Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Taking Ayurveda Global | Rishabh Chopra @ The Ayurveda Experience
172 Plays4 years ago
“I believe little in luck & more in working hard & getting something done” - Rishabh Chopra
In this episode of Founder Thesis we talk Rishabh Chopra, the founder of The Ayurveda Experience (Transformative Learning Solutions). An alum of the prestigious student run global organisation AIESEC, Rishabh started his career here beginning as a volunteer and moving on to be elected to run the local chapter in Delhi, the national chapter from Mumbai & finally as an integral part of their Global offices as the Global VP of external relations.
Having always aspired to be an entrepreneur, Rishabh returned to India to start a venture of his own. After several failed attempts & a few small wins in the ed-tech sector Rishabh’s hardwork led him to Ayurveda.
Through Transformative Learning Solutions, Rishabh took the knowledge & benefits of Ayurveda across borders to the West & has since grown the business through diversification into ecommerce, recording a 70 Crore turnover in the last year.
Tune into Rishabh’s story of taking Ayurveda to the West and operating a successful global business out of India. Here are our key takeaways from this episode:
- Rishabh’s experience at AIESEC & the impact it had in shaping him as an entrepreneur & leader.
- Choosing the US as a target market for Ayurveda.
- How to raise funding & manage the capital raised.
- How to retain the best human capital & knowledge in an organisation.
Recommended
Transcript
Introduction to The Founder Thesis Podcast
00:00:02
Speaker
HD Smartcast You are listening to an HD Smartcast original
00:00:24
Speaker
Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
Founding Transformative Learning Solutions
00:00:40
Speaker
Hi, I'm Rishabh Aurodi. I do the experience.
00:00:46
Speaker
Imagine basing your business on the Ayurvedic traditions of India. Imagine working out of India but selling in the US market. Imagine selling in a space without any large established competitors. Transformative learning solutions checks all these boxes. It's a company that hit a turnover of 70 crores last year, selling Ayurvedic products and training courses largely to the West.
00:01:15
Speaker
and Rishab Chopra, the founder of Transformative, has had a roller coaster journey full of highs and lows, starting with leading the student-run prestigious Isaac Bori in India to making multiple failed attempts in business before finally finding success in the US market with Ayurveda.
ISEC Leadership Experience
00:01:39
Speaker
So was college like a transformational experience for you or was it like just like, you know, nothing special? So I went to College of Business Studies, you know, in Delhi. It's a well reputed college now. And I studied finance.
00:01:57
Speaker
But the most transformative, transformational part of my college was I was part of ISEC, which I don't know whether you've heard of. Yeah, yeah, I have. Yeah. So the very large youth organization across the world, 100 plus countries. And I joined as a volunteer in college. And then I used to head the Delhi chapter, which we are about 70, 80 people. I think ISEC is a life changing experience for anybody who does that. Many, many well-refuted alumni of ISEC.
00:02:26
Speaker
And it's a first training or entrepreneurship for me as well, because basically the organization is global, but every local chapter runs itself. So you have an election, you become a president of a local chapter, you hire your team and your team has their teams and a city usually has 50 to 100 people, maybe even larger now, but it might have about 50 to 100 people in a local chapter. So I ran the local chapter here and then I ran the national chapter out of Bombay and we had
00:02:54
Speaker
2,000 people in India at that time and I think already we were in around 15 cities at that time. And so it was Mr. Adi Godrej had given us a part of his office to work out of him and Mr. Tata for a long time was sponsor of ISEC. So running the national office was very interesting. So you like took that up after college or this was while studying that you were running this national office?
Global Role in ISEC
00:03:22
Speaker
So, the local office while I was studying, while I was in college, you're a volunteer, you work on the side, you work without getting paid, but you run an organization. And the national office is full-time. I mean, it's full-time. I mean, even back then, you manage, I think, over a million dollar annual budget, and you're 21 or 22, and at 21,
00:03:43
Speaker
I think I was about 21 when I ran the national office or 22. You know, we used to have board meetings with Adi Godre, Nandan Dilikani, Deepak Parekh, you know, huge, huge names. Nana Ralkidwai, I think she used to run HSBC probably still does. Chairman of McKinsey. I mean, to be at 21 or 22 running board meetings with these people all in one room is a transformative experience, right? And also the entire country is run by you. You are like the decision maker on
00:04:12
Speaker
an organization with 2000 people at that early age. And it didn't end there. So then I went to the global office where I ran one third of it, all external partnerships of it. And that global office again manages or is the central body for 100 plus countries. So I traveled to 28 countries in that one year. I was in a new country practically every 10 days, just doing the external partnerships of that organization.
00:04:42
Speaker
Now the core work of ISEC is youth and talent development. And a big part of that is they do cross-border traineeships. They send people from one country to another country to work in an NGO or a corporate organization. And that it thought was a very significant way for somebody to change their worldview and get another cultural experience and a professional experience. And if it happened early enough in your life, it was transformative to you. So for example,
00:05:09
Speaker
I've never met him, but Arun Puri of, I think, India Today Group? It's India Today Group, right? We are dragged back. He and even he, for example, had gone on a traineeship to Japan in his early years. Okay. Becoming president of the country or running one-third of the global organization, how did that happen? Well, when I hear the autobiographies, a lot of great people, they talk a lot about luck. I believe a little bit of luck or not much about luck.
