKUs? Oh, interesting. We were so arrogant. I don't know, like, now it's easy to look back and laugh. But at that time, we were convinced that Bummer Sharing Company is the only sharing experience worth having. So,
00:34:32
Speaker
We will only sell the whole kit. You cannot buy individual products. So the kit was also like this. We made the kit look real. And I think that worked for us in the long run. We had this metal razor on top. Think about a luxurious fountain pen. We had a metal razor which weighed 100 grams. It looked beautiful. It's still one of our best products. Then we had a shaving cream, a pore shave balm, and a pre-shave scrub. It's a regimen for shaving.
00:35:02
Speaker
We had a shaving brush and a Japanese blade. All of this came in like this big nice box, like the size of a shoe box. And this was like that single razor blade here? Single blade. Nice. So you would click for the purest. And we charged three and a half thousand bucks for this. But this is such a niche product, man. Like how many people use? So even today, we realize that razor and blade is something where we will struggle to beat Gillette because they have just been so good at it.
00:35:32
Speaker
that at the price point, it is so hard to beat, unlike Dollar Shave Club in the US, which could beat a bigger club. And they're very value customer, right? So we can't win in that game. We have to win in the shaving forms, shaving creams, aftershaves, facial cleansing, face washing, face scrub. That game is where we will have to win. So yeah, we have kind of evolved significantly from this
00:35:58
Speaker
And we said we will not sell on Amazon and Redcott. Another very smart thing. You come to my website and buy. It took a long time to realize that people in the world are not as passionate about shaving as we are. So, like Colby's guy also used to tell us, you have to, the product has to kind of cater to the customer. The customer will not cater to the product. And it took us two years to learn.
00:36:27
Speaker
Like when did you realize this is not working, the strategy you took of being pure sharing experience and only on our website? Yeah, only 6-7 months we realized. Basically we have to spend 2000 rupees per CAC. So we were like this is not working man, this is not working. So we said occupy.
00:36:54
Speaker
How many kits did you sell in that first six months? We sold a lot. To be honest, our first month sale was 5 lakh rupees. So we sold 120 kits, by the seventh month our sale was 15-17 lakh rupees per month. This is not bad. 17 lakh rupees selling only to kits is not bad. And that's only through your own site? Only to my own site.
00:37:22
Speaker
And you had a fulfillment partner to do the logistics. Yeah, all this whole logistics. Very, very good. Yeah, very good. One warehouse in Delhi because of an assembled product. I think the first thing we did was we will sell individual products which are in this kit on our website. The buy-in was lower, that you can come and buy a shaving cream if you want to buy all those. Then Amazon guys told us to guys,
00:37:48
Speaker
I spoke to many friends, a couple of friends from India also left and joined Amazon and they were like, he bought something. Amazon is not traffic to the website. There is no way. The product is the same. The customer is the same. The customer wants to buy on Amazon. You're taking three days to deliver. I'll deliver it in the same day. Why are you being stubborn? Why are you being stubborn? I said, no. On Amazon, they will not get the same experience. What experience?
00:38:16
Speaker
Amazon, what experience do you want on Amazon? Product listing, brand store. I said, yeah, brands, two brands open up. For a brand like us, which is so small, they gave us a brand store, which then there was not something they would do for a lot of brands. Then we went on Amazon and we suddenly saw scale happening. I was like, wow, that's an interesting thing. So a lot of, like a lot of, like this entrepreneurship has been very humbling that way. A lot of things that you think, you know, ego gets broken a lot.
00:38:44
Speaker
But when we learned over a period of time, which is one, we were the customers. Second is make sure that the customer wants. Third is be at a price point that is genuinely competitive. Just because you feel your brand is premium doesn't mean the customer feels that your brand is premium. So if you are making a sharing dream of 190 rupees and the average sharing dream in the marketing of 50 rupees, then 145 rupees for premium you have to justify to the customer fairly well.
00:39:12
Speaker
You can't just say because my packaging has got, you know, max finish, you will pay. No, customer won't pay for that. Customer will pay 250 rupees for a shaving cream in body shop because the store and body shop and the fragrance and everything is so amazing, right? But still fewer people will buy. We have to really realize that we want, we have to be where the customer is, so it will be everywhere. Secondly, our category is lesser in vision, right?
