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How to build a profitable bootstrapped D2C | Arush Chopra @ Just Herbs
171 Plays1 month ago
It is rare for D2C startups to be bootstrapped because they need to burn cash to acquire customers initially. But the Just Herbs story is proof that there are clever growth hacks that can help you grow your D2C brand while remaining bootstrapped.
Arush Chopra was an aspiring actor who stumbled into a role in private equity which led to the start of his journey in the world of startups. He started Just Herbs with his wife and mother in 2014 out of his family home in Chandigarh. Today, Just Herbs outsells brands like Maybelline and Lakme in the lipsticks category and counts Marico as its primary backer.
This conversation is a gem for D2C founders and Arush shares some amazing insights around product channel fit, co-building with customers and running a profitable D2C startup.
Stay tuned for tons of insights and subscribe to the founder thesis podcast on any audio streaming app
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Transcript
Introduction and Background
00:00:00
Speaker
Hi, I am Arush Chopra, the CEO and co-founder at Just Herbs.
00:00:18
Speaker
It is rare for D2C startups to be bootstrapped because they need to burn cash to acquire customers initially. But the Just Herbs story is proof that there are clever growth hacks that can help you grow your D2C brand while remaining bootstrapped. Aarush Chopra was an aspiring actor who stumbled into a role in private equity which led to the start of his journey in the world of startups.
Origin of Just Herbs
00:00:40
Speaker
He started Just Herbs with his wife and mother in 2014 out of his family home in Chandigarh.
00:00:46
Speaker
Today, JustHerbs outsells brands like Maybelline and LacMay in the lipsticks category and counts Mariko as its primary backer. This conversation is a gem for D2C founders and Arush shares some amazing insights around product channel fit, core building with customers and running a profitable D2C startup. Stay tuned for tons of insights and subscribe to the Founder Thesis Podcast on any audio streaming app. Arush, what is JustHerbs?
Just Herbs' Market Position and Sales
00:01:15
Speaker
So we are basically a new age Ayurvedic beauty brand, right? A digital native. um We are now ah at a scale of 100 crores plus net sales. GMV will be much, much higher. On a cross basis, we deliver about 135 crores.
00:01:33
Speaker
um and atlantic take what What is this gross 135 crores, net 100 crores? What is the difference here? So the net number yeah so if you if you add GST, then it's 135. I like to clarify always because we hear all sorts of numbers in newspapers. So yeah so i've just I just think it's good discipline to qualify what you say. so right Right. And what is GMV? And GMV is the MRV value of what you sell. right so Without discounting. ah So it's very hard sometimes to figure out when you see those YouTube thumbnails and you know and you read newspaper headlines, it's very hard to figure out what is it that they're really talking about. So I thought I'd break it down for you. So on a pure net ne basis, it's very it's very close to 100 is what we delivered already. ah we we are The will be much higher now.
00:02:27
Speaker
But yeah, that's so that's a little bit of an idea. 100 was last year's top line. hanji last year's top line.
Product Development and Market Trends
00:02:37
Speaker
So now that's where we are at today. We are a subsidiary of Mariko which bought a controlling stake in the company about three years ago. um We are based out of Chandigarh in the north of India and always been here. So built this ah from zero I would say from here.
00:02:58
Speaker
2024 is my 10th year of doing this. So I've been doing givals for a time amazing doing this for a decade now.
00:03:07
Speaker
When you say you're in the beauty category, can you break that down? Because this beauty is a big over, like, I mean, even Baba Earth would I mean could be in the beauty category. So what what what is what was is included in this category and which ah space do you offer? Sure, sure, sure, absolutely.
00:03:30
Speaker
So I'll tell you, I'll also start from the present when I explain that to you. So today, know ah today we are slightly very uniquely positioned in that um in the in the beauty space, there's the you know the scientific products, there is the so-called natural herbal products, and there is organic, and then there is Ayurvedic, just to explain it very simply. So we fall into that Ayurvedic bracket. okay Now, in terms of the categories that we play into, we started off as a skincare and a hair care company. right and But today, ah a large chunk of our revenues and lot ah what really consumers, you know the most loved products that we have are actually from our makeup range, right which is your color cosmetics.
00:04:16
Speaker
which is a very fresh proposition for consumers where you know um I would say that natural makeup in itself or Ayurvedic makeup in itself has been very nascent. It is probably the fastest growing you know ah pocket ah within the beauty, within the Ayurvedic space and it so happens that we've been beneficiaries of that growth and we've we've been seeing that in our numbers, we've been seeing in how consumers are responding to it. right So but that's where we sit.
00:04:44
Speaker
So it's ah it's a brand with an Ayurvedic promise. It's very young. It's not, you know, my favorite way to describe it is that it's not haldi wala doo, it's turmeric latte, right? So it's, it's very powerful to the young sort of Gen Z millennial consumers. And we've Throughout our 10-year journey, we've also consciously moved towards that direction through a rebrand, through kind of tweaking communication, product mix, and you know we can get into all that. But as of today, this is where we are at.
00:05:16
Speaker
We're sort of the you know pioneers, I would say, or category creators in the natural makeup space. A couple of other brands did attempt that before us, but ah we saw where they lacked and we kind of you know improved upon it. But we've been able to, with God's grace, crack the natural makeup proposition, and which is what what sort of ah consumers know us for today.
00:05:39
Speaker
Okay, interesting. um How big is this cosmetics space? but You're in the cosmetics space, right? like broadly yeah you could What percentage of your revenue is cosmetics? As of today, I think I would think about 60 or 65 to 70 percent, between 60 to 70 percent. yeah And the rest is like moisturizer. The rest is so post care person care, like you know skin care, hair care, doctor's care, shampoo, cleans, etcetera. So, lipsticks, kajal, etcetera are 60, 70 percent and the rest is the other stuff. so okay okay How big is the Cosmetics market?
00:06:22
Speaker
um you know There are different numbers, of different places, but just to give you a sense, it's smaller than skincare. So skincare is the biggest and there is a huge delta between how big the makeup market is and versus the skincare market.
00:06:35
Speaker
But makeup is growing very, very fast, right? And what is the delta? Like, state care would be 3x of makeup. Easy, yeah. 10x. From the top of my head, from what are the the stats that are ready, that was the type of a delta. And you know logically, although although I never looked at that when I thought of going into makeup, I mean, our reasons to for going into
Arush's Personal Journey
00:06:56
Speaker
it was very simple. Yeah, consumers were asking for it, right? That's it. through we never um im I'm not that guy who looks at time and does things, right? i mean i'm not I'm not so intelligent in that sense. I just go with a little bit of gut, a little bit of emotion and just hear what people want and just give them that and see what happens, right? So we did that. ah So the delta is huge, but what I read now is that it's growing very fast. And um when I say it's growing fast, my thing is not what is published in papers and all, I see it. I see it every day.
00:07:28
Speaker
Anecdotally, I see it. When we started making make-up, people said, you know, this was lacking. If I'm putting a foundation on my face, which sits on it for eight, nine hours, it better have the credentials of my skincare products. You know, if if I demand clean skincare, why can't I have that in make-up? And why can't you guys do this? We also thought that, you know, we are not a cosmetic company here because, you know, the whole trade is organized like that. Like you go to They sell products in the offline space. They have they say, skin get gama margin a la game make up ke like you go to nios it is a separate team for makeup separate the whole trade is constructed that way. But the consumer doesn't think about it that way. The consumer is like, you I'm using your cream. I'm using your shampoo. I also use a kachil. Why don't you make that? How nice it would be if you'd made a lipstick.
00:08:17
Speaker
Yeah, it makes sense. But we never thought of ourselves as a makeup company. So I think somewhere in 2017-18 time we said we'll take up this challenge. And I can get into those details because that's my favorite topic because that is something that we saw something happening. We took a bet on it and it's kind of paid off. So yeah.