00:05:40
Speaker
You know, I believe a lot about Working hard and getting something done so I think the thing is that one of the things I was credit my parents for is in leadership roles diversity of experience matters more in many ways than you know, really focus specific skills, so you need to be able to Execute some things and have some skills, but you also need to be able to communicate you also need to be able to understand diverse perspectives and
00:06:10
Speaker
While a lot of that learning came from ISEC, but, you know, winning elections, sort of to win elections, you have to do the whole election drama for which you have to sort of articulation matters. And, you know, so debating, for example, in school would have helped or dramatics would have helped. And our parents, you know, to both me and my sister, it never restricted us from diverse opportunities. You know, they were never like just study like hell, but
00:06:40
Speaker
but don't experience all these other things. And in hindsight, I think that does help. Even today, sometimes you'll see somebody who's really talented. In fact, I think a lot of the talent today gets overvalued or undervalued by the quality of the communication.
00:06:55
Speaker
And sometimes you'll find great talent which is undervalued because the quality of communication is just not that good. And you'll have some other talent overvalued because quality of communication is much better. So I think that those diverse experiences helped. Of course, you know, you have to be fully committed to it.
00:07:15
Speaker
And what did your parents feel about you taking this up as a career? This was like a career only, I guess,
Career Stepping Stone in ISEC
00:07:24
Speaker
right? I mean, you were getting a salary, and there was a growth path. Well, it is sort of a career stepping stone, but it's hardly a salary. I mean, by salary, by first two years, it bombed me with 7,500 rupees. So it is really, you're doing not-for-profit. And then when I shipped it to the, it is a not-for-profit, I said.
00:07:42
Speaker
And then when I shifted to the Netherlands, my salary was below 1,000 euros a month. I keep trying to tell that to everybody who, you know, all the young guys nowadays are all about more salary, more salary, more salary. I tell that till 27. I made less than 25,000 rupees a month. And it wasn't about salary. It was about professional growth and the opportunity to have these great experiences. And again, you know, I have to thank my parents for that, I think, because a lot of parents would say, no, right? They'd say,
00:08:12
Speaker
you know, go get your particular certain pedigree job with a certain financial outcome. They've never stopped me. Even, even after business school, they've never, never pressurized in that way. You know, even after business school, I went straight to the straight to start the startup. I never, never went to a job. Uh, and they've never stopped me. So, uh, which year did you finish a college of business studies in 2005?
00:08:39
Speaker
Okay, so and then you spent I think three years in ISEC, so five to eight you were in ISEC? Right, I retired from ISEC.
00:08:49
Speaker
So why did you retire to like, take up a real job? Like, was that like a better paying job? Or what was the plan? So, you know, I retired as a global head of external relations. The only thing else to do what I said was to be the global president. I didn't apply for it. I didn't do that for many reasons. I won't go into that micro, but mostly because I thought the job already had was very market focused. So you went to market and got rejected a lot, which I thought was very good for your ego.
00:09:19
Speaker
And the global presidential role, of course, very tough role to get, but again, you stand in an election, you know, it's more like a policy maker. So the global also, I say like the UN, right? So think about it like a UN secretary general, and I didn't sort of feel like I wanted to do that. So I left, then I ultimately came back, took supposed to be a 60 day break, but in 50, I couldn't tolerate it. And I went to help my parents for a while.
00:09:48
Speaker
But in three months of that, I advised them to close their business and they did close it. It was only a coronavirus business. It was in textile. It didn't have big margins. The debt costs were too high. It wasn't going to scale. So I literally, in three months, and maybe I was too immature then also, didn't realize what even getting to a coronavirus means. But I said, you should just shut this and all of that. And ultimately, they shut it and I went to Malaysia.
ISEC Traineeship in Malaysia
00:10:15
Speaker
So I went to Malaysia to do an ISEC training show, which is actually the kind of operation that ISEC facilitates, that you go work in a company or startup or in June. And in Malaysia, I went to a company called Mindvalley, which sold personal development video courses in the US from Malaysia. So the company is still around. It's now quite a far more sizable company. But I went to the startup days, worked at our house, and I was there about six odd months.
00:10:41
Speaker
I do have to give it credit for, you know, giving me the first exposure to running an internet business and running a cross-border business, you know, where you, from one country selling another country through the internet. And yeah, so I was in mind value for six, seven months. And then I went to business school at ISB. What was your role exactly over there?
00:11:04
Speaker
So I essentially manage affiliates, which means that you, I think most people in the internet world would know what affiliates are, but you get other people to promote your products for a commission.
00:11:16
Speaker
And at the end of my time at Mindvalley, I was beginning to look at a particular early education product, which is basically, it's a homeschooling product made by an institute in Philadelphia called the Doman, it's called the Doman Method. I think the institute was called the Institute for Achievement of Human Potential. And they have these products about how to teach or be able to read, usually before the age of two.
00:11:41
Speaker
So I was very interested in it. So I was beginning to barrier that product, but left soon after. Okay. So why did you decide to do an MBA? Uh, so I decided to do an MBA, send me a book and I want to be an entrepreneur already. Well, the one thing I didn't mention was between, uh, I say again that your time that I spent some time with my parents, small business.
00:12:07
Speaker
I also tried to pitch VCs for another business of my own and failed. Maybe it's so far back in memory. I don't even remember, but I sent a couple of emails to a couple of VCs. Sort of, again, a head tech kind of idea, but totally like a paper idea. Why did I do an MBA? So this entrepreneurship model. Tell me more about this. What was the idea and did you actually get to speak to any VC or it was just like you sent some emails and nobody replied?
