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How "Efficiency First, Scale Later" Built 2 Unicorns - FirstCry and Xpressbees
150 Plays4 years ago
"We understood that logistics wasn't just a back-end function—it was a core component of customer satisfaction."
This was the pivotal realization inside FirstCry that sparked a billion-dollar idea. By reframing a major operational problem into a strategic opportunity, Amitava Saha didn't just fix a bottleneck for his company; he built an entirely new one, Xpressbees, to serve the whole e-commerce industry.
Amitava Saha is the Co-Founder and CEO of Xpressbees and the Co-founder and former COO of FirstCry. He is one of the few entrepreneurs in India to have built two unicorn companies from the ground up. Under his leadership, Xpressbees has grown from handling approximately 50,000 shipments a day to over 3 million and is valued at over $1.4 billion. An alumnus of IIT (BHU), Varanasi, and IIM Lucknow, his journey from financing his own MBA with a bank loan to becoming a celebrated two-time unicorn founder is an inspiration for entrepreneurs everywhere.
In this episode, Amitava Saha sits down with our host Akshay Datt to discuss his incredible journey.
Key Insights from the Conversation:
- Solving Your Own Problem: Xpressbees was born out of the logistical frustrations faced by its parent company, FirstCry. This "inside-out" approach gave it a battle-tested product from day one.
- The Power of Assortment: A key strategy for FirstCry's initial success was its relentless focus on creating a wider product assortment than any physical store could offer, directly addressing a major customer pain point.
- Operational Excellence as a Moat: Amitava built his logistics arm with a mandate of zero CapEx and extreme efficiency, a principle that remains core to Xpressbees today.
- Pragmatic Technology: Technology at Xpressbees is not built for its own sake but is a tool to serve the two most important pillars of logistics: cost and quality of service.
- The Asset-Light Model: The business was intentionally designed to be asset-light, using a hybrid model of owned hubs and franchise partners to maintain flexibility and scale efficiently.
Chapters:
(00:00) - Intro
(01:12) - Early Career: Why a Stable Job Was More Important Than Entrepreneurship
(04:11) - The Path to Tech Sales & Navigating the Dot-Com Bust
(11:53) - The Brainvisa Story: From a B2C Pivot to a Profitable Exit
(23:41) - Founding FirstCry: Solving a Personal Pain Point for Parents
(33:11) - The "Accidental" Funding of FirstCry
(35:10) - The Birth of Xpressbees from FirstCry's Biggest Operational Crisis
(40:40) - The Strategic Decision to Spin Off the Logistics Arm
(43:23) - Scaling Xpressbees with an Asset-Light, Tech-First Model
(45:33) - The Future: Expanding into B2B Logistics and Beyond
Hashtags:
#FounderThesis #StartupPodcast #AmitavaSaha #Xpressbees #FirstCry #Logistics #SupplyChain #Ecommerce #Unicorn #FounderStory #Entrepreneurship #VentureCapital #ScalingABusiness #OperationalExcellence #StartupIndia #MakeInIndia #AkshayDatt
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Transcript
Founding Years and Early Ventures
00:00:00
Speaker
Take me on a tour. Take me on a tour. This could be a great intro.
00:00:27
Speaker
Very few founders can claim to be as responsible for driving the e-commerce revolution in India as this guest. He started the last decade by setting up an e-commerce company focused on products for babies and children. By the time the decade ended, he had scaled his venture into a unicorn. In his next entrepreneurial avatar, he is supporting the next generation of e-commerce companies to solve the logistical pains. This guest is none other than Amitavasaha.
Motivations and Early Challenges
00:00:56
Speaker
He co-founded First Try in 2010 and then went on to create Express B's in 2015. Listen to this insightful conversation between Amitavah and Akshay Dutt about how to scale up business with a relentless focus on operational accidents. Was there like an entrepreneurial bug biting you and I am or that happened later? No, I think entrepreneurship was not
00:01:22
Speaker
that much in bulk and in 1999, 2001 although like a dot com, dot com thing I heard some of the seniors saying I'm starting a dot com and not in the campus though some of the seniors I remember I was doing my summers in Delhi and there was this freshers welcome party that used to happen
00:01:49
Speaker
in different, different cities, the freshers who were, who had, it was a sort of alumni get together and freshers as well. Like a mix cell, right? Yeah. So, so, so if you have got admission now, you know, you, you joined the, you were, you were asked to join the freshers party there in that alumni would also come and hold back cells.
