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Building SaaS For Small Businesses | Sumit Agarwal @ Vyapar
274 Plays3 years ago
Micro, Small, and Medium Enterprises (MSMEs) safeguarded the Indian economy during the COVID-19 pandemic. However, this segment's financial health used to suffer owing to the lack of a robust framework for logging data.
In this episode of Founder Thesis, Akshay Datt speaks with Sumit Agarwal, Founder of Vyapar which is an easy-to-use software for business owners that provides billing, inventory, and accounting services.
A software engineer by profession, Sumit worked at Intuit India for 8 years. He started his entrepreneurial journey in 2016 with an aim to solve the critical financial pain points of the MSME segment. Today, Vyapar has bolstered this industry’s growth by offering a holistic technological bill book.
Tune in to this episode to hear Sumit speak about his journey of building Vyapar and how it's transforming the lives of MSMEs!
What you must not miss:-
- Key tenets for running app-based businesses
- Fundraising journey
- The unique product portfolio
- Critical skills for building a company
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Transcript
Introduction and Zencaster Shoutout
00:00:00
Speaker
Before we start today's episode, I want to give a quick shout out to Zencaster, which is a podcaster's best friend. Trust me when I tell you this, Zencaster is like a Shopify for podcasters. It's all you need to get up and running as a podcaster. And the best thing about Zencaster is that you get so much stuff for free. If you are planning to check out the platform, then please show your support for the founder thesis podcast by using this link, zen.ai slash founder thesis.
00:00:27
Speaker
That's zen.ai slash founder thesis.
Inspiration and Creation of Vyapar
00:00:47
Speaker
But there's nothing as inspiring as a story about life coming full circle. And the story of Sumit Agarwal, the founder of Vyapar, is one such inspirational story. He is the son of a retail store owner who ended up creating an app that has helped millions of retailers, traders and SMEs to manage their financial health.
00:01:07
Speaker
Sumit got an engineering degree and spent almost a decade at the India offices of Intuit, the American fintech giant, where he learned all about building tech products. But the urge to do something of his own was strong, and a casual weekend project ended up becoming the Vyapa Rap.
00:01:24
Speaker
which is India's leading expense and invoice management app for SMEs and was most recently valued at almost 900 crore rupees. Here's Sumit telling Akshay Dutt about the journey of building Vyapar app through frugal innovation and first principles thinking.
00:01:54
Speaker
So what for? And this was like a as a hobby, you did that. Yeah, that didn't put the job and as a as a part time for learning and for building and how to put up on Play Store and to provide something to our cousin brother. So we both did not know how to do Android programming at all.
00:02:24
Speaker
So we learnt Java, we learnt Android, development of it. So that was the first time that the app went on Play Store. So that was how the idea of Vyapan was born. But Phil, how do you say full-time business schedule? So I think it was on the Play Store. On the Play Store, I think it was on the Play Store, but it was on the Play Store.
Transition to Full-time and Initial Challenges
00:02:57
Speaker
So what I used to do is I used to call each one of them.
00:03:15
Speaker
and ask them if they have a problem or if they have a good challenge or if they want to improve their sales. I used to do that. You know, regular. Wise of customers. Exactly. You can say that. So, whatever feedback I used to get from customers, I used to ask them, how much did they pay for the build? Or did they pay without spending even a single rupees, this install base is slowly actually reached around 100 to 150 per day.
00:03:44
Speaker
This continued till around September 2016. It took around 8 months for it to actually get to some traction. I already had quit my job like one year, about 6 months back.
00:04:08
Speaker
I had a son, I was already married, I had a son, home loaned me, you know, so all those things are there. I did not have guts. Then I said to myself, I set aside a certain amount of my saving.
00:04:39
Speaker
And that amount was roughly 12,30 lakhs I separated from my savings. I was running on half of the salary also. His point was I did not get the same salary, right? They would have promised you it could be a place of cash.
00:05:09
Speaker
And I will say, I will get back to my job.
Monetization and Early Success
00:05:15
Speaker
Did you think that you will raise funds and then figure out monetization? We used to ask customers and a lot of customers used to use them regularly.
00:05:41
Speaker
You should get at least 200 rupees. We used to say that. So we decided that people are saying, well, let's try it. When I talked to a couple of friends who are already in the startup, they were saying...
00:06:02
Speaker
I mean, it was risky. I said, you are saying, I believe keep playing card. The total 16 I left the job. Started hiring a couple of people from my savings.
00:06:49
Speaker
Slowly we started building that trend and decided from March 2017
00:06:55
Speaker
You need marketing spend to do that, right?