00:12:37
Speaker
So what was the idea? Well, the idea was that effectively to provide free educational management software to all universities. So that would have the incentive for the universities to use that software and then
00:12:55
Speaker
include all the, because all the students would be signed up on that software, basically that would be a source to have all the database of students and effectively sell that on the front end like one of the job portal businesses. So you've got the backend because of the solution you offered the colleges at the schools, and you've got the front end, which was monetizable by talent acquisition costs, et cetera.
00:13:24
Speaker
You could think the front end would be like a knockery.com or a jobs ahead or one of those. But the sort of the supply side problem
Early Entrepreneurial Failures
00:13:32
Speaker
would be solved in a different way. And did you actually talk to VCs or it was just some emails and nobody replied and you gave up?
00:13:41
Speaker
So what I talked to a lot of Saudi alumni of this organization I was with and I suddenly realized that business is very different from being a part of a sizable not-for-profit. When you do your own thing for the first time you could have been anything in a large entity and you know people sort of don't credit that so much as now you're a person doing business by yourself.
00:14:04
Speaker
A lot of the, I don't know, I reached out. I did not get any positive sort of help. And then VCs, I wrote to many of them. I actually remember getting a reply from Excel partners just saying, when you have traction, let us know of a cold email. So I guess that's not bad. So yeah, but I think I wrote to, Buster wrote to several VCs, but I only remember this one strong reply in my head.
00:14:30
Speaker
So then you decide you want to get a formal management education and you go to ISP. So what was that experience like? I go to Malaysia and I think also relies on this experience that this whole thing about raising millions of dollars on a piece of paper is really not happening. And I think even today doesn't happen. Now what I see is on a piece of paper you can raise a couple of corroded angel money and some very lucrative valuation.
00:14:58
Speaker
still raising big VC money or without traction doesn't happen. So after that I went to Malaysia and then somebody sent me a book, one of these books, I forget the name, I think Rashmi Bansal's book talking about how all make my trip and info age and all of these guys came from IMA, MBAs. So you're sort of like, oh, there's no way to make it to a significant business in this country without doing a good MBA. So I thought, let's try the ISB route and that happened.
00:15:26
Speaker
So for Malaysia, I went, actually for Malaysia, I had three, four months before I went to ISB and transformative was started in those three, four months actually before I went to ISB, the current business I run in which owns the Irutha experience. So while at ISB, I was already running this business and another vertical of this business. So I assume that would have been the at-tech part of your business.
00:15:54
Speaker
Yeah, so I mean, so post Malaysia, now we're talking about how post Malaysia, there was two businesses, one formed Malaysia that early, early education product, you know, a lady who was my boss at that time, she said, you know, why don't you take this to India? So I was doing that. And if that's of interest, I can talk about it was a massive entrepreneurial learning. Well, yeah, so
00:16:20
Speaker
I mean, won't take days, but, so the Mindvalley is a good, credible company, but they had for a moment of time engaged this American lady who was running our vertical. And she said, you know, you go to India, you run India, you take 50% of that business. I'll invest $15,000 in it. And it makes me realize how silly I was back then to give 50% of business for $15,000. And, but you know, I thought they are giving the product. So, you know, product is a sizable thing.
00:16:49
Speaker
And I spent a good six or seven bucks getting that product into stores, et cetera. And we had some very credible stores signed up and nothing would ever move. I actually had a friend of mine move back from Singapore to become CEO of that business while I go to ISB. At six or seven months in, I went to ISB and he stopped receiving salaries. And even though we had all these stores signed up, we could never get a response from the owner of the license in the US.
00:17:17
Speaker
So between my ISB term, I actually flew to the US to those guys and say, what's going on? We have all these stores signed up in India. You know, why aren't you giving us the product? You know, why aren't you giving us a license to sell this set of products? They were all early education products. Teacher were able to read, teacher were able to do math, teacher were able to swim, all of that. And well recognized, sold more than 5 million copies in the US. And I went, so in the middle of ISB, I took 15 days off, convinced my professor that I'm going to go do this and she shouldn't fail me.
00:17:46
Speaker
I actually go there and I walk into Philadelphia to this guy's office and they say, what are you talking about? And they had no idea. So in effect that lady had no licenses and this was a massive learning, right? And until today in my firm, we are quite crazy about paperwork, you know, contracts, written agreements, all these things. We look at these things with significant granularity. I think it probably comes from that experience.
00:18:16
Speaker
And this was with foreigners. Some people think that there are higher grounds in foreign countries. There's nothing like that. It's about good people and I would say not so good people in all countries. But big business experience. You should document everything documented well. So that business went, of course, that was the end of that business.
00:18:41
Speaker
And, you know, it also makes you feel the responsibility you have for other people you engage. I had a friend leave a $60,000 job in Singapore to come and run this in India. And he stopped getting paid. He didn't have a job. I paid him a couple of lakhs for borrowing from somebody else, but then I couldn't pay him any further. And he also had to leave. So then you took on personal debt. Yeah, I took personal debt from, you know, another friend of mine,
00:19:10
Speaker
who I was close to while I was in Europe. And you also had debt for ISB? Like ISB was a student loan? I also had debt for ISB. Yeah. And I don't think of debt very well. My parents had a very bad time with debt in their lives. So I don't think of debt in, you know, I don't enjoy debt. I
00:19:31
Speaker
I've given up, you know, I've been offered pretty sizable venture debt and all, and I don't take it easily. But yeah, at ISP debt and that debt, which was only a couple of lakhs, but when you have zero in the bank, a couple of lakhs is a lot. So that business went to the fold. So that was, but there was only one business, you know, maybe by that time, life had already figured out that, you know, I was saying dependency is death. So not to be dependent.
