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Content, Community and Commerce For Pet Parents | Varun Sadana @ Supertails
366 Plays2 years ago
Supertails is a trailblazer in the pet care category, taking the approach of building a full-stack platform. Varun traces his journey from ideation to go-to-market and talks about the macroeconomic trends that he is betting on and the amazing metrics of a petcare e-commerce business.
Know about:-
- Insights gained during the pandemic
- Product offering
- Building the pet relationship manager team
- Funding journey
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Transcript
Introduction to Supertails and Founder Thesis Podcast
00:00:00
Speaker
Hey guys, my name is Varun. I am the founder at supertails.com. We are a pet care startup based out of Bangalore.
00:00:19
Speaker
Do you have a pet? Or does someone close to you have a pet? If yes, then you would surely understand how a pet can be as close to your heart as a child. Given this, it is surprising that the child care industry is so massive and mature, while the pet care industry is tiny and offers very little support to pet owners. In this episode of the Founder Thesis Podcast, your host Akshay Tath is talking with Varun Sadhana, the co-founder of SuperTales. SuperTales, the trailblazer in the
00:00:45
Speaker
pet care category, taking an approach of building a full-stack platform, offering content, community and commerce to pet parents. In this conversation, Varun traces his journey from ideation to go-to-market and talks about the macroeconomic trends that he is betting on and the amazing metrics of a pet care e-commerce business.
Experiences and Perceptions of Pet Ownership
00:01:03
Speaker
Stay tuned and subscribe to the Founder Thesis Podcast and any audio streaming platform to learn about leveraging microeconomic trends and leading metrics to build and scale startups.
00:01:21
Speaker
I've had pets in my life. I've had three dogs. I got a cat in 2011. And this was not the time when people around me had cats. So the first problem statement, and it's even worse when you have had dogs as a kid because you kind of assume this cat will be like a dog.
00:01:41
Speaker
And you want the cat to learn fetch, you want the cat to, you know, when you say her name, you expect the cat to come to you. And when you open the door, you expect the cat to jump on you. Obviously, none of that will happen. The first interesting thing was here. And this was not the time when Google had that kind of an extensive understanding. And obviously, there was no charge GPT 10 years ago.
00:02:07
Speaker
I remember going to a vet and this first question, the answer is, why did you get a cat? And then the second was a taboo and you're also from North India. Now, why would you get a cat? I mean, it's such a superstition thing. So there was these things, especially when you're growing up, you move to a startup and then you start understanding real problem statement.
Business Model and Market Trends for Supertails
00:02:29
Speaker
It's all at the end of the person.
00:02:32
Speaker
So I went to Snapdeal, worked there for almost five and a half years and set up lots of stuff, saw the zero to one journey there. And interestingly, when we, you know, my other co-pondability and I were coming out, we wanted to start something in the pet care. And where did that come from? You know, one thing which MBA teachers use here is to break down the idea. So we said, hey, you know, we need to figure out some idea.
00:02:55
Speaker
And interestingly, you start looking down the problem statement in India. You know, D2C brands will start becoming bigger because people start spending on themselves. That's a very common thing that we saw across a lot of geographies. This is 2017. D2C as a word had not come into apartments back then.
00:03:20
Speaker
And we knew brands will get built. And interestingly, we also understood that people may start spending more money on themselves. And then we had something called as an oxytocin theory, which is very interesting that we felt that as in when there is this hormone in our body, which is oxytocin.
00:03:35
Speaker
and it needs to get fulfilled. It's a love horrible, touching, kissing, feeling. And what we understood was because people are getting married late, they would want this to get fulfilled. And then we saw that there was an India around 2017 that was time and we were like, damn, we had the idea of kissing a banana here.
00:03:52
Speaker
Next we understood was he wants cinderful phase oxytocin, then pets. That's the next step. And interestingly, that feeling of companionship has happened across the globe at certain interesting junctures. So we came back and we said, hey, pets as a category sounds very interesting.
00:04:10
Speaker
India is going to the same concept. Back in 2010, 11, 12, when I got married, people were supposed to get married at 24, 25. Now, everybody is getting married around 40. And this suddenly happened in five to seven years. This is not going to change anytime soon. Our fertility rate has decreased from four in 2000 and 1990, I think, to 2.1 now. So that's a very huge drop. 2.1 is what the 2022 numbers suggest. And so now we'll be growing. We'll start growing as a
00:04:40
Speaker
overall population. And what we understood was, yes, there is a lot of problems. And then it follows a very interesting, optimistic curve. So there has to be a right time
Impact of COVID-19 and Changing Pet Ownership Trends
00:04:53
Speaker
to build it. And then, you know, it's a patient game. And once it starts getting built, it will suddenly shoot up. With that, this is a very good couple of
00:05:00
Speaker
investors and we understood, we had absolutely no clue about fund rates. So we started meeting a few founders and we understood them and interestingly in that whole conversation we ended up meeting Abhin Vivek from the ships. So they had started literatures and it was a very small company back then and they wanted to expand and because of this whole back-end understanding on B2C that we had, we knew we had to meet right. Honestly, I don't know if any of you can meet with them.
00:05:29
Speaker
That was the common part which everybody was seeing. But because we had all these old theses and backgrounds, we said, Hira, this is a world-world thing. And we suddenly find ourselves in there, right? But the journey of those four years was outstanding, right? From everybody saying, Dhanda bani is ata hai. To everybody saying, Ki yaar reetho hamare samne bana hai, ito hamne bana hai.
00:05:50
Speaker
Right. And so, you know, the conversation scene, you know, the conversation scene in those two years, right. And this, the tipping point, I won't say the tipping point, but I think the one large issue that should happen during COVID. And, and the interesting thing that happened was that when the first lockdown happened, there is this whole citizen theory for us came back. We said,
00:06:22
Speaker
And all of us have a pet, all three of us, and we started calling our vet and they said, I need you. So we just absolutely overwhelmed with the number of pets that are coming to the clinic. And we came back and said, Kibos, John, Mazar, Mazar, me, academic theory, when I was in real life.
00:06:57
Speaker
It's just one blip in COVID. And you know, is it a demon moment for us for payments in India? Because I mean, everything changed after that one event. We went somewhere but the payments the way it changed. Is it that demon event in India? And obviously then, you know, we went back academic and there's something that we kind of like and we went back and said, Hey, here, what is the big point after which a category doesn't look bad?