00:07:23
Speaker
So in March 2017, we made the app wait. It was for 30 days of free trial and then you have to pay. And in the first day of life, I got 8 payments. And that was I think the best, happiest day of real life. We have a lot of people who live here. And we have a lot of people who live here too.
00:07:52
Speaker
So we said, what do you think? What was it for traders? For traders to manage their business? What was the supply of the vendor? What was the inventory? It was basically, most of it was basic invoicing and very, very crude accounting inventory management. Very basic.
00:08:26
Speaker
This was essentially like a, you can say, quick books for math. You can say that. Like at the starting stage. Yes, it is still that only if you can say. We tried, we will follow those principles forever.
00:08:45
Speaker
The product is so simple that everybody can use it. Even a 10th grade pass who is running a business should be able to understand and use it. Second, cost should not be a reason to move to technology. The cost should not be a reason to move to technology. We don't want that. We want more people to use the technology. As I have seen in my family itself, I don't want to use the technology.
00:09:14
Speaker
Because there's no accounting of it, right? Because there's no accounting of it, right? Because you understood the pain area of that category, you wanted to make sure that you're really sorry for that pain area. Yeah, simplicity is important.
00:09:41
Speaker
I think the seeds are very intuitive. I think culture wise I learnt a lot from that. But how the product should look like and how it will be built and how people are going to use it was very different from any other product in the market today.
00:10:05
Speaker
So this is how it
Accelerator Experience and Learning
00:10:07
Speaker
was. And obviously, you will have raised a lot of money. So yes, you will have raised a lot of money. But you will have a lot of understanding of the MSM. You will have a lot of clear perceptions of the investor community. So businessmen don't pay for the solution. That is one. Second, businessmen...
00:10:34
Speaker
There's a lot of online sales that are not available for sale, but also for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale, for sale,
00:11:04
Speaker
Right. Like in 2017, you made it paid, but were you earning enough to meet your expense at the same time? It might not be a problem, but the amount of money that we were getting from the business, we spent almost the same time. In a certain way, it is not good to be in a state at that time.
00:11:55
Speaker
But you need to survive to grow, right?
00:12:07
Speaker
Right, right, right, okay, okay.
00:12:22
Speaker
Okay, okay. Well, you were running for 5 lakhs, so about maybe 1000 paid subscriptions.
00:12:53
Speaker
Amazing, whether you almost tripled it those 9 months. But the value of this hotel is very high. And at 12, 13 lakhs of revenue we got stagnated almost. But we have to do the same for the same people. Apparently, in 2017 itself, I also signed up for Exiloktavani's request about the hotel.
00:13:16
Speaker
That means that one person is going to recover from the accident. That means that one person is going to recover from the accident. That means that one person is going to recover from the accident.
00:13:33
Speaker
So we signed up for it. Okay. But they invested like a seed. And it is not only about, it's less about the investment. They invest only in specific cases, but they don't. Right. And they correct. Okay. Where was the company waste?
00:14:02
Speaker
When you do that accelerator program, I would say that there is a change in trajectory.
00:14:15
Speaker
So the way it changed is we got good guidance, what place don't pick your numbers, what are your installs, what is your conversion ratio. I was purely from a corporate world. So I had no connections, no friends at startup circle. So we were living in a silo.
00:14:39
Speaker
We realized that we are doing really good business.
00:15:05
Speaker
What are some of those key things that you learned for people who want to run like an app-based business? What are the metrics? No, Barry wants to be learned. Play Store Optimization plays an important role. Play Store Optimization, I don't know what it is.
00:15:27
Speaker
which is basically like improving the availability of the search. Like QuickBooks search, that's exactly what we are talking about. Exactly, exactly. We are talking about building software search, that's what we are talking about. We have a product called metric tracking, which is what we are talking about. They connected us to a lot of, to a clever tab. So clever tab, where we are tracking, tracking shuruki to see actually how our business is performing.
00:15:55
Speaker
However, users are using it because we are not using any of the product. So they gave us subsidized rate. You can pay any respect to the other. So CleverTap gave us very, very subsidized rate. So lot of things from that angle. And the most important thing that happened after this was connect to the investors.
Key Metrics for App Businesses
00:16:20
Speaker
You can connect with zero connect.
00:16:24
Speaker
I had only seen a few decks that were shared by my friend in spoil when I was working there. What are the practices they will look at, what is not important.
00:16:45
Speaker
So also understanding was not there, right? So Exelon helped a lot in dividing the story also. How do you pitch? How do you, you know, put the right matrices, et cetera. And most important, connect to the investments. What are your learnings? Like how to pitch, whether if you have to give advice to someone on how to pitch, what will you recommend? It depends on the stage. Let's say I am a seed stage, you have a very, very early scale, right?