00:19:59
Speaker
And so I had a second business, which had been the first sales off before I went to ISB. And that was basically with a professor of Delhi University, who had written books on mythology. We had made video courses about learnings from mythology, you know, the philosophical learnings of mythology, and we started selling those.
00:20:20
Speaker
And what was like the quality of video? Was it like an animation video or one man speaking? It was mostly one man speaking that we bought some very cheap animation, but it made the video look terrible. I think for a while we had it, but then we removed it. But it was only one. It was only one man speaking for the first video.
00:20:42
Speaker
And why would people pay for this? I mean, internet is like, you know, in those days, especially internet meant free videos, free information, stuff like that. Well, that we think about, and you know, I, when I first went to Mindvalley, I thought about this is crazy. So much videos free, but Mindvalley was then you should set $10 million a year, $10 million a year of video. Okay. On, you know, personal confidence, meditation, self-help.
00:21:10
Speaker
anything you can think in the self-help space they used to sell. So I knew people paid for video by being at mind value. Okay. Then it was about the product and about the uniqueness of the product. Now the thing here was we were telling people to buy mythology video, right? Videos from professor on mythology and anyways, this wasn't like a, you know, you should have hope video. This was a really an academic professor and we wanted to bring it to very,
00:21:37
Speaker
you know, crisp ideas of powerful ideas for mythology, which I believe there are many, right? There's so many great ideas in our mythology. Something like what Devdath Patnaik also does. Absolutely. I would say so. I've not read a lot of his stuff, maybe I've read one on, but something like he does, I think is a good, broad definition of it. Right. He also has a podcast, very few episodes, long time back, but yeah.
00:22:06
Speaker
So we sold those even before I went to ISB and while at ISB, I continued to sell them. And how much money was that making for you? Oh, it's tough to say that far back, but I don't, I mean, it wasn't making any money. I think in the first year, half of it was while I was at ISB. Maybe I lost 50,000 or one lakh and maybe it made two lakhs or three lakhs. I don't remember.
Mythology Video Courses Business
00:22:30
Speaker
So nothing great. And even that, I think 30, 40,000, I ended up borrowing from another friend in the US.
00:22:35
Speaker
A lot of friends have to pay back. So it wasn't paying a lot of money. How were you selling it? People would pay money and then they would be able to log in and go behind a paywall and watch it online. Or people could pay and download it. Or was it like on a CD? So we were selling both online and on CDs. And an ISP incubated that and they put in a couple of lakhs.
00:23:04
Speaker
into that business, gave me a place to stay, gave me an office. And that was our business till about 2014. We basically published many things in philosophy and mythology and in its final stages, maybe it did a hundred grand a year. So still wasn't, you know, doing anything insane. A hundred grand INR? Not dollars, dollars. Okay. Yeah.
00:23:29
Speaker
So by saying it was doing $100,000, maybe a little bit more, maybe touch the throat, I don't remember now, till about 14. But we would have burnt out. We were going to fall off the cliff. And I had raised post ISB between 70 and 100 grand. I think almost 100 grand. So I think closer to 70, $70,000 here.
00:23:53
Speaker
So during your one year and a few months at ISB, you were focused more on building up this business and ISB incubated you and also put in some money. And so once you got done with the degree, you continued to sit out of campus and do it? I mean, what was that incubation program like? Yeah, so both businesses valid ISB, one burnt out, one continued, ISB incubated, then stayed on ISB campus for a year.
00:24:23
Speaker
amazing, amazing campus in Hyderabad, an amazing experience. The best part of the experience was, you know, you stay with other incubates and all of them are some of our, you know, we're all very close friends. In fact, we just had one of our reunion calls last week, everybody starting their own business, almost everybody a single founder. And I thought that was pretty amazing because we sort of were like co-founders to each other, even though we were not in each other's businesses.
00:24:52
Speaker
And till this date, all of us are very special born and talk to each other all the time. And I trouble all of them all the time. So even this morning. So with those on campus, we didn't get honestly much intellectual support from ISB. Maybe we had to seek it out more or something, but it wasn't like proactively coming. But having a good infrastructure to work was very useful. I mean, just the fact that we had
00:25:22
Speaker
good room to live in and a good office to work in good as it's simple but functional fully functional and in a campus that people really know because these are issues these things these things slow people down didn't have to worry about cooking and anything like that I mean we are yeah you can go to the
00:25:42
Speaker
cafe or you have a maid car, all of those things happen. So I think the biggest value was good environment and being able to work with the other entrepreneurs and have each other through all the updates or down days. I remember at the end of my incubation, there was a $70,000 or $80,000 term sheet that somebody gave me. Of course, one of the first times I looked at a term sheet and a very, very complex term sheet, right? The usual 50 clauses.