00:08:45
Speaker
Interesting. What all comes in makeup? You said kajal and lipstick. ah So look, I mean, yeah, so what all comes in, and so think about your face, right? So right from your eyes, for that you have a kajal, you have eyeliner, then as as the base of your makeup, you have a primer on top of it, you put foundation, right? ah This is a very basic thing that I'm not telling you. Then there's lipsticks, right? Lipsticks, various varieties in bullet form and liquid form.
00:09:12
Speaker
right So that's essentially ah your basic makeup. ah Within this, I think lips and eyes are the biggest categories, right? So any but any makeup company you pick, I think lips are the bread and butter. And what we started now seeing is what tact tells us, which I think is our value, is that Indians still consume very little makeup compared to other markets so that the the room for growth is really, really high.
00:09:36
Speaker
you know Yeah, yeah, true, true, true, true. So between these like lips and eyes, which one is bigger for you? um Lips is the biggest, right? So we have a product which actually went viral. You know, I think most consumers also associate
Early Challenges and Growth Strategies
00:09:54
Speaker
are us with that product. It's a small little pack. It's a very cute little pack of 16 lipsticks in it. And price point is really, really economical. yeah And how much is it?
00:10:06
Speaker
for What is the price? it's The it's a the m MRP is $5.45. It comes at a good offer most of the time on various platforms and now I'm told that we actually sell more units of lipstick on Blinkit than even Maybelline and you know some of the other top brands. I was just doing a little math and I think in a year we sell close to about six to seven crore pieces of lipsticks right alone. right so um yeah So it's been phenomenal for us and ah the beauty of that product was just this that you know link every woman has about 18 to 20 lipsticks to match with all those dresses. But if you look at a lipstick, it's never fully utilized. okay So either it gets melted because you leave it in your car, somebody steals it from you, you lose it or it breaks, it's never fully utilized.
00:11:00
Speaker
So which they imagine the case, it has 4.2 grams of sort of plastic and the product inside is very little. That's true for most makeup by the way. The real cost that you're actually paying is for the packaging and not for what's inside.
00:11:15
Speaker
yeah yeah So what we thought like we what we thought was that we'll eliminate all that plastic. So it is sustainable also, but that's just by the way, I mean, I'm not i'm not asking anybody to buy me because I'm sustainable, because people don't believe that way. You buy me because I'm delivering you great value and those are really tiny little crayons type lipsticks. And, you know, there are 16 of them there. So you get a mini library of shades for yourself.
00:11:40
Speaker
um You don't mind losing them also because there's 16 of them. There's plenty of reasons. I mean, why shouldn't anybody not buy it? right So that product actually went
Consumer Engagement and Marketing Innovations
00:11:51
Speaker
viral and it has helped us recruit consumers at a very, very ah economical cost. It has brought CAC down. it has you know That has been a game changer for us. amazing Amazing. This is like the gateway drug for Gen Z to get into makeup.
00:12:07
Speaker
Yeah, yeah, it is definitely. And you know the the insights were also very interesting. like you know So Megha was my wife and my co-founder. Her elder sister lives in Delhi. And being a startup, we always used to use friends and relatives places to stay when we travel. So I used to spend a lot of time there.
00:12:25
Speaker
And she has two daughters who are like you know in their early 20s now, but they were sort of in their teens, late teens then. And I have this bad habit of you know swooping around in people's bathrooms, checking what they use, and all that. I have this problem. So I would spare them also. And I would always see that they had either sort of some Korean product line, or you know there's a brand called a Benefit from the US, which young girls really like. you know They have a lip tint and all. So again, I want to capture this cohort here. What can I do for them? right So we were working and one day I saw our products lying there. I said, dude, I'm flattered. How come you're using my product today? He said, yeah, obviously, because I don't want to spoil my skin. And Mom has said that you should use this. That kind of set off a light bulb. I had never imagined a use case around makeup that this is better for my skin, better for you makeup. So then we said, let's double down on this, man. Let's forget everything else. Let's just double down on this.
00:13:25
Speaker
And um so the consumers were telling us, I hadn't totally seen it. and And then we follow a very interesting process for product creation called crowdsourcing, which we can you know touch upon later, as you wish. But but I'd love to you know kind of tell you more about that as well, because we created some five, seven products through that process, and um out of which, I think,
00:13:49
Speaker
apart from one, everything is a best seller. And that one product also couldn't do well because I think he priced it too high. So now we've kind of brought it in a smaller size and I'm pretty confident even that will do well now. So yeah.
00:14:01
Speaker
What is this crowdsourcing method of new product development? and so isma a hoki um and This has roots in how we started, right? So when we started, we were bootstrapped, sort of these 10 years, no? Give me like a quick overview of your pre-starting journey, like what up up to the point when you decided to start. Then we'll bring you here that that because everything is related, right? so Yeah, let's hear from you. So I used to live in Singapore. I was working in a investment house there. Megha was also in Singapore. Like a private equity fund or something? Yeah, it used to be. We used to invest in farming assets across the globe, right? Yeah, the thesis being that there's going to be more people than there is food on this planet. So assets which can produce food will go up in value, right? Very simple. Like in India, foreigners can't buy farmland. So we would invest in tea states and Darjeeling, for example, right?
00:14:57
Speaker
ah good And that investment would go like five, six, six, just because Darjeeling gets a GI certification suddenly. and know So those very interesting things happening in the world and churning out of Singapore, there is no farming being done, but investing across the globe, including a defunct sort of a rice project in Africa to like an apple orchard in Australia, some coffee plantation around Mount Kilimanjaro.
00:15:21
Speaker
and you know so Amazing stuff. and I was um not ah i've never studied finance, I don't have an MBA. right How did you become an investor without studying finance? oh god ah yeah Good story. so Whilst in Singapore, I used to play squash with a Scottish guy. and I asked him, what do you do? He said, I work in private equity, we do farms. He said, that sounds interesting, tell me more.
00:15:45
Speaker
told me what he does. And then I said, but what is your background? He's like, I used to have a Bollywood group, which I used to take around the world. I was like, what? What is this? It's a chance to search people, right? So oh in 2008, when the financial crisis had happened,
00:16:02
Speaker
One of the gentlemen called Ed Peter, who was heading something called the complex assets group, walked out to create his own firm, where about 20 odd people, all Deutsche, right? And I think this this boy that I'm talking about was probably the only outsider they had then hired.
00:16:18
Speaker
So he said, come over for beers, meet the team and all. So we met them and this was not a single Indian, you know, this is a mixed bag of people from, you know, Ireland, Australia, different countries. and And during the interview, I think I still remember I had asked me, so tell me something which is not on your CV, but which is very interesting about you.
00:16:40
Speaker
I wasn't prepared for an answer, so whatever came out was actually, you know, ah the real to truth. So I told him, I said, look, I mean, if there was really some money to be made, I would have been an actor. I love doing theater. I've performed at the NCBA in Bombay. I used to love when people would pay 500 rupees and come watch me perform. I would have done that. He's like, we'll hire you because then you're not afraid of picking up the phone and talking to people, right? That was the interview and you were hired. Whilst I was leaving, he asked me,
00:17:07
Speaker
By the way, do you know things like financial modeling and all that thing? No. He said, they don't tell anyone and you better learn it fast. right So once I got the job, I enrolled myself in the CFA program. So did my CFA level one. um By the time i have what I wanted to clear level two, I thought i'd had I had the knowledge to kind of engage with clients, et cetera.
00:17:30
Speaker
And by that time, I'd already made up my mind to you know towards entrepreneurship. And I think the time ah that I spent there working also shaped it a lot because what I was seeing was that ah you know conscious consumption is becoming a common theme across the world. I'm talking more than 10 years ago.
00:17:48
Speaker
Secondly, we were always pitching markets like you know Vietnam, Indonesia, et cetera, saying that look at these island nations. They're growing super fast, you know big demographic, different in young populations, high disposable income. And I'm like, wait a minute. This is true of India. And if you pick two or three of these islands and there are more people in, let's say, Uttar Pradesh in India. right So yeah what what exactly are we doing here? like you know And then you know then I met some family friend who had spent a lot of time working in FMCG and he said, you know, you kids are you know at your age, you should be in an emerging economy. This place has plateaued, what are you doing here? So but we took the plunge. um did It took me a year to sort of marinate it. But then finally we took the plunge, takta bags came out now.