00:02:13
Speaker
And you have also the summer training. So I met some of those guys. I was in Delhi doing my summers in Maricot. And there I met some of the seniors who were saying, we are planning to start a dot com. And so on and so forth. And but you know, my family situation also very different. My father retired during the last year of my engineering college. So I had to get into a job. And when I
00:02:41
Speaker
fit my job to do my MBA. I pretty much took a bank loan because my father was also not working. There was a toning member, so I got some scholarships from IMs and some of my savings to pull through the college. So my intention was very clear. My family condition was that I had to go back to a job. Right. You had to pay off your loan.
00:03:08
Speaker
Yeah, I had to pay off my loan. My parents were dependent on me.
Transitioning to Business Roles
00:03:14
Speaker
And then I went, you know, obviously my father had retired and he had the savings. But, you know, as I said, he was in a government job throughout his life. And he, you know, he earned his government. All his savings and everything was from the government salary.
00:03:38
Speaker
So which was not very sizable. So only thing I think he had managed well is he bought a land in Calcutta and had built a house. So other than that, the savings are pretty meager. So I needed to, I had to go back to a job. I was very clear. So I am supposed to stop that between adding a qualification to your name.
00:04:05
Speaker
But I was pretty much clear that I could go back and join a job. So you joined the NIT through campus placements. I joined NIT in tech. So it was supposed to be a sales job I was supposed to join. I was very clear. From day one, I was very clear. I wanted to be in tech.
00:04:34
Speaker
I was, once I was joining IAMs, I was very clear I wanted to be in tech. Somehow I felt that tech was the field to be for future, not a publicity, not marketing, not finance. But again, I was very clear, I did not want to, I was not a techie by any, many, many, many imagine, I still can't write a single line of code. So I always wanted to join the business side of technology. So somehow that thing was very clear with me.
00:05:03
Speaker
I had to join business side of technology. I did not apply for a lot of, I applied for only few, few opportunities. I remember I applied for Sapient. And then I had an offer from Ramco Systems so that something called, started called in a higher than entry placement.
00:05:31
Speaker
So I got a job as a sort of, I think, business analyst or senior business analyst in an AMCO systems. And I'd applied for an IIT because they were offering sales positions. So I hadn't applied for any of the FMCG companies. I hadn't applied for any of the finance companies. The banking, right. Somehow I was very clear I wanted to get on a technology and I would
00:06:01
Speaker
I wanted to get into business side of technology, but since the business side openings were not so, very few companies came with the sales opportunities. So I said, why don't I get into a BA or a business analyst or a business consulting role, which would gradually, and I said so in all the interviews.
00:06:26
Speaker
You know, some of them crossed question me and said, like, why don't you then join a sales and let it come to consulting? A lot of sales people graduate consulting. Maybe, maybe I now realize that those questions are trying to cross me and check what my thoughts were.
Success at Future Software
00:06:41
Speaker
But I will always, when I somehow, I was very clear that I wanted to join the business side of technology. So, so I joined NIT and
00:06:53
Speaker
And it was, you know, NIT picked me up for overseas sales. Okay. I was supposed to be, you know, I was supposed to be sent for overseas sales and they said, preferably I'd be sent to Far East, Singapore. Okay. And that was here 2001. Hmm. The 9-11 thing happened then. Yeah. I know even before 9-11, I think the markets went down. I think .com bust was happening and, and
00:07:24
Speaker
A lot of my batch mates had companies differing their offers. For example, some of my batch mates who were supposed to join I2 from campus. I2 had come, I2 pulled back all the offers. Then a lot of US offers were revoked. And all things were getting delayed.
00:07:53
Speaker
And fortunately, NIT let us join on time, and then 9-11 happened. And then obviously, it was sort of a force majeure, and every company was looking at restructuring or reworking assets. And NIT also decided that it would reduce the sales force in the US. And not only US and other parts of the world as well,
00:08:23
Speaker
So there were like, you know, there were no chance for us going overseas. The fresh patch which was higher, that got completely negated. So I was doing a very, I was doing an interesting job helping the head of Asia Bank business with overall managing and sort of PA to help and business planning and doing a little bit of marketing and so on and so forth.
00:08:52
Speaker
I wanted to go frontline sales, so I was getting restless. Within a year, I think just after a year, I got an offer for frontline sales from a company called Future Software Engine 9. What was it that you were selling exactly? What was the product? I used to sell Layer 2, Layer 3 switch. It was R&D product.
00:09:20
Speaker
So, we used to sell to, in Korea, I would go and talk to various telecom SABs and sell them the product on which they would make their enhancement and they would plan for, you know, bidding for making enhancement on the base product. They would plan to bid for Korea telecom tenders, which would happen, appear like. So, this was 2003.