00:39:41
Speaker
we are in a low engagement category. So we have to accept it. And which means that in a high engagement category like mobile phones or cars or whatever, customer will do the research and make the choice.
Partnerships and Investments for Growth
00:39:53
Speaker
If you are genuinely a better product, you will get bought. So in our case, even if you are a better product, because customer will decide it like two seconds, you have to be there and your brand has to be a consideration brand. So invest in brand and be in every shell. So customer big bazaar needs to go out.
00:40:13
Speaker
You have to be there. You have to be everywhere and you have to sell yourself everywhere. There are multiple things that we have learnt along the way. So, like from that 17 lakhs a month, when did you cross once a year a month? We crossed a crow over 17 lakhs of 2020, 2017 June and we raised our power from the
00:40:40
Speaker
from fireside. I think we crossed the crow over the year next year, like a year later. Okay. And what led to the corral? Like what was the contributor? You went offline, you went to Amazon. What all was it? So we went to, no, we didn't go offline then. We went to Amazon. At that time, Mica was also building out pretty well, number one. Number two is we launched a range of products in the beard category. The beard was taking off at that time.
00:41:06
Speaker
Because we were in facial hair management, you know, sharing, we kind of had a complimentary, equitable launch there. And because I think we raised some money to be able to invest in the brand. Did you also like, change your product pricing? Yeah, so the good part, Akshay, was that our initial products, other than the raise, like at $1,800, or other products of, yeah, premium, but not so premium, our beard range was fairly comparable. It was fairly comparable.
00:41:35
Speaker
After that, we have been very, very particular that our price point has to be affordable and attractive to the customer. We're not cheap, but we are very competitive. Like, for example, a shaving foam or mama shaving company, you'll get for 220 rupees, Gillette will get 190 rupees. So we are equally good and so on. Okay. Okay. Okay. So, you know, like how did the fireside deal happen? Like, you know, what did they like in you?
00:42:06
Speaker
Kaval was the GP there. He was the founder of IFI. We met at a mall and I took our initial product. Oh, he loved the initial product. He was sitting at the Barista and Vasan Square Mall in Vasanpunch. He opened the product and he wrote up. So there are lot of things we did right in that. We should fold the towel up in a particular way and spray fragrance on it. So when the box opened, the fragrance would fit.
00:42:34
Speaker
and the customer would get a good gift, right? People open the mall and ask them, this is really cool stuff, man. This is really cool stuff and so on. I mean, we would like to invest in your company. I mean, they are amazing investors too. I want Deva. High support, very, very, like very, very emotionally attached to the brands.
00:43:01
Speaker
So you genuinely like, when all these guys, they buy your products as consumers, they'll give you feedback, they'll use it. And they have their now invested like in 50 companies. So our guys keep using their brand to give feedback, but that was very good. So that was helpful. Okay. And like, when did you start going offline then? So like 17, you were at like one CR a month.
00:43:31
Speaker
Fireside invested in 2017 when we were at 17. 2018, August is when Colgate invested. When Colgate invested, we were at 75, 80 lakhs per month. I think we hit a CR in Valentine's Day 2019. February 2019, when we hit a crore amount for the first time. And how did the Colgate investment come through? Was that through Fireside? Like they enabled it? No, no, no. Fireside was in that Colgate had
00:44:01
Speaker
reached out to us while the fireside deal was going on, the head of strategy global, who was the India CEO in the late 90s, Jayar. So Jayar is now, but you know, one of the last strategic investors, how it is. So we said, look, we have a Tom sheet and we want to build a fireside. But let's keep talking. And we kept talking. We started growing and we, you know, came back to India. We met a few times.
00:44:27
Speaker
And they loved our D2C capabilities. They loved how we thought about D2C, how we built websites, how we built marketing stacks. And they found that it will be a tremendous value to learn for their teams globally also. They really liked our men's grooming business from Palmolive, St. Louis, St. Paul also. So they said, look, we've put in a little money. It's not an acquisitive deal. Your two guys are too small.
00:44:55
Speaker
But we want to learn. They were already invested in Dollar Shave Club, which was something that they had done well for them. So this is what we want to learn. So 2018, they invested in us. And it was, again, just a brilliant set of people. They invested in us. It was a global decision to invest from the internet. It's not the India company that invested in the internet company. Why are the Hong Kong business?
