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Building the e-commerce platform for factories | Siddharth Vij @ Bijnis
481 Plays2 years ago
Siddharth spills the beans on starting up Bijnis while still in college. He talks about finding product market fit, raising funds without having an IIT or IIM pedigree, and how they continue to scale Bijnis profitably despite facing competition from extremely well-funded competitors like Udaan and Ajio B2B.
Additional links:-
2.Matrix moments: building a B2B platform that helps digitise manufacturing in India
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Transcript
Introduction to the Podcast
00:00:00
Speaker
Hi, I'm Talat Bhuj, co-founder of Visionist.
00:00:15
Speaker
This episode of the Founder Thesis Podcast is a masterclass on how Thanda happens and how to build your company with a focus on what really matters.
Genesis of Bijness
00:00:25
Speaker
Siddharth Vij started Bijness straight out of college with a simple idea of helping manufacturers get more efficiency in how they sell their products to retailers.
00:00:34
Speaker
In this candid conversation with Akshay Dutt, Siddharth shares his rollercoaster journey of building a business as a leading B2B e-commerce platform. Siddharth shares his journey of finding product market fit, raising funds despite not having an IIT or IIM pedigree, and improving margins despite facing well-funded competitors. Stay tuned and subscribe to the Foundathesis podcast and any audio streaming app to learn about building e-commerce businesses.
00:01:10
Speaker
So, I think, I still remember, I discussed this idea with Chaitanya in a train coming from Delhi back to, I was coming back to Agra and he was coming back to Bholiar. So, I discussed this idea with Chaitanya in a train and I think he got so curious about it that the next day he, he didn't even stay at his family, family business for a day. Next day he came into Agra and said that, okay, let's start.
Challenges in B2B Landscape
00:01:34
Speaker
So that was it. So what was that idea which got Chitanya so excited?
00:01:42
Speaker
I just told him that, okay, my father is a photo manufacturer. B2C is booming because I think in 2014, and almost 2014, when we were graduating, B2C companies were a lot of consumer internet, and internet was doing a lot of justice to good consumer side solutions, like smart roads of the world, peaking for the world, and all those companies, but lip cuts of the world were coming in.
00:02:08
Speaker
B2B had just seen their companies since many years and they were India, Martin Peak India. When we started B2B, there was no B2B. All the big B2B giants came later. But I think when I told Chaitanya was the entire supply chain behind the consumer is massively announced and my father is a footwear manufacturer and he faces these kinds of problems as a factory owner.
00:02:36
Speaker
He was a domestic manufacturer. He was dependent upon domestic middlemen to take his goods further and expand to India.
00:02:52
Speaker
So it is unbranded footwear basically. Yeah, there's almost unbranded footwear and everything. And he could produce for a few brands as well as a contraction manufacturer.
Building the Bijness Platform
00:03:02
Speaker
But it was a mix of both, right? And they had problems of periods, they had problems of trust, they had problems of connections. And the two sites which I need the large bit of the companies who were running since 1990s, they were more reliant on connection-based problems.
00:03:18
Speaker
They are like classifieds. You pay us and we will give you five numbers. Now, if they convert or not, we don't give a damn.
00:03:27
Speaker
So, you know, and I saw that only one person of the entire industry is using that solution because no one wants to pay for the solutions because the problem was not connection back then, the problem was trust of payments. Trust that who is coming in between and that's where, that's what we thought that, I told Chaitanya, there is a case to create a grave platform. Can you just come and I can make you roam the Huttwai Mandi in Agra?
00:03:52
Speaker
and he's like, tomorrow I can come, he came tomorrow and that's it. Okay, so then what like? So I think of course then Chitane came and then Siddhartha also was, Chitane spent almost three, four days in Agra with me. He lived with my family there at my home and both of us discussed that idea with my father.
00:04:17
Speaker
And he was, of course, quite interested and excited about it. He's like, I will handle the family. You just don't care. You guys just move forward if you don't want to do a job. Chaitanya, although he took a placement, he actually got a job. But we started this in last semester. Even last semester, exams were not happening. So we started this in last semester.