00:09:50
Speaker
2002-2003 that I was doing. So they would buy the base product from us and build enhancements and probably in a year down the line, year and a half down the line, they were planning to participate in a tender which Korea Telecom would take out for the switch they would launch in 2005. So it was a futuristic R&D telecom project. And NEC was another one of my clients.
00:10:18
Speaker
So, Samsung, MSE, you know, I think the very tough market to be, if you're in telecom, they're both good and they're bad at tough markets. And we were a pure,
00:10:34
Speaker
data when a routing software company. So it was not all, it was not a full stack telecom software. For example, huge was a voice tax. Voice tax has much more demand in the market at that point of time than data stacks. So when a pure data stack company, which was a much more difficult sell. And so it did well, but I, at that point of time,
00:11:03
Speaker
I wanted to join. I was handling the Korean market, the Japan market. I was doing well right from Mr. Rangmi to all the seniors. Everybody knew me. I cracked into accounts which they have been trying to crack in the whole years, like Samsung. They have been trying to get into Samsung for the last seven, eight years. I got them into Samsung. So I was very well regarded.
00:11:32
Speaker
everybody knew me and but you know I was itching to get into a sort of a smaller setup where I could contribute more it was you know it is at that point of time I felt that you know I needed to get into something I need to get into a semi entrepreneurial startup some something in a semi entrepreneurial world that's the first time I felt and
Role at Brain Visa and Growth
00:12:03
Speaker
And I was looking around, and then I figured out about Brain Visa, which was in Pune, which was founded by Supam, who is currently my co-founder, in two of the last two of my ventures. So Supam had founded, and I had a couple of my batchmates working in Brain Visa. What is Supam's backstory?
00:12:32
Speaker
Superm is IMA, I think IMA 98, that I'm not wrong, that he worked for a taxi for a year or two and then in 2010, he launched Rain Visa, it was more of a test prep company at that point of time. So I think they were ahead of times. Test prep like real launcher and all of these? No, online test prep.
00:13:02
Speaker
So I think that the concept was slightly ahead of its time. So right now, for the last few years, it's online. But at that point of time, they tried to do an online test prep. They tried to do more of a career launcher rather than career launcher than IMS thing, online IMS.
00:13:23
Speaker
Okay, got it. And this was for mainstream exams like CAT and IIT JEE. So there was no, no classroom training. It was a lot of exercise, like no basic, some course material and a lot of exercise. Trying to do a B2C concept. And how did you fund this? Because I'm sure this would have needed funding to launch. So yeah, they had some funding from some funding guys.
00:13:55
Speaker
They lost the money and then they pivoted to a B2B model, B2B e-learning model. Once they pivoted to a B2B e-learning model, they never needed any money. So, B2B e-learning as in like corporates, like giving corporates a e-learning platform. Corporates e-learning platform. And just a platform or a platform with content? No, so it was a custom content development project.
00:14:21
Speaker
okay okay okay so like a turnkey solution yes so initially they tried they were doing b2c selling b2c content and then they pivoted to b2v custom learning solutions and once so in the bargain they have lost all the money the investors own majority of the companies majority of the company but once they pivoted
00:14:50
Speaker
You know, they never needed that. The company, the company was generating his own cash. So, so the investors put in money in some business model which did not work in first one, one and a half years and then the company went and it became very profitable. And this was what? Indian markets or outside India? It was primarily overseas. So they started with doing some, some, some project for L and T for tech and others. But when I joined, they had one client in UK and they had one client in US.
00:15:20
Speaker
It was a very small company. Although I wanted to join it, Japan will start up. But my thought process was, look, I started my career with Tata Steel, which is like a bear. And then I was in NIT tech, which was at that point of time the fourth largest software company in the country. And then
00:15:47
Speaker
future software which was around I think at that point of time around 16 to 18 million run rate and here I joined a company which was barely doing like $600,000 to $700,000 a year.
00:16:10
Speaker
So I had my, it was slightly contrasting, contrasting, I would say, contrasting positions for me. I wanted to join our startup. I wanted to, and at that point of time, one has to understand that startups are not that passionate
00:16:37
Speaker
I'm talking 2003. Start-ups are not fractionable. And I was still like, I needed to support my family. You know, I was not in a financial state where I could take a risk. So, 2003, you know, so I was having my, you know, I finally took the plan. Supam used to call me every day, almost every other day,
00:17:06
Speaker
after I, he sent me the one letter, he used to tell me every day, I love you to join. Because when he asked me, how much do you do? I said like, not this much. I felt like, I said, why is your company so small? And I said, he was asking me, how long do you think it will take? I said, like, you know, we're at a very basic stage.