00:17:13
Speaker
that the more investors will look at only purely a couple of things. One is, what is the market size that you are solving for? How far you are from achieving the product market fit? What is the product market fit definition? If let's say NPS score is high, basically when product whoever is using it, they really need it. What is the churn rate mark?
00:17:40
Speaker
Okay. Okay. Okay.
00:18:03
Speaker
There are three things broadly like the market, the second is the capital product, the market can be solved. And third is customer acquisition, like competitive landscape in a way. Customer acquisition costs would depend on... Not necessarily, it depends on the behavior of the customer also.
00:18:31
Speaker
I mean, for me, principally these are the three things.
00:19:16
Speaker
Did investors see this as a big market like accounting software for traders?
00:19:22
Speaker
So they would do next to it. Understanding of that part, key accounting software itself says, but the pitch that we used was key accounting software is the user engagement was very high.
00:19:41
Speaker
They were using it very, very well. So when the users start using it, then apart from the software, there will be other structures that we can sell to the same customer base. Like insurance, like lending, like inventory fulfillment, a lot of things that can be done on top of the current. I can confidently say software itself is a large business.
00:20:12
Speaker
The things change over a period of time. But how people are looking at it is the question.
00:20:35
Speaker
So it depends, it depends on all those mathematics that you have to do to figure out whether it is practically or theoretically at least possible or not. Okay. Okay. So where did, uh, so did this lead to funding going through the, uh, so we raised our first round of funding in 2018 June.
First Funding Round and Growth
00:20:58
Speaker
We started looking out. Kafis are friends in the Bhatki. Maxim did not show interest obviously, which is the part of the journey. Okay. So, whom did you raise from? Institutional? In fact, I just introduced. First round we raised in 2013 from India. India was the first investor who showed the interest.
00:21:18
Speaker
They participated and then Exelor also participated in Dharav. There was one more Indian investor who also participated. He was like a mentor in Exelor, so he understood our business and he was bullish that I also want to go Dharav. How much did you reach? 6 crores. We went around roughly around 1 million at that time.
00:21:45
Speaker
So we should give you what? Yeah, so it gave us one and a half, two years of runway. But since after raising that amount, we were doing well. We reached 30-40 lakhs of Madhir Avenue. So we reached 30-40 lakhs of Madhir Avenue.
00:22:09
Speaker
How did the jump happen? Like again a 4x app, 40 lakhs, 40 lakhs, 3, 4x. No reason to jump. Well, we started doing marketing spend. So a lot of users started doing marketing spend. Second, in... That was one reason. Another was, we had a desktop product launch.
00:22:37
Speaker
In 2017, June was the first version, but you can say it was mature. So roughly up to one in November, it got retro. So desktop product was costlier. We had, we were selling it around 2,000 rupees a year. So these two factors got bigger.
00:22:57
Speaker
What are the features compared to mobile? What are the features compared to mobile? What are the features compared to mobile? What are the features compared to mobile? What are the features compared to mobile? What are the features compared to mobile? What are the features compared to mobile?
00:23:26
Speaker
Got it. Okay. Okay. Okay. So, so then what happened? Like you were at that 40 lakh monthly rent? Yes. So we were like 40 lakh monthly rent. So I had started. So at that time also I started looking out for the next fund raise. They were like hundreds of crores they had raised.
00:23:54
Speaker
And Katabuk was in the same space like accounting? Yes and no. So I will tell you why yes and why no. So yes, because in the investor community, it was looking like that Katabuk has raised a lot of money and now MSME segment will be acquired by Katabuk. No, because the product was very different.
00:24:18
Speaker
We were solving for billing and accounting and they were solving for credit given and payment received. So there was only one different use case, which was for a different segment of the MS-AVs. And what Yagar was solving was for a different segment for a different use case. But when you look from outside, like if you've not seen deeper, everything will look like MS-AVs.
00:24:42
Speaker
We also tried to build a similar product and seek the other product.
00:25:14
Speaker
It was pressure that we actually created. But we realized that we understood that by building that product, we had to create a market for that product. So we realized that we had to actually create a product. That's a guy we were talking about. We had to create a product for it. But we realized that we had to get the growth of the product.
00:25:43
Speaker
It is not organic, for sure.
00:26:13
Speaker
Okay. But long term we are letting and selling. Probably. I mean nobody was clear at that time. But probably. So I was bullshaun. It is just to only burn and there is no revenue. Personally, I am not that kind of a person. In the personality, I see the memory.
00:26:34
Speaker
So, we decided as a company, we just stopped working on it. It is still there at the place where people download, use it. We sometimes support also, but we don't put anything, any investment there now. So, we came back and we started focusing. So, it was a period of time when I was trying to raise funds a lot.