00:04:41
Speaker
And Chaitanya was like, okay,
Technical Development and Pilots
00:04:43
Speaker
let's start it. So we started building wireframes, pilots and everything. And I and Chaitanya were like e-commerce for businesses. Like that was the plan. Not e-commerce, we were not planning transactions. We thought first we will build a sort of, you can see a Facebook for footwear factors.
00:05:01
Speaker
You can see that up to a platform for virtual factories to register, to register in their factories, their intra, and we will give you leads without charging anything. So why to give? Why we should give the leads? First, we will get retailers on the platform as well. Let them connect to you directly. First, understand what is the problem because we didn't know the problem really. We just thought that there is a communication and task management. First, launch the platform to understand what are the connection problems standing.
00:05:28
Speaker
So it was no transaction. We were not building any e-commerce solution. The idea was to get footwear factories on the platform. And the idea was to get buyers on the platform so that they can connect directly without having the middleman attention required. That was the idea. Right. And four or five days we verified it and he was also very much excited. He was like, I'm also coming from this kind of business. And I entered and I buy together a lot. So I thought that, okay, just again. But one thing we realized that we both are not techy.
00:05:54
Speaker
And the solution we're trying to build is very technical in nature. And otherwise, we went back to Delhi and the only guy in every non-technical kind of background, a few people were damn crazy for technology.
00:06:17
Speaker
Yeah. They do something or the other. So Chidhat was that one guy who I have always seen on a laptop over the last three years. So he was like, although he was an economic student, but he was very much interested in, he was very much curious to know about technologies and so on and so forth. So he was like, this is Iain Chitane trying to plan. So he's like, yeah, I'm going to do it.
00:06:37
Speaker
And I promised my family that I will do a CAT. And unfortunately, he also got a good percentile in CAT. So I said that doesn't matter. You see the solution and I will talk to your family and we will make that trust with them. Because if she will not come, then I and Chaitanya of course will not be able to build tech. So at least please come. Because with you, you might not be able to code. But at least with you, I have the comfort to talk to an engineer that engineer is not fooling.
Financial Struggles and Investment
00:07:05
Speaker
Right. So he was, he got interested and I think we spent two days together and then I, Chaitanya Siddhartha, you know, we said that, okay, we'll go ahead and that's about it. So the entire last semester we spent in biofame creations, thinking what we need to build just after exams, how we will launch. However, Siddhartha and Chaitanya both took the jobs. I didn't take the jobs, but Siddhartha and Chaitanya both take the jobs, but they were like, Jaseel, launch with that. You will leave it in comfort. So don't worry about that.
00:07:35
Speaker
When I go, I'm fine. Okay. So I'm trusting one of you guys. Let's start it.
00:07:42
Speaker
So that's how it all started. I think that's what happened. Just after launch, just after exams, I came back to Agra and after three months, Chaitane saw me struggling in Adhrad alone. He informed his HR that I have some family issue and I cannot be in the company because I know that. So he just informed the HR that there's a family issue and I need to go.
00:08:06
Speaker
and the human resource manager told him that he will be blacklisted and all that. So he said that, okay, take this laptop, blacklets me, I'm going. The day he saw me struggling, on the night, he came back to Abra and submitted his laptop. And I think three months later, Siddharth almost did the same and he left the job and he came to Abra. For the first six months, we operated in Abra before shifting to Delhi to create the company.
00:08:31
Speaker
So you launched immediately after graduating. Was it like an India what kind of a thing where businesses are listed?
00:08:42
Speaker
So I'll tell you, I'll tell you what was that. It was not an India month. It was like that we were, so after, after, so it was a connection platform. We got footwear manufacturers registered, footwear factory. It was, it was, it was show connect. And this, and the idea of show connect was that first we launched on web, but web did work. Then he launched the mobile and mobile worked very, very directly.
00:09:04
Speaker
So what happened was in August 2014, we launched it. In Agra, I had some contacts of almost 100 to 150 footwear factories. There was one platform, like my school helped me get the stage and we got on the stage and we said that, okay, we have launched something 10x better than Inyamat.