00:17:33
Speaker
You should be able to rapidly climb out because I know X amount of business. As a sales guy, you have hired couple of guys like me, you'll get out of the woods in the next couple of days, next couple of year or two max. And he knew that I was one of those guys who used to do a million plus dollars run rate of business every year. And he used to tell me, Amitav, you should be absolutely sure because don't
00:18:02
Speaker
come and leave. It's okay if you tell me that you can't join and I will remain friends. But don't join and leave after two months, three months because that would be a very big shock to us. It's difficult. We are a small company. We can't absorb that shock. So anyways, I joined and... Did you take a pay cut or did they match your salary? No, it was not a cut. They matched my salary.
00:18:34
Speaker
So, you know, but 2003 to 2007, I think it was a, we grew the company, I was heading, I started with Europe and then rest of the world, Superm used to manage US business and then I started managing, you know, I used to handle rest with the world business. So, it was a, it was a, it was a, it was a,
00:19:01
Speaker
Very, very good, right? So we took the company from $6,700K to a turner of $10 million in four years black. And the $10 million might not sound too very high right now, but two things. That was way back in 2007.
00:19:28
Speaker
And second thing is e-learning was a very, very small field out there. But we were big data in e-learning globally. So we used to, I had clients like Nokia, I had clients like Vodafone, Deutsche Bank, Novartis. And they were like, so we had clients like UPS, Microsoft,
00:19:57
Speaker
even government clients, I had very contract with Minister of Defence UK. London Corporation was one of my clients. And all these were headquarter relationships because e-learning was always controlled out of HO. So all these were like for, I would work with Nokia this school in Finland, I would work with Novartis in Basel, out of the headquarters in Basel, I would work with Modafone in Newbury, Newbury headquarters outside London.
Exit from Brain Visa and Birth of First Cry
00:20:26
Speaker
How did you become so good at sales? I mean, you know, to crack such tier one clients means you must have been very effective in doing like in doing high ticket B2B sales. So, you know, like what were like your learnings on how to do high ticket B2B sales? I don't know. I think it came pretty naturally to me.
00:20:49
Speaker
So I used to value my time, I used to prepare well, I would think what could be my value proposition. I was very clear in defining value proposition, both for me as well as the client. So you would do a lot of homework to figure out what is a good value prop?
00:21:19
Speaker
Not a homework, but I would probably within the one hour meeting that I did, I used to do a very detailed meeting and I used to meet a lot of people and 70% or 75% of them who I would not meet the second time. If I was not clear on the value prop, I'll just politely say that, you know, nice meeting, well, let's keep in touch.
00:21:44
Speaker
I wouldn't go back to the, but rather like 80% of them, I would not probably meet them second time. So once that I figured out, you know, the meetings clicked and I had like, you know, we feel, we felt there was, there was value pursuing. And so I used to, I used to, you know, obviously get into details and multiple meetings and then close it. So, so yeah, so yeah.
00:22:13
Speaker
Very good, right. I think Sequoia came in around 2005. They bought out old investors. So it was Westbridge initially. And then Westbridge got acquired by Sequoia. So Sequoia joined our board. They put in some additional funds, although we're generating profits. We tried to acquire companies in the UK and US. And we looked at the
00:22:40
Speaker
the largest of the biggest companies we had any learning areas in this industry. But we realized that, you know, those were still a small, relatively nascent market and it would not give the quantum step jump that we're looking for. And in the meantime, in 2007, we got a good all cash offer from a US company.
00:23:07
Speaker
So we sold Brain Visa in 2007 and we exited in 2009. So 2009 and both me and Superm exited Brain Visa in a span of like, I exited and Superm exited on 31st of December. And in 2010, September, we launched first try.
00:23:31
Speaker
So that 9 to 10 period, what happened in that period prior to the first cry idea? How did that idea evolve? So we used to set an idea what to do next. So by that time, I was in a relatively better financial condition than I was in 2003. So in between three years, I was in London.
00:23:56
Speaker
Since I was doing sales, I did make some good salaries and commissions. Plus, there was a little bit of money I put aside from the sales. I was the only non-founder to become the director of Brain Visa. So I was on the remote. I had my exops not too much.
00:24:21
Speaker
But yeah, so I had my ease off, so made a little bit of cash from there. Plus, you know, I was based in London for three years, so had put together some money, although I had my family around, but I was paid handsomely. Or rather, I decided my salary and it was always a percentage of sales.