00:26:56
Speaker
But again, a second time I also faced the same challenge. People were not interested in the market. So, I mean, the people did not show interest a lot. Again, obviously, it was a challenge.
00:27:22
Speaker
And then, India was also reached out actually, one of the people who reached out was India. Now, India is in the MSIV segment only, right? They are in the segment. So, I think India understood KIA project strongly. I mean, everybody was not getting it. India had got it. I am not a very good storyteller, right? I can feel the vision and I can execute it.
00:27:50
Speaker
But that is not my skill. So probably India understood. I don't know. They showed interest. We were getting the like-minded people. I think they were the only people.
00:28:20
Speaker
Because they understand this market, they understand how these people behave, they understand how people can sell their cars. So we both achieved that. And then we just decided... Yeah, India might have like a very strong connect with that community of traders, manufacturers. And I mean, because they are not just selling purely online, but then they also have people on the street who go and visit and, you know, to definitely connect with India.
00:28:50
Speaker
He is very humble and I personally hate arrogant and aggressive people. That is my personal feeling.
00:29:15
Speaker
Obviously, there was a question around, other investors will perceive it as strategic, etc. But, I thought, does it hurt? What is the problem? So what if it's strategic? Will other investors not invest? Will they think about it? If the stake increases, that perception can come in.
00:29:42
Speaker
We will not get into your strategic play. Strategic will be alignment that we will see. That is not something that we are getting into.
00:30:07
Speaker
I am very proud to be a founder. Everybody understands that when somebody is building a company, the vision is that I want to make it large. At least for me. If I have a purpose, I want to sell out the company. The reason I am building this company is that it is going to stay for 100 years. It has to stay beyond my life span. That is the goal. I am very proud to sell out the company.
00:30:45
Speaker
If you like to hear stories of founders then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts and subscribe to the show.
00:31:07
Speaker
OK, OK. And so how much did they invest? At that time, we raised around 36 crores total. Second round of our past, we learned about the total 36 crores investment of the majority in India. We had to invest in other world investors also. People had believed that we will do something in the future, but
00:31:35
Speaker
I mean, old investors did not have that capacity for large investment, right? So we had to get somebody who can do large investment. So that's how it happened at that 2019 September memory fund risk. India market IPO just worked. Okay. Okay. Right. That IPO happened. Yes. I think August may have an IPO with India market after that.
Impact of the Pandemic on Business
00:32:03
Speaker
What is the trajectory of the project? The trajectory is very interesting. We will come to the journey. The risk is like 40 lakhs a month of revenue roughly. We have a lot of revenue left.
00:32:26
Speaker
Wow, amazing. So those, which is again like 4x more than four and a half x like in that period. Correct. Okay. So now the journey is obviously 2020 normal.
00:32:44
Speaker
COVID-19, things changed drastically. Obviously, revenues went down and then when lockdown opened up, businesses started again. So I'm not an option, but to be honest, every time lockdown happens and it opens after that, that's what we have seen. Okay.
00:33:04
Speaker
I think that is more important.
00:33:27
Speaker
But they have started understanding the situation. You don't know. I think that is the reason why people are changing. Digital adoption is how people have started, you know, flowing focus towards it.
00:33:54
Speaker
So things have changed. And we are also growing as a company. So we were trying to do everything only through the product. When we experimented with that, we saw good results.
00:34:34
Speaker
How did you figure out?
00:34:42
Speaker
In-person sales is worth it. Did you hire someone that paid him, let's say, Chaylak at annual salary and then you realized that Chaylak at annual salary was an increase of revenue of $1,000. You know, how did you... You know, how did you... You know, how did you... You know, how did you... You know, how did you... You know, how did you...
00:35:12
Speaker
It was all completely sales. Inside sales, the purpose was to increase the conversion percentage.
00:35:41
Speaker
And then we started to do basic test. There is a lot of things to do. There is a lot of optimization that you do. It has to be solved to make it better.
00:36:07
Speaker
But overall, of course, but it's pretty good. Okay, this works. Right. So that's how we have evolved. And now we have like, around 60 people sell inside sales team. And yeah, when things are obviously conversion percentage is everything has improved drastically.
00:36:28
Speaker
Okay. Did you build the steam remote or is it sitting in office? So, everything is inside of this. So, we were adding people while in lockdown also. We were onboarding there, we were trying to train them, we were trying to protect them. We used to generally try to get people in the office and train them. We have a training room and radio.
00:36:59
Speaker
And how is the product evolved? Like, you know, from that India art funding to where it is. Like, tell me about that journey.