00:09:23
Speaker
And India Mart will show you the, will give you filtered leads and everything, but we have built a connection platform where your factories can come, the raw material suppliers can come, the retailers can come, and you all can have interaction and they can connect you for business directly rather than paying for it. And we'll be the nodal agency for payment transfers.
00:09:43
Speaker
That was something that we were trying to build. But at least come on the platform and register your factories or your shops or your businesses and so on and so forth. But the web, as we launched the website in 2014 on August, I think in the next three months,
Scaling Post-Investment
00:10:05
Speaker
we got understanding that web chart is not working. So we feel badly there.
00:10:09
Speaker
And I think, I remember in January 2015 in Bangalore, I and Chitanya were there and Sinatra was also there. We spoke to some guy, some person from the investor world and he recommended us guys by trying to do web. You should go to mobile. I don't think. And then also we realized Kia, my father had never used web. I think that time internet was coming along. Jio and 4D was not that complicated. But I remember that my father and other businesses are more comfortable using mobile.
00:10:38
Speaker
So we thought, OK, I think we have launched the right solution. But I really think that the medium is not right. So we should just change from web to complete mobile. So we actually launched a mobile app within the next three months of the organization. But on May 24, 2015,
00:10:59
Speaker
the mobile app of Shupanek launch. So we marked that as a launch and founding day of business because that's where the company got incorporated and so on and so forth. Because as the mobile app launched, I think in the next four to five months, we handled the growth and the marketing part and Siddharth handled the product development and technology part.
00:11:22
Speaker
And I think as the mobile launched, it shooted. We had so many retailers, we had so many factories registering because people were comfortable using mobile. So the accessibility increased and the network effects ticked and factories, manufacturers, middlemen also, wholesalers also started coming on the platform. So the entire value chain, the idea was to get them on the platform first.
00:11:46
Speaker
and see what they do to actually understand the problem.
Team Building and Operations
00:11:50
Speaker
So then the mobile app scaled and I think post that all the things happened. What did you see them doing? Like initially you, I'm sure you would not have had payment gateways and all of those, right? So initially... Absolutely.
00:12:02
Speaker
enabling absolutely people to chat with each other. Absolutely. So the idea was, of course, for the first three to four months, we realized that the daily activities are shooting up, people are coming, people are registering, people are talking because we were able to look at chats, what they are interacting and how they're interacting. Of course, there was a clear problem, but I think he realized that because factories were also there, the back end of factories were also there on the platform.
00:12:30
Speaker
middlemen were also there, and the end retailer, which is consumer minus one, was also there. Right. So, that supply chain was there, and people were interacting amidst other, and after four to five months of, I think we had almost 3,000, 4,000 baby usage, which is almost a good usage when it comes to B2B transaction perspective.
00:12:52
Speaker
And we understood that when we interviewed some wholesalers, some middlemen, some facts. So middlemen is creating value since hundreds of years. We thought, what is this? It is not monetization. It is problem solving. So platform interacts with people. But again, lead conversion is not happening. So we are facing the same problem as India. However, we have changed the way how it operates.
00:13:15
Speaker
But we have, or trade India will operate because people are not actually relying on leads. That's the idea. And when we ask them, is like, is there a payment to responsibility? So we understood, okay, what is happening. And then we intend it to become the middleman. Like after that, three, four months, three, four months,
00:13:45
Speaker
Dictating what middleman is actually doing, which is creating value, but also creating inefficiencies. So we observe after 2-3 like within by early 2016, we understood that we did 3-4 transactions on our basis. So like we went into a wholesaler show.
00:14:05
Speaker
it will become the whole seller. And let us become the whole seller, no problem. We will see that how retailers interact with us, how we interact with factories, and what is the exact problem statement that these guys are facing. And what wholesalers, because wholesalers and middlemen are staying since last 100 of years, you can't, by just launching a small technology platform, you just can't devalue their thing, you have to eliminate further ongoing.
00:14:31
Speaker
We realized that later, but we understood that here, elimination is not possible. Value creation is not possible. But at the same time, we didn't focus.