00:24:46
Speaker
So yeah, I had a better financial condition and now this time I wanted after coming out of Brain Visa, I was sure that I wanted to work for myself. Me and Supermoo just go sit, think and ideate. So then that's where the first cry ideas come in. During Brain Visa, both of us at that point of time at 1.8,
00:25:15
Speaker
and Super used to travel a lot. I was based in London and again, most coming back from London or prior to London, I used to travel a lot. So for both of us, for our daughters, we brought in a humongous amount of stuff from oasis. Whenever I used to travel, I used to carry something back. And we realized something as simple as Johnson. In India, you have probably, you know, one lotion, one oil, one now, one moisture, not a moisturizer. You get one lotion, one oil,
00:25:45
Speaker
one powder one shampoo and you know if you just go west or even if you go to singapore you have so many types of lotions moisturizers rice cane oil is in night time day time bath time you know even johnson's was the range is much much wider and and and obviously there are other lot of other products which you did not get in any at all
00:26:10
Speaker
So we realized that this is one area and we knew that India was the country which produced the maximum number of babies. And although a lot of them would not have the purchasing power, but even if it was percentage, that was a huge one. And that's how the idea of first cry came to us.
First Cry's Business Model and Growth
00:26:40
Speaker
We launched first cry in September 2010. So was the plan to like retail irrespective of online offline or was it clearly e-commerce? No, it was e-commerce. It was more clearly omnichannel. So we were very clear from day one, we'll start off as online but we'll also have our offline franchise stores.
00:27:07
Speaker
So September, we took a bungalow in on, then we started like, me and Subam, you know, I think if I remember it right, I think it was 9th September or something like that. I still don't, I don't remember the date exactly. Now I think it's 9th or 10th September. So people in first trial probably know it better. I slightly don't remember. I think it's 9th or 10th of September.
00:27:36
Speaker
We took a hire, we took a bungalow in Pune and we started working. We used to create a small, we hired a whole bunch of people. We created a small studio out there for clicking on photographs. There was one finance guy whom I interviewed on a roadside install and he used to work for a franchisee in a franchisee of I think Levi's or somebody in Pune. So,
00:28:06
Speaker
Anyway, a small team started within like, you know, it was a two bungalow complex. Within like one month we hired the bungalow behind us and used it as a warehouse. So we had internally set ourselves a milestone that we need to get out of this place by six months. We should outgrow this place by six months. And within six months, we outgrew that place in three months.
00:28:33
Speaker
But was the focus initially that you were building a digital interface and all that or was it like you have to go out and find a lot of good products which are not in India and import them and make them available? No, our first objective was to put together a good assortment. Because we realized that going around a little bit in Pune and others, we realized the shops which were doing well in Pune
00:29:01
Speaker
at that point of time was the one which had an assortment. Simple. I think one of the thing is if you have a good assortment of mothers or the parents would block there because otherwise going to a small shop or moment pop store, even if 1000-2000 square feet, the assortment level was pretty meager.
00:29:23
Speaker
So we said we wanted to put together a good assortment. So we studied a couple of top stores of Pune and bigger stores, top five stores of Pune in babies and kids. And we made a list of and obviously we looked at diapers.com was there in US.
00:29:42
Speaker
at that point of time, we looked at Amazon and we said, okay, we designed the categories, we decided, we looked at what kind of products, which are the catalogs, which are the product categories, subcategories we wanted, and we launched it. Okay, so we had some backup. How did you get all the assortments like you have to like, find the vendors and convince them? Initially, we
00:30:10
Speaker
tied up with one or two stores in Pune with whom we agreed that they would end the assortment to us or they would give us the assortment at certain margins. We said since we are all buying from you, you would give, say you might be getting 20% off the amount, you would give me 5% off the amount, something like that. So we used to, and we are very clear because the assortment was here, we said we want the products in our
00:30:40
Speaker
in our warehouse so we don't want it that after we get the order that was the most what most other people were doing you know as soon as they got up that's how Flipkart was doing as soon as they got some to get got in order they would send lunch somebody with the reality or something pick up the book we are uncomfortable baby boy who was pretty much trying to drop ship but he said that you know we would want the product that's why we set up our own photo studio as well in next bungalow
00:31:07
Speaker
We had a fourth photo studio, we had a small content team which would write the description. So whereas we have a content team writing the description and at a small photo studio, we had everything all we have thought through. We said, we want to do it. We'll not copy the content. We'll not, obviously, you know, you might not find the right photograph or the quality of photographs in the website of the manufacturer could be very, very poor and shoddy.
00:31:34
Speaker
So we said we will click our own photo, edit our photos and write a content and put it up in our own website through our internal mechanism. So that's how we started First Tribe. Within six months we launched our first tour in Surat.
