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Ayurveda's Modern Makeover | Ameve Sharma @ Kapiva
147 Plays4 years ago
As busy as it can get, health, in these times, has taken a back seat. We often fail to consume a proper diet which leads to numerous deficiencies.
Founder Thesis brings you the journey of one such founder who has made it his mission to make Ayurveda an integral part of the day-to-day life of the modern consumer.
In a candid conversation with Akshay Datt, Ameve Sharma, Co-founder, Kapiva, has taken us through his journey. Ameve has previously worked with McKinsey across various projects before setting off his entrepreneurial journey.
A third-generation entrepreneur of the 104-year-old Baidyanath, Ameve started Kapiva in 2016 with Shrey Badhani, intending to bring the wisdom of India’s ancient food traditions to its modern-day consumers. And today, Kapiva has scaled into a 100cr brand in the D2C segment.
Tune in to this episode to hear Ameve speak about how Kapiva is disrupting the health and wellness industry by presenting the benefits of Ayurveda in contemporary and convenient formats.
What you must not miss!
- The learnings from consulting and how can they be applied in a start-up.
- Why is it important to understand the consumers?
- Why must founders create a data infrastructure? How can this help in taking decisions?
- Why is it paramount to build a fantastic customer service team?
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Transcript
Introduction to Founder Thesis Podcast
00:00:08
Speaker
Hi, I'm Akshay Hi, this is Arav 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
00:00:25
Speaker
Hey Akshay, I'm Aamiv.
Founding of Kapiva Ayurveda
00:00:28
Speaker
I'm co-founder at Kapiva Ayurveda. Children of family businesses end up taking one of the two routes. Either they join the family business or pursue a path completely different from the family business. But Aamiv Sharma, who is from the family running Baityanath, one of India's oldest Ayurvedic product companies, decided to do something unique.
00:00:48
Speaker
He entered the Ayurveda space with his venture Kapiva but pursued a very different type of business model that is more in sync with customers of today. This proved to be a very apt choice, giving the fledgling startup access to insider knowledge that comes with decades of experience while at the same time allowing it to be agile and fast.
Journey from Consulting to Entrepreneurship
00:01:09
Speaker
Listen to this fascinating conversation with Aamiv talking about quitting a lucrative consulting job to start up and going through the journey of finding product market fit to eventually scaling Kapiva into a 100 crore T2C brand in the space of Ayurveda. Here's Aamiv telling Akshay Dutt about his wonderful journey.
00:01:30
Speaker
The story that I want to hear from you is about the legacy family business. You come from a well-established business family. Tell me about that story. Who was the person in your family who started it? How did it start? What kind of environment did you grow up in?
00:01:47
Speaker
Sure. So the business is Dernak, right? So, you know, typically famous for Chavantrashe and he's a goal and your traditional kind of Ayurvedic products started back in 1917 by my grandfather and his brother. So basically, you know, he was very much involved in the freedom movement by grandfather. And one of the reasons why he got into Ayurveda was, you know, he wanted to kind of get back the legacy of India of, you know, sort of knowledge that we had.
00:02:14
Speaker
So I think that he was a really kind of different kind of person, you know, like the national poet of India wrote a book about him, like he was just an inspirational figure. There was very rudimentary kind of packing materials, very labor intensive for sure. But also at that time scale in general was very much smaller. So people didn't really
00:02:38
Speaker
They weren't that many consumers in India anyway. So when you were growing up, it was understood that you would join the family business. At that time, the structure you were working in was still a very...
00:02:53
Speaker
acceptable structure, right? You know, this, as businesses grew, things got more and more professional. But yeah, expectation was that I would join the family business, right? Grew up very involved in business, right? So I started like visiting factories and offices and all that at a very young age. You know, went for market visits and stuff at a very young age.
00:03:14
Speaker
So there was this sort of, it wasn't explicit, but there was this understanding. But you know, basically what happened actually was that at one point I felt that there was more I wanted to
Professionalizing a Family Legacy
00:03:26
Speaker
do. Right. You know, I felt that, you know, in the family business, there was a way to kind of professionalize it. Right. And, you know, with the family setup, it's better to go to the professional route than kind of, you know, me being involved. Right.
00:03:42
Speaker
Before you actually joined full-time, what did you do in terms of education? I did a double major in national politics and economics at NYU.
00:03:53
Speaker
Post that actually I was supposed to actually get a job work in LA but I graduated a semester early which was a bad idea 2008 December which was the middle of the financial crisis so I didn't get the exact job that I wanted to honestly right out of college and I had a job but I thought working in the business would be better better experience. How was the mechanisms like what did you learn in that sense? Sure so I would say the biggest learning honestly Akshay was that how to take a larger problem
00:04:23
Speaker
break it into smaller pieces and make it very solvable, right? And also discipline and structure, right? I think, you know, I didn't know what it meant to work hard until I went to McKinley, right? I thought it was no hunt, it was okay. But then, you know, when you see people slogging like 13, 14 hours, your life was different class, right? Really taught me a lot of discipline, really taught me like hard work to a different level, right?