Market Adaptation and Competition
00:14:40
Speaker
We of course, focused on the value creation that they created, which was obvious to an extent. But we really focused on the inefficiencies that they created. The inefficiencies were totally bigger inefficiencies.
00:14:52
Speaker
For factories, it was like 2-3 bigger inefficiencies, right? For retailers, it was a minor inefficiency. For factories, they were bigger inefficiency. So we said, okay, we understood this. Let's try to launch and become an alternative middleman, which will not work like middleman, which will work like a tech platform, but it will create a value in terms of all the things that middleman is already doing. But we will capitalize on 10 or 20 inefficiencies.
00:15:22
Speaker
which will make the futuristic solution 10x better than the existing solution. So, that's where we understood that there are three problems which middleman is creating. First, capital flow inefficiency. For example, that if a factory is being given three months of credit inside the middleman chain. So, the middleman factory is giving three months of credit inside the middleman chain. But retailers are giving three months of credit inside the middleman chain.
00:15:52
Speaker
That means somewhere in the middle chain, the money gets consumed. So, the middleman is trying to play on the money which factory can be built upon. So, middleman is not investing in his own money at all.
00:16:09
Speaker
He is trying to minimise the invested capital and he is trying that care of my factories to put our load down though and I will earn out of that because factories are burdened with the burden with the problem of capacity not being utilized. He is likely at least utilize my capacity, take away my profits, take away my payment cycle but at least utilize my capacity.
00:16:33
Speaker
That's the point, right? Under that garb of capacity utilization, middleman is trying to create an efficiency for the factory. And I think that is big. That is big. Because if that credit true is going to end retailer, we could have understood that the problem is actually at the end retailer.
00:16:49
Speaker
and retailer both answer, I don't want to use credit for every Omer transaction. His business is 50% cash and 50% credit. So why this entire payments, where this entire payments are getting used in between? So we understood, okay, this is the efficiency and this is an unnecessary part, which is not required.
00:17:05
Speaker
First, second, by launching an app, we could solve a massive discovery problem in the fashion lifestyle categories. Because it's not like Piazz or any commoditized product. It's not standardized. It's
Factory-First Approach
00:17:20
Speaker
not standardized. It's not standardized. There are billions of designs. Every day, there are so many designs which are getting uploaded in footwear and lots of other categories.
00:17:27
Speaker
So, actually it was surprising to us, we didn't face a problem of tech adoption on both the ends. Neither the factories nor the retailers. Retailers were using it massively because they wanted to search designs because retailers were limited to the designs that the local trader was offering. So, we understood that of the discovery problem.
00:17:49
Speaker
And by coming in between, we can solve the cash flow problem of factories and profitability part 5 to 6%, because there are 2-3 middlemen in the between. So, we thought we can be one. So, we'll increase profits, we'll solve the discovery problem and we'll solve the cash flow problem, all the three intrinsic parts of business and we'll solve it from both the parties.
00:18:14
Speaker
And that's why we thought, okay, let's launch the transaction module of Shukunet. And back then it was called Shukunet, now it's called Business. But that's where we understood the clear problem statement. And we understood why it's factory-first approach. So everyone asks us, then, what is a factory-first approach? Because we have been always advocates of the applications. There are so many companies after that routine.
00:18:38
Speaker
We only won it with the perspective that we understood in the first two years of our journey that if you create value creation at the factory's end, only then you will be able to create a pool amongst the other stakeholders in the energy. Because retailers will only go for price, quality, heat and rate.
00:19:03
Speaker
If wherever they find it better, they will go there. Right? So, from that perspective, we know that, okay, he is loyal to that. Retailer is loyal to this. It doesn't matter anything. You solve the discovery problem. You solve the price, quality, heat time problem for him and he's there. He's not loyal to you. He's loyal to the price incentive. He's a business. He has to make 2 kapoor. So, he has to have the price incentive.
00:19:25
Speaker
but create deeper problem solution approach for factories, create a great solution for factories, they will love you, a great B2B product can be created. So we understood that early in our execution and that's when the Shukanesh transaction module launched in early 2016 and that's where we scaled the transaction illness.