Product Evolution and Feature Expansion
00:37:11
Speaker
The product has definitely been evolving strongly. I mean,
00:37:15
Speaker
irrespective of the idea what investment this product had been evolving from the beginning till today. Earlier we had like business billing, inventory management, accounting and VC accounting and GST reports. Now inside billing there are so many additional capabilities that we have added like transportation management inside that people can manage automatic transaction messages are there.
00:37:42
Speaker
If you create an invoice automatic message goes to the to the party, then you're sharing of invoices on like helping in payment connections. Inventory management has become very deep. They can manage badge-wise items, serial-wise items. People can maintain. Even they can generate. We have created online store. People can create their online store with a click of a button.
00:38:10
Speaker
Which is linked to their inventory and when people order receive their payment processing. Exactly. Right. All the GST side reports have matured a lot. A lot of reports got added for business insights.
00:38:26
Speaker
There are a lot of things that keep getting added into the product based on what people need. There is a lot of things that keep getting added into the product based on what people need. There is a lot of things that keep getting added into the product based on what people need. There is a lot of things that keep getting added into the product based on what people need.
00:38:46
Speaker
But if you ask me very broadly bird's eye view, billing, inventory development, accounting, GST. These four things that we are doing and going deep into it so that we solve all the categories for all the categories of the business.
00:39:01
Speaker
Okay. So as a business owner, personally, one of the big hassles I find in accounting is the data entry. Have you done something to reduce that burden of entering data? So data entry is one of the key purchases. See, as a business owner, you have to enter three things to be honest, right? One is you have to enter your sales. You have to enter your purchases.
00:39:31
Speaker
And you have to enter your expenses. As a business owner, there is nothing fourth thing that you will do mostly, right? Because everything is linked to these three things. Because when sale is happening, you have to create the bill. Nobody else can do it, right?
00:39:53
Speaker
We are trying to build an ecosystem within the APA users.
00:40:08
Speaker
If one user is raising a sales invoice, the customer will purchase the invoice automatically. He doesn't need to enter the data and even the payment can happen. This is a time-taking journey, but it is a new world that we are trying to create within the MSME segment, which is a big network of MSMEs.
Building a Network Among MSMEs
00:40:34
Speaker
Because on an average, every business works with 20 other businesses. That is an average.
00:40:40
Speaker
So the bigger the network, the stronger the ecosystem.
00:40:49
Speaker
Does this network effect help you? Like, you know, MSME works with 20 other MSMEs. So every time you onboard one MSME, he would enter details of his vendors. And would that help you to acquire more customers? Like, is there a flywheel? A lot of cases it helps a lot. I mean, when we talk to our customers, a lot of people say it's hard to measure. I'll tell you why it's hard to measure because let's say I create a bill for you.
00:41:17
Speaker
you will receive on WhatsApp. Now you look at GAPAR, what you will do is you will go to web or Play Store, you will search GAPAR and download. So, when I ask you, you will tell me that I downloaded from Play Store. And I came to know about GAPAR because I got a bill. But when I look... That's a bill, correct.
00:41:43
Speaker
But when I look at my data, it will not be possible for me to figure out how did you come. You might have clicked on the third party website where you saw the ad, et cetera. So when we ask people, most of them say...
00:42:09
Speaker
So I believe that is getting built. It's not measured very strongly with data, but again, we will see a different number.
00:42:21
Speaker
Basically, the same side of that business is also advertising. What about the purchasing side of the business? Like, for example, you could do something.
00:42:40
Speaker
If you log in, you will be able to find out what you have to expect. I have done a purchase from you. I have done a purchase from you. Still you will get a message saying that you have sold this many items to Sumit. So that is the reason why this is growing well. This is one of the reasons I would say.
00:43:10
Speaker
Right, right, right. Okay, okay, okay. And do you have like a WhatsApp integration? Like through chatbots and all of that? Yeah, the person will just click share on the Vyapar app or with an attachment to WhatsApp, okay, through share, correct? No, no, I say, automatic VA or manual VA. So if let's say I created in movies for you, I will enter your name, your phone number, and when I save the bill, you will automatically receive the bill from Vyapar site.
00:43:40
Speaker
he so it has created a bill for you and there's the bill and there's the amount that you have to pick like that you eat it up on what sir automatically I can't share a manually also manually jump back on the mirror for the person's iron or I got a minute that I have to work a counter
00:43:56
Speaker
Okay. Okay. Okay. And for payment, a reminder will be that probably as a business owner can get that state bond reminder and reminder. Exactly. So yeah, I did say the MSM is a very deep segment. I personally believe we have not even scratch the surface. There is huge potential in this segment to solve a lot of problems and a lot of use cases out there.