00:04:47
Speaker
And, you know, end of the day, what I realized is that if you enjoy your work, it's not work anymore, right? You know, like, you know, you need to work hard to be successful. That was obvious, right? But you can only really work hard if you enjoy what you do, right? If you're not enjoying what you do, can you work? I don't think you can. Yeah, absolutely.
Ideation and Co-founding of Kapiva
00:05:08
Speaker
So,
00:05:09
Speaker
So, funnily enough after McKinsey, I started kind of thinking about what to do next, right? But if you were enjoying McKinsey, why did you want to do something next? I had met, so my co-founder actually went to Xavier's Bombay with one of my really close friends from Calcutta, right? So, I knew him through him, when I came to Bombay at McKinsey, I didn't really know anyone, so he ended up being one of the first few people I met, right?
00:05:32
Speaker
So he got friendly and then he wanted to start something as well, right? So, you know, we actually spend a lot of time trying to figure out what to do, right? And we talked about everything from tech to fund to food to restaurant, right? Funnily enough, we ended up in, but honestly, we felt that was the largest opportunity at the time, right? We saw it exploding and
00:05:57
Speaker
So yeah, we spent a lot of time discussing what he wanted to do. I was quite clear that I wanted to leave. I was there for the experience. I was there for the learning. I was not there for the long term. It was not something where I knew that from day one. And I wanted to start. So I started after a year or so, trying to figure out what I wanted to do. So that's when me and Shre kind of started talking and that's how kind of career was born. What was the initial thesis? What did you want to do?
00:06:26
Speaker
So, you know, a couple of things, right? There were a lot of things that I wanted to do in the original business in Bednars, which I was not able to do, right? Because of whatever reasons, like, you know, bureaucracy, process, whatever, right? And a big part of it was actually breaking Ayurveda out of the mold. It was stuck in, right?
00:06:47
Speaker
Now, I told you, you know, my grandfather wanted to create this Indian Ayurvedic business, right? But the fact of the matter is that all Ayurvedic businesses today, traditional businesses are very much westernized, right? Ayurveda is not about problem solution, right? Ayurveda is about staying healthy, being healthy. It's about balance, right?
00:07:06
Speaker
The name Kapiva comes from the three doshas, Kaapitvat and the whole idea about Ayurveda is to have a balanced lifestyle, balanced body so you don't get sick. And a small part of it is that symptomatic relief if you get sick. Today 99% of Ayurveda has become that small problem solution piece.
00:07:28
Speaker
And that 99% of real Ayurveda, which is actually staying healthy is kind of lost, right? So Ayurveda is to get good Ayurveda treatment, right? You need to like for complicated treatment, you need a doctor, right? Very difficult to kind of just go pick stuff off the shelf for something serious, right? If you have constipation or something like fine, right? But for something more serious, you need to meet a doctor.
00:07:55
Speaker
and very few good quality Ayurvedic doctors also. Also because the number of them graduating is very low. The government has been doing some good work in trying to increase it in the last couple of years but it's a long gestation period. I think around 2017 is when you started, right? Late 2016 roughly. So we started the clinics late 2016
00:08:20
Speaker
How did you fund this? Like, you know, setting up a clinic and all that.
Challenges in Scaling and Store Limitations
00:08:25
Speaker
So we started with the initial funding round of maybe about $400,000, right? I put in some money and she put in some money and we also got some family and friends to kind of invest, right? So we started with 400 grand and that got us five stores, right? And this was like a service business at that time, not a product.
00:08:45
Speaker
So we had a product line as well. So we created in-house products, right? And then you walk into the store, half the store would be computer products, half the store would be third-party products. And then you had an Ayurvedic doctor and sometimes a nutritionist, etc., in the store. So you could come get customized advice for what products to take. How much were these stores making?
00:09:05
Speaker
So we recuperated our cost within about seven, eight months, right? The cost, it started being profitable like nine, eight months, nine, 10 months, which is likely very good for detail. The problem, and we created a very efficient box, right? So it was like a 300 square foot store, very cheap to set up. And we spent a lot of time building that model. We thought we'll build 100 of them, 200 of them, right?
00:09:31
Speaker
But we built five of it very quickly realized that the business was going to be impossible to scale. So why is that? Two reasons. The first one that because it was a very small box, right? The break even for a storeable of 45 lakh.
00:09:44
Speaker
and good stores were doing like 6-7 lakhs. And the maximum you would do is like 8 lakhs, which is a good outcome per month. So to create and say before this work in private equity, I had a decent size family business. The ambition was large. The ambition was not to create something small. The ambition was we wanted to create something big and impact a lot of people. The first thing we can remember, we still said and we still talk about today is that
00:10:08
Speaker
We wanted to make 5 million Indians live a healthier life. That was the first level goal. How do we make 5 million households rather? Being healthier, live healthier, have better health outcomes. End of the day, we found that this would not be that business.