00:45:25
Speaker
Vinod Namdiar, who today is the CEO of More Retail in India. At that time, he was CEO of Colgate Asia. He became a very close friend. Mukul, who today is the Asia CEO and was earlier the chief marketing officer for Colgate Global. He's a close mentor to the company. These are guys who, the money for them is very small. They're like $100 billion of market business. But for a small company like us doing 50 lakhs a month, 60 lakhs a month,
00:45:55
Speaker
They were spending time teaching us, you know, these are guys who also understand brand management for value. Isn't running like a 220 year old brand, right? So it's usually they understand product. Like in India, they sell 3 billion toothpastes and toothbrushes every year. They understand supply chain, they understand fulfillment. So we have these, we showed a lot of loans. That's how like we, I was excited. They were excited about us for their own reasons. I was excited about them for my own reasons and it was a,
00:46:25
Speaker
act which was very well made. So when did you go offline like after the Colgate investment like I guess Colgate must have helped. You know in the Indian end of Colgate sales is a guy called MC. I would probably be most knowledgeable guy in offline sales I have professionally interacted with. During the you know during the courtship period I had met him a couple of times and he shaped the way we thought
00:46:50
Speaker
One of our very high-performing guys, Shankini, made a night of offline sales. We were at that time 10-12 people. So he went to Bombay and he started a Rekke for like a month. And then we started, only we started cracking a few beers. We started shaping up our products to look good on ourselves. And Bombay was our first city. So we slowly went to like, you know, 50,000 a month, 80,000 a month. Then one lakh a month. Modern trade, we track La March in Delhi.
00:47:20
Speaker
It was very slow and steady about building out offline sales business. Without Ebeneer, Colgate coming in really helped us. And then head of Colgate offline sales for Delhi and North, with a guy called Deepak Gupta. He had a personal situation at home because of which he couldn't start up, but wanted to go to a startup. So he had left Colgate, wanted to go to a startup, and the Colgate deal had just happened. So I ended up meeting him.
00:47:48
Speaker
And I loved him and he joined us to head our offline sales business. And today is the CEO of the company. But he did a fundamental part in helping Sankey kind of take the game to the next level. Today, we do upwards of 2 to 0.2 crores a month only offline sales. We are the, for a young brand to do that scale of business offline. And like we have grown five times from last March to now, in like one to five quarters.
00:48:17
Speaker
which was very fast going business. And that too at a time when offline sales got hit due to the COVID thing. Yeah. Good matters like personal care did not get affected that much because people continue to shave and wash their face and so on. Right. So it was not, and plus, you know, at the business level people, you know, continue to look online for software we complete well. So overall it was good for us, but the offline did very, very well. So what is your mix now, like offline marketplaces and D2C?
00:48:47
Speaker
Halfline plus B2B, right? Which is our gifting and corporate gifting and all that. All that put together was roughly 35% of our business. D2P is roughly 15% and 50% is not our business. Okay, okay, okay, okay. And how did the racket investment happen? Again, so racket, I got introduced to racket because
00:49:14
Speaker
The global CEO of Wreckert, who joined them in 2019, was the person who inducted me to McKinsey as a senior partner in 2011. So he was an abseco, and I met him in New York, and he was very close. He was very senior to me, but he was a mentor, and he was a mentor to a lot of people from the McKinsey Indian office. He was a very magnanimous personality, Lakshman.
00:49:37
Speaker
So the next day, you know, I'm Johnny Hreckett and I'm going to be the global CEO. Why don't you talk to a few guys about, you know, your business and how we can work together. So he kind of made an introduction email and kind of forgot about it. But the people I was introduced to were the global head of e-commerce and ERB and a couple of their senior folks. And we just started off here. So they were in India 20 years, 2019. We did a lot of brainstorming on categories. They came to our office.
00:50:07
Speaker
They saw our data security abilities. And they said, hey, your D2C is brilliant. We feel that we can learn a lot and normally learn a lot. Like Colgate has a more soft approach where it's more, you know, you guys learn, share, and so on. For all that, you guys run our D2C business. You run durex.com, you run nfa.com. Two of our brands, if you do well, we'll give you more brands.