00:44:25
Speaker
which people are still looking for. I mean, I would say Lambda companies should come into our service segment and pick up one-one problem and try to solve.
00:44:39
Speaker
Right. Okay. So are you also trying to do the other monetizations like lending and selling insurance and even processing payments percentage on that, issuing credit cards? MSMEs typically struggle to get credit cards. And again, I'm speaking as a
00:45:04
Speaker
There are many startups that have made it easier, but two years back, it was very tough to get a credit.
00:45:18
Speaker
There's a lot of things to do within the product itself and we have not built payment, we have not built banking, we have not built staff management, we have not built for manufacturing service business by our improvements. So there's a lot to build in the product itself which can improve the life even better. So create another, use cases will be there but probably a little more down the line.
00:45:58
Speaker
So all that data is eliminated and you will get more streamline basically. Automation is the key here. So basically getting a bank statement. On banks outside it is a lot of times hard to find last financial statement.
00:46:10
Speaker
Okay. What are these things that you want to build? You said you want to build backing.
00:46:30
Speaker
Yeah, especially PSU banks. Their websites are very, very difficult to use. But can you integrate with a PSU bank so that you can fetch? We are working on that. Okay, okay, okay, okay. So what are the road back like? So as I said, like next two years on a payment, payment is something we are going to do banking.
00:47:02
Speaker
Payments banking, boss, staff management, manufacturing.
00:47:33
Speaker
Post like a like like you will provide.
00:47:45
Speaker
Yeah, what else? Like PAWS? Yeah, PAWS, Manufacturing Unit. Manufacturing itself is a very, very deep use case. Tax filing, integration with GST Portables. Manufacturing make accurate. But what is there which you don't have right now? So, manufacturing make basically a raw material management. Basically, you are purchasing lecture 3 item and you are selling some new finished product.
00:47:48
Speaker
That is for which category?
00:48:10
Speaker
So there are steps to convert that, right? Right. So all that, there are different manufacturing and different processes. Building that for different segments of the business.
00:48:37
Speaker
Okay, so like a welcome animation for manufacturers just may go define kar sakte hai hai mehre production teh yeh work flow hai, and then wo track kar sakte hai hai hai hai mehre kit nahi finish kur jai, kit teh seh meh finish kur jai, kya chis kahat kiwi hai, bottle nahi kapare hai. Exactly. Okay, okay, okay.
00:48:58
Speaker
which would be a pretty high value product then. I mean, this would not be like a 3000% high value. It depends on the size of the business also. The size of the manufacturing will also increase that we needed and the pay of the product cost will also increase accordingly.
00:49:35
Speaker
Yes, yes, yes, right. Okay, okay. What else?
00:49:50
Speaker
like, like all of that. Okay, delivery, delivery, the tracking and automation of that. How let's say, let's say, let's say I am a manufacturer, right? I deliver my products to my wholesalers or distributors through our transporter. Right.
00:50:18
Speaker
There are too many things to do.
00:50:40
Speaker
vertical, if you go to garments to different medical, there's so much to do. Okay, so this network of MSMEs that you have, are you like leveraging by helping commerce happen? Not right now. Like, you know, say,
00:51:09
Speaker
Logistics, you could, for example, offer logistic services though. MSMEs, which offer logistic services, then also get business from Vyapar because Vyapar customers who need logistics would give them business. But look, there's just one example where there could be so many such use cases of commerce between the customers. Definitely. See, in future, we might get into the B2B marketplace kind of a thing which you're talking about.
00:51:34
Speaker
individual online stores, lot of people are transacting and getting orders through online store that they have created. In future, we maintain. Which in a way is a competition to India. It has, but it is okay. The scale is very different.
00:51:55
Speaker
It doesn't matter. It is actually a good thing because I would say, I would look at it in a positive way because we might even cross pollinate to see how we can leverage each other's platform. Yes, yes, yes. Absolutely. Yes. It's like your store is getting listed on India. That could be very powerful.
00:52:20
Speaker
If the purpose is to provide good service to the Amazon, help them build and grow their business, then everything will align. Rest everything is more of alignment and figuring out. Okay.
Advice for Aspiring Founders
00:52:39
Speaker
So, like, do you plan to raise further funds or what's the plan on the funds? We will definitely raise funds. We will lead the next round of funds to raise, to be raised to, you know, grow the business to the next level. We have to take the business to the next, like, 10 crore. So, yes, funds will be required and we will raise. Short answer.
00:53:06
Speaker
According to you, the other players in this field, are any of them making as much revenue as you? No, nobody else is making that kind of revenue. Because of your focus. The other thing is that, I think we will be the only companies that will be able to raise money, pay for the business.