00:10:27
Speaker
opening a store, it was becoming very, very time consuming, right? Yes, you need to find life's place, negotiate leads, do the interiors. And also what we found was that doctors very quickly would move on, right? So we would spend a lot of time hiring a doctor, getting them and then, you know, they would look for another opportunity, right?
00:10:47
Speaker
because high quality doctors, right, don't actually want to sit in a store. That's the fact, right? So we had bought that they want to do R&D, they want to do manufacturing, right? Eventually, right? Very few of them want to do Chikitsa and if they want to do Chikitsa, if you're MD, then eventually your dream is to have your own clinic, which is fair, right? So we found that a lot of young doctors would come, you would train them, a lot of after doing the MD, and then they would move on very quickly, right?
00:11:13
Speaker
So you're really struggling to scale, right? These Kappiva branded products that you had on the store, how did you get those ready so far?
00:11:23
Speaker
So we, of course, leveraged a lot of the back end from the family business, right? There is also a lot of contract manufacturing we got done from my businesses. And see, honestly, even till today, I would say the family was a huge help, right? Like having that background and being able to pick up the phone and call someone for advice, even something as simple as sourcing raw materials, right? It's not easy to get the right quality at the right time at the right price, right?
00:11:53
Speaker
So, you know, all of the supply chains for even our contract manufacturers, we've built out, right? We've told them when to buy what raw material from there because that really makes a big difference, right? So, at that time also you got a lot of support from the business. Still, you know, from a knowledge point of view, then you get a lot of support, right? So yeah, so basically,
00:12:17
Speaker
Yeah, so once we started the store, we found that scalability was
Innovation in Ayurvedic Nutrition
00:12:21
Speaker
a problem. But at the same time, it was kind of the best place in the world to do market research. So you have a store where me and Shrei spend a lot of time in the physical outlet, talking to customers. So we must have spoken to, I don't know, maybe 1,000 Ayurvedic customers by the end of the year, maybe more.
00:12:40
Speaker
And in a way, if you think about it, it's a store where you have a brand new unknown brand called Kativa. And then you have five very well-known brands next to it. So it kind of very clearly showed us where the gaps in the market were, what consumers were moving towards, what they wanted.
00:12:59
Speaker
taking the same vision we had initially, right? We realized that there's another big part of Ayurveda we could provide potentially at scale to people, right? Which is actually something which exists to some extent, but not really because Ayurvedic foods or Ayurvedic nutrition, right? This is Chavanpraj is a part of this.
00:13:18
Speaker
Kind of, yes. Jamprash is on the borderline, right? So I would say on one hand, you have medicinal Ayurveda, right, which is capsules, you know, off syrup, you know, you have a tablet, blah, blah. On the other hand, like what we have, for example, now Ayurvedic breakfast, right? So Ayurveda, for example, has a very clear point of view, what grains are good, right? You know, what kind of, so for example, we have Ayurvedic breakfast with
00:13:46
Speaker
barley, amaranth, oats, 5-grade grains with amla, haldi and tosi with high fiber, high protein, very low calorie and no preservatives, no additives.
00:14:03
Speaker
So, you know, so basically incorporating the principles of Ayurveda in health, in food, right? And kind of creating a Ayurvedic petition. And so like, when did you realize that this is the way to go? Like, initially you had those stores. So what do you figure out? Two, three things actually, right? So what do you figure out is that?
00:14:23
Speaker
You know, I'll give you an example in my house. I've been having a shot of amla juice every morning since I was like eight years old. We have this very funny thing like we take after like after lunch we actually with my family it's like a tradition we have we take dahi.
00:14:41
Speaker
We put ashwagandha powder and honey and that's like a dessert. So we incorporate Ayurveda into our daily lives. So I take Ayurveda as part of my daily supplements. We found that to be really something very different.
00:15:00
Speaker
And you know I think I keep telling my father at least take out five minutes and be my spokesman, right? He's like the epitome of health and like I don't want to jinx it by taking it to age but yeah at this age, right? Like people can't believe it, believe it when I tell him what it is, right? So I've seen how it can really you know in the long term benefit you and keep you healthy, right? And see you know Ayurveda actually is very simple, right? Ayurveda is just good food.
00:15:23
Speaker
Right. It's like, you know, Amla is the richest source of vitamin C in the world. Right. And there are a lot of ideas that you can actually measure in nutrition. Right. So the same way, like, you know, you eat like a lot of spinach, you get a lot of fiber, right. I will describe the like a, it's a board, which is pure, a hundred percent fiber. Right. So a lot of it is actually very simple. Right. And there's also now a lot of data on it.
00:15:46
Speaker
So the number one let's say digestion product in Europe is Ayurveda. The only FDA approved product globally for liver is Ayurveda. So there's a bunch of research happening now in Ayurveda, in the US, in Europe, in Canada, on things like Ashwagandha, turmeric and all of it has been very positive.