00:50:33
Speaker
And I said, look, we're not a service agency. This is what you give an agency. We're not an agency. We're a brand business. I understand. But if you run our business, your company will also benefit. You'll make some money. Your team will get into learning. So much benefit comes from running a big brand. I agree with that. So I said, sure, cool. We did. But if you want us to do this, you have to invest equity into the company.
00:51:01
Speaker
So that is the only, okay, should we invest equity? What do you already have Colgate? Colgate is also strategically bound for us. You guys, Colgate and Brecon don't compete. You guys are a hygiene health business. Colgate is a oral care, personal care, beauty business. So, what's the issue? Okay, so then it took a long time for them to agree to it. But once the ball gets rolling until
00:51:30
Speaker
I think it stops only after it stops. So, we kind of got a shareholder agreement together. We introduced the poll gate guys, the racket guys, they got one well. And today they are a small business with two globally large companies as strategic investors sitting on the top table with all these other big injuries and other
Building a Strong D2C Strategy
00:51:48
Speaker
angels. So, it's an interesting capital. So, which brands are you running for racket? Durex and Ensa. What is Enpa?
00:52:00
Speaker
It's a milk substitute for young kids. Okay, like PDS shows. Yeah, Nanpro, etc. So they have a brand called Enfamil, they have Enfabro, they have, it was owned by somebody called Meat Johnson. And it's one of, it's one of, it's not the world's largest brand. I think it's a three and a half billion dollar brand global. But in India, they have, they have 10, 30 data. So they're picking up now in India.
00:52:28
Speaker
And I think my personal belief is D2C is a fantastic place because high AOV, high repeat, inscribable business. If the child likes the taste, then the parents are not going to go to any other brand. They'll just say, I'm fine. I make a basil, I'm on deck. And the other one, Durex, which is like the sexiest category possible. So those two brands, we are going to run. We are in the process of handing over the websites to us.
00:52:54
Speaker
So, how much money will you make in this? Is it a percentage of sales arrangement with you or what is it like? It's a percentage of sales arrangement. The percentage of sales arrangement and a percentage and a bonus kicker for achieving the road targets. Okay, but how much do you think it will contribute to your revenue? Not a lot. Yeah, initially it signaled it, but I think for us it's not, we're not in this for the revenues. We're in it for
00:53:24
Speaker
for the learnings, and I think it's a flex on muscles a lot. Just running Bombay Shaving Company at home will help you get to a certain level. But if you only start doing three, four different things, three, four different target pools of audiences, three, four different kinds of media which you're buying, your team becomes much sharper if they do three, four different things. So I think that's what is more exciting for me.
00:53:52
Speaker
So you've told me a couple of times in our conversation that a lot of investors were impressed with your D2C stack. Tell me about that. What all does it include, and how did you build that up? I always feel that D2C is something which people use this term a lot. And it's becoming a little bit happy. People are becoming this, like this, somebody call it.
00:54:17
Speaker
this cultist thing that D2C, D2C, like people who don't do D2C will like, oh, we need to, everyone feels we need to do D2C, etc. I think the idea was simple. I think it is about doing a lot of simple things really well, rather than doing like three, four big silver bullet kind of things, right? Building a really conversion friendly website, for example. It's super critical.
00:54:42
Speaker
Making sure that loading times and convert customer journeys are as clean as possible. Making sure payments are zero on failure. Like everyone knows this. I'm not saying that people don't know. Then bringing people, bringing the right people to the website very economically, right? Being on top of media buying. So Facebook, Instagram, Google are the most important media, you know, media spend you make.
00:55:11
Speaker
The sophistication of data that you get as a marketer is amazing, right? You will know exactly what kind of audience interacts with what kind of ad set for what kind of product and how it converts or how kind of click rates you get, right? We would run experiments through the roof, right? Every ad set is like an experiment for us. So you keep learning, you keep becoming better. You keep doing small, small, small, small things. And an increment, like it's a goal by a thousand possible approach.