00:53:48
Speaker
Obviously, this is not very motivating from the investor's perspective if you look at it. See, everybody has a different way of looking. In these things, there is no right and wrong.
00:53:59
Speaker
These are different ways of growing. How would an investor invest? Investors will be your customer base and revenue should grow. Expand the current debt secondary. Okay, so what's the spend? Growth is paid. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is paid up. Growth is
00:54:29
Speaker
So, you know, what's your advice to young aspiring founders, people who are thinking of doing something of their own? Like, you know, what are some recommendations you would like to give them? Recommendations to exceed. Entrepreneurial journey is very different for everybody, right? I mean, everybody has a different way of building it. I would say there are multiple stages of a company, right?
00:54:59
Speaker
If you ask me what is the most important skill that you need when you are building a company. So I personally believe one of the founders, at least one of the founders, should have people skills. It was super radical. Building a company is more about people than anything else actually. That's what I have seen in my journey so far.
00:55:23
Speaker
It's more than 70% about people and there is 30% about idea, execution, bridge talk, fund rate, etc. In the end, founder can do only, we have only 24 hours, you cannot do much. Whatever has to be done is through your relationship with others who are working in your company, who are working with you, and building the right culture of the company.
00:55:53
Speaker
So all those things matter a lot. In my opinion, I mean, I'm from Intuit culture, so I believe in that. At that time, I was like... At that time also, I think when Ashutosh asked me, Ashutosh is the person who was running the program at Exilor.
00:56:19
Speaker
At the time I was like, I want to build a company like Intuit with a strong culture and a strong bucket and with customer obsession. Baking jeezy can be figured out. So my first advice will be people's skills are very good, good feeling for others, positive mind.
00:56:46
Speaker
Second, most important is perseverance. It's a challenge of failure. It's unconditional. So how do you deal with that? But perseverance is rather bad. I'll tell you why I'm calling that out.
00:57:18
Speaker
Let's say working on the idea that it is not working, right? So that is also perseverance. But it is not, yes. So there is a point where we have to decide, I should move out. So when you say perseverance, when I generally say it with a pinch of salt.
00:57:40
Speaker
Perseverance means when you believe something and you are sure it will work, then you keep trying it. So what is the headcount today?
00:57:59
Speaker
Okay, quite big. And so how do you do like culture building and organization building and, you know, drilling customer obsession down to the lowest level? How do you, like 330 is fairly large number of people to buy? In an organization like this, right, the way I personally do it, and I'm sure that is the only way to do it anyway, is you keep, you define the first principles and find out how you can
00:58:27
Speaker
convert those first principles into matrices. And if you cannot convert into matrices, then you keep talking about it as many times as you can. I'll give you very simple transparent examples.
00:58:42
Speaker
One thing, when I talk to anyone, right, anybody who is joining new in our HR sessions or I also talk to every, you know, every support agent, sales agent who is joining a company. So we join, we hire in the batches and every batch I talk to, two things I call up very explicitly. One is, our company has highest level of transparency.
00:59:06
Speaker
When I say transparency, it basically means that you can ask, come and ask about each and everything, except salaries of people. Except that if you come and ask me anything about the company happening, anybody can ask anything. That is one. Second thing I cannot very explicitly that everybody is equal in the company, there is no senior junior, only roles and responsibilities are different.
00:59:34
Speaker
Okay, so you are not greater than your body. You are equal to that person. It is just that your role is to manage and his role is to execute. Right? I'm very, very strict and stringent about there will be nobody who will be rude to anyone.
01:00:02
Speaker
If you feel that somebody has not done right, you escalate it in the right manner and solve it. No shouting, rudeness, the thing that is not acceptable. Those kind of things that I do very strongly. Coming to customer obsession, the way we do it is, when I meet these guys who are customer-facing, I always tell them,
01:00:27
Speaker
We are working to help them. Vyapar is one family and this is our extended family. To make sure when you are talking to anyone of them, that is one of our family members.
01:00:51
Speaker
or when I say matrices, the matrices are intended to be customer support by call. After every call, there is a message that goes to the customer and we make sure the average rating from customer is 4.8 out of 5. So we are already running at 4.8 consistently for years. So customer support, the extra support is very critical. Actually, you were saying something, sorry.
01:01:20
Speaker
like a customer can ask for support at any time, like even like during the traffic period, they can just call and get sent support. We have towers 9 to 9, Monday to Sunday, all seven days, and customer can call anytime.
01:01:40
Speaker
And all customers will get the same help. So how are you using AIML?
Hybrid Model for Future Readiness
01:01:51
Speaker
So AIML is primarily used in our package. So we have AIML where we try to figure out the user's behavior and based on that behavior, we recommend features to our existing customers.