00:16:07
Speaker
Most large pharmaceutical companies now, right, from your Pfizer's have a, not Ayurvedic, but herbs division, where what they do is like, they look at herbs that have been used across the world, try to isolate the active ingredient. So, you know, there's a lot of work going on and Ayurveda that way is a very simple kind of thing to understand.
00:16:29
Speaker
That's why it's about good nutrition eating well every day. So we wanted to bring that daily health angle of Ayurveda. There's a saying in Ayurveda that in English roughly it's health is not the absence of illness, but it's the presence of vitality.
Digital Pivot and Expansion
00:16:46
Speaker
That when you wake up in the morning and you're like ready to go, your eyes open and you're fresh. And you're like energetic throughout the day. And those things are very, very key indicators of good health.
00:16:58
Speaker
And what we found, right, the second reason why we realized that and nutritious, nutrition based products are very key for lifestyle problem, right.
00:17:08
Speaker
But when I say lifestyle problem, what do I mean, right? And these have become very prevalent today. Digestion is a big one, everything starts from a shock. Skin, hair, hair fall, having blood sugar, raised blood sugar at a young age, right? But not diabetes, but diabetes is something where we don't, but nutrition become very difficult then, right? Then you need
00:17:30
Speaker
a lot of different things, but when you have like say a high blood sugar, then even a doctor will tell you nutrition is the key thing to solve, right? Let's say if you have hair fall, right? You go to a doctor, first thing they'll tell you is that hair is the part of the body which will deprioritize the most when you have nutrition, right? So more than applying something on your head, more important is good nutrition, right? So there's a lot of these problems which is solved by good nutrition. What we did as a step-part in the new business was that we wanted to solve the food part of it, right?
00:17:58
Speaker
So the idea was that, how do we kind of create this, how do we incorporate Ayurvedic wisdom and kind of give people better quality leadership, right? We were at the same time, very aware of number two and three also, right? Because number two and three are also very important, right? You can't, like one is still incomplete, right? So we already are today doing that and we're working a lot about creating an entire ecosystem, right? So we as a company don't see ourselves as a product company.
00:18:26
Speaker
We see ourselves as an Ayurvedic ecosystem where you get knowledge. Till today, we offer free consultation on our website with Ayurvedic employees. So you can go on our website, any problem, talk to them. They'll give you an entire detailed nutrition plan. 70% of the stuff they suggested, not from Atapiva. So I mention it, give the best possible thing. So if you have it, if you don't, give whatever's best.
00:18:54
Speaker
You know, we have a lot of content and we now created, you know, work together a huge team. We've actually tried to get a lot of people from Kyojo, which I believe is one of the best content creators for Ayurveda. And we are now creating a bunch of Ayurveda content around lifestyle, what not to eat is as important work to eat, right? So, definitely we sell products.
00:19:14
Speaker
But then the ambition... Tell me about the pivot phase, like from running stores to becoming a food product company. Like I said, the ambition was always to bring a genuine form of Ayurveda out. Like I said, there were two ways to do that. One was the doctor led better quality medicine. The second was the more sort of nutrition food lifestyle based.
00:19:40
Speaker
they both require doctors, to be honest, and they both require, it's already connected, but depends which route you go. So we decided that the
00:19:48
Speaker
physical route was in the way to solve this problem. The digital route was in the way to solve this problem, right? How do we kind of scale up, you know, advice? How do we create our content? How do we create products? How do we increase availability, right? And the way to actually do what our initial goal was, which is 5 million Indians live better through our ways up, right? It was going to be a much more difficult store by store by store, right? Probably we'll pay tea by the time we reach that goal, right?
00:20:14
Speaker
So, and you know, online had started to take off a little bit there. We had done a few experiments with both online as well as offline distributions. And we found that there was a lot of scope for growing the business from that, right? That's when the pivot started happening, right? Initially, you know... You cut down the stores or... That's what I'm coming to, right? Very difficult. The stores had invested money into them.
00:20:37
Speaker
We had reached break-even and profitability, right? It was a very difficult decision, right? Initially, we were like, we'll do both, right? Keep the stall and we'll do this also. But basically, you know, we were a small team.
00:20:49
Speaker
We had very little funding, right? So we couldn't go ahead and hire 50 people, right? We had raised another round at that time from, again, angels, right? So there was this guy who was called Madhu Kela, who was the ex-CIO of Reliance who invested some money, big food owners invested some money, right? There was a small sort of investment bank that invested some money, right? So we raised another about, I would say, $800,000 at the time.
00:21:17
Speaker
and we tried to kind of do the, do both, right? Run the stores and do this. But very quickly realized that boss, you don't have the bandwidth, right? They're two totally different businesses. We're not at a scale where we can do two things, right? So then finally, somewhere around, you know, mid 2017, end 2017, right? It took the decision that boss, you have to close the store. There's no other way around it.