00:07:10
Speaker
And the question is, what is the answer to this question?
00:07:25
Speaker
We realized that any time a group of people do certain things and that group of people is more than 10%, somewhere 10 to 15%, suddenly explodes. Categories after that suddenly explode.
00:07:43
Speaker
All year across age, it's not like only pet parents everywhere. And just to give an example, we call this a peer network effect here. I mean, when we're kids, or at least when we're growing up, we have girlfriends or girlfriends because well, our friends have one. That's a peer network effect.
Community Engagement and Pet Owner Support
00:07:58
Speaker
We buy a car because our friends, we get married because there are those things. Yeah, for sure. We buy a house, we are all, you know, you know, you know, right? So,
00:08:09
Speaker
So I think that peer network effect kind of starts becoming much, much larger at around 10 to 15%. And that was the time, you know, in 17 India, 5% household had pets, and around after this, our understanding was 8% household had pets, but then we did a large scale understanding of apartments.
00:08:29
Speaker
And we realized here, this number was close to 15%. By the way, we did a couple of, you know, some of these surveys last month itself, larger apartments in Bangalore have anywhere between 18 to 25% of them having pets. And I will tell you what is the beauty of it, that this is a very reverse phenomenon that has happened. Normally, things go from tier one to tier two. This is actually the opposite. Why? You will still see in tier two, people have pets. Why? Because there's a space, there's a large house and so people will have pets. As soon as you
00:08:57
Speaker
you moved to an apartment, pet became almost zero. And then it starts. Now, suddenly, that number is 25% and societies have different groups, pet and groups. This has become very common. If any society looks from the window, you will see always a few people walking their dogs, right? And this was not a site which was earlier.
00:09:16
Speaker
So I think currently we've failed things up to then it has kind of crossed the big point. It has happened from the pet being a guard dog, a functional animal to the second step, which we are going through at a large scale, which is people becoming parents to this pet. They are a functional animal. They are part of the family, but there is a third shift that is happening. And that's what SuperTails is about, but people don't talk about it much. And that is the fact that
00:09:45
Speaker
There is a demographic difference in the set of people who are keeping pets. Imagine yourself in new world, 2025, thinking when you move to a new city, I will keep a pet. The answer is no. I need to find for myself first. I need to solve for myself.
00:10:01
Speaker
the largest population of people who are getting pets today is between 20 to 30 years of age and they don't consider as a kid because they say, I'm too young to have a kid, I'm too young to be a parent, these are my companions and that companionship is something a large shift is happening towards that companionship and we were very clear we are building supertales for the new set of customers who are Gen Z
00:10:30
Speaker
who are early millennials and these are the set of people who will, who require so many more things. What does this so many more things? Fundamentally, you again, you go back and you, you know, academic U.S. What is the difference between the U.S. and India? Almost 80% of people who got a pet in the last three to four years in the U.S. and Europe are second or third-time pet parents.
00:10:53
Speaker
95% of people are getting pets in India, first time pet parents. Let's say you have a Labrador and I have a Shih Tzu. I mean, Max, I can ask you 5-7 things, but I know you will only say, I have a Labrador. I mean, I have absolutely no clue what Shih Tzu is. There is specific information available in it. So practically, the point we're saying is it does not follow the baby, human baby, for two reasons. Number one,
00:11:22
Speaker
Human babies, you know, the parents know, they definitely know for eight months that the baby is coming. There are so many mental, physical changes and mental health. And you are prepared, the baby doesn't pop out one final day. I think there is, you know what's going to happen. And after that, you take a, you know, there's so many records, I have a clear old sign, you know, if the baby doesn't pop out, it plays okay.
00:11:44
Speaker
The kid will do this and the next month you will see the kid will start to do this. In pets, what happens? Think of a 25-year-old person. I went out to a party. Everybody's conversing about a dog and I feel, hey, I don't have a dog or a cat at home and I'm missing out on something. I get excited. I go to Instagram, start following dogs. There is this huge urge that I need to get a pet. I need to get a pet and start searching. Should I buy? Should I adopt? Then suddenly somebody hooks me up.
00:12:14
Speaker
Bam! One Sunday morning, I go out and get a bed. In the expectation that my life is going to change, I will have better dates, I will have, you know, better mental health, I will have a cooler life, I'll have a better sense of life. I'll also have the same conversation with my friends I have. Right now, I can be part of the circle. Also, I'll get a companion. There'll be so much love, and cuddle up, and you'll sleep, and I'll name him or her this. You have all of these things, and bam, the dog comes to the house, and the life just changes.
00:12:42
Speaker
And interestingly, the life changes for worse for the next couple of months. And it's a very, very bad time. And by the way, this follows a curve which is called as the Dali Kruger effect. Dali Kruger effect is a well-known academic concept, which simply says the less you know, the more confident you are. It's absolutely funny when it comes to it. And the less you know, the more confident you are.
00:13:04
Speaker
It takes one day for it to change because the same night the dog is not going to sleep, they're going to whine. The next morning you wake up, there'll be party everywhere and there'll be peeing everywhere. The two days out, we'll start smelling. And one friend of mine said, I need to take this dog to the vet. And they realised, oh my God, half the Ubers and Ola Zakhi.
00:13:21
Speaker
canceling and I go there each the way I wait for six hours for the way to tell me very nice. Good job done. You know, take it back. Everything is fine. And you start feeling here and then you decide, you know, your friends are going on a road trip. You can't take the dog because the place is not pet friendly. And this whole thing, after a couple of months, it's so low that exactly the place where abandonment happens. I know people about it. But at the end of the day, we have to manage. I had a very different view about pets.
00:13:51
Speaker
Now, anybody who crosses this curve will fall in love. I'm sure there will be a tipping point for you as well. You tell the woman, hey, if you want to change your life, come to Japan. And I'm sure it's true. I say that about Magyar. If you want to change your life, come to Magyar. It's amazing. Once you get over the issues of the city, it's a beautiful, beautiful city.