01:02:02
Speaker
Somebody has used five features, then based on the behavior of a lot of other users, we know that this person is going to need six. This is the six features that I will need. So we are solving discoverability using that, plus we are merging users to purchase a product who have reached that level of engagement.
01:02:20
Speaker
through AI because mobile is a very self-serve product. Mobile we cannot call in every customer. That will be not cost effective. So for specifically for mobile we use these kind of mechanisms. That for internal efficiency we use AML. We predict that which month is going to have more number of calls. So we increase our support team strength based on that.
01:02:45
Speaker
Then, out of sales, which customers they should call first, which they should call next. That is, you know, again prioritized using the IAML. So these are the places where we do use the IAML.
01:02:59
Speaker
And are you like a cloud product today or a desktop product? Like the mobile app, of course, which is on your mobile phone, but for the desktop version. So we have, so one important point here is that we are the only product in the world which has a hybrid model, which basically means that the product by default, when you start using it, it is completely offline. If you switch on the data or switch it off, you will be able to use it completely.
01:03:27
Speaker
Now this, we didn't toggle that if you want to be online, you click a button, and then you become completely online. So you are an online software going from now on. So, so we believe we strongly believe in the you know, theory of building for the current and prepare prepared for the future. So our solution solve for the current behavior of the users their current needs. And it is equally prepared for the future that whenever somebody thinks that I want to use it online, then they can just toggle the button and go online.
01:03:59
Speaker
And because current behavior is offline. So that's how we have built it.
01:04:29
Speaker
And do you also cater to service businesses, like say an ad agency, which needs an accounting software, like, you know, like Tally is used by everybody or was used by everybody, not today, maybe. But so like, you know, how broad is your use case? Sure. What is also a similar case? It is very horizontal product. So any type of business can use it including service. So we have around 10-12% of services business who use Vyapar, very comfortable.
01:05:01
Speaker
Mm. Okay. Okay. Like, like their entire account. They can create his voices with items and whatever their services that they're charging for. So we have to kind of items that they can create product or service. So you can create a service product, service type of item itself.
01:05:21
Speaker
Do you plan to also look at enterprise customers or do you want to stay focused on? So if you look at the MSN sector, it is broadly divided into four categories. Micro, small, medium and large. Currently we are focused on the lower section of the small. So we are going up the value chain. We will go slowly up the section of the small and medium.
01:05:49
Speaker
We are not going to go below the score as of now. This is what we are planning to do. That could be very easily figured out from our discussion also earlier, right? The kind of features that we were talking about payments, that will be required by the upper segment of the business.
01:06:15
Speaker
So, you know, what is like the core differentiation of Vyapar compared to say like traditional products like Tally or like more new age products like say Zoho and of course your former employer, they also have QuickBooks as a product. So what is Vyapar's key differentiation or how is it different? See, the primary difference between the products is how we have built it. So if you look at any product,
01:06:41
Speaker
Tally, Busy Bark, Zoho QuickBooks. All of these products, if you start using them, you will feel that there is some level of accounting knowledge that you need. If you have zero accounting knowledge, you cannot use it. Tally, you will face a lot of challenges, but compared to Zoho QuickBooks, you will face less. But there will be some level of challenge that you will face if you don't know accounting. But Vyapang is built purely for non-accountant.
01:07:10
Speaker
If you have zero accounting knowledge, you don't even need to know what is dividend credit. You will be able to completely run your business without any problem. That is the USP of Kubernetes. I'll tell you why that USP is there. The USP is there because there are two reasons. One, we don't know accounting, the people who have built it.
01:07:36
Speaker
So if we don't do accounting, it is not built while it is not built. The master might be behind this product is not a CA. And that's why it doesn't have any accounting involved in it. The mind behind it is an engineer. So as an engineer, always mindset is to simplify things. So that is one reason. Another reason is that when he saw in my family that nobody was using Tully,
01:08:05
Speaker
I realized that they don't understand accounting, and they don't need to know accounting. Their job is to actually run the business. So that's the reason why we thought we will build it for the view of a businessman. It is not built from the view of an accountant or a CA. So everything in front of the accounting first party will be right, but at the back-end. So I have a question for you. We are a businessman, and I don't know how many people are in the business.
01:08:33
Speaker
If you like the Founded Season Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit the podium.in, that is, thepodim.in for a complete list of all our shows.
01:08:54
Speaker
Before we end the episode, I want to share a bit about my journey as a podcaster. I started podcasting in 2020 and in the last two years, I've had the opportunity to interview more than 250 founders who are shaping India's future across sectors.
01:09:10
Speaker
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01:09:31
Speaker
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