00:18:31
Speaker
Living in the orderly life of Singapore, we were a little spoiled. I've studied in Bombay, I went to say we were there, so I understand what living in the metros, etc. is like. Megha is from Delhi. But we thought they are a lot of Singapore. At least we are good city like
Strategic Partnerships and Funding
00:18:50
Speaker
Chandigarh, right? That was one. the second is that Now that we are coming back and we want to do something,
00:18:55
Speaker
What do we do, right. And my mom, she is a biochemist who got six gold medals while she was studying here at Punjab University, but didn't do it much with it throughout her sort of, but ah you know,
00:19:10
Speaker
family life. Eventually, when my sister and I had grown up, she decided to kind of do this as a, you know, passion project. ah So of course, you know, the three, four, five, six, seven formulations were approved. You know, ah the the the brand name was in place because when I was in college, she had once called me that I want to register a brand name. What should I call it? And I hurriedly asked her, I said, ah what do we do here? Is that like we take herbs, plants, flowers, we mix them. this and That's what basically just herbs, right? Like, yeah, you like the just herbs.
00:19:40
Speaker
that's been minimum vietnam was up top She was renting it out of her home. No, no. So we had an industrial unit. My dad back in the day had, you know, taken an industrial plot ah where he thought he would do something, but we weren't doing much with it. So, you know, you have to build 25%. Otherwise the government takes it away, etc.
00:20:01
Speaker
so So that 25% that had been built, she was working from there, like a shed, you know, like it was like a tin roof, etc. So very rustic, the best of it was all kacha and she was growing plants there, which she would then make some extracts out of and all that. So I really liked that I saw And i up this was um like skincare and hair care products. such Yeah, skincare, hair care, even dry powders, e etc. there was We still have that mill where, you know, if she would she started doing this and all like a small chucky where, you know, you would be so everything and all. So when I saw that, I said, look, I mean, let's stay close to the source of the products. It only made it just felt the right like the right thing to do.
00:20:41
Speaker
um And we didn't know that this is going to become a business. I don't know why we were doing this. We were just too moved by the whole idea of creating something. you know um And we sought we just dived right in. yeah We didn't think much. And I'm talking 2014. I think two thousand November 2013 is when we returned.
00:21:02
Speaker
So that's why I would call, you know, we started in our nest in 2014. Five odd years, we, till 2018, around four and a half to five years, we were a bootstrapped venture. We were not even a private limited company. We were a partnership firm, you know. A bootstrapped venture, never cared about, you know, anything. ah the The product, of the business was doing well. It was putting food on the table.
00:21:28
Speaker
the first god yeah what did you ah like 2014 when you got involved with what your mother was doing, what did you add to it? What was your contribution to it? So all we had was a few basic products which were not very finished. you but They were too raw. There was no proper packaging. The supply chains to add new products weren't there. ah there was How was it being sold?
00:21:56
Speaker
and How was it being sold? It was, ah you know, through some fairs, some exhibitions, you know, how typically people do, friends and family, a couple of you just, you know, put a listing on India Mart, you get that one odd call, you know, in in a month, sometimes. There was no market. It was like a little bit more than
Navigating Sales Channels
00:22:16
Speaker
a hobby, I would call it, right? There was nothing there. So we built everything when we came, you know, which we then again rebuild, rebuild, but that's how we did it. so Bootstrapped here, so 4 lakh rupees, I think, bank limit I got from SBI. There's something called the CGT MSC scheme where you don't have to put any collateral. And I could sense that a lot of people were thinking we are absolutely nuts, right? Because they're like, who leaves Singapore and comes here, right? Why do you have to? I live in Chandigarh where there's an immigration center in every 10 steps away. So the whole place has a atmosphere of being obsessed with going to Canada, UK, Australia.
00:22:55
Speaker
yeah yeah like you know There is still time, you know Australia is quite lenient these days and you have good education, you've studied in England and all that, you get it. I'm like, are you guys crazy? like you know We've come here to start something. you know Instead of encouraging, i'm I'm sure they meant well, you know but it was really odd listening to all that. So five years, we had to just keep our heads down and work.
00:23:18
Speaker
So that four four or lakhs from SBI and the rest of it was my credit card, my personal savings. Megha would really get angry with me that you're blowing up your savings on Facebook ads and you know, who does that? I'm like, you know, there is a like I can't sit, I can't not do it, right? if If things are not moving, then we'll have to do something because I was pretty sure that which not which we will do it, we will crack it somehow.
00:23:40
Speaker
and how did you What was your go-to-market strategy in 2014? So this was a time where D2C was not a word, okay? yeah just give You have your sense that brands like let's say a Kama, Forest or other Ayurvedic brands who would who existed back then.
00:23:57
Speaker
They did not even have a shopping cart on their website. Biotech did not have a shopping cart on its website. It was a catalogue. Yeah, it was all offline. If you tell somebody that I'm thinking of selling online, the answer would be that online is for discounted stuff, for duplicate items. Today, things have changed so much. This was a scenario.
00:24:19
Speaker
And the advice we were getting is that why don't you distribute through shops, set up your distribution channel, chemist shops, Kiranas, et cetera. Why don't you start your own stores? Why don't you do hotel amenities, et cetera? We were like, sure, but we don't have any money, right? I mean, putting stuff in offline means two things. One is your fingers are going to get burnt because you need a big team who's going to take you for the ride. And you never want to get your money back because nobody likes to pay.
00:24:47
Speaker
right And we don't have money because we can't take that credit risk, right? The second was, ah you know, hotels, e etc. Again, very, very thin margins, very hard to crack. And again, long payment period.
00:25:00
Speaker
so Long payment cycles. Long payment cycles as well. We said, approach hasa man we get paid fast on time man because we don't have money. So online was a good this thing. So I hired a developer in Nepal you know because because none of the Indian you know tech companies prefer Indian clients right because they all want to work with the US, at least where I was. So I found him on Upwork you know and I said, let's build a website on WordPress, some really scrappy website we built.
00:25:29
Speaker
And I got you know pay you pay you but which what is Pay You today used to be something called Pay You Pessa or something. They had also just started. It was a new payment gateway. And before that, you know, CC Avenue used to put you in line to get a payment gateway. And like it was really like a horrid experience. So I was like, thank God something new has been launched.
00:25:47
Speaker
And you're also just giving you a sense of those days, right? And so pay you didn't even have a mobile-friendly interface at that point. I still have an email from that time telling them you know what you should make a mobile-friendly interface. sounds like a That's how we started. yeah We made an ecosystem ah ah for you know logistics. There was a guy who started ah took an agency for Track One careers, who's whos still a vendor, all these years. We told them you'll have to do COD.
00:26:15
Speaker
And he said, woke your head so I told him, customer will pay you cash and you have to bring it back. So there was some 10,000 rupees we had to collect from him. And he said, sorry, sir. what like in the rest estate makecur you know to mypo yeah so So we realized now we've taken the sort of, we've jumped out of the plane and we are basically building the parachute along the way and completely bootstrapped, profitable, putting food on the table.
00:26:42
Speaker
The first car I ever bought after coming back, which I recently sold three, four days ago, was bought with, you know, with those winnings in the beginning. And our customers were funding us, yeah, for five audio, right? Amazing. Then what we realized is that we are getting some scheme. How did, I mean, buying
Team Building and Company Culture
00:27:03
Speaker
beauty products online from directly like the brand store, instead of going through a Flipkart, that would have been really hard to convince people to do that, right? but I mean, you trust the Flipkart, so you might still take a better buy from a Flipkart. You know, ah we, I just didn't like the idea. So first of all, when we started Flipkart wasn't into beauty, the beauty came much later.
00:27:29
Speaker
Naika we've been working with from day one when Naika was just a PowerPoint presentation. and i both But you know I always thought that my value addition only is like, this is what I enjoy doing also. I'm naturally good at, which is basically to tell a story.