00:31:58
Speaker
Why Surat? Why not Pune only? We wanted a franchisee-based approach and we're talking to people and the first person to agree was the person in Surat. Once we started and we said we're looking for franchisees, looking at the assortment, a lot of people used to pick us. They wanted a franchise. They again established one thing very clearly. If you have a good assortment, if you have a winning kid studying babies and kids,
00:32:29
Speaker
So, so then how much did you do in the first year, like 10, 11? Like what did you end the year at in terms of your turnover? I don't remember, honestly. It's so far back. I remember when we had first day, when you get 10,000 rupees of sale, I think after starting off, I think 10, 15 days, week first day, we get 10,000 rupees. We're very happy.
00:32:57
Speaker
So I don't remember the turnover at the end of the first year. I remember doing so. So during that, during that period, I think, and we used to carry the customer care phones. Okay. We wanted to know how the customer felt. And so one day in the evening, I had a call from Sam partners on the customer care phone. Okay.
00:33:24
Speaker
saying we are SAM partners and obviously we know who SAM partners were. But they said we'd like to speak to the founders. I said, yeah, I'm one of the founders. And so the point is that the person who made the call was Mukul Arora, who is currently one of the senior partners of SAM, which is now become elevation. So that was Mukul, let's just join SAM. And Mukul made that call to me. I require them 4.25 in the evening.
00:33:55
Speaker
And then we got started getting contacted by others, couple of others as well. Then we realized what happened, because we had not hit the market. We had a secret limit of seed fund.
The Birth and Expansion of Express B's
00:34:06
Speaker
GBA was trying to form the deck and they have hit the market trying to raise funds. And by the nature, they were approaching people and people would find our first cry and then they contacted us.
00:34:25
Speaker
And I think people liked our processes and other things. So whoever went up to us, so everybody was interested in investing in us. So we had something like five to six offers. And it happened without us planning for it. Sam was the first to call and then within like
00:34:54
Speaker
Two to three weeks, everybody had come. A lot of people had come, talked to us, met us. When we started first try, the babies and kids market was very unstructured on the supply side. So I think we helped bring a lot of structure in that market as well because we helped create some large vendors and we did it out of our own interest as well because we felt that was the city for us as well as for the industry.
00:35:25
Speaker
And along the way, what happened was we realized that our customers were young moms who needed a good logistics service. And although in those days, those initial days, delivery and e-commerce press existed, but the service levels are not up to the mark. And we do that as well. And we had first flights, RMX and others.
00:35:54
Speaker
So out of necessity, we decided that we would have our own logistics. So which year did you decide this, like to create in-house? So two years after the match year, we decided we will start off with our own logistics. And end of 2013, early 2014,
00:36:22
Speaker
I got approached by some of my good friends who were also like you know all the other e-commerce founders are good friends of ours because you know and some of them were also young parents and some of them were prolific shoppers from first cry so they had a first-hand experience of what we called ourselves and first cry express so they used order in the
00:36:47
Speaker
in the morning or early afternoon and the packet would be with them by either evening. And they approached me and said, you know, would you mind doing it for us as well? We'd really like to serve. We'd really like to service. And at that point of time, we're just serving in eight top cities in the country. And my only selfish interest at that point of time was, OK, if this guy is also, you know, if I carried shipments for, say, Snapdeal or a PTM,
00:37:15
Speaker
or shop clues. Those are the three people who had approached me. At least I can extend my service from 8 to maybe 20-25 cities and I would be able to extend a better quality of delivery service to prescribed customers in 12 additional cities. That was my only thought process. And the cost would probably come down because of volumes.
00:37:45
Speaker
Yeah, cost would come, no, from, okay, another thing is from day one, when we started the logistics, my mandate or the target I set for myself was very clear. I would, there would be zero Capix, okay? And I had to manage within the budget that I would, I had to deliver the packet within the amount I would give it to Blue Dot or Aramax.
00:38:14
Speaker
Okay, without so in those times, so so in the first what we did was we used to serve Delhi out of say just one one office, entire Delhi. No, no, it would not mean so we had office in Brijwassan warehouse in Brijwassan first cry warehouse, we had a small corner of the first cry warehouse from where we'd launch our deliveries. Now, I can't expect the entire Delhi people to become or my entire staff delivery staff to come to Brijwassan and pick up the load and go and deliver right become very inefficient.
00:38:43
Speaker
What we used to do is, we used to create back in the night, put it onto a vehicle, and there used to be a supervisor who would go around Delhi. And my boys would assemble at different parts of Delhi. Different, say maybe somebody would come in Rohini, somebody would come in Subtajan Clef. The vehicle would start at 4.35 in the morning. And then, you know, you'd go around picking and dropping the loads, and it would end in Mughal. The other vehicle probably would start from Gurgaon, and, you know, dropping the load in the northern Saket and all those places.