00:26:09
Speaker
I tried to negotiate. I said, remember, I think 30 or 34 of them. So they pulled out the deal. They walked out of the deal. They said, no negotiation. They said, we're talking out of this deal. So I said, I was almost part suicidal, I think. And in that kind of moment, the camaraderie of the fellow entrepreneurs
00:26:32
Speaker
Okay. So once your ISP degree was done and you were scaling up the business inside the campus, did you hire people there? What was the plan? Were you like creating more content and then spending money on PPC campaigns to get people to your website? I mean, what were you doing? Okay. So I think my ISP, we got three for lakh bucks or something. I don't know something like that. So there wasn't a lot of extra money. I think through that whole year, maybe
00:27:01
Speaker
Couple of extra lakhs, but I've been raised from somewhere, but nothing extra. So we were just doing the content and doing very little bit, very little PPC, but I think the less of the money, the better you become at PPC. So, you know, today my firm pride itself has been very good at PPC, but so very little PPC, but just like thinking of the product, doing more video, understanding the customer, et cetera, trying to raise money, trying to raise further money because
00:27:29
Speaker
We had proven that it makes some money. I think by the mid of eyes, we must have made 5, 10 lakhs by then. You see when you make 5, 10 lakhs by pure internet sale on your own website to global customers, there's always something to look at. You have to look deeper, but if you're selling to people you don't know randomly over the internet, there's always the chance of it being a massive business. So then you, and of course,
00:27:58
Speaker
The burn rates are usually higher just because you're marginal. I mean, you're not making any extra cash because of low scale. So I think it was just about getting a couple of more videos and courses done and trying to raise money. And then at the end of ISB or a couple of months after that, I think we finally managed to raise close to a hundred grand. And then we burnt it.
00:28:24
Speaker
So I think that was the first, maybe that's the next phase to go through. You've got that money, you're like, oh, what do we do with 70 lakh rupees? Never seen 70 lakhs in my life. Now I remember clearly it was 68 lakhs. So what do you do with this? What does everybody else in the internet do it? We try to grow fast. So we try to just scale faster PPC and you dream of some LTV or lifetime value and you bump up your revenue and you feel very good about it.
00:28:52
Speaker
But I remember I think between six months somebody invested at a three, four crore valuation and somebody else invested at a eight crore valuation or seven, eight crore valuation. But he invested only eight lakhs, right? So actually that is no change in valuation. But at your early stage you say, oh, now I have. You still have to think that, oh, now you've made a billion dollar company, which is absolutely not true. Absolutely not true.
00:29:22
Speaker
So we did that for a couple of years, though. The board kept going along. I think it dragged to 2014. And when did you move to Gurgaon? I moved to Gurgaon only one year back. We moved to Delhi. I moved to Delhi in 2012, right after Hyderabad. Yeah. So that business dragged on to about 2014, where we were really running out of money for sure. And somebody had bought four or five of those courses on mythology and philosophy.
00:29:48
Speaker
You know, I called it up. I said, you know, a lot of people don't buy this stuff. Why do you buy it? And you buy every course. So I said, I love Indology and I love philosophy. And why don't you do a course with your Ayurveda? And we did a course with our Ayurveda and I think everything changed after that. Because that course did very well. You know, it was an introductory course on Ayurveda. I think less than a hundred dollars. And I think over the years we sold almost a million dollars of that course. But in its first two years, we sold maybe a couple of hundred thousand of
00:30:19
Speaker
And then we just dumped everything else and looked at the Ayurveda market and realized this market is really a much better place to be with a lot of global opportunity, a lot of digital opportunity, no large digital global player. And we sort of just totally shifted to the Ayurveda market.
00:30:35
Speaker
Okay, so you are, I mean, now into physical products also in addition to the online videos and courses.
Expansion into Ayurveda Products
00:30:46
Speaker
So how did you decide to make the switch into physical products from just an online product? So I mean, in about 16 or 17, once we had had some traction, I go to the courses and so can now we're going to be naive with our business.
00:31:05
Speaker
you know courses we would contribute to have some success but obviously we need to find other ways to scale up who were the people buying these courses were they like practitioners or consultants or just like normal consumers looking to improve their health normal consumers I mean we've always tried to build our courses for normal consumers but there are credited in some countries for practitioners to get credits right
00:31:30
Speaker
And we try to build for normal consumer because that's where the scale is, et cetera. Either in foreign countries, it doesn't have large enough practitioners to easily build an education-based business around them. It's growing, but it's more limited. Yeah, so there were normal consumers who think, so yoga, of course, was a big trend in the US, right? I mean, yoga was almost a 20 to 30 billion dollar market, one out of every
00:32:00
Speaker
at the max 20 Americans that some people interact with yoga, fairly significant interaction with yoga. As a doctor, what's next? And I think that's why I grew maybe more and more convinced about the idea with the idea. Plus traditional Chinese medicine, alternative medicine in the US had always been big. There had been 50 to 80 billion dollar markets. So we became very convinced of the idea. Then we thought, okay, so let's build the consumer base through education.
00:32:29
Speaker
And we'll monetize through having this marketplace on other people's products. So first we started the marketplace on other people's products. We thought, who's going to build product? Or which has its complications and all of that. When we started doing that, we just realized that none of the brands in the US were big enough. So why wouldn't we just build our own brands?
00:32:49
Speaker
and that way we'll have the full leeway. So that was another significant shift after becoming a marketplace, selling third-party products, then we realized also how many successful marketplaces in the world have been created outside of the very big ones from our product standpoint, very limited, right? So then we sort of very quickly, in a year or so, moved from marketplace into wanting to do products.