00:27:47
Speaker
and right Because the first story I told my dad when he said, how are we going to compete? We don't even have a proper factory. He's an engineer. He thinks in terms of machinery and plant and all that. right For him, that is scale. So I said, we don't need a machinery because somebody buys a product. They don't want to know where it was made and how it was made. Of course, that plays a part. But it is also about you tell the whole ethos behind the brand. right So how do we do that? you know We just record a video of a product being made.
00:28:17
Speaker
these ah This is Neem has just arrived. We are making it to make a video. We posted on Facebook. And that's how it started happening, right? So people could relate to it. And now it's become like a so-called
Philosophy and Vision for Future
00:28:29
Speaker
playbook for many brands um who try to be sort of authentic. You know, it's like it's staged authenticity. you In our case, there was no place to sit. So we are sitting one sitting on gunny sacks and you know, making videos.
00:28:43
Speaker
yes the people who are working with them sometimes talk about them, the guy who's backing the orders, we talk about him. ah So I think we were we were quite ahead of times in being authentic because we didn't have, we didn't know better. So so that was that sort of that was quite different and refreshing because normally would on a cosmetics page, you would see a well polished ad of a model and all that, never did that.
00:29:10
Speaker
We hadn't paid an influencer ever in our lives in about six years of our existence. It's only when I got some funding and you know we wanted to scale harder is when even then we were very, very sort of tight with you know spending on marketing and burning cash, et cetera. Amazing. amazing and ah Your revenue, what was the split from Nika versus own website for those first five years? So, you know, interestingly, and I'm told this is an anomaly, which I realized I was told much later is that till about until three to four years ago, 85% of the revenue used to be our own website.
00:29:48
Speaker
Even now amazing now, because other channels have grown, ah the mix has come to about 40-45%. But it still is a major driver for us and always has been. ah you have had when The website I developed with the Nepal developer was so bad.
00:30:06
Speaker
that it would go down, you know, that the website would freeze. And yet, you know, our old customers would probably remember, ah they would call me and say, you know, can you just quickly send me my shampoo? Look, I don't have any time to, you know, use your website. It's it's horrible. Can you just use products? Or can you send it to me? just Just take my order on the phone and just do it faster. So I was like, okay.
00:30:31
Speaker
At least we are doing something right. And through that, room we used to get a chance to connect with consumers. okay and And we we were but but you know spending money on Facebook ads. ah Traffic would come, a little bit would convert. And I was seeing, ah you know so about for every 100 people, two or three people would buy. And I said, that's not good here. Today, I'm told that's the standard conversion rate in e-commerce.
00:30:56
Speaker
But to my sort of beginner's mind, it was like, that's a horrible percentage. We need to do better. There's a lot of money getting wasted. And how do we do that? So like you said, getting people onto your website, it hard. We said, let's not bring them here. Let's go to where they are. And where were they? WhatsApp was taking off. Everybody was on WhatsApp. We said, let's go to WhatsApp and talk to them there. Do some what we now call consultative selling. We just accidentally started doing that.
00:31:23
Speaker
I put my own WhatsApp number in the Facebook ad and I said, if you want to know more, consult about your products, you know, form a regime for your skin, then you can WhatsApp us. And then I sat with mom and I said, look, ah let's do it. like Once we did it with a few customers, like I would send those questions to mom and then she would make the regime and also tell what to eat, what to do, you know what lifestyles to eat. Then it became like a playbook of sorts where we knew that the different use cases, this is what you suggest, and then we made a whole system around it, like a regime where first is the face wash and these are the three products. So we kind of made an algorithm within our product universe, which we would then recommend to people. So two things happened. One, the average order values went through the roof. So we were we would do about 50, 60,000 in sales a day.
00:32:12
Speaker
I just threw WhatsApp. right and This was a time, mind you, WhatsApp had not even released its API. right Even today, I have two numbers on my phone because that one number got banned in the middle because he weren't allowed to advertise it.
00:32:26
Speaker
ah um so that's That's the first thing that happened. The eves went up the second thing was that it became one-on-one with consumers. So we really know what are these people from different parts of India who are actually ordering a product, how do they talk? ah Do they use the word glow? Do they use the word fairness? Do they call it a shower gel? Do they call it a body wash? And then that would inform our SEO efforts. Right. I like what other, what is the search term then? You know, it gives you a good insight. Then what took a step further. Sorry.
00:32:57
Speaker
No, I said yes. Yeah, so then we took it a step further. We said, you know, um let's create a community around it. I mean, these buzzwords didn't exist. ah This was just us thinking logically, right? First principle thinking, we said, let's let's sort of build a club or something of people because you know, getting repeat people people to buy repeatedly from you will always be easier than getting new ones, right? So ah Facebook groups were popular at the time. And so there is a group called Just Herbs Insider, which still exists with about three and a half to, I think between three to 5,000 women are part of it. These are people who shop at least two times on our website. Then we created an email flow, email automation that, you know, you're, you're most welcome to join this group. It's an exclusive group. Even before joining, you're asked three, four questions that a moderator approves that it's heavily moderated.
00:33:43
Speaker
And in this group, you'll have access to the founders. You can speak to them. You can talk to other users, exchange you know tips about products and all. you know I got this face wash, but for me, it's not working. The other one would say, no, no, you should do this. future This face pack didn't work for me. You should add a little bit of cream to it. ah we are not People are talking this chapter, so there's a whole sort of a cult being created. And in that cult, people started telling us that please make makeup. And that's how the process of crowdsourcing was born.
00:34:13
Speaker
So the first time we ever did it, we in that group, somebody said, look, I'm an office worker. And you know there first of all, there is very little time to get ready. And secondly, when I use makeup, I have to use makeup. And when I use makeup, it kicks up on my face. you know I see those creases on my face. It looks very artificial. Can you create something very lightweight, which is very breathable? And because you're just her, you'll be able to do it as a good career. career That's when we thought, you know, we are not a makeup company. How are we going to do this? But then we took it as a challenge. And, you know, my mother is the type of person you want to challenge her for something. Then, you know, she really gets started. So they said, let's do it. Right. So we created, you know, a prototype and we created like you made small little jars, five, six, small little jars, put them in a jar, ABCD, put them into envelopes and shipped it out to like, you know, some at that time, about three, four hundred people were signed up on a phone. Right.
00:35:08
Speaker
And that's how we chanced upon crowdsourcing and how it is done. right So first time we did, consumers loved it. that This was not a time when you know people could sort of you know change their clothes on Instagram. you know because It was not a thing. right so but so So when somebody talked about a product without getting paid and all that, it was a big thing. right so people But people talked about this on their social media. Look, kind what does I still have those videos. it's it's like a It was an amazing moment, people saying that this has never happened, that the beauty company is asking us and making things with us.
00:35:40
Speaker
And it is a very top-down industry, right? I mean, the whole idea is you put money behind a trend created. You say ah Moroccan oil is good for you and you know you don't really need it. You have coconut oil. Nobody asks consumers what what and let's make a product together. So we did that and two things happened. Consumers got very invested in that product. So obviously it gets a push and your chance of failure also reduces because you have a very good sense.
00:36:04
Speaker
And if there is some deficiency in the product, you can connect it before the launch. So we did that. You would send them like five variants of one product and it would help you understand which variant is the most liked one. Absolutely. And you would probably get feedback also on consistency. Yeah, a lot of averages comes into sort of force and usually the whole thing deviates to the right product.
00:36:32
Speaker
And these are this is a completely randomized sample of women across the country, different age groups. different you know It's a fairly ah you know sound way of sort of at least removing a lot of uncertainty from a product launch. right so We said let's, so the first time we did it, apart from us, we didn't really make any noise about it. Nobody even noticed apart from the consumers who were taking part. The second time we did it, I think there was one some journalist who also happened to be a Just Herbs insider and she wrote about what is it. What was the category? Second time? like the first time was for a had so we wantation or something yeah So we were taking baby steps towards makeup. So we thought let's launch a makeup remover, which is Ayurvedic, right? so
00:37:11
Speaker
a micellar water. So, a micellar water is a French formulation, right, which which basically means that you suspend oil in water, which forms micelles, right, and which has a cleaning effect on your face. So, we said, can we do it? Can the water be, you know, ah the water of tulsi and trifla? And can the, you know, can the oil droplets be some vegetable oil? Can we do that? And we called it Saptajal, which is basically seven seven plant waters. And that's the product I'm talking about, which was crowd sourced, but it's not a best seller, but it's a beautiful product. People swear by it.