00:39:12
Speaker
and would end somewhere. And there's to be supervisor in the vehicle and then after dropping the loads, there's to be some larger shipments like prams and other things. So the supervisor would go around delivering the prams and other bigger stuff. And the evening when the boys would come back and the number of shipments were not very high, the boys would come back maybe within two to two and a half, three hours. He would collect back all the shipments, undelivered shipments and cash and come back.
00:39:39
Speaker
Okay, so you managed to keep it pretty lean that were like the costs are pretty lean. Yeah, my objective was you know, okay, logistics cost was always reported above your gross margin. And we used to plan and first cry was continuously raising funds and we used to disclose our gross margin figures to our investors every week.
00:40:03
Speaker
So we had to, like, even if I bought a chair and a table for people to sit on, I would expense that off. I'll not take it into asset. Simple. For chair and table, 3,000 rupees. So put a cost of 3,000 rupees in the VT sheet. And even that 3,000 rupees should match up to whatever costs we're going to do that in RMS. What does that do in those times, brother?
00:40:32
Speaker
But these laws were pretty high by current standards. So, you know, so we could that's how we started. And that, you know, this three, PPM, Snabble and Shopkoos came through in 2014, 2013 and 2014 beginning, we worked with them for a year at the end of 2014, early 2015, all of them came back and said, you know what?
00:40:58
Speaker
As far as service quality is concerned, you are the best guy on the block, but you are very small. So if you stay, we can put more business your way. And that sounds like, you know, I went and talked to Superm and then we went and talked to Board. Board was not very happy initially because, you know, half the first guys reported to Superm and happened to me. So I was looking, I was responsible for not only logistics, I was responsible for the entire fulfillment piece.
00:41:28
Speaker
the warehouse operations, the offline stores of Firstcry, HR, and a couple of other functions, corporate functions. So a lot of investors felt that some of our investors felt that I should continue focusing on Firstcry. But some of the investors who had seen me build this logistics piece and heard about good things on the market, they were very interested.
00:41:56
Speaker
So took some time to convince others. So by 2015 met is when we decided that we'll spin off Express B. So I mirrored the cap table and I started Express B's. Okay. So what was like, did the warehouses go to Express B? Like how did you split the logistics infrastructure of first cry? So warehouses are still with first cry. So
00:42:23
Speaker
Only the last-mile delivery centers were kept for its express fees. So we are a very asset-like anyway. As I said, with the expense of everything, we had zero KPEX. So there was almost no assets, except some chairs, tables, and computers. All the offices were leased.
00:42:50
Speaker
So that's how I started ExpressBees. And then 2015, now it's five years in ExpressBees. I think ExpressBees today is one of the largest logistics companies in the country.
00:43:01
Speaker
Okay, okay. Like, you know, like, can you give an idea again of the trajectory, like in 2015, when it was spun off into an independent identity, like what was, what were the numbers like, it could be like number of deliveries or the top line or the head count or whatever, and how it grew over the years. So, so when we spun off in 2015, we were typically doing around 20, 25,000 shipments per day.
Technological Innovations and Future of Logistics
00:43:31
Speaker
And today we do around seven and a half lakhs of things per day. Wow. Okay. Okay. Five years. Okay. And you said you cover about 2,600 cities and towns in India. So 2,600 cities and towns spread across all throughout the country. So we deliver everywhere in the India except Lakshadhi.
00:44:01
Speaker
including Andaman and Nicobar. So right from Kashmir to Kashmir, to Kanyakumari, there from West Gujarat to Arunachal Pradesh in the East, including all the Seven Sisters. As I said, except Lakshwadeep, including Andaman and Nicobar, we deliver everywhere.
00:44:22
Speaker
Okay. Okay. And do you like continue to have that asset light kind of a model where everything is largely leased and it's, it's, it's, it's the same as if you just continue. Okay.
00:44:37
Speaker
So where would you put Express B's in like the overall logistics space, you know, just to help listeners understand, like, is it comparable to delivery or the other companies like E-Com Express? And what are the differences between them? Are they similar types of setups or are they focusing on different parts of the market? And, you know, if you could just like
00:45:01
Speaker
Yeah, so we delegate e-comm express as competitors. So size wise, e-comm express are pretty close. Delivery is slightly bigger than us. So we are a fairly large size company. And by organizational design, obviously, each of them has its own nuances because, you know,
00:45:23
Speaker
Each organization is set up separately. The design structure is separate. But we essentially address similar markets where we say we do primary e-commerce deliveries. And right now both, I think E-commerce Express is not getting there, but both delivery and us, we are focusing on B2B as well. So we have started entering the B2B market. And I believe similar to what we did in e-commerce delivery using technology to bring about efficiency and bringing about the cost.