00:19:45
Speaker
So e-commerce means catalog, right? You need to have a catalog of products that people can search with price. So how do you build a catalog?
00:19:58
Speaker
So we launched the marketplace. We turned our platform to a marketplace. Back then, I think then factories bought resistively RTD platform. Factories, no RTDs. But it was very difficult to convert them because factories were too much reliant on wholesalups.
00:20:16
Speaker
And they were like, we won't come because if they want to also come, they won't because if whole share will see us, then existing because it's crashed and then so on and so forth. One question here.
00:20:30
Speaker
Factories do are made to like a, does the wholesaler tell them what are your designs, what are your produce, what are your factories produced like that and then he picks up, like how does it happen? 80% later, 20% for more. So basically 80% is for factory inmates, more and more, more and more, more and more. And 20% is like coming from, 20, 30% is coming from the demand side. Like, okay, you can make this, you can make that, you can make this.
00:20:57
Speaker
The factory owner was mostly taking a decision, became a gap producer based on his understanding of trends and all that.
00:21:04
Speaker
Yeah, because every factory does sampling. Small, big or large, every factory does sampling. Factory owner has two core jobs while running the factory. One, invent and sampling. And second, agreement and sampling more and more. And second is running the factory, which is managing cash flows, procuring material, managing production. That's what.
00:21:29
Speaker
All the other part, which is sending, managing payments, communicating to retailers, he left it on wholesalers. So he's like, I don't go there. I don't want to go there. I will just focus on two things, core sampling and management.
00:21:44
Speaker
And sampling means that they'll produce a small lot and they will give it to the wholesaler. Wholesaler will further give it to retailer and then the feedback will come back to them. Yeah. Yeah. I think back then, I think back then, I think back then, I think back then, I think back then,
00:22:00
Speaker
Photos were based there and then Pinterest used it in the factory. You know, Pinterest, corporate design from Pinterest and so on. 80% market runs on unbending market. Design innovation is unlimited for them. They can do anything. Yeah. Okay. Got it. Take it. So then your job was to convince them to approve their catalog. Your job was to do it. Exactly.
00:22:30
Speaker
Exactly, it immediately happens and how many retailers do you want to sell and how many retailers do you want to sell and how many retailers do you want to sell and how many
COVID-19 Impact and Digital Adoption
00:22:45
Speaker
However, we understood that later, we had a relevant selection, but first we focused on the selection, and then of course inefficiencies, we focused on it. And that was it. I think in the mid-journey, when we understood that factories were converted, it was a check-in problem you're facing. Factories were like, sir, after this demand to any of you.
00:23:00
Speaker
retailers do you want to sell.
00:23:08
Speaker
I can come, sir. I know your solution is better. I know you are better for me in two or three points. I know that you will give me better cash flows. I know you will give me better profits. I know I have an incentive. But the problem is you don't have enough demand. And if you don't have enough demand, my factory can't come on small demand and erratic demand. And if I join,
00:23:31
Speaker
the platform, if I join the register on the platform, the wholesaler will also not trust me again. So I will use both the edits. So at least first try to create a solution in a way that I can come and run. Right. So we all, and then we face the Chica Connect problem and what we use in that way that we started onboarding the next guy immediately after the factory on the platform, which is the wholesaler, a bigger wholesaler, stockist.
00:23:56
Speaker
which is counterintuitive to what we're trying to build, but I think it could be a temporary strategy which would help create catalog to a large extent because you multiply, because wholesalers have large catalogs. And I know that, and they work in multiple factories. So to convince one stockist, then it's as good as convincing 10 factories.
00:24:16
Speaker
100%. But it was counterintuitive to our vision. We know that this is not a problem that we are trying to solve. We are trying to solve the factories problem. But I think for next six months or almost for an year rather, we got on board like X number of wholesalers and stockists. But we didn't, we were adheha to the fact that we have to be selective in our approach. Because this is not our long term strategy. This is our short term strategy. At the end of the day, we have to go back to factories.