00:14:10
Speaker
And, you know, so that is called as a slope of enlightenment. And when I take this Anikruva effect, I totally understand what I need to build as a superteller. And that's where the whole thesis started. We said, you know, and that's when, you know, you had asked here, how did you decide of living superteller? But this was such a solid insight for us that we said, and being an entrepreneur at heart, it was like,
00:14:39
Speaker
I don't know if you like the idea or not. Why would you like to leave it? It's a very difficult decision, no doubt. It's a complete absolutely very close to all of our hearts and it's just been a fantastic journey.
00:14:56
Speaker
If we compare with a human parent-child kind of a setup, one option is D2C, like say Momsco, Mamas, etc., which are doing products, and then you have communities, Momspresso, and Baby Chakra, and a couple of other start-ups. So what is it that you wanted to do?
00:15:16
Speaker
So, we went on to deliberating, that will also come from the new set of people. And interestingly, what we understood is that this new set of people was also not, this DLC was not going at home. So, which means the packet for penetration will increase. And that's what we're also seeing all the numbers show the packet for it.
00:15:34
Speaker
penetration. It was $1.5 million back in 2015 and I think this year it should reach anywhere close to $700 to $800 million. So that kind of growth has happened in the last three years, massive growth, attributed to Gen Z. And more so because pet food is large portion of pet food, the main ingredient ends up being meat and we understood meat.
00:15:53
Speaker
And we said, yeah, we were, I think, when we went out factory, we knew how to build a factory, we knew how to run a factory. And we said, then it's about just selling that product. But me, that's where we hit a roadblock. We said, yeah, I mean, you, you named some of this brand. They obviously they required a platform like, you know, to help sell their products. Baby care you talked about and baby care requires was tried to be a platform. Obviously Amazon is a platform, but you require special
00:16:23
Speaker
platform. And then the second part of this question was here, right? Obviously, you as much China, you have it love in Brazil and it's a place has on platform. But why is it a requirement of this category to build at the back of a platform?
Product Launch Strategies and Service Innovations
00:16:41
Speaker
And interestingly, the answer lies in the fact that platforms get built wherever there's an indulgent behavior. So, you know, you don't want to commoditize your purchase. So think of meat as a platform, think of meat as a
00:16:53
Speaker
Like meat is special and there is meat is special. I look at lishes as much as a brand, as much as I look at a platform. I mean, it's a platform because when a person thinks about me, they go to lishes in the platform. So yes, it's a brand, but it's more of a platform. You have meat, but delicious. In a very similar manner, Naika or Mentra was fundamentally important because you buy products for yourself.
00:17:20
Speaker
And you say, I want to specialise on because I'm going to spend it on myself. Baby is even more. You always want to make your baby feel special. So, you know, if you have to buy those clothes for them, you will not even go to Minnesota or Amazon. You will go to push back or some of those babies websites. Yeah. You will get specialised products.
00:17:40
Speaker
absolutely very similar for patch. It's our companion and they are very special. And so, you know, we've, we understood why these platforms are getting built. In coming back to your question, the fundamental reason of D2C was
00:17:53
Speaker
And for that, we understood our platform. In that thesis, we also were very short. We have our own brand called Henlo, which has a couple of products which are already out and a few are going to launch very, very soon. But that came out to be large from a requirement that had to be solved in India.
00:18:12
Speaker
as most of the petrol was getting manufactured outside the country, they were not solving for Indian problems and Indian problems ended up being different. And we have seen in every category that has gotten built that Indian problems ended up being different. Did you, I mean, you know, one way is that you build a D2C website, which can eventually maybe like the listeners would have started as a D2C website, which then would have eventually morphed into a platform.
00:18:38
Speaker
On the other approaches, you've taken approach that it is a platform and I will not only sell my own brand, but I will also sell pedigree, for example. So, what approach did you want to take? Yeah, so I'll tell you the larger approach. Products is just one part of the approach. You know, I just go back and say, you know, we talked about fundamentally the platform that we wanted to build had to solve for that. Here, let's say tomorrow,
00:19:00
Speaker
I get a bed and I absolutely don't know what needs to be done. I have to be handheld. Handholding, you have to make me cross that valley of despair. I really can't survive with despair.
00:19:16
Speaker
So this is a very simple case of roti ka pran mukhan. We call that primary need. Nobody abandons a pet because of grooming. Nobody abandons a pet because of insurance. But people abandon a pet because of health. So these aren't the real roti ka pran mukhan for pets.
00:19:38
Speaker
As a platform, we said we will solve for all three. The first is obviously, we will sell everything under the sun because people want to discover products. People want to make a very clear purchase for their platform. Number two, when somebody buys a product from us, we will handhold them because now we have more understanding for that customer and pet care as a category revolves around
00:20:01
Speaker
largely because nobody else has that understanding of kri karna kya. India has around 80 or 1000 vets out of which 90% end up being for livestock. India has the largest livestock in the world, cows, offshores and goats and chickens. So most of them fundamentally end up working for that sector. Practically 7-8,000 companion tier one cities, my concentration is higher, but this is still 2000. And you know, the amount of, we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets and we're talking about 10-12 million pets
00:20:31
Speaker
The second, with a large set of people coming in, supply though, or problems, the dog has not eaten, what do I need to do? Nobody's answering that question for you. And you want somebody in a position of authority to come and tell you, you know, in a household, the dadi and the nadi were at the position of authority.
00:20:55
Speaker
But you have to consult. The dog is not able to solve it. Simple problem. How do I know my dog isn't well? I don't even know the parameters. If I go to Google and say they will talk about 15 of them, one of them will always be true for your pet. So practically what we understood, we have to give people access and we said we'll do it in a very scalable manner. People have simpler problems.
00:21:18
Speaker
I suddenly made a product or service. And I said, hey, you come on my platform, you have access to the web, you have access to products, you have access to the energy, you have behaviorist, you have nutritionist. Just come and don't worry anything. We will handhold you. And to bridge this gap, we caught a concept of what we call as a pet relationship manager.
00:21:39
Speaker
Everybody requires a buddy. I mean, how do you go to when you have a problem? And we said, don't rely on your ecosystem. We are giving you the ecosystem. Here is this person, just ping them and they will call you. These are people who are pet parents themselves, more experienced. They're not wets. They don't have degrees, but they're massive pet lovers. And no, they have seen three, four. Like I've seen three dogs. I can tell basically, hai ari tikla hai nahi nahi nahi nahi nahi. Obviously, not at a traditional quality, but at least I can guide you what you need to do.