00:33:18
Speaker
What we started doing was product partnerships with other people. So there was sort of two kinds of partnerships. There was a couple which was promoting a spa tool. And we sort of gave them a royalty because every time they did video for that spa tool, that did quite well. And we sort of give them a royalty to, you know, become the face of that sort of tool. It was like a body massage tool made of copper and wood. And it was not, you know, commonly seen, et cetera.
00:33:48
Speaker
It was you know, you could rarely find it wasn't a popular product So we give them a small royalty and then we really push that tool ultimately, we sold eight million dollars that tool over three or four years and And you know you can see on Google trends sort of that it only rises once we get into that market So then we became clear to us. Okay, so we're not gonna be marketplace. We're gonna try to back these and
00:34:15
Speaker
lesser known things which don't have too much competition. And ultimately it also became about trying to protect the products that we build. So for example, this tool I'm talking about, it's called the Kansa Wand. Now it's quite a popular beauty product in the US. In fact, after this Oscars, the aesthetician of the, I think the woman who won Best Actress,
00:34:45
Speaker
She actually said that the Kansa wand is one of her beauty tools, right? So now it's that popular. But you know, at every stage of the learning, even though we built that tool up, because we didn't trademark it, because we couldn't trademark it, because we didn't create the moat surrounded to protect it for the long term. People started selling it much, much cheaper than us on Amazon.
00:35:06
Speaker
And ultimately we lost that market. We didn't lose it. We still own, I think 60 or 70% of the market is still us, but the profitability went away and we used to sell at much higher prices and the prices came down several fold. So that was one. The other thing was that we said that, okay, let's try to, there must be small businesses. And like this couple who was doing this, this part tool, you know,
00:35:32
Speaker
They had no way to build this into something that sold in the millions. But they had the idea and they had the training around it. So this is a good way. Let's find people who have got these interesting ideas and concepts and products and let's partner with them and we know digital very well. And I missed in some part of this, some part in the middle for survival, we ran a digital agency also.
00:35:56
Speaker
Right? Just for a couple of one or two years, we had a digital agency. We consulted some very well-known educational players, including ISB, Jamboree, the GMAT guys, and Ashoka University. They were all our clients. So we understood digital well. So we said, okay, we will bring the digital, they will bring the product, and we'll scale. But we must have a part of the pie. So we found a company in Wisconsin, USA, called Ajara, which you should have $100,000 a year.
00:36:23
Speaker
And we sort of sent a partnership to the promoter, saying, for every half a million dollars we sell, we'll take 10% of the company. So we'll help you grow, and we'll get part of that growth. And I'm very grateful to her. Her name is Nicole. And she agreed to that. And we did that, and we ended up owning half the company. And just last week, we actually bought the rest of the company. So now we fully own a Jara.
00:36:53
Speaker
But I think the key learning is bring your strengths together. She had product, we had digital, and so we partnered with her to build a Jara. And then the end of that year, which is 2017, we launched our own skincare brand called Ayura, which has been a phenomenal growth story since 2017. But Ayura was totally built by us, brand is built by us, and we sort of contract manufactured with very reliable partners.
00:37:23
Speaker
And Ayurveda just in two and a half years has more than 200,000 customers in foreign countries. And so then we realized that we can just build brands by doing good diligence, contract manufacturing, et cetera, and do that. So I don't know whether I skipped some things, but now I've covered a couple of the things in Ayurveda. So the shift that also I have to say,
00:37:54
Speaker
The team as it begins to come together also adds value to that. So I don't really consume much of anything except for I think food and a lot of juice. I'm not one to think a lot about consumption. So my understanding of retail sometimes was weak earlier. Now it's a little better because of naturally having to research it. So many members of our team, including Veenu, who's now my wife and we worked together for seven years,
00:38:23
Speaker
So, you know, Vinu is quite love skin care. Let's do all this skin care. And so we started doing the skin care stuff. And Raghav and Magender also two partners who joined me six, seven years back. You know, I think they also wanted to the e-commerce side. So, you know, we partnered with some supplement companies. So it's a team of them, right? My best mind has always been about transformation, transformative education,
00:39:13
Speaker
So how much did you do turnover wise, like this financial year, which has just ended?
00:39:20
Speaker
So the GMV basis would have done just less than 70 crore. Okay. What does that mean when you say GMV basis? I mean, in our case, GMV is almost, it is net sales. The only reason I use GMV is that it would be very accurate is because last financial year, we didn't own a lot of our Jara. So half of our Jara was not counted as our revenue. Right. So the financials will show about 64 odd crore. But, uh,
00:39:51
Speaker
of including a Jarab because now we own it would have been close to 69 crore and GMV is equal to revenue in our case. So why the US market?
Focus on US Market
00:40:00
Speaker
Why not the India market? Was it because your videos were selling in the US and therefore everything you did was aimed at that market or? Yeah, I think it's just that. You know, the one big learning of Warren Buffet is, you know, stay in your circle of competence.
00:40:17
Speaker
I have been on the US market for 10 years. So even now we have opened European markets, are looking at Indian markets. But the US, Australia, and Canada, we've always done for 10 years. And so we really analyze the market, understand the market, and solve the problems of that specific market, right? So that was what just, you know, education was there. So naturally the customer was there. So we tried this there. Second thing was competitive.