00:37:41
Speaker
And so we said removing your makeup is like brushing your teeth. So it's an easy entry into the you know vanity. And you know there's just one or two brands like you know of miscella water, which are like very plain vanilla. They're cheap. did They do the work. But if somebody wants something a little bit more indulgent, which also acts like a toner, which kind of removes makeup and takes care of your skin also.
00:38:03
Speaker
then probably this is an opportunity. So that journalist wrote about this whole process that India gets its first Ayurvedic Masala water through crowdsourcing in the mint newspaper. And that article really helped us ah you don't get the word out. And now suddenly, we were in a different orbit. We were not just another beauty company. We were sort of democratizing this space and whatnot.
00:38:23
Speaker
we we We jumped on that opportunity. We also sort of made it our own. i was important Which year was the radical published? ah Good one. yeah I think should have been around 17, around 17, 18. And that also happened to be the time when we started getting a lot of investor interest.
00:38:40
Speaker
You know, you name it. like What was your revenue like monthly revenue by that time? It probably should have been, you know, yearly we would have probably done about seven, eight crores around that time. Okay. Something like that. So that in that time, then investors started approaching us. You know, I although having I had worked in private equity, but when you want to raise your own money, it's a very different ballgame.
00:39:04
Speaker
So a lot of people, we found it quite hard, you know, most founders do, but I think, so I wouldn't be able to compare my journey with others, but I'm told that it's its fundraising is hard. For me, I think it's like a kickboxing match, man. You get punched on your face every day, and every next day you have to get up and say the same thing. Like I started sort of enjoying that whole but torture, you know, like say thank you.
00:39:32
Speaker
And to perform again today is like felt like a performer, you know, like that theater artist in me was like, you know, enjoying it now when I look back, but it was quite painful. Right. You were pitching to early stage funds like a blue only stage fund. So acknowledge like yeah front probably most people have kind of A lot of the so-called OGs of that space, I would have pitched to a couple of broken deals here. We've learned our lessons that when the money is not in the bank, it's not in the bank. and
00:40:05
Speaker
i wrote what Why did it break? What happened? Various reasons. Yeah. are I mean, that's the, that's a good question. What happened? We also don't know. Right. So so word um but some people would take like nine months, you know, taking data, like, you know, take keeping us away from the business, you know, even sort of saying that, you know, signing the SHA, like you've signed the SHA and at a term sheet level, it happening is still okay.
00:40:32
Speaker
But at the signing level, nine months, I'm like, you know, nine months you can make a baby. ah These guys couldn't make a baby. So yeah, so those lessons happened. But eventually, how much were you trying to raise? At that point, I think about in Indian rupees, I would say about 20 odd crores, something like that. But we ended up, we but then eventually we thought we we said we don't need the money right now because the business is growing well. um And eventually we said, we we after a few months, we raised a small round of about a million and a half dollars, about 10 and a half crores.
00:41:09
Speaker
18 months those investors were in the company, some angels and a VC fund and after 18 months everybody got an exit and about an 80% IRR when Mariko bought a stake. So those guys should love us, I hope.
00:41:25
Speaker
yeah that and since then so What did you need the funds for for marketing? or Marketing are mainly. So the landscape was changing. A lot of factors were happening. GST came in suddenly. So it was a 2% tax. Then it suddenly became 28%. Then it was brought down to 18%. So that was impacting cash flow. That was one thing. then you know um there was, you know, as as the sector was expanding, there was more competition coming in. So you needed some money to kind of, you know, fuel your growth. But when I look at what the peers have have done and how much money they've raised, I think we've been able to do this with very, very almost no money, I would say. So that 10 and a half crores is all we've raised before, you know, becoming a Maricos subsidiary.
00:42:16
Speaker
and So that's been the journey. and and before that What was the ah valuation that Mariko gave you? well it's not a That's not a public number, so I wouldn't be able to share that with you. But but I think it was fair and generous. So now for your capital needs, Mariko does fund infusion, like if you need capital.
00:42:38
Speaker
Yes. ah Yeah. Yeah. So that happens, but it's run like a, um and it's a, it's run like an independent entity. So okay if, you know, if, if the capital infusion happens, then, you know, it it is against equity or it is, a lawyer whatever it is you know, so okay you have to dilute if you, yeah there is no free money basically. yeah right right But ah when Mariko acquired 60%, uh,
00:43:05
Speaker
Did any of that money go into the company or was that to buy out your holding? Major lead went into the company and to buy out the existing investors. There was no cash out for you? like um but Very little cash out. so we we were We thought that it is too premature. Age wise also, business wise also, we are seeing that you know there is a lot of potential for growth and here we are getting a partner who first of all understands this business. right ah is line like What do we do is aligned with what we what what they want to do. And thirdly got a good vibe from the management. So we said this is a better sort of a thing, otherwise
00:43:51
Speaker
Finding the right partner is extremely critical here. The motives have to be aligned. you knows Just because you raised an outsized fund doesn't mean that you're going to force a founder to become a unicorn. You know what I'm saying? yeah You know what I'm saying? Just because you have raised more than what you should have and you want to now give her it. that And this is this realization I've had now, I used to wonder then why some investors behave the way they do.
00:44:12
Speaker
Now I understand. right So the motivations have to be correct. So we found that the strategic is better a better fit for us. um So from a time when deals were breaking and you know things were hard, when we did Mariko, we had about four or five term sheets. And we chose them over the others. And this was a crazy time, man. this was like 2021 when suddenly everybody B2C was sexy and personal care would be sexy. So we became like, you know, from like being under confident and, you know, mired in self doubt, we suddenly were like, wow, you know, simply people want us. So that's how... What was your revenue by that time? 21? Even around 17 crores delivered and about 24 crores.
00:44:56
Speaker
Okay, okay, okay. You've grown quite significantly from them. Yeah, yeah, so not 36 months, we've probably grown about 6x, yeah. Wow, amazing. What did Mariko give you in addition to the capital? I'm sorry? What did Mariko add besides the capital?
00:45:16
Speaker
um So, a lot of people, you know, when i even my friends are like, Mariko, now you will be everywhere, you will get distribution and this and that. We also thought we would get it, but it did not work that way. And I see the reason for it because ah we are into personal care. Perhaps the shops where a parachute or any other thing is sold, we don't really go into those shops.
00:45:38
Speaker
Second is that you know the guys who work there, very good intentions, good hearts, but the point is it's just not it's just not possible for a big company to work with the agility of a a young startup. Bottom line is, yeah you have to do it yourself. right And sometimes not not sort of getting in the way is also a big help. right That is one. But where I think the help was very, very clear is a lot of the back end stuff. like you know A simple example here, we were playing so the financial discipline of running the business, right P&L management. Sometimes you know when you're a VC funded company, ah you you do a lot of things which which are not sort of, which you wouldn't do normally in a business right because the intentions are just to grow and grow at all costs. right So that financial discipline of how to first of all understand the P&L constructed and then
00:46:34
Speaker
you know, improve it along the way by building those efficiencies. um And, you know, once you identify where are those opportunities of bringing it down, for example, our logistics cost, we cut down tremendously in the last two years because two, three brands came together and we got a good deal, right? um Similarly, in terms of, let's say, for our 16 pack of lipsticks, right now we needed to get molds made. I'd never gotten a mold made in my life, so I took their help. We built maybe we built a mold.