00:21:41
Speaker
And then finally, around 2018, early, we finally ended up closing the stores. And we then had a much more focused point of view on growing the product, FMCG. So what was the digital distribution? Was it like through marketplaces that you started listing products? Initially, we were purely marketplaces and offline. So we started from day one and offline.
00:22:05
Speaker
So we started selling on in like large walkthrough stores, right? So, you know, in Bombay, like a Pateel or Krishna, like the large format stores, not modern trade. Initially, we didn't want to pay the listing fees on modern trade, honestly. So we went to like, what we call today standalone modern trade, right? So these are standalone walkthrough stores that you find in your neighborhood.
00:22:27
Speaker
10,000 of these in India, actually. And we would spend a lot of time creating content as well. But what he realized is that we would try to put a lot of content. For example, every juice bottle had a yoga pose, which was helpful for the problem that users tried to solve. You would put pamphlets. We would put a lot of A plus content on Amazon. Very quickly realized that we need our own platform. If you really want to estimate information, there's no other way.
00:22:53
Speaker
So then, you know, we kind of, that's when Capiva.in came in, right? Okay. And then now Capiva.in is slightly just overtaking Amazon as a largest kind of that. So yeah, that whole pivot happened. We raised that our first proper series. When did you launch Capiva.in? Which year? I would say 18 I guess. End 18, mid to end 18. And we started scaling it properly though, I would say 19 to be honest, right?
00:23:25
Speaker
learning on the go. It took me some time to figure it out, right? And we weren't really a fund that well funded at the time, right? So we want to nowadays I see startups and probably a good idea. They go out and they raise $10 million. And the full team will pay on day one, right? So it works well, right? But you know, we weren't we didn't have that. You still like boss, we have to build it. You know, I come from a traditional business as well. Right. So, you know, so
00:23:50
Speaker
We were trying to figure things out, so it took time. Now I would say one of the things I'm most proud of in Kapiva as a team. I think we've really built a solid team. We've really managed to get some fantastic talent from some of the best companies out there. And growth has also kind of been accordingly now. They've really come in and taken it to a different level.
00:24:09
Speaker
But back then, you were still just figuring stuff out on a daily basis. You were talking about your series A. Where did that happen? So we raised our series A in 2018, so it was in two branches, end 2018, early 2019. It was led by Fireside. At that time, the company had started to get some traction.
00:24:28
Speaker
And our angels also all talked up, right? So it was a combination of that. Fireside really, I would say I still am so appreciative of them. Like they really were a fantastic investor to have at that time, right? Like, you know, they have people like so there's one guy at Fireside who had a lot of experience online, right? Our board member Kanan, he had fantastic experience with offline distribution brand, right? He was CEO at Daubert for many years. So I understood the category very well, right?
00:24:57
Speaker
So really the perfect investor for us. I think I was super happy about that decision till today. So they came in and that's when we really started being able to grow a lot faster. We raised about a total of $2.5 million at that time.
00:25:12
Speaker
And that's when we really started to grow as a business,
Data-Driven Growth Strategy
00:25:15
Speaker
right? We started to hire better people, right? We started to... What kind of revenue were you at around that time? Like 18, end of 18, early 19? So March of 19, we would have been at roughly about a crore and a half, I would say. No, actually maybe a crore, probably a crore.
00:25:30
Speaker
And there's the three channels, one is Kapiva.in, second is Marketplace, third is the standalone modern trade. And what was the split between these three channels at that time? So actually offline was big at that time. Offline was about 50%, 50-60% and the balance was online, right?
00:25:47
Speaker
Actually, March 2019 is when online started to take off for us. Amazon started to grow. Our website started to grow very aggressively. And that's when we realized that today offline is 8% of our sales. And it's grown. It's not like it's not grown. It's grown year on month on month per month. Just like online has grown a lot faster.
00:26:10
Speaker
So just to give you a little idea of the journey, if you're a referee about let's say a crore, maybe about 90 lakhs in March of 2019. March of 2020, we're probably about two and a half ish, right? And then March of this year, we have probably around about
00:26:27
Speaker
five and a half, six. So we don't have one of those stories where we went from one to 500 crores in a year. I know there are a few. We took our time to grow. But we've grown like 250, 300% year on year. Today we're roughly about 100 crore business.