00:55:37
Speaker
You see the final goal, it's a tap-in. It doesn't look sexy and it definitely doesn't, you know, feel like you've achieved a lot. But the process is one where the team continuously gets better and better and better. So continue the review and doing the small things, thousand small things really well. I think is what makes D2C work for us. So you in your initial hiring did not have a
00:56:03
Speaker
guy to build a D2C stack. We are a product designer, a procurement guy and a marketing guy. So me and the marketing guy built it out initially. McKinsey has taught us that if you are a generalist, you should be able to solve any problem. For the first two, three years, we were only doing everything. Then we asked someone senior to look at D2C. We started learning this from junior folks who had done this for
00:56:31
Speaker
branded at scale like Mintra for example. We got a lot of experts to come and teach us through workshops how to do B2C. A close friend of mine was someone senior at Facebook so we asked him to set up something for Facebook advertising. So we were very curious and we were very eager to learn. And because you were hands on so I guess that's like a very strong part of the company DNA since you personally like built it up. Correct, absolutely.
00:57:00
Speaker
For the first three years, three years and after that was like three times a day, reviews, problem solving questions, whiteboard questions, all the time. So that's when you build the foundational muscles. And then after that, I've gotten lesser and lesser involved. As in how people are far smarter than me joining the team, my requirement was kind of made irrelevant. So it was great for me to allow me to focus on things that I like doing.
Setting Ambitious Business Mandates
00:57:27
Speaker
What is it that you like this?
00:57:29
Speaker
What are you focusing on? So I have realized as a CEO, I'm not as good an operator as I am a strategy guy. So I'm able to see patterns much better than I'm able to execute a particular piece of work. I think the CEO's job is three four things. Number one is setting a very clear mandate for the next three, six and 12 months.
00:57:57
Speaker
for the organization and the team. For the organization, for the leadership team, and for each individual team in the company. So manual building after that multiple levels. Then secondly, defining what the vision of the business is for the long term and over communicating it. Like I think I found like a broken record nowadays, but this is what we're doing with every on hand, every interaction.
00:58:26
Speaker
Just reminding people of what the bottom goal at the end of the rainbow is really. Third thing is to keep the company financially stable and to be financially compliant. Have a very clear understanding of your financials, how much money you need, what kind of margin structure you have today, what are the decisions you need to make to make the margin structure better, etc. And fourth job I think is for a culture of performance and emotional
00:58:55
Speaker
as part of the business, right? Which is, I know 20 people have to work in a particular way, have to interact with each other in a particular way, CEO, and founder holds that close a lot. But on execution, operation, like day-to-day decisions, recon week decisions, even target achievements, I have, you know, my COO and my leadership team look at it all by themselves.
00:59:23
Speaker
And it's not even a skill of mine, to be honest. I don't do that well. So teach me how to do mandate setting. Like, you know, do you put it on paper with numbers or is it like a more aspirational kind of a mandate you set or, you know, like, how do you do that? So I think the mandate at the end of the day, this is what the business expects you to achieve. But there are some very strong reasons to believe
00:59:54
Speaker
For example, we are doing very well in women's hair removal today. For example, it is not 20% of other women. We started as a men's business. We are now reinventing our men and women's business. Now, where is the process of setting the mandate for women's hair removal? So, how do you do that? I want to build a 100 crore women's hair removal brand in India. That's the mandate. Why it makes sense for me? Number one.
01:00:23
Speaker
There is a 20,000 crore women hair removal market of which 95% is vaccine for the person. But 5% and growing is products which is razors and hair removal and so on. Women, younger women especially want a razor in the purse. Okay. NITA has told us that that's what they want. They are going to listen to them and initial feelers are that it's going to work. Vaccine is inconvenient and painful. Women don't have time.
01:00:53
Speaker
If they want to go for a party tonight, or they want to go for a date tonight, they want to wear something skirt, they will shave their legs. So you have to be the razor there. And this is the competitive landscape. Unlike men, there's mark 3 and 2 of such good products. In women, hair removal, our product is far better, far better than any other offering. So we believe that the reason to believe is high.
01:01:22
Speaker
And how did the 100 crore number come? And is that a number you tell your team that you need to hit 100 crore turnover in the next 12 months? Is that how you set the number? Yes. And how did that number come? It's basically I want to get to 5 crore per month by end of the year and 10 crore per month by end of next year. By June or next year. Pretty much as simple as that. It's a run rating. And for that you need to sell these many units. This is the average price.