00:47:04
Speaker
And you know with God's grace, we are now want we now need another mold because we're taking all the supply from that factory and he still can't keep up. you know So they're helping you there also. So those type of things, whichever we could. So it was more like, you know look, we have this ecosystem. You have to know how to use it. um it's very It is difficult to navigate through ah the labyrinth you know in like a big company. But this is this is how it has been, mainly.
00:47:30
Speaker
Like you you were able to build relationships with the right people in Mariko to help you find solutions to problems. Yes, to some extent, yes. I think there are two things here. One is that you're sitting in Chandigarh there in Bombay, which is also going away because I personally believe that if a startup has to survive in a big company, it should be located in a place where you have to sit in a plane to come and not in a car.
00:47:53
Speaker
and you to that's right okay that's a you know That's a good thing also. But then the disadvantage is that your rapport building gets limited. but i think and and And when the deal happened, it was COVID time. We hadn't even met them in person. you know Can you believe it? It all happened on a Zoom call. Amazing. and I remember speaking to the COO. I cut the call and I fell on my bed because I had contracted COVID.
00:48:17
Speaker
And so, yeah, so out of the three-year association, I think almost I met them in the flesh about, you know, a year and a half. muslim other time niol chialla right That's when I actually met them. But there has been a lot of interaction, good rapport building. And I think one thing which is probably inevitable and it's nobody's fault is that a lot of people change here in a big organization, people come and go. Right. So there was a bit of that as well. So yeah, but but on the whole, all good.
00:48:46
Speaker
Eventually, like the the ideal outcome would be like say similar to what a Carat Lane outcome was. Tanishk had acquired a stake in Carat Lane where eventually they bought out the founders completely at a fairly large valuation because the company had scaled to an extent where the founder got a big payday.
00:49:03
Speaker
that's right ah okay so good okay oh So, you know, you told me of what was working for you in the early days in terms of crowdsourcing products, crowdsourcing the new products, driving through your own website, the sales, the WhatsApp, but consultative selling approach. I'm sure now there would be a different set of things which are working at the current scale, right? So help me understand that evolution, you know, from that 10 crore revenue, those things which are working to an now at 100 crore revenue, what is it that's working for you? What have you learned?
00:49:41
Speaker
Yeah, I think but after that 15 odd crore types, now though we had to kind of shift gears a little bit. So we said now we've got product market fit. Now let's go product, not product channel fit has to come. right Because we have to now expand channels and products have to work for that channel. right So what we realized is that um if you Even if you look at marketplaces, every marketplace has its own nuance in terms of the kind of people who come and shop there. So a beauty shopper on Nike, we realized is very different from a beauty shopper on Flipkart. Because of our premium positioning, we couldn't crack Flipkart for a very long time. We finally lake sat with them, met them like, why is it not working? They said, let's make a new product for them.
00:50:31
Speaker
So he said, let me create products for, let me do it backwards. You tell me, what do you want? How can I help you recruit new consumers on your platform? I tell this to young founders like ask the category manager, what can you do for them? What do you want to do? What is your KPI? Like I want to recruit new consumers in this age group and your brand can do it. Sure. Let's do it. So that's how we kind of did it. There's more about that.
00:50:53
Speaker
And secondly, what did you create for Flipkart? For example, we partnered with Athiya Shetty and we created a beauty kit for them, which was exclusive to them, right which they can which we then went big with. we They put us on the you know in in the one of the specials on their big billion days, for example. This was after having done miserably on the big billion days the year before where we couldn't even get our stock inverted. We were trying to figure out what is this beast called Flipcar and how does it work. So this time we said we'll co-prepare it and we'll track it. So we did that. um um What price point worked? Sorry?
00:51:32
Speaker
What was the price point that worked? So yeah, it's a flip cover to the discounting place of 3, 400 rupees max. Show a customer a value and it kind of works. And if you have a high margin product, you can do something around it. Otherwise, it's difficult to sort of do that.
00:51:52
Speaker
okay yeah so And what happens is once you get that momentum, you can actually bring pricing to Parity, etc. as It's just just about sort of breaking out. Blinkit is a different beast altogether. I mean, that's one Blinkit. When we started, we thought, you know, people are just people just buy chips and Maggie, etc., right? And who's going to buy beauty products online? and And it's a very tight inventory model. So so we said, just take seven, eight skews or other seven, eight skews. I think two or three didn't work, but then those who work really hit the ball out of the park, right? So that's what it is. I think just this iteration process has to happen. And simultaneously, what also happens is that once you cross that threshold, you need to start building a good team around you because without that, it's just not possible to scale up. but What worked on quick commerce like Blinket and all?
00:52:43
Speaker
and The 16 pack here, the lipsticks work really well, there are some lip glosses, there's kajal that works well. think like it's it's Now it's very intuitive, like things which women need like you know for a quick touch-up, like nail paints, Google, that type of stuff. Last minute preparation. Last minute preparations, absolutely. Then just by this logic, we also launched a a small touch-up kit, like with really tiny, like a small perfume, a little lip and cheek tint, a little lip liner, which we started selling at the airports, you know, in W.H. Smith stores. So like then the innovation engine starts, you know, then you get one model, right, and then you start innovating with it, right.
00:53:25
Speaker
for That channel of airport sales, you so for each channel basically you were trying to figure out what will sell. I said let's do channel marketing. There's no point thrusting something somebody's down somebody's throat. Let's hear them out. Let's see what it is and let's see if we can you know plug in that gap. you know So that way.
00:53:43
Speaker
What's the split of these channels for you? Like how much from own website? How much from Blinkit? How much from Flipkart? How much from Nike? How much from the airport channel? So ah broadly speaking about 40% is own website. ah regularwise Another% is your marketplaces.
00:54:00
Speaker
And like this includes both Nika Flipkart and Blinken. Yeah, everything together, everything together. Within but i these three, what is the split? Like Beauty and General and... Blinken and Amazon would be Blinken and... So Amazon is the biggest and then closely followed by Blinken and Nika. And now Flipkart is becoming quite formidable as well for us.
00:54:19
Speaker
okay okay and this airport channel and offline like how much is about 20 percent of the business the airport is very very tiny we just started it uh but the and the offline our channel is your distribution basically uh like so so super general trade general trade basically b the bh channel we call it the beauty advisor channel where there are beauty shops and then there is a girl who Can I explain the product to you? She's called a beauty advisor. ah And so there's about 500 odd touch points. As of 31st March, we had about 500 odd touch points across India doing that, which we built in about less than 18 months, right? So that was crazy. but How did you, does the BA channel mean that you have to deploy that girl?
00:55:09
Speaker
yeah So you have like 500 beauty advisors deployed? Yes, yes yeah not exactly 500. Beauty advisor is not 500. I think there will be somewhere you don't need a beauty advisor because the shopkeeper doubles up or the shopkeeper will provide the staff. So it's um it's a mix. I think I wouldn't say that all 500 are like you know on our rules.
00:55:34
Speaker
but How much sales do you need from a store to justify putting a full-time duty advisor? It depends. on So in Delhi, the store, the shopkeepers charge you higher rentals. At some places, they will charge you lesser rentals. you know Salary levels will be slightly different in states, e etc. But on an average, I think we start breaking even at about 80-85,000.
00:55:57
Speaker
rupees of sales. Two reasons, yeah because we enjoy like a little bit a higher margin because of you know ah manufacturing, we build our own products and also makeup has slightly higher margins than skin care. You said rental, so the shopkeeper is not taking the sale revenue, he's charging your fixed rental.
00:56:20
Speaker
So in this trade, what happens is, and this is a very syndicated trade, right? you The rules have been the same 20 years ago, and I don't see them changing 20 years from now. ah The shopkeeper is the boss, right? The shopkeeper has a lot of power. Now, at this point, there are more brands than there is space in the shops, right? So it's an evolving yeah thing. You won't give it, somebody else will give it. So he will say, this is the space I'm giving you. Please put your your display unit here.