00:22:06
Speaker
And that was the first layer we built and then we built a whole layer of experts, as we call it, and we gave them to the customer. I said, hey, as an ecosystem, we know what you require. The only thing we will do is come tomorrow after you get a pet job. We will try and solve for the issues that you have. You should have a very enjoyable journey with your pet. You have a problem, just ask, get confidence and move on.
00:22:31
Speaker
To the extent that when we know there is a problem, people have issues and we say, then we guide them, go to this doctor. This is the one closest to you. We can help you with that appointment or whatever. But the idea is to handle them. So that's the thesis, you know, what we wanted to build as a platform. So it was not simple here. This showcase very good looking photographs and pets, put a sale there and say, hey, I think
00:23:01
Speaker
So, the differentiation comes from what is the real problem we need to solve. For us, like I said, the real problem was people who are coming in are young, it's the first type of parent, their life has changed and it has changed for the world. Interestingly, we are here to handle you.
00:23:24
Speaker
Did you see this as a subscription service? At scale, you can't be giving this out for free. Absolutely. A lot of these are, I would say, the way we work is, in our experience of startups, you take a cohort, you do your experiments,
00:23:42
Speaker
You start scaling them up. You scale it to an extent when you realize, do you want to monetize it? Are you able to create efficiencies in such a way that you have a premium service, you have a premium service, or you have a free service? Different experiments lead to different things. Tell me that journey of your experiments.
00:24:04
Speaker
Oh, yeah, yeah, absolutely. So, you know, when we started, we said, how do we reach, how do we create a mass that SuperTails is here? And we said, Hey. And you're like, this is which month here? Just put a timeline on it. This is May 2021. Okay. And, and, and May 2021 SuperTails is like a first cry, but for pets, like that's what you were launching.
00:24:25
Speaker
Yes. So this whole thinking started around January, 2021. Obviously we were discussing when we were at Leastion. We all three of us combined had like, I think almost two and a half years of a notice period combined. I think I spent seven, eight months and we needed seven, eight months. I never did nine, 10 months, so close to here.
00:24:43
Speaker
After we told them, obviously, that was the amount of love we had for dishes. So if they would have asked for more, we were given more. So we started thinking about it in 2020. In 2021, we moved out. The first two months, we thought, we met a lot of customers. When that thesis, interestingly, we were able to do a fundraise,
Customer Engagement and Retention Strategies
00:25:00
Speaker
a first round back then itself, got the money around April, build a team in April, and May and May, June, we launched. Obviously, we were five years more experienced, wiser.
00:25:11
Speaker
You had a network? Did that help? Yes. So I think that is the biggest thing that changed. And I was summoned to that as the most important point. I think we built a network. And that realization came when we understood, when in 2017, we started meeting funds, right? We realized here, we had a lot of
00:25:33
Speaker
But the other thing that also changed was that the whole ecosystem also changed. I can tell you this ecosystem is just the founder network today. It's so helpful.
00:25:57
Speaker
It's just amazing and obviously some of them also help in fundraise, some of them become angels, so many angel networks. So a lot of things had changed. We had so much of success stories coming out of India, people were bullish. And then we also had this background with lishes where people worked okay. I'm sure more confident on partnering with us as a category.
00:26:19
Speaker
Covid was getting better, everybody was getting better. So, a lot of things worked in our favour, to be very honest. And timing, 2021, starting was a super good timing for seed funding. So, a lot of things went quite in our favour, to be very honest. We didn't expect, and luckily we had some capital because also we didn't want to go out and to be very honest, we wanted to appear first. But you know, you don't say no to incoming.
00:26:43
Speaker
interest rate. So it happened. So before we realized that in seven days, we were able to have a dope sheet and it was amazing, right? And Hamidanga BOTS today, which was a one policy, large policy that we had. Yeah, the fundraiser is not the end till the start. So then obviously, with that high, we started to put our heads down and we said, I think
00:27:09
Speaker
The biggest thing that works for a startup and that functionality has not changed. It's always an execution game at the end of the day. If you can execute it better than others, you have one house to create. Actually, most of the end gets one because of execution. If you have a dual AML log, you have to launch it. And from an unknown person, the website was standing and we were having the first transaction. So that was super. But now the question was, we hired a few heads also.
00:27:37
Speaker
Now is the time and you asked about the experiment. How did some of these things work? Critically, we had some idea here, products or services, etc. Very few companies across the globe have been built where product and services kind of come together. This category had products and services which had to be built. So we knew how to do it.
00:27:58
Speaker
So we said, yeah, let's get a bus. And this is around June, July. And we said, let's do one thing. Let's announce we will give free web conservation. And suddenly we started seeing a large set of people starting coming to Supertest because they were getting free access to our website. And we said, this is fine.
00:28:14
Speaker
And because of these people coming to our website, they started buying products also. And so there was phase one, as I would say, where it did its purpose very well. Giving ads for free consultation was inexpensive. The tax was very, very, very low. So we weren't spending too much money on acquiring a customer. And once they came on the website, they started buying. But we knew one problem very common. We kind of hit the roadblock very soon. This was not a very sustainable journey. One, because as soon as you make
00:28:44
Speaker
free consultation has paid, then the tax will go to the roof. And the bigger problem was that people who were coming for consultation were not buying. And the simple reason for that is in India, the penetration of package sold is only 6-7%. 93% of the people basically gave home book forward. So, how many people, a large set of people who were coming were not giving home book forward. So, they had no reason to buy as well. I mean, who were giving home book forward. So, they had no reason to buy.
00:29:11
Speaker
You were getting signups, but you were not getting transactions. Yes, and people loved us. So people were coming to the website, they were taking a consultation, they were loving us, but they were not doing, you know, practically not making a purchase. But we knew this will happen. So the good thing is, how many signups did you get in those?
00:29:31
Speaker
Couple of months. In August itself, we did around 1,000 consultations that month. 1,000 consultations here and, you know, for a 2-3 month old company, I think our transactions also, we were able to do something, not conversion the day. It's 7-8 transactions a day, maybe. It's not a small business, especially it's a very high AOE gatic reason. So we were quite happy, but we knew it was not sustainable.