01:01:51
Speaker
Here is how the channel structure or channel mix is going to be. And here is what the large market is. Here is the budget for marketing. Now figure it out. And this is where the intuition also comes in. Like you said that consultants don't have that intuition, but this would be a gut driven number. It is triangulated, right? So I know, for example, how big Venus is. I know how big Venus is. I know how big Kai and Tinkel are. I know
01:02:17
Speaker
number of searches for women's hair removal products across Google and Amazon. I know the size of the category offline. I know what is the size of the category in stores that my men's products sell. So I'm able to triangulate a lot of these things. Today I am at 1.3 crores. Watch the journey from 1.3 crores a month to 6 crores a month. How does that waterfall build up? In my mind, how much do I have to invest in that?
01:02:47
Speaker
And then I give the mandate to the team, saying, this is my belief. Mandates are always presentations. They never ask. So mandate cutting is a five to seven page slide deck that I make and present and say, you either disagree with me and tell me, I would be delighted if you can be more ambitious than me. I cannot accept if you are less ambitious than I know.
Future Growth and Personal Interests
01:03:11
Speaker
I mean, I have gotten some assumptions around.
01:03:15
Speaker
So you tell me, no, absolutely you're overestimating the market size or you're underestimating the competitive difficulty. So let's have a discussion. Then we have a discussion on it. And many times I think the news is me that I'm either being overambitious or underambitious or whatever. But once they align, then I let them go and then they hire on their own, they figure it out on their own and I was review every month and stuff. Amazing. So in a way you sell a vision using a deck.
01:03:42
Speaker
on why that vision can be achieved and in what timeline. Absolutely. Then sometimes I have to hire the right person for that mandate. If the person doesn't exist, I feel that this mandate needs to be run by an individual and people in my team don't have the bandwidth or the capability or I think any terminal, then I also go and hire. That also becomes my job. It is senior team setting up a senior team.
01:04:12
Speaker
Okay. And so what is your product range now? Like you said, you've gone into women's hair removal. What else is there now? So we have obviously a men's shaving, which is, you know, razors, trim off, aftershaves, shaving cream, shaving foams, shaving balm, etc. whole shaving range. We have a lot of facial hair management solutions, right? Arbyord range, charcoal, face washes, etc. We have hair oils.
01:04:40
Speaker
We have charcoal trace pack and stuff like that for men. For women, we have three, four different kinds of razors. We have a pore shave balm, lavender soothing balm, and we have a pre-shave foam for women. And of course, the eyebrow razor, face razor, bikini razor, foldable razor. We have a body razor.
01:05:07
Speaker
Okay, so where do you stand in the pecking order? Like, you know, like there is Manko and there is Beardo. So, you know, in like, between your peers, like, are you like, you know, where do you stand? Like, are you bigger than the others? Or are there other peers who are bigger? So depends on the category. So, for example, in shaving, we are bigger than all of these guys.
01:05:33
Speaker
Other than the others, they are smaller than Gillette, Nivea, and possibly Vizon, but they are bigger than the others. In Beird, they are much bigger than us. Beirdo is much bigger than us. Beirdo, Ustra, Mancopi are bigger than the Beird category. From an overall business, in women's hair removal, Venus and wheat are bigger than us, but we are climbing very quickly and competing very hard. From an overall standpoint, I think Beirdo
01:06:03
Speaker
And man company are probably 20-25% bigger than we are. And Ustrah is probably the same size as we are. I'm not sure, last week or month, how COVID has been for them. But I really respect these guys. By the way, I think what Bierdo man company and Ustrah have all built outstanding brands in new categories, which is not easy to do. So we took on sharing, which is an established category. So it's much easier to build a proposition there. But building a new category like Bierd was just
01:06:31
Speaker
insanely difficult and they did a fantastic job of it. How has COVID been for you? Very good for us. I know the country went through like unbelievably tragic experiences. Three of our colleagues have lost a parent. Through our business standpoint, two things happened. One is personal care,
01:06:57
Speaker
uh products went up from a category standpoint people bought more of it right why is that like why did that happen they're not spending on going out so they spend on pampering yeah you and you have to show your face no zoom calls in office not like you have to wash your face you have to shave you have to clean your beard you have to like all the users continue in fact we are at home all the time so you won't even use the bad stuff that you get in hotels and you know all the bad stuff you continuously buying stuff second thing is people are buying online so
01:07:27
Speaker
When people move from offline to online, it's much easier for us. Like, we are in 2 billion stores in India. We are in 50,000 stores. So offline, we can't compete as well yet. But if you put all of us in an online store, then our ability to compete in China. So when traffic online goes up, we take a significant chunk of that traffic for our products. What is your current Muncie rate? Are you at liberty too?