00:40:47
Speaker
Competition-wise, it makes sense, right? Because India is a very competitive Ayurvedic market. So you need wide open spaces to run, especially if you want to consume very little capital. I mean, transformative has raised significant capital, but its direct usage of capital in the business has been very limited. So I think if you have a non-competitive space,
00:41:16
Speaker
And in the US, you can of course do work on dollar values, etc. And you have high dollar values. So, you know, the spread is much larger, your capital burn is much lower. And so we sort of always stayed on that market.
00:41:33
Speaker
Now we are looking at India and all as well. We are evaluating that. So you raised, you told me about $100,000 when you were running the training and the video business. So after that, did you raise further money? Yeah, I mean, and all people have invested almost 45 crores in transformative. We haven't done so too much media in the past. But in primary and secondary capital, almost
00:42:02
Speaker
20 odd crores has been secondary capital, that is people buying shares from each other and not into the business. About 26 crores is in the business. In about 2016, we raised about a four crore angel round, true lens venture, but led by Moit Satyananda, who is the chairman of the firm, which runs the Jaipur Literature Festival. And he was on the board of the company, which owned Cracks for a long time. So Moit has been a great mentor to us over all these years.
00:42:31
Speaker
you know, even now on a weekly basis, we bother him and he guides us. So we raised a folk road back then under his mentorship and he stays deeply involved and very grateful for that. And then in 2018, and we raised money from Fireside and Centrum and both Kanwal, I guess in media known as Kanwaljit Singh and
00:42:59
Speaker
and Giri from Centrum on our board, and they both invested there. So that was about a 35 crore round, but 15 crore was secondary. So in primary capital, we only till today sort of used 26 crores, and we haven't used it. A lot of that, at least a significant part of that capital lies with us till today. OK. So why did you raise that money?
00:43:27
Speaker
One, I think we were seven, eight years in, right, by 2018. So we were seven, eight years in. And I think is that, I think you should always have money if one to weather storms, nothing is, it's not easy to weather all the battles now, you know, in this environment, you could need it for any kind of cost with starts to fluctuate significantly. The second thing is,
00:43:55
Speaker
I want to look at transformative like a research institution that we invest in research, primarily in Ayurvedic product, but also in technology, also in even we think of customer acquisition as a sign. So a lot of research around that. And so for some of these things, you know, need capital to play out models for a longer period of time. Plus when you have capital, right? Uh, uh,
00:44:22
Speaker
The thing is that you can think longer term. Otherwise, a lot of it you are just trying to manage cash flow all the time. And if you're trying to manage cash flow all the time, then taking really big long term decisions is a little bit hindered. Can be significantly hindered also.
00:44:41
Speaker
And how did you go about raising money? The first experience you had of going to VCs was not a good one. Then the next experience, I guess, your ISP connects would have helped you for that angel round, which you did around that time, around 11, 12. This time around, you went to bigger name VCs. So how did you go about doing that? Yeah, well, actually,
00:45:07
Speaker
11-12, one was an ISB friend who gave half his salary as an investment but was also a couple of school friends who made significant investments and one of my childhood friends and his father Kabir and Ajay Kucher, they invested a significant amount. I told them many times that if this blows up, there's no way I can give it back to you. But they trusted me and made that investment.
00:45:38
Speaker
And I think one of the things we're happy is that in these last rounds that we did, a lot of people have got their returns also, right?
Raising Capital and Growth
00:45:44
Speaker
So in our second phase, I feel very lighter that all the early investors have received significant exits. So then I raised in 2016, which was of course a lot with Moen's help, but we raised on Let's Venture.
00:46:04
Speaker
because a lot of the VCs still didn't get it. I mean, I got one VC offer, which I thought was low balling the valuation with all due respect, but mostly we, and all sort of strange danger terms. I mean, you see every sort of strange danger term in this country, including I must be allowed to sell my share before you can raise the next amount of capital. I actually have seen that, you know, I think now it's much better, but even till before 15,
00:46:34
Speaker
2015 or 14, it was tougher. You know, now I'm sometimes blown away at the valuation they see. And I look at some Indian deals myself now, but I'm a little blown away. So I thought this, let's check on a platform was phenomenal because this gave you the chance to really pitch to many people. Everybody wrote a small check and you want a lot of people with very valuable experience from business.
00:47:03
Speaker
And some of them have become real advisors and friends. And some of them are parts of funds even larger than VC funds, like PE funds, et cetera. So they're very astute investors. And yeah, so I reached through Let's Venture after trying all the private routes. But in Let's Venture also, this was the earlier parts of Let's Venture. I really reached out to everybody with personalized messages.
00:47:31
Speaker
And also I think in fund and to close a fundraiser, you have to give put scarcity in the end. I think this ends up being something that you have to get some timeline, otherwise it can keep hanging. I think when the time we put the deadline that we're going to close, I think the last 40% of the round closed in four or five days. Uh, and before that was dragging.
00:47:57
Speaker
Also, the other thing about investing a lot of it is you have to get the momentum going. You have to have many people interested at the same time. And that's where you can really, you know, get more people interested and get the tempo going. So fundraising is a big exercise. And after 2016, and even before, I think some point I came to realize that, you know, focus of the business, not on fundraising, because ultimately, people only want to fund a good business. And
00:48:27
Speaker
you don't get rewarded just for fundraising. Anyways, even if you raise funds, but you had such a deficient business, the liquidation preference will mean that you are not left with anything. So post that I really with business focus, if I got an easy introduction somewhere or something that I've always taken that opportunity and spoken to the VCs and given it my best, given all the information, try to make it work. I mean, at my general sense, I try to make all deals work.