00:29:52
Speaker
We had to flip it. But as an integrator, we knew that the whole thing, the way it will work, is that we have to give this customer handholding. And we've slipped it in a way that anybody who comes to a website and buys a product, we said, we now know more about you, we will handhold you. And we got the concept of a pet relationship.
00:30:15
Speaker
And then we increased the number of people that we had on the veterinary side and we said, please use our network. And this experiment started with 5% of the people in January. Today we reach around 25% of our customer base. And in the next three months, we are now in a sale where we're scaling up and we found a way where we can scale it up without massive costs.
00:30:38
Speaker
Interestingly, this whole services side of it creates its own revenue also. It's not a loss making entity for us. What it feeds back is a massive amount of customer love and customer validation. Our repeats have gone up by almost 50-60%. That's a massive, massive number I know.
00:30:57
Speaker
just because we are able to engage more with it. It was a real problem-solving product. But how do you engage with the customer? And we learned it from Chewie. Chewie was written on customer love. We said, but that kind of worked very well for us.
00:31:19
Speaker
Chewy is like a first cry. What is Chewy for people who don't know? So the US market is around $100 million, right? And Chewy is the largest retailer in the US and it's actually an online retailer. So in $100 million, it does around $8 to $9 million of revenue comes along from Chewy.
00:31:36
Speaker
It's the largest in the world. It is a listed entity. I think last we knew its valuation was around $30 million. It's a massive success in pet care. Similarly, there's pet love in Brazil. There is a book in China.
00:31:51
Speaker
But Chewie is only e-commerce. It's only e-commerce. So it has services. So over time, it has started to build services. But there was one thing that you talked about at the start of this conversation, where you'd said, this was subscription. So Chewie does it as part of the subscription model, where if you are a subscriber to the loyalty program, and then you get started getting the services. So a lot of these models exist. Like Amazon Prime.
00:32:18
Speaker
Yeah. So they call it, they call it auto-ship. So it's part of the auto-ship program. Got it. Okay. So you were, I want to zoom in on flipping the model. Initially you said free VET consultation to get signups and some of those would transact. Then you said, okay, if you transact, then you get some services. Was there like a minimum order value to qualify or did you open up for everybody or like, how did you do that?
00:32:42
Speaker
Got it. So, yes, when we thought about the first few cohorts, so we said, yeah, let's try it with 5%. Obviously, I mean, you first try it with 100 customers, right? And obviously, you can choose some customers, right? And then when we moved to 5%, we may go use the cohort. We said, go to the other cohorts.
00:32:59
Speaker
Are there certain codes that perform better than others? What we realized was that is not true. Every customer, even if so, what are the kinds of cohorts that you will build? You can build it on the average order value, you can build it on the frequency of buying, you can build it on LTV, any customer has given me X amount of money, they don't transact in more than a few times. What we realized was the cohorts fundamentally behave the same.
00:33:28
Speaker
You chose a 5% segment of customer and you sent them a mailer or something saying you qualify for like a free pet relationship manager. No, actually we did not do that. So all we did was if when you buy, we just call you or we message you.
00:33:44
Speaker
and we tell you, you don't qualify, you are there so here is the person and this is my name and you know in pet care it's very easy okay and not very different from baby care the name of the pet is the biggest icebreaker that exists
00:34:00
Speaker
If I ask you what's the name of your pet, why? Because nobody asks the name of your pet. You know, are they located? You have a dog, I will not enter your house. Other people will come and start meeting. But anybody who asked the name of your pet, you start, you know, aligning so much more with them. You know, I named him Luca. Why did I name him or Luca? And then on the scene starts. You know, this was my favorite character in this movie. And where did you get him? How old is he? What need is he?
00:34:25
Speaker
This is exactly what we do. It's very similar to babies. When two people are talking about babies, they talk about, you know, and that guy is so amazing and they do the best things. It's very similar with pets.
00:34:44
Speaker
You know what, my doctor yesterday, this pucker knows when I'm going to enter the apartment. You know, those conversations happen. But behind those conversations, similarly in a baby, behind those conversations, there is a list of a thousand issues. So we kind of start with this bridge and we get over it.
00:35:08
Speaker
My dog has a very weird spot on the skin. I don't know what it is. I read about it on Google and they said, it can be cancer. What do I need to do? The dog sometimes howls in the night in a very weird manner. This dog hums some of the people who come to my house and I feel very embarrassed. It's a very common problem. What do you do? It's been three months but he always pees in the house when I'm not there. What do I do?
00:35:33
Speaker
the dog has so much anxiety or the guy just can't leave me whenever I'm at home and I feel she would be happy. I mean, these are so common. But I'm sure it's all going to be solid. Now the best one knows. Just bring this body of mine. Give me an example. So if I purchased, let's say, a bag of dog food from Supertails, then what would happen? What would be the workflow? Interesting.
00:36:02
Speaker
okay so let's say you buy a product and let's say you buy a royal cannon maxi puppy it's a product you know you the animal is a puppy it's a dog it's a puppy and i also know that it's a bigger breed it can be a german shepherd or you know that's one of the more common breeds or if you have bought labrador food
00:36:26
Speaker
Imagine you make a conversation, I have orders to start. So when did you get a puppy? What did you name the puppy? And why did you name the puppy? You will get a call. Obviously you will get messages that we will call it. And then when you get a call, you make the conversation will start and it will start with what is the name of your puppy.
00:36:42
Speaker
And you would have gone to this thing, have you vaccine? You know, so I'll talk about, we'll talk about those. We will talk about those. And a lot of people are very smart. They have done a lot of these things. But when you start coming to the real problems, and we tell you, do you think your dog scratches? Do you think your dog pees when you don't want to write? And do you think you've been able to manage or a simple one?
00:37:08
Speaker
Does your dog know your name? Like you know your dog's name, but does that dog know their own name? Does the dog respond? Hey, you want him to respond or her to respond. Do you know the right way of walking with a dog? Does a dog walk take the leash? Does it walk on your right hand side or left hand side? And I can tell you, yes, there are some smart people who know it, but most of the people find them in the middle of the day.