00:56:51
Speaker
Please appoint a girl and pay me either a fixed rent or a percentage of sales. Depends. That's your negotiation. or How how are you can do it. You have to squeeze out your margins. your your Your bitta has to come for that channel from all these costs after after taking care of all these costs. Okay. And how big are these stores? like say ah I don't know if you've seen modern bazaar in Delhi. and So modern bazaar is modern trade, right? That's a separate channel. So there we do stores like wellness forever, for example. We don't we don't do modern trade anywhere where you know they don't buy stock from us. I mean, I don't want to do any other model, right?
00:57:36
Speaker
So, modern trade and and modern trade I think right now is going through some sort of an upheaval as well, you know, it's like there's a lot of churn, I would say, things shutting down, closing, you know, but getting sold, you know, so there's a lot of this. So, modern trade, ah we in the last year we we didn't pay a lot of attention on, we have some accounts of modern business forever you will find us, which is very active in in the western part of India.
00:58:02
Speaker
um okay Yeah, health and do we used to work with in Bangalore, but not anymore. for Same reason, I think there was a management changes, etc. So, you know, so these are like and BBC specific stores. These are not like ah all-inclusive stores. BBC is not like, for example, Wellness Forever is, so you know, it's not really a chemist shop. You do get a lot of other stuff also. You could say a BBC specific store, yes, or an open pharmacy in Bombay, that type of stuff. That's for me, I define that as as sort of modern trade only.
00:58:32
Speaker
Whereas my beauty advisor is like in every city, know there will be those few famous shops where the ladies of the house will go to buy their lingerie and their cosmetics and things like that. Where in the north that she will go and buy her Dua Carva chaat shopping. you know so it's like a very It has a fixed clientele for years you know and the shopkeeper is like the influencer there, you know those those types of problems. It's a very specific kind of a team, very specific kind of a a team with the right relationships already built, because otherwise you can easily burn your fingers in this place.
00:59:08
Speaker
Okay, because you need that insider knowledge of how much you should negotiate. Yeah, there is no time to do it on your own. Like I'll learn it on my own. I think that has been a big change. You asked me now what changes this changes this attitude changes. You like to either you pay for experience or you pay for making mistakes, right? And time is limited. So you get the right people who have done exactly this. So you don't need generalists. That's the biggest difference when you scale.
00:59:33
Speaker
You don't need generalize, you need the best spinner, the best fast bowler, you need a good opening batsman, meaning opening batsman only. No other batsman could do, you know, that way. oh Fascinating. How did you figure out that, okay, I need somebody who will open up the beauty advisor channel for me?
00:59:55
Speaker
like That's an interesting story here. So i I was looking at people, I couldn't find the right person because either they were like, because it was a yeah sort of a gold rush in BBC. So people were paying like the heavily funded companies were paying any salary, anything to people. um So, you know, I started like I'm um fairly active on LinkedIn, right? Because I'm studying in Chandigarh, right? I'm not in a Delhi Bombay, finding talent is hard ever. Right? Yes. So the only thing I have to do is basically,
01:00:25
Speaker
build a decent personal and a business brand, you know, so that people know me and know the brand, et cetera. So through that, I think somebody approached me and he said, I'm working and I'm looking for a job, et cetera. That gentleman was what think easily above 50. He is easily above 50. So I had my apprehensions. I'm like, yeah, do you need somebody but who's very energetic and, you know, this and that, and you know, would he be able to do it, this and that.
01:00:51
Speaker
So I remember I told them, I said, because I'm sitting in Chandigarh, I have this advantage that when I want to hire somebody, at least for a senior, slightly senior role, I tell them, I'm sending you a ticket and you know, you please come down here and please clear out your day and just spend the entire day with me.
01:01:10
Speaker
night So when I'm eating lunch, we eat lunch together. If I'm going to do a market visit, you come with me. If I'm going to the factory, you come with me. If I'm at the warehouse, you'll be with me. You'll just shadow me that entire day. Two things happen. One is that if somebody is serious about the role, then they will travel and come here. That's one. ah That's the first filter. The second filter is that if that person is sitting here and seeing everything, you know it's very difficult to pretend for an entire day.
01:01:38
Speaker
like Not everybody is such a good actor. Your true self will come out in some conversation. and If you've been talking for so long, you would have figured things about me also. You hear the subtleties and in the person and and I'm a big one for that.
01:01:52
Speaker
so so So similarly called this guy, so we did the trip and I was still like, you know, in my mind, I was still a little, you know, like, I was in two minds, I was still like, I wanted to, but then I was a little iffy about it. And and then he said, you know, I have my train to catch. ah So I said, you will not make it because we're very late. So I told the driver, I think you stay here, I'll drive the car and I'll talk him to the station.
01:02:17
Speaker
So I zipped, I was zipping and I was talking to him on the way and I just asked him, I said, bro, tell me something. We have, we don't have this channel at all. Right. And we are a not a, you've come from big companies, like, you know, big Revlon's and color bars, et cetera. And why do you want to work with us? He said, look, look, I'm 50 plus. Now what I want is legacy. I want in the market people to say that in the offline trade, this brand just herbs was built by me.
01:02:46
Speaker
That kind of, ah you know, like a light bulb went up. I was like, because that is the motivation. And I believe in aligning motivations of people. I said, we are also doing it the same reason. We are a little crazy that way. And he has that a little bit of craziness. And I was that pre decision was right, because he is probably more energetic than anybody. We started alone with him.
01:03:09
Speaker
the I said we'll start Delhi. So he took me to a shop in Kamala Nagar, which is a very famous shop. So all that, so all the groundwork was done. Like, you know, if I had to like sit and figure out what is the universe of these shops, he had all the data, ah where where where does LACME sell more? where Where does this one sell more? yeah yu payment built ta and name mil ta managerja nice manam ba me i engage This we will do first. And when the other one will see him, he'll also call us, you know, for all that stuff was sorted.
01:03:36
Speaker
Wow, amazing. but so So I went with him to this Kamla Nagar shop and that guy said, oh, you know, herla ah charge aitovfe long stay in yajevo and he started like, you know, dismissing us right there. So then I, then he said, sir, i ku su netodo like you put it on your hand, then iss ah chaurra you know and then the beauty advisors attack you from the other brands and they start putting the product down. You know, this compact has coarse grains and all that.
01:04:02
Speaker
And I stood there and I kept hearing everything. Then he took off, he's like, look, you're giving this discount on Nika. What will you give me? Tell me that, this and that. So for two hours now, it was literally like getting a complete walloping from the shopkeeper, right? and And that's the power they have. And I've seen it with with people from Maricoh and Market Wizards also. When the retailer talks, no matter who you are, you may be a CXO or whatever, you just listen. you know like He will tell you that, you know, the mistakes you've made and what a bad scheme you gave last time. So he said, you know, this is a discounts are running. I said, but sir, you are also selling Nika. I said, Nika has opened a store two blocks away from you and still you're keeping their stuff. like yeah Then he didn't know what to say. But I told him, I said, look, when I have a solution for your problem, I'll come back to you again. When we came back, we said, yeah, boss, Delhi is a very important market. Can't go wrong here.
01:04:59
Speaker
you go wrong here, once they will never entertain you again. So I said, what if Mr. Gautam would be hired? He said, so then what do we do? I said, where are you a tiger of? You know, tell me a state where you say I'm the tiger here. He said, that's UP. I said, then let's start with UP. And people ask me who starts with UP. I said, I don't care, man. We start. The point is that we start.
01:05:21
Speaker
we And then he said, and sales people love doing this. you know They'll always have come up with excuses. like you know They'll say, oh, you know you don't have the right products. you know Who goes to market with just one type of lipstick? I said, I'll give you everything. right I know I've come to a doctor. If I'm not going to listen to what he says, he'll always blame it on the fact that I didn't give him that. That's my that's the other thing I've learned. right So remove everything.
01:05:44
Speaker
ah give them whatever they want and then hold them accountable to it. So that's what we did. So I said I'm not giving you Delhi, I'll give you these products and then we cracked UP. We cracked UP and by the time UP was getting cracked, the product rate but channel market fit, the products were ready for that channel. Then we built a team and then once... What products did you build for this beauty advisor channel?