00:26:46
Speaker
Okay, like this year, you'll cross. Our current run rate is somewhere around 100 crores, and annual will also be somewhere around that, correct? So what are the secrets to that success? How did it grow so far? What are the things you did to make it grow? So we made a lot of mistakes. Let me not pretend like we did. A lot of things we got wrong in the beginning. I would say today, looking back, the two most important things
00:27:13
Speaker
Number one is that have a very strong data infrastructure and use data to make decisions. I think people always delay that. If I had more insights through data earlier, I would have been able to grow faster. Give me an example of what that means, like deciding what product to put on the homepage. No, but understanding how consumers are behaving, understanding consumer funnels, understanding what retention
00:27:36
Speaker
actually is what ltv actually is you know so i think stuff like that you know you need to have a very strong data and structure to get that live data right very easy to kind of take excel and put it together once in three months and try to make that decision but you know on a daily basis if you're looking at ltv versus aov right your decision will be very different right well just help me help me understand this stuff for someone who's not from this space what is ltv what is aov so ltv would be a long-term consumer value
00:28:07
Speaker
So, let's say if a consumer AOV would be average order value, so let's say today we are coming in and buying for 1000 bucks, right? So, my mind I'm looking at my consumer acquisition cost and I'm looking at what I'm making today, right? But the reality of it is that what's really important is how many times that consumer coming back and what is the actual lifetime value of the consumer, right? And then certain products for example will have very high AOV. We're like, oh, this is doing really well, let me push the product.
00:28:31
Speaker
But there are certain products where consumers are actually loving it and coming back to buy 20 times. So the LTV would be much higher. So that's a small example. And if I had the clear data, then you would put your money on long term bets, not on short term things, and you need data for that.
00:28:47
Speaker
The second thing is that focus on retention, right, paid acquisition is not sustainable, right? We invested a bunch of money initially on Google, Facebook, kind of acquire customers, right? But in reality, what really helped us grow, right, is giving the consumers the best possible experience. So they come back off, right? So it's not about, see, the most important thing is the product, actually in a health thing, right? Good health outcomes, right? If someone is buying a product for a specific problem, it should have a solution.
00:29:17
Speaker
Right. But also a lot of other things matter. Right. Delivery time. Right. Consumer customer support. Right. And honestly, people like Amazon have set the bar. Right. Yeah. Next day delivery. Next day delivery. Like if you have a complaint, they refund you immediately. So, you know, you have to benchmark yourself to Amazon. Right. Yeah. So a lot of people think, no, no, Amazon is there. But that's the competition. You have to accept it. Right. So building a fantastic customer service system.
00:29:45
Speaker
really replying to customer grievances very quickly, right? Having a very liberal cancellation policies, right? If somebody has a problem, cancel it out, right? Give them refunds quickly, you know, things like that. So spend a lot of time not only on having a fantastic product, but on the Numo delight, right? The Numo should have fantastic experience when they're buying from it. And that's when they come back. How did you build the data infrastructure? So you said that data infrastructure is super important. What does that mean? Like, does it mean hiring data scientists or does it mean
00:30:14
Speaker
investing in some software? Sure. So I would say we're still building a data infrastructure, honestly. It's a process that never stops, right? Whenever you think that you're good, you see something that's much better, right? So we're constantly in the process of improvement. But, you know, as a first step, what I did was that I spoke to like 10 people, right, who already done a fantastic job with this, right?
00:30:37
Speaker
are a series of investors who is Vertex. They have a lot of tech companies that they invested in. Fireside also has a bunch of companies that have skated a lot. Like, Mama has done a fantastic job. So they have also strong data back-end. Spooked a lot of founders. There's a lot of, I wouldn't say mentors, but advisors that I have, that I speak to. I feel that
00:31:01
Speaker
There's no need to reinvent the wheel every time. Definitely innovate. But if someone has already done something well, the least you can do is understand that in great detail. Got a lot of advice, got spoke to a lot of people, and kind of figured out what the right way forward is. Then we did a couple of hires. We are now hiring data people. We've hired a first data person now. But we had people who understood data, who worked with data, but they're not data scientists.
00:31:29
Speaker
I would say potentially, and the reason why I brought this up, I would say potentially we were late. Looking back, I should have probably hired people a little bit earlier, better late than ever. And we did hire people who understood it. And we did use outside to help. We use agencies, we use tech companies to help us build it out. But basically the thing is that if you don't build a website with that mindset on day one,
00:31:54
Speaker
It's very difficult to do it retrospectively, right? As a website and you haven't put it in place, then it becomes very complicated. So the most important thing is when you're building a website, keeping it in mind.
Pandemic Response and Adaptation
00:32:04
Speaker
And where did you do the series B? And how much was that? Sure. So series B was early this year, although late last year.
00:32:15
Speaker
So we finished on November last year. We raised about 10 million dollars. And what are you validating now? Our series B was somewhere around, so we raised about 10-12 million. We diluted about, let's say about 18-20% roughly. And then now we're like about
00:32:39
Speaker
70% bigger than what we were then or 70% bigger. So we don't really have a new valuation, but we haven't really gone to the market. So how did the lockdown impact you? Did you see offline falling? So initially it was a disaster. So when the lockdown was first happening, which was April of last year, I was just about to close the bridge round and then COVID happened.