00:37:30
Speaker
You have to solve the problem. You have to solve the problem the same way. And suddenly people have this thought process. I will get a trainer and it will get solved.
00:37:45
Speaker
which may be learned in two hours what we need to do. No baby has ever learned. And animals obviously have lesser gray cells. So they are not going to learn in two hours. So they will take a long time. And the person who will make them learn is the pet parent themselves. And that's what we do. We connect them to a trainer or a behaviorist and we tell them, hey, these are the five-step things that are you going to do in the next two months. And after the first month itself, you will start realizing, or some of them will start realizing, the dog has started to respond to the dog.
00:38:15
Speaker
As a parent you need that, you want that and I can tell you either when you catch also will start responding to their names but because we had none of these things it took us five, six years before my cat's name is Nifty and it's only now that I called her by name and she'll come and start responding and we have a dialogue.
Scaling and Future Plans for Supertails
00:38:34
Speaker
I wish somebody should have told me when I called Nifty because imagine when she was a kitten I would have had
00:38:39
Speaker
Those conversations that I heard back then, how was it day NFT? And she responded, I like to ask her a question. But there is a very daily thing that we'll have. I'll come back home and we'll sit together and we'll have a conversation. It's my way of advocating.
00:38:56
Speaker
You said that this is not a loss leader. How is that? So when you're connecting to an expert, we've kind of built a few cohorts there. I would say Fortress is there where we are able to get the customer back. So one way of this.
00:39:13
Speaker
Not being a loss leader is a simple fact that I have 50% more replete of this customer. Obviously, I get that money back. But not just with this. Obviously, a lot of customers, for the next time they come, they pay for the service. There are certain allied categories that we run. Obviously, there are times when people want some
00:39:33
Speaker
treatment or they want some pharmacy. So we ought to do pharmacy through this road. We write a prescription, obviously we write a prescription. So we also sell pharmacy to them. So this has started to become like, you know, the cost of whatever we encourage that we start to, you know, get back. The wet concentration is paid, the pet relationship manager is free. Is that what you're saying?
00:39:53
Speaker
Yeah, so today when the relationship manager also connects to our web, so we don't charge for it, but there are certain cohorts where we charge, but any person who comes directly on the website and wants to talk to our web, it's paid for that. It's a nominal fee of 300 bucks, but we are very happy to customize what we've seen and are willing to pay for it because
00:40:13
Speaker
Yeah, the convenience of doing it from your home is absolutely a big, big plus factor. Because most of the times you may not even need to actually show your pet to the vet, but you are going to discuss some anxiety you have or whatever. Absolutely. And we also feel that this whole ecosystem has not been built in the right manner. And I'll tell you why. See, pets are territorial dogs and cats both are territorial, right? I mean, they are not happy going to a vet in a cage. One, they're not used to the care and second, they're not used to all these animals around them.
00:40:41
Speaker
asked one pet parent here, I mean, they trade the day they have to take it to the right, right? And we feel a large portion of these issues can be sold online. I mean, there are numbers around it, not by us, but by some companies across the globe where they say the same 91% of issues can be sold online.
00:41:00
Speaker
And our numbers also, by the way, show us in the case. And what we've realized is that obviously, this customer will keep coming back for issues which don't require any kind of surgery or a massive amount of physical check. And by the way, because we don't have to earn money through
00:41:19
Speaker
you know, putting a knife or doing a surgery. I mean, it's easier for us to be more clear on the kind of contradiction that we end up doing. I want you to go to a way and show it to them physically. That's exactly what we do. This is what I'm thinking. You can always come back to me for a second opinion, but I think you'll really take your way.
00:41:42
Speaker
You want to build a prime, like a prime subscription kind of a model where you charge something and then for the, you know, all of this gets bundled into that. Or do you want to continue to do this as a way to build repeat purchase is the average order values and.
00:41:59
Speaker
you know overall increase the long-term value of the customer. You're absolutely right. It's not a question of if it's a question of when. So obviously there are certain priorities and we are a small lean team so some of these things will keep coming and definitely definitely this is something that we have to build.
00:42:14
Speaker
So as it right now, you're still building in the pieces which add more value, like you're creating more features so that you can eventually bundle it and monetize it. 100%. There are P0s and you solve for P0s. And second, there are certain things which work better at a scale. So today, you know, if I know key, okay, a loyalty program will increase my repeat and average all the value. I can quantify that number. So now it's only a question of doing that.
00:42:42
Speaker
But if I have something else, which I want to try today because it might think these are repeat much larger. So I would, I would focus my energies on that. See the known name. It's known for everyone as green service will work. So it's just the function of when sort of the question of if, and how do we kind of create that a real service display actually may value like Amazon prime is absolutely worth every penny. It's absolutely worth every penny.
00:43:07
Speaker
And without naming some of the other subscriptions that we have, I mean, in question, I don't know, so my partner was saying, or 30% of extra time, because fundamentally, I'm going to get the same service, right? What is the decision? And you know, how do you calculate it? So he's just barely covering that cost.
00:43:32
Speaker
What are the P zeros in front of you right now? Like, you know, the more things that you want to try and solve or the experiments you want to run.
00:43:39
Speaker
Yeah. So, you know, without going into too much detail actually, I think that largely it has to be well done repeat. We have, and how well, how better are we able to, you know, I told we reach around 25% of the people. So I think the biggest thing is how can I scale it up to like say, you know, 75% of the people, 50% come up, but clarity is the next 25% is being thought about because, and this liver, imagine if, when I do 75% of the people using my production service integration and to
00:44:09
Speaker
Then my pitch is, there is my loyalty service. Why would anybody go out of the ecosystem? I don't want to sound key. We want to take it slow, but we have to rationalize it. I mean, there's certain things you can always hire people. And what we have seen, at least our experiences, a lot of time we see so many companies shutting down or, you know, they're firing people. I mean, you don't want to win that stage. So there are priorities. Okay. It's okay. But then obviously we take a call and we hire a person. So it's just a matter of that.
00:44:39
Speaker
You want to figure out a way in which, like say, you have 10 pet relationship managers covering 1000 or 5000 customers. You want to figure out a way in which the same 10 customers, these pet relationship managers can cover twice the number of customers. Like that is... It is, the experiments are happening as you speak, the domain name experiments are dying. And obviously that is also a pipeline that we look at. There's a subscription service coming. So everything I'm talking about is nothing is like a point ratio. Everything is a couple of months here and there.