00:24:44
Speaker
And that was a very clear, clear idea. So we always put a filter of who we are on body. We were not running behind. So we were almost like a bootstrap company that back then some angels invested and that we were not having the pressure of the energy of the banana and so on and so forth. So even like you went and pitched to people or this was like friends and family.
00:25:08
Speaker
No, not friends and family. Only few family members trusted us. No one was trusting us. Of course, they could have no chance of friends and family investing in us. Two years after, I met a person from the Indian Indian network who is Sahil Gijwal. And I think we invested. So that is another story because I think that after 2.5 years of doing all this, scaling the transaction model, we understood that we want to have some investment.
00:25:37
Speaker
But of course, no one was actually trusting us. So one guy called Sahel Kejriwal, he messaged me on LinkedIn. That was something that you're trying to build interesting in footwear sector. I am in Bombay. I'm in Bombay and you could come to meet me. And I think that is also a very interesting story because I never had lost hopes that we could get an investment. So we like that. So I think it's a very interesting investment.
00:26:04
Speaker
But you had tried, like you had heard NOS before that. The first two years, I think after while we are trying to get wholesalers and stealing the module, we understood that it is a clear market fit. It is a customer value creation and it is not a value creation.
00:26:24
Speaker
A guy named Sahel Kajiwal, he was coming from Carnegie and then he joined his father's factory in Bombay. So he was kind of familiar with technology solutions and he came to Bombay and he joined his father's export factory. So he somewhere saw us and he just linked in messages, I don't know, this random guy messaging us. But Chaitane and I were going to Bombay for an event.
00:26:53
Speaker
So we were like, let's go to Bombay. Let's not expect, let's not have any expectation from this guy, but let's go to Bombay and see that if we can have something.
Scaling Operations and Vision
00:27:00
Speaker
This was the last try on something. We went to Bombay and we went to, we went to Bombay and we were like, and it's very interesting story because first, first one day we did, then he didn't call me back. I called him back, but didn't pick up and then he didn't call him back. And I thought that, okay, it's a loss too. Doesn't matter. Right. So, and I think we had a train back to Delhi.
00:27:22
Speaker
next day, almost at 8pm in the night. I and Chaitanya were sitting and travelling in a local and then she called me at 3pm in the noon and then I could not pick up the call for some reason and I called him back again but his phone was switched off.
00:27:41
Speaker
We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him. We were not interested to meet him.
00:28:17
Speaker
We went to that cafe, which was not very far. And I think within 30 minutes of sitting with him, we had a one crore kind of a...
00:28:31
Speaker
He will connect us to 15-20 more angels in the Indian. He was an investor at Indian Engine Network, which is a community of a lot of angels and they could invest. So he will even lead the round in Indian Engine Network and all the investment efforts and he will help us raise one crore from various other engines.
00:28:55
Speaker
So, we still have that tissue paper on which the pen and tissue paper... So, this is like 2016 when this happened.
00:29:18
Speaker
Yeah, 2016, almost. And then, apparently, you were trying to solve the ticker problem. The stockists came through, you were doing the catalog building. Yeah. Were you also seeing transactions happen then? Yeah, yeah, yeah. 100% of you were clocking almost 30 to 35 lakhs monthly. Just immediately. How was this happening? A retailer would see something. The stockist would check the price, and the retailer would see that he would. Typical market. Typical market. Typical market. We had the payment gateway and everything. The tech was built.
00:29:47
Speaker
So, I think from that perspective, we were clocking almost 35% and we were making good revenues so that we could sustain. No, no, we understood that credit is something that is not a retailer's problem right now.
00:30:07
Speaker
So I think if you don't have money, you throw brain on the problem and actually we actually understood what is not to do. And credit, we also understood that if we do credit, it is a false way of proving PMF in the month. So I think the stockist would get the order and he would take care of logistics.
00:30:34
Speaker
Yeah, so we had the logistic contracts, so we had the seller panel for the stockist and he would cattle a product, he would initiate a pickup, the logistic ones would come to that place, take the pack of confinement up, deliver it to retailer and we will get the payment and we will cut our service fee and we will give back the payment to the supplier.