00:48:57
Speaker
I mean, if they seem like of value, I try to make them work, but I wasn't like I don't, I almost never want to full fundraising board. Because to start a fundraise and to end the fundraise, your numbers have to be doing very well. I don't think we'd easily do both. Show the upward curve and to the fundraise. Not easy. I know some people might want to do it.
00:49:23
Speaker
So the truth of the world is that of course you've got to enter an introduction to file side and central. Through your angels. Through angels and you know, I had somebody reach out. Yeah, I mean, ultimately, I think we don't find it tough to get introductions anywhere. We have a decent sized P&L by those, you know, by an Indian startup standards. You know, once you start to reach to this level,
00:49:53
Speaker
people at least want to talk to you for 10 minutes. So getting the intros is not a problem usually. Okay.
Personal Journey and Meeting Venu
00:50:03
Speaker
So how was that? How did you end up marrying Venu who used to work with you? What was that whole story like? Oh, okay. So, you know, Venu came seven years back as a, you know, she wanted to join just as an intern.
00:50:24
Speaker
Because she was a vocalist and is a very good singer. And if you YouTube her, you'll find many great songs from her. And she blames me for spoiling her singing career. So she came to join for an internship for a month or so and say I'm going to bump into film. Then I convinced her to stay.
00:50:53
Speaker
And we worked together for all these years. A couple of years in, I think, you know, we had, of course, a lot of people say from the very beginning, we knew this was going to happen. But a couple of years in, after we had gone through so many tough, complex startup situations together, I mean, it's so much we joined, we had, we were about four people or five people. Okay, so she joined almost in 2013.
00:51:22
Speaker
And we have been through all these really complex situations of startup life and mental struggles and all the other kinds of struggles. So I guess you build camaraderie, you build that trust. And of course, I think everybody at transformative knows we pride ourselves on creative. You see the quality of our packaging, our websites, et cetera. And that all comes out of we knew
00:51:52
Speaker
creativity, which was of all existence from the time that she was a singer and manifests itself into skincare ideas, products and packaging and education now. So a couple of years in, we started dating, then we lived together for several years, even before we got married, because I think we are big proponents of testing everything.
00:52:20
Speaker
And a production market fit. This is a complex one. Who's the product and who's the market? You know, but I think the biggest thing is you have to, so you only got marriage.
00:52:41
Speaker
Seven, eight months back, and people say, anything changed? I said, no. I said, what could have changed? What does marriage do? You have a deep emotional tie-in, and then in some sense, brutally put, you have some financial tie-in. And we had both before. We sort of went emotionally tied in. We were sort of financially tied in. We had lived together. We had gone through every sort of complex situation. And survived. So it was high.
00:53:11
Speaker
high confidence interval that it should work. And I'm very grateful of course for our support over all these years. So what are you currently attempting to learn as an entrepreneur? And I mean, in my experience, entrepreneurs are like perpetual learning machines.
Maintaining Quality and Growth
00:53:29
Speaker
They're always looking to learn. So what is it that you're personally attempting to learn at this stage of life? Well, I'm always trying to learn many things, but I think at this stage,
00:53:42
Speaker
My primary sort of problem I try to deal with is how to maintain and accelerate quality of product and effectivity of product while scaling at the same time. I try to answer that question whether that's even easily possible. But to balance that, that's one. I think the second thing is about, I mean, clearly I have no more hours in the day I can work.
00:54:11
Speaker
you know, how do you pass down this entrepreneurial energy to, you know, whatever number of people you have, hopefully hundreds of people, how do you pass down that energy and that, that vision, passion, all of that, that everybody function at that pace? Because without that, you know, unless you want to just burn capital, there's no way to grow fast.
00:54:37
Speaker
and create a great company. And if you do that, I think the need for capital in many businesses can be far more limited. So, yeah, those are two sort of perpetual problems. Effectivity and scaling and lifting, you know, the sort of output of every single employee. And I don't even like to use the word employee. I like to often
00:55:07
Speaker
I try to think of transformative as a partnership with senior partners and junior partners, but everybody has partners. And if I try to take inspiration from the best finance firms, they use very few people to manage very large sums of money or the best law firms structured as partnerships. And I believe a lot of the internet business is
00:55:35
Speaker
A lot of the time people have to replace knowledge with capital or they use capital to buy knowledge. But I think you structure it well as a partnership where everybody has significant upside. You know, because of the upside should be an automatic sort of compensation for the knowledge and try to retain all the best knowledge inside a company.
00:56:01
Speaker
So try to build this partnership or build a structure for a good internet partnership or internet business partnership is something I'm always trying to think about.
Conclusion and Call to Action
00:56:13
Speaker
So that was Rishabh sharing his secrets of how he scaled up Transformative and if you want to know more about their products then do visit the Ayurveda Experience dot com.
00:56:27
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 thepodium.in that is t-h-e-p-o-d-i-u-m.in for a complete list of all our shows. This was an HD Smartcast Original.
00:56:57
Speaker
HDSmartCast Log on to HDSmartCast.com to listen to more such podcasts.