00:45:08
Speaker
So, you know, I was just trying to answer here, why has it not been done by now, till now, right? In one and a half years of existence. What is the way in which you are improving the number of customers you can cover with the same human resource, like with the same pet relationship managers?
00:45:25
Speaker
Yeah, I mean, interestingly, a lot of these technologies exist. So the conversation chart is here, you know, scaling up without losing the efficacy. So scaling up is easy without losing the efficacy is a difficult part. Today we get a certain repeat when we do it in a certain manner. The experiments that we're doing is largely one, how do we scale up without the loss of efficacy? And I think that's the focus. So when
00:45:49
Speaker
On terms of mediums that exist, I think WhatsApp as a medium is very solid. The whole conversational AI conversation, etc. There are certain cases of voice AI also trying to get solved. We have not tried it yet. We're just exploring it as we speak. And I also feel today it's quite raw. May I call you, I'll start having all those discussions with you. So now is the experiment says, yeah, how quickly am I able to reach to those
00:46:17
Speaker
issues. Fundamentally with the issues because that's what I solve. So I go conversation. So in a very simple manner, it is the spiel, the spiel in a more complex manner. It is the whole structure of how I break through you and figure out what is the issue. And so multiple ways. So it's a very multifaceted problem. I think, hey, even if I say it, you'll feel, let's say the word, but
00:46:40
Speaker
But one single SMS or a type of SMS which works, when it goes to a large piece of customer, it just works wonders. So that's how we look at some of these things. Amazing. How are you building your pet relationship manager team? Are you hiring and training or are you looking at hiring specific kind of profile? Are you hiring for empathy and training for knowledge on pets? Or what is the way in which you're doing it?
00:47:09
Speaker
Awesome. It's amazing that actually you've told me the answer also. So this is built on three things. One is actually clear understanding that they have had pets in life or they have a pet. So, and then the understanding of the pet. The second is massive amount of empathy. And that interestingly, pet care is not very difficult. You have a conversation with somebody for 30 minutes and you'll be 90% sure.
00:47:31
Speaker
you know, are they moving in the pet level or are they faking it? So that is the part number two and the soft skills. So what a pet relationship manager, these are the three large things that we look at. The training is something that we know we take care of. And so we're not worried if somebody, then some people who know a little bit more than others, which is fine, but honestly, that's not the environment. It's 15 day crash course. And then, you know, a couple of hours every week.
00:47:57
Speaker
that kind of refreshes them. And because we have a large set of Vets, everybody's happy because if somebody genuinely loves something, they would like to know more. Also, a lot of times, these people have similar issues with their own Vets, so they are able to solve it. So, I remember we hear a lot of these calls in one of the calls, and it was amazing that the pet tenant talked about that this is an issue that
00:48:20
Speaker
the pet is going through. And this pet relationship manager said, Hey, wait, my dog is going to exactly the same thing. But you know what, I never knew this was an issue. Right. And now, you know, and then this person shifts on a video call and you know, both of them are showing the dogs to each other, then there is something. And our parents said, Yeah, I never thought it was a problem. And thank you for helping me because otherwise I wouldn't have in both of them then going to consultation with the vet. And interestingly, it was nothing.
00:48:47
Speaker
Right. Interestingly, it was not an issue, but you know, I actually remember that call because, you know, how much confidence you as a customer will get. So soft skills, being a bit bent and empathies of three things.
00:49:10
Speaker
In the long term, do you think you'll be able to replace a PRM with tech? Because essentially, a PRM is following a playbook that, okay, let me ask these questions, find out what is the core issue, and then give some suggestions, and then do a follow-up. And if there is an escalation, then I escalate. So, you know, does it seem like something which could be replaced by tech?
00:49:32
Speaker
Yeah, so if we talk about very long term, you know, I think it should happen. Short term, India has a very interesting problem. Every person means want is different. The solution is both and let the customer choose.
00:49:47
Speaker
This is what we feel at some level isn't getting. And the question is also, Yaki, do you need... A lot of companies, what they've done is just put a bot and the bot keeps answering. The bot doesn't understand half the things that we are saying. In India, we don't have English. Also in English, you know, combination of Indian English or original language in English. So the answer is three, four. It is a combination of AI, human, and between both of them,
00:50:17
Speaker
voice and chat so it's a 2x2 and between this 2x2 lie all the people my sense is you know it is evenly split or you know it is in a proportion where you can't ignore any code.
Financial Insights and Profitability in Pet Care
00:50:30
Speaker
So help me understand some details from the business perspective what kind you know
00:50:35
Speaker
What kind of average order values do you see? How many times in a month or in a year does an average customer transact? Share with me some of those metrics for people to understand this space a little better. Absolutely. So it's a decently high average order value business.
00:50:53
Speaker
And where does it come from? So the way it works is that there are a few types of people. One obviously, which is not so much relevant for us, people who don't give packaged food, we all give home cooked food to their pet. The second chunk is much larger, which gives a mixture of home cooked food and packaged food.
00:51:09
Speaker
And then there is one set which is the growing set of people who only give packaged food to them. So there is obviously a decent amount of difference between packaged food and on how to cook food. And one of the larger, I would say, problem statement is that a balanced diet for a pet is very, very different. And to the self, it was table scraps, which
00:51:28
Speaker
you know, pets used to have over time, I know it has changed, but it's impossible to give a balanced diet to a pet because it's practically quite different from a human diet. You know, they need Dory and they need some of the things that humans don't require and that proportion, right, with them in K and with them in some of these other things. But the point being that still a large portion of people make packet food and home cooked food. But coming to what is the, imagine somebody who only gives packet food the cost of
00:51:54
Speaker
food ranges between $200, $200, or kg. If you have a medium-sized dog, let's say 30 or kg, the proportion is quite clear. They need to put 3% of their body weight as food every day. So if you do the mass, cost will range anywhere between 5,000 to 10,000 basis in average size of the dog. Obviously, if somebody has a very large dog or a very small dog, these numbers will differ. So
00:52:17
Speaker
So the cost of keeping a pet only on the food front for a month ranges between 5,000 to 10,000 rupees. Now, some people take smaller packs, which will last them for a week. Most of the people, like I said, make packaged food at home cooked food. So when you realize this number will change from 2,500 bucks to 5,000 rupees, because every half will not become zero. And so the average order value ranges somewhere around this number itself for us. Which? 5,000.