00:33:04
Speaker
It was really stressful. And the first month was chaos. Everything was shut down. There were no factories, there was no Amazon, there was nothing. Even your supplies would have been disrupted. Exactly. But we really, really, we kind of saw the lockdown coming to some extent because it was happening globally. So we built up a lot of inventory. We actually made a full lockdown plan a month earlier and said that it was going to happen. So what do we do about it?
00:33:33
Speaker
We built up a lot of inventory. We got alternate suppliers for a lot of our key products. In case one shuts down, we can go to another. We stuffed Amazon with inventory. We said, we do FBA. We stuffed our distributors with inventory. So we really just kind of stuffed the channel. Gave a little bit of credit to do it, but we did it. That really helped us bounce back very quickly. So April was, of course, a disaster. We tanked, but we bounced back quite a bit in May.
00:34:04
Speaker
So, what is your customer acquisition strategy? Do you like rely on more of content as a way to get ranking on search engines or do you do paid acquisition or you know? Sure. So, Akshay, honestly, we spent very little on consumer acquisition until I would say like six months ago, right? So, to build, so we raised the series B, right? And that's when we started spending, right?
00:34:31
Speaker
As an organization, we spend very little money to get to where we are. We always try to be very efficient.
00:34:38
Speaker
non-etrospect, you know, maybe you could have been more aggressive, but for example, we're starting our first ATL campaign, which is our brand campaign this month. You've never done any brand marketing, right? We started on TV, so yeah, like YouTube ads and stuff like that, right? We started performance marketing at any scale for the first time early this year, right? Which is paid acquisition, right?
00:35:04
Speaker
So a lot of our early acquisition was honestly just over the mouth, right? We have a fantastic retention by a form of consumers, right? Our retention for products, some product like 40% plus. And I'm talking about like just on our website, right? You know, our average consumer, you're doing the Mac, our average consumer on Amazon, right?
00:35:23
Speaker
buys us five times in a year, right? So we have really good sort of repeats and a lot of the consumers who've gotten good results, right? Become your advocates, right? In healthcare, right? What we've noticed is that if you have something effective, something that works, right? People will tell 10 people about it and they'll recommend, right? And that's a very common way where people actually end up trying something.
00:35:46
Speaker
Where friends, family etc tell them, you know, try this, it really works. So a lot of our acquisition and growth actually came completely organically. Six months ago, we did start using spending on Facebook, Google. But again, it's not our key strategy. Like only a minority of our revenue comes from paid on our website. What we are growing now aggressively is content. Because people are hungry for content in healthcare.
00:36:16
Speaker
you know, and we want to go down a very sort of validated scientific road to doubt, right? Like, you know, have very high rigor in our content, we create, you know, have very clear sightings of sources, look at studies and try to create, you know, very solid, high quality content, which is will stand up to fit me anyway, globally. And we feel that we can really create a lot of content to be able to allow consumers to take the right decision or what's good for them, right?
00:36:44
Speaker
We also have a lot of sort of integrations to guide consumers to their journey through our website. So I mentioned that we have a doctor free product consultation, which we do almost 2,300 a day.
Vision for Ayurvedic Leadership
00:36:58
Speaker
On top of that, we also have something called a customized user journey we create. So today we do it through telesales, where you can talk to a specialist or a nutritionist that can help you guide you through your journey.
00:37:12
Speaker
But going forward, we're trying to make this more tech-based. Like through an app, you enter some information. We don't want to say much about it right now, so we're still working on it. But that's something we'll have in the next few months. So the idea is to use things like that to acquire consumers.
00:37:29
Speaker
which are long term, which actually grab value and talks about that in our advertising. I think paid acquisition through Google, Facebook can be strategic but can't be a long term sort of plan. That's how we feel it. But do you see yourself being mass market FMCG like Davar, which has
00:37:48
Speaker
like say even a toothpaste with our wedding benefits and you know so it's like mass market so do you see that path so you know we have a few filters right that we put before we launch any product service anything right
00:38:03
Speaker
I think the first filter is that, is it something that's really benefiting the consumer in a real way? That's the first filter our product needs to pass through and we have multiple ways of checking that including consumer trials and doing a lot of research and on that, see the beauty today is actually there's a lot of research globally done on Ayurveda.
00:38:24
Speaker
So if you want to find out about an ingredient, there's probably 50 clinical trials you can go through globally. So we spend a lot of time creating a fantastic product. If it passes through that filter, I think the second filter is that, is it at least something scalable to the point where a million people can use this? And very often what happens is that if you pass the first filter, price becomes the problem. If you really want to create a fantastic product,
00:38:52
Speaker
It becomes very difficult to do it for like 80 rupees. Because you are buying very rare herbs very often which are not even grown. You have to have a forest license to be able to pick those in a sustainable way once a year. It's complicated.
00:39:09
Speaker
You're not able to do it in huge scales, right? A lot of our stuff is like very small batch, right? For example, the Amla we use are something with a specific kind of Amla called Chota Amla from Pataabdha, right? Which is smaller, but have a much higher concentration.