00:30:58
Speaker
So that logistic setup was there at that time, like that kind of infra where you don't have to build yourself, you can just plug in with a third party. Yeah, we had that setup and we were using two rooms in Agra to do all this. So I think we shifted to, yeah, so I think we were in Agra by its 2000, early 2016 and then early 2017, we shifted to... Once you got the money, that one crores.
00:31:25
Speaker
No, we got the money a bit later. So, although the first branch came and then we shipped it to Delhi and I think that's it. So, basically, we understood how this had to scale and we actually
00:31:48
Speaker
We were also transitioning to factory. We started transitioning to factory somehow. We had some good loyal retailers because retailers can need problem solve already, which is discovery.
00:32:04
Speaker
They were using the assets and they were transacting on a daily basis and we understood what value we have to create for the retailer. And what is this? How taken option is happening amongst them? Are they using the product? So the product engagement metrics were exciting enough for us to motivate care in this country. Because the only challenge was to now get to our ultimate take care, how to get these factors on the platform.
00:32:30
Speaker
So that was the, that was the idea because I think the real value creation was lying there. What stopped a regular person like you or me to also buy shoes from there? Like was there some sort of KYC that you are a retailer or was it whenever order quantity or minimum order quantities?
00:32:46
Speaker
Okay, perfect. Like you they have to order at least 10 pairs or something like that. Yeah, exactly. Exactly. Yeah, take it. Got it. Okay, take it. So then what like, so then then almost I think by by only 2017, we
00:33:03
Speaker
We shifted to Delhi and everything. We also started thinking about changing our name from Shukunek and we thought Kya Kya Kannab because I think Sumit Sakpeyam crossed the category. But we didn't want to expand categories immediately. I think the demonetization, 2016 and demonetization came and Thaptomata bought Pangorg and I think they thought digitization was an adoptive order. You must have seen transactions go up after demand because people would not want to do so much cash.
00:33:33
Speaker
You are right, you are right. So basically, that happens with that there were two events, 2016 and demonetization, and mid-2017, GST, which blundered in our short term because short-term is not good because everyone starts trying to adjust to newer circumstances and newer scenarios. 35, like JV, where you had enough margin left over to pay salaries like,
00:34:02
Speaker
Yeah, pre-funding, it was there. But after funding, after we got this angel investment, we increased a bit of our expenses in terms of getting good people and investing in engineers. They took most of our money. And I think from that perspective, I think we understood that there is no problem. Because I think that's where the issues also came. By the end of
00:34:28
Speaker
Like late 2017, because I think mid-2000, we all shipped it to Delhi. So Delhi, it was our first office. Delhi, we all shipped it to like, then it was very difficult in early 2017 to actually, you know, have managing half team in Andhra, half team in Delhi. And now we wanted to scale. We wanted to scale factories in Delhi, like sellers in Delhi, sellers in other markets. You want to get this platform, like how to do that.
00:34:57
Speaker
So, we all shifted to Delhi at one place because Siddharth and Chitane Duro, all of our teams managed to manage it. So, I think back then, we were also trying to form the team. There was one guy, you know, and we took early team was very raw. It was like, you know, we took college graduates as an only team, but people who know the sector, that's what we did. So we were not paying anything.
00:35:27
Speaker
We weren't paying anything to them. We had commitments. They had to start building with us. And they had nothing to lose. So, people had nothing to lose. They were already living in a small city, in a small area. And they had to go back to the factory. So, why not experiment this and if we can make our lives in a better way.
00:35:59
Speaker
You hired people who hired for marketing. Marketing. Correct. Marketing, operations, operations. Siddharth was working with a few of the engineers in Delhi. I think it was Chaitanya's friend called Shudha, who is not the co-founder now. He was in an institute of management doing his MBA. And Chaitanya said, what is your internship?
00:36:15
Speaker
So we got because Agra is a hub of photo manufacturers.
00:36:47
Speaker
If you want to say, he's like, no problem, I'll come.
00:36:54
Speaker
And then two months with him, I understood that he's pretty excited seeing the six landscapes and seeing that.
00:37:11
Speaker
But after 7-8 months, I kept on approaching him, I kept on interviewing him. As I think in