00:52:46
Speaker
Yeah, correct. And which you would realize is very, very, very different from any other category, because most of the category end up being between 500 to 1000 bucks, or some really good categories end up being 1500 bucks, but here the average order value is very high. Also, the margin structures are quite good. This category sees margin structure could be 30% to 50% basis that type of product. So it's an average of 40% is not a bad average,
00:53:12
Speaker
But then there are the other side of the problem statement, which is also the fact that these products are heavier because the weight is higher. So the cost of shipping becomes much higher. As against personal care, which will always lie mostly 500 grams, this people are buying average weight is around five kilos. So five kilos of products being transported to air or surface. So supply chain is cost and supply chain networks end up being quite different for us.
00:53:41
Speaker
But this is pretty incredible. So this is like a in the long run and extremely profitable business. I mean, even like Mica is seen as the poster child of profitable e-commerce. And I think your average order value is higher than what they get and probably better margins also.
00:53:57
Speaker
Yeah. This is one of the parameters that we looked at that this category has an inherent way of being profitable. This is not a one, 2% of business category. The reason why probably it can be slow.
00:54:13
Speaker
increasing that is the scale the category is that right now so i just sub-billion dollar package for industry obviously in the next five years hopefully it will be a three to four billion dollar industry and and also those are aggressive numbers but you know even when that happens obviously this category will see a mastering model growth profitability is category and customers come once a month more frequently on an average
00:54:39
Speaker
Yeah. So the average buying behavior that we've seen is 35 days. So yeah, so the customers will come much
Brand Expansion and Offline Strategy
00:54:47
Speaker
more frequently. And look, we also have for us offerings are massive or it's maybe action. I will tell you the cohort of people is significantly very, very industry-wide. So anybody who gets wet food, let's say a cat with food will not buy for a very long term. They'll keep buying and they'll keep keeping some packets, like paint packets.
00:55:04
Speaker
I have a cat and I don't buy for more than 10 days. I just buy it. I give one packet a day. I'll buy a pack of 12 and I'll keep repeating. The next time, I need to buy a toy. I don't buy for like, I don't keep like a 50 odd packet. But this interestingly is like, it's absolutely different for...
00:55:24
Speaker
everyone. There is no standard pack like Serilev pack for baby or diaper pack of 24. There is not too much of standardization. Every brand does it differently because with brands, practically most of these brands are from out in the country. So something works for them in France.
00:55:41
Speaker
and you know the same pack phase which comes to India something works for them in Thailand and the same packs is somewhere and something works for the US and the same pack phase come here. What percentage of your sales is your in-house brands? You said you've launched some in-house brands. Yeah so it's quite small right now because the only category we've launched is one product which is a nutrition dopper. The brand is called Henlo and interestingly this is
00:56:03
Speaker
This is always for the 93% of people who don't get packaged food, where we say, hey, you give whole book food, it's not complete, so why don't you sprinkle on top of it? So today at the scale that we are, we sell around 2,000 to 2,500 boxes a month.
00:56:18
Speaker
maybe a little bit more than last month. So it's growing, but the target segment for that product is very different. Very soon, in the next couple of weeks, we will launch Dog Dry Food. That's when we'll be like, that's a mainstay product in this category. So very excited for that. So let's see how that product grows, because it's going to be probably the only product which is going to sell online only and like a new-age brand.
00:56:45
Speaker
or industry structure was so tilted towards an offline kind of a thesis writing. One question, let's talk about this offline only. All of them are going offline also now with their retail experiences, retail stores, et cetera. So that is something you also think in the long, long term. I mean, right now, obviously, it will be spreading yourself too thin.
00:57:07
Speaker
Yeah, so you banned on the first part of the answer that the answer today is probably wait and watch largely because we need bandwidths on it and I think online as a space is something that is absolutely open and we want to win that. Offline in the future, we are quite closely looking at this category of how we believe key offline we wish to solve the current organization's speciality store, WholeKits on Nuva in the long run.
00:57:30
Speaker
But if you want to go to a larger base of people, what is the offline format that works for them is going to be a little bit different. We have some ideas already, but I think we'll reserve those ideas for the time and we are happy to launch.
00:57:49
Speaker
It's definitely not the next six months. That's something that we're absolutely clear. But we have not at all said no to that whole concept. We believe there is some power in offline. It's just that in this category, we can solve it. If my average order weight is 5 kgs.
00:58:04
Speaker
I am not expecting everyone to be OK in carrying that 5kg pack. The second thing I also mentioned at the start, my target segment is Gen Z. In the next two or three years, I'm expecting that Gen Zs are going to be OK in carrying that pack 5kgs. How is that Gen Z plus offline thesis, how does it come together is something that we'll be very close looking at. But startup teachers, you'll never say no to anything.
00:58:33
Speaker
Akshay, I can tell you we did a fundraiser last year, which was around June, July. Yeah. We announced it a couple of months later. At that time, this was the $10 million series. Yeah. We could fight side. We were around close to 5 million era. And obviously we are a small startup today. Obviously we grow.
00:58:55
Speaker
in double digits every month. So I think that's the zero to one which kind of keeps us excited. So yeah, so that's how we're growing right now. So it's a good journey. Amazing. What works on Instagram? Like long form video, reels, images, what has worked for you? Interesting. So I think Instagram in the last one and a half years, two years has changed massively, drastically.
00:59:18
Speaker
When we started, and the brands which have been going before that, so there was this whole post-COVID brands started coming and getting with. And that time, the influencers, larger, micro influencers, et cetera, was what took people during COVID. And interestingly, very early, we found out each other. Influencers, probably after a while, doesn't work. Maybe not in our county. One thing we never wanted to do was we didn't want to have those videos of good-looking dogs and cats. And we didn't want people to just say, yeah, I like Karbir Akshat, the photographer. So that's something we didn't want.
00:59:48
Speaker
Just produce high quality content, and after that, just leave it to beta. And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.