00:39:25
Speaker
We use only something called tar aloe and we go from plant to plant in 4 hours because we leave it exposed, it is beginning very quickly. So there is a lot of sourcing and process stuff which is very difficult to scale to a very large extent.
00:39:45
Speaker
So we're never going to be able to be that mass market. We sell something called A2G, which is basically from Indian non-genetically modified cows. They make like five times less milk than a regular cow, than a chosen cow, or these globally covered cows, and they have much less fat.
00:40:02
Speaker
So the amount of gear is like eight times less, right? These things are not things that you can do at huge scale, right? So that's why I said that very clear thing. Our ambition is 5 million people that we want to give a better product to. I think one of the things we're constantly trying to think about is that how do we create
00:40:22
Speaker
something which is fantastic here affordable, right? Actually has a much wider impact, right? And currently that's one of the things by reasons why we are so passionate about stuff like content, right? Well, it helps everyone, right? You know, and a very big part of health, like I said, food is one part of it, right? Is your, you know, daily routine, is your overall exercise, what yoga you're doing, what not to eat, you know, stuff like that, right?
00:40:50
Speaker
At least, you know, that's something where we feel we can make on a very large scale, right? Product, you hit that ceiling, right? Where if you really want to create a fantastic product, it is going to cost money to build, right? Then that automatically kind of makes it more difficult to make it very, very massive. And do you, like, directly compete with Bedena also? How does that equation work? Very little, right? Very little. So we have maybe two, three products in common, right? But again, very different consumer, right?
00:41:20
Speaker
very different distribution channel, right? So we find like very little conflict at all, if any. And also, you know, Bednath is very much poor traditional Ayurveda, right? What do you see as the exit for investors, an acquisition or a listing or what? My dream is to list, honestly, right? I love this business. I really enjoy it. I'm really passionate specifically about the product part, right? So as we professionalize, you know, a lot of new people have come in, great talent has come in.
00:41:51
Speaker
10 times better than me. But one thing I'm really passionate about and really love is product, putting my black swag ears and making the best possible product out there. So, you know, I would like to think of this eventually as a listed business. Are you also doing content on video or is it only text?
00:42:07
Speaker
So you're going to see our first big flurry. We are doing content on video on YouTube mostly right now, right? It's not content. So we collaborate with people to create a lot of content, right? So our YouTube sort of content we've created has gotten, I think the marketing team was just telling me very happily the other day. I think like 30 million views or 40 million views or something. So we do a lot of content pro creation.
00:42:30
Speaker
So this would be with like Ayurvedic doctors and experts who? Ayurvedic doctors, you know, health experts. So we did a lot of work right now with Pooja Makija, who's a very famous nutritionist, you know. Right, right.
00:42:43
Speaker
We also now for the first time actually creating our in-house content, right? So, content videos on, you know, different herbs, benefits, lifestyle, sleep. So, that's something we're investing a lot. We'll be seeing a lot more of that over the next few months as well. And do you plan to launch a mobile app also? It's something we're thinking about.
Leadership and Future Endeavors
00:43:04
Speaker
We haven't really started anything towards it yet, to be honest, but it's on the couch there. I think the first... See, it's a...
00:43:10
Speaker
My real belief is that you really need to be very focused on what you do, and what you need to do is you need to get it right. So right now, there's a lot of different things we're doing. We're creating an entire content infrastructure in the organization. We're also doing a lot of stuff. We have a new website launching actually next three days. We've already started the beta. So if you go to cover, 10% of people will already start seeing the new website.
00:43:38
Speaker
There's a lot going on. We want to get this right. You know, opening too many things together is never a good idea. Definitely something on the cards, but still a little while ago. And how it worked out between you and your co-founder, like what do you look after?
00:43:52
Speaker
So, I primarily look after product, D2C, a bunch of the strategy work, fundraising and things like that. And then we both kind of look at finance sector together. Shrey looks at marketplaces, he looks at full operations. He also does a bunch of, he's also involved in finance and as well as offline. So, honestly,
00:44:19
Speaker
What I'm telling you right now is more kind of the structure maybe three months ago. But kind of now as the team has kind of more senior people have come in, you know, there's been more integration there and then both of us are spending more time doing everything. Right. So I think, you know, now the idea is to manage the overall vision, you know, the one thing I still like to spend a lot of time on is product. Right.
00:44:38
Speaker
But overall, we've gotten a very good head of revenue, a very good kind of guy. So we hired this guy recently who was the number two guy in Uniqlo to manage marketing as well as operations. We hired a very senior guy who was ex-director of growth at Dintra, then director of growth at Hotstar to look at revenue as a whole. So honestly, these guys are fantastic and they are taking a lot of the lead in those kind of things.
00:45:19
Speaker
We hope this conversation inspires you to go natural and introduce more Ayurveda in your life.
00:45:26
Speaker
Check out the entire range of Ayurvedic products from Capiva on Amazon or at capiva.in.