01:06:08
Speaker
ah so What kind of products did you build for the... A lot of nuances which again came from the people as they kept hiring them. So for example, in UP for example, you know I think this is true of India in general, everybody wants to look fair no matter how woke you say you are, right? You still want to look fair. That's the... Yeah, it's it's very simple, right? I mean, we launched foundation. I remember people started saying that you only launch six shades. What about us? So we launched like 12 shades for darker skin tone. They just don't sell.
01:06:38
Speaker
Whether it is compact, whether it is foundation. I learned my lesson. I'm not going to block money in that inventory anymore. Like, you know, bookness aside, it doesn't reflect in the numbers, right? And in UP, I realized that even the lightest shades are not light enough for them. Like, you know, so, so we had to, somega like, we had to launch a foundation where Mega said, I will never use this asset, but I don't think that this is the reality as you scale. Now you have to go to the.
01:07:05
Speaker
lowest moment denominator sometimes and maybe sometimes you are not that. So your core, the first order we launch you will use, we use it, but perhaps this shade you will not use that. So make up NPD make up looks very closely. So so yeah, so that's that's what we did. So that was one example of it. know So there were some other tweaks also.
01:07:27
Speaker
In terms of shades around lipsticks, there is there is differentiation around that. So in a state like Gujarat, people don't wear very very ah loud colours. They would wear a nude or a brown mode. Whereas in the in Delhi and Luthiana and Punjab and all, it's all red and you know magenta. So those those those things yeah we have to take care of.
01:07:48
Speaker
Fascinating. Okay, so one thing you learned was channel market ah fit. Channel product. Channel product fit. Okay. What else? Like at this stage of growth, you know, now you are in the 100 to 500 journey. Yeah. What else is it that you're figuring out? So now I'm figuring, I think one of the biggest things is that now, no, you are not the, you are not the captain of the team. You are more like a coach now, right?
01:08:12
Speaker
Now you have to basically assemble the best people together and and and and basically just let them do their magic here and just make sure that their incentives are aligned, that they're getting ah getting along well. Suddenly that role has changed basically.
01:08:31
Speaker
that is ah that is the biggest thing I would say sometimes there is this temptation that you know sometimes you go to the office and you're like I don't feel productive for today because I'm not really broken my head over something I'm not really done done something but then you realize no you've done a lot because you have five back-to-back meetings where you solve a lot of problems sitting with people you know so I'm the same guy who started running Facebook ads you know and doing everything and cutting a bill and going in making deliveries to like this said so it's what's been a crazy journey basically
01:09:03
Speaker
Amazing, amazing. When you go for market visits, what's the objective there? Like why do you go for market visits? I mean, i so to be fair, I think I don't, i don't you know, but read too much into market visits because everybody's polished and everything before you, you know, the the the shopkeeper will hand you a chocolate and some, you know, a bouquet and you you end up collecting so many bouquets on these market visits. It's all about formal aid.
01:09:29
Speaker
I think it's sort of aid's it's sort of morale boosting. so we've So for example, for us, we built a team so fast that um not I didn't even get a chance to meet people. Like I'm the kind of guy when somebody joins in, I personally spend time with them, but as you scale, it's not possible. So these visits won't give you that opportunity.
01:09:49
Speaker
Second is it sends out a good signal in the market, you know, like, you know, when a market wizard happens, etc, the retailer also feels a little, you know, confident about the brand. So it's just a confidence building measure, I would say. There's no, you really can't be hoping to audit anything over there. It's it's more, it's more of a song.
01:10:10
Speaker
How did you scale up manufacturing? You still do everything in house. I'm sure you're no longer in your father's land. which yeah only at ando You're there only, okay. We're there only the and, you know, if you want to ask us how we do it, it's just, it's even that's been a journey, right? So there was a time when we were building a floor and but running the business. It was a nightmare and somehow we managed. um So now I think, it so be if you come and see it, at the the space utilization is very, very optimum.
01:10:44
Speaker
People tell us that how you are achieving this type of an output from such a small plot. So today, but in all fairness, we then have to kind of outsource some products, so we do.
01:10:55
Speaker
ah But still about 70, 80 percent of the products are still made in house. The others, I think the formula is done or or you know the oils are done or some ingredients are done and sent to for for contract manufacturing elsewhere. So that's that's how we are running right now. Okay. So you know what's like your top three advice for young listeners who one day aspire to be entrepreneurs? Let me end with this.
01:11:22
Speaker
Yeah, I think I see this a lot here.
Advice on Personal and Professional Growth
01:11:24
Speaker
I think the first is that just move with first principles thinking like just because something is hot, some new jargon has come into the market, don't stop using that, you know.
01:11:33
Speaker
like, you know, social media is just going to create sameness everywhere and sameness doesn't help. So I have a view of the future and build for it today, right? I mean, when we were building, people said, nobody will buy online and how can you buy a face cream online and look at where we are right now, right? So what's the new thing? Have a vision of the future and build for that future today, right? That is one. and Second is that to think long-term, yeah.
01:12:04
Speaker
These I you know, I have to admit even I look at headlines and all even I get for more sometimes that you know Why doesn't that happen to her? But then I think yeah, I mean if it if it happened three four years later also, what's the big deal? Yeah, I mean we are here for the long haul right we in it for the long haul and Yeah, and thirdly I think big things which you are innately good at right like things which probably your friends and your family would have told you when you were at KTR, you know, I think when you grow up you'll become this. You know, those are normally the things that you're innately good at. ah Do those, yeah. And I also see it today like I used to be a good, you know, good at debating, etc. at school. So now Megha pushes me for every investor meeting. So I'm that guy who does the talking and all that.
01:12:47
Speaker
or interacting with you on this podcast, for example. right right In it, you have to play to your strengths. right and and Identify those you know early on and then do something there. you know um yeah that That would be it. And can gather experiences. you know like rather than go to an MBA, go work in a startup, go travel somewhere. you know The more experiences you will gather, the more reference points you will collect, the more data points you will have to ah you don't compare with situations you encounter. you'd be like Your bulb will go on your head, okay, I've seen this before in some XYZ situation. So your brain acts in very interesting ways and helps you out if you have experiences. Amazing. Are you still doing something to pursue your passion for acting?
01:13:33
Speaker
like notley but really I do it the other way now. i I patronize a lot of performing arts. I live in Chandigarh, but unfortunately ah not a lot happens here. But you know if there's any stand up, any play, I make it a point to go watch it. Normally that's going out of favor, but I still try to kind of do it. um Yeah.
01:13:54
Speaker
yeah you You don't plan to be a podcaster yourself. Like that would be a good mix. I thought of it. I thought of it. I'm i'm i'm learning from you. I would i want to get some advice for you. So what I did then was that I thought I'll take on a challenge. I'll i'll i'll start with Instagram reels. Okay.
01:14:11
Speaker
And I had about eight, nine hundred followers about a few months ago and I'm at about 70,000 now. So I clearly something is working well and I'm enjoying it because it helps me a you know think in a disciplined way, do some research and all that.
01:14:29
Speaker
what And what you saw in the background were those ring lights I ordered on Amazon and then there's a small mic I ordered from Amazon. I first told my team to help me out and then they're like, you know, we have a lot of work and all that. They go, okay, guys, I'll do it on my own. This is, let me take this as a challenge, like a hobby. So I trained my, the guy who, I told Meghal to shoot for me. She's like, I don't have time. So I taught my cook.
01:14:52
Speaker
how to shoot for me on the phone and he does it for me very quickly and then I get it edited through a remote mode. What kind of content are you producing for Instagram? Business ah content don't clear but I try to make it very very easy to understand. Just posted something yesterday around you know a few terms which you are used of Shark Tank for example. What is Tank for?
01:15:15
Speaker
what is you know I did a reel around what is Epitta and how to read a B&L statement and that really got about two and a half, three million views. I did a basic business idea around how you can use Orange Wheel because we use that in our in our business that really had about five and a half million views. right So well it's fun it's fun. Amazing. Phenomenal. Thank you so much for your time, Arush. Yeah, lovely chatting with you.