01:07:55
Speaker
Yeah, we do. We do eight, eight-and-a-half rolls and so on. So we are looking to, and like we have a solid undergrowth brand now. So we are hoping to increase the 50% this year. Okay. So what's like a five-year vision for Bombay Shaving Club? What all categories do you see yourself in? I think men's shaving, we want to be bigger than Gillette in the consumables business.
01:08:22
Speaker
Right. We want to be bigger than Nivea in the community. So I think. So what do you mean by consumers? Like the raisers? The non raisers play business. Like shaving cream, shaving foam, aftershaves, balms, that stuff. Right. Like we want to own that. Right. So our super full proposition through our amazing packaging, really sensorial product experiences, we want to own that. So I think 500 crore business there.
01:08:50
Speaker
And we want to own women's hair removal from a product experience standpoint also. That's another 500 crore business. So we want to be a 1000 crore business which owns hair removal for men and women in the next five years. Do you see yourself getting acquired? Like if RB is really impressed with how you're handling the D2C, they might just decide to bring you in. Yeah.
01:09:18
Speaker
So we, I mean, always, always, I think acquisition should be a more practical decision than an emotional one. If the value is right, the time is right. Look, I always feel that self-grown brands sometimes need a home to achieve their next realm of growth. Let's say we can go to 200 crores, but
01:09:46
Speaker
if RB or Colgate buys us and they can take us to every store and every salesperson of Colgate or RB has Bombay Shaving Company as a separate line item in the garbage. They can do in one year what we will take five years to do. So isn't that better for the company? If they acquire us at a fair value, is that good return on investment to all the people who have put in the money over many years? Yes.
01:10:16
Speaker
Do employees feel that, you know, do they make money? Yes. Do they get more professional opportunities as a part of a huge company like Colgate or Wreckett working in many geographies, working in many countries, working in multiple functions, learning and becoming more seasoned effectively? Absolutely. At the right value, right future intent. Every company needs to think hard rather than taking what I feel is a very myopic view of saying, oh, I don't want to lose.
01:10:46
Speaker
my freedom and that's all I think. Indian promoters associate like the reason my Indian promoters don't sell is that their identity is their company. And then they end up kind of refusing really what I feel are lucrative and better thing for the company. But for us when the time is right, if the offer comes, if it works for our investors, if it works for our employees, if it's good for the brand, we'll do it.
01:11:15
Speaker
And what is it that you are personally passionate about? You know, like, what is, of course, building Bombay Shaving Club? But besides that, like, you know, Shantanu as a person, what is it that you seek to learn or how do you seek to spend your time when you're not building Bombay Shaving Club? It's like 24-7 Bombay Shaving Club. No, no, no, no. I'm a very regular guy and I love sporting sports.
01:11:45
Speaker
I am online. I devour content online. I am on Twitter. I have so many various interests. I love music. I play with tabla. I love hanging out with my friends. So for me, if you remove Bombay Sharing Company for my life, I will be very happy to spend time. I am a very social guy. I make friends easily. I also want to get into teaching now.
01:12:16
Speaker
I started getting interested a lot in like primary and middle school mathematics. I feel that if 8 to 14 year olds in India are taught mathematics the right way, we will have a very different kind of workforce that comes out in the future. So I'm thinking how I can do that because I have a passion for teaching mathematics to school. Friends kids for example, I'm curious to see how I can teach many of them math. There are a lot of lot of lot of passion.
01:12:47
Speaker
If you like this story, then do check out the amazing range of products that Shantanu is offering at BombayShavingCompany.com.
01:13:17
Speaker
This episode of Founder Thesis Podcast is brought to you by Long Haul Ventures. Long Haul Ventures is the long-haul partner for founders and startups that are building for the long haul. More about them is at www.longhaulventures.com