00:45:52
Speaker
we would be able to do a similar stuff in between their deliveries as well. Okay, so e-commerce business is what? You receive it at a certain point in the city and then inside that city delivering it from that point to the customer's house? We can pick up anywhere in India and deliver it to anywhere in India. So we can pick it up with Surat and deliver it in Agatala, pick it up with
00:46:18
Speaker
say Bombay and deliver in Jammu and Kashmir. We can pick up shipments from, so we are an end-to-end logic supplier, so a service provider. So we can pick up pretty much from anywhere into anywhere. We also do warehousing. One of the very interesting things about warehousing is we have the omni-channel technology. So we can help you online and offline
00:46:46
Speaker
from from the same warehouse from the same stock pool which sounds easy but technologically it's quite difficult challenging not many companies can do it in India so what does that mean like a company could use your services for both sending the inventory to its retail stores and directly delivering to the customer absolutely
00:47:08
Speaker
Okay. Okay. And when you say that you are now increasing your focus on the B2B segment, can you describe what you mean by B2B segment? Where do we are the traditional businesses, traditional businesses like, you know, we are focused on B2B express business as we call it. So moving goods from
00:47:30
Speaker
The manufacturers or factories to the distributors or to the warehouses or larger warehouses, smaller warehouses, we serve almost all the leading parmanis in the country. We serve some of all the leading fashion houses. And we also work with, you know, these are like, you know, meet Alita Belden, meet Tata, meet Reliance, meet
00:47:56
Speaker
all the leading farmer names and pharmaceuticals, we work with all of them. So this would be like a bulk goods movement, like you would be moving a whole truckload at a time as opposed to the e-commerce business, which is more of individual packets. A truckload or a part truckload, yes.
00:48:17
Speaker
Okay. Got it. Okay. Okay. And so, I mean, since you are no longer in first cry, but is the equity table the same? Like you continue to have stake in both companies equally, like both you and Superm or is it like a, like a split up now? I'm still on the board of first cry. Superm is on the board of express fees. So, so yeah, I hold equity in first cry.
00:48:46
Speaker
So how do you see technology influencing the logistics business? Do you see stuff like IOT and maybe drones and things like those changing how this business is happening? Like, you know, what's your forecast on where the business will be five years down the line in terms of technology? Like what are like the disruptive technologies that can shake up this market?
00:49:12
Speaker
So, you know, it's technology, we are a tech led logistics company. So technology will play a very important role. I think, you know, IOD and others, while that is there, a lot of work can be done using the technologies available today to make things more efficient in logistics. Simple, you know, how do you how do you route a shipment?
00:49:41
Speaker
How do you, the challenge of finding an address in India, you know, we Indians write address in a very different manner than the rest of the world does, right? The rest of the world, write a zip code first. And as soon as you write a zip code, it will narrow down to like six to seven doors and you can select the door and rest is auto-filled. In India, you'll find like, you know, you will find addresses like, like the lane next to Lakshmi hardware. Yeah.
00:50:09
Speaker
Landmark-based. Two doors after Sai Baba Mandir and all those things. And there's a good chance, there's a good eight to ten percent chance if you're in a boundary pin code where the pin code could be either your area or your neighboring area as well. Or it could be absolutely wrong as well. So, yeah.
00:50:39
Speaker
So the challenges in Indian logistics is very unique and use of technology is what will help you predict a lot of things, bring in efficiency, bring down the costs. So you think there's an information problem, like the quality of information available? It's not only information problem, it is how you use technology to ensure better efficiency, reduce the number of sorts.
00:51:09
Speaker
reduce the number of scans. For example, in e-commerce, the way it is designed, there is absolutely no pen and paper in any of the operations. So everything is automated. Everything is through the system. We do not use pen and paper at all in any of my offices. We have around, as I said, we have around
00:51:38
Speaker
2000 plus offices and so more than two, we have around close to between, so totally around 20 to 2300 offices and we do not have pen and paper, we don't need a pen and paper. We do have printers, you know, some printers, but everything is on the system or automated, even the run sheet, for example, when the Moias take out the shipments from delivery, it goes into their mobile phone.
00:52:07
Speaker
So it is about how do you bring in and that's just one part of it, eliminating people. That's rather simple thing. But you know, how do you route a shipment? How do you look at how do you dynamically route a shipment based on the efficiency, based on the situation? You know, in which shipment goes in which bag? That's where the technology comes into play. So that was Amitavah talking about how he scaled first cry and express piece.
00:52:34
Speaker
If you run an e-commerce business that needs to get better with logistics, check out ExpressBees.com. That's ExpressBees.com.
00:52:48
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit thebotium.in that is T-H-E-P-O-D-I-U-N dot I-N for a complete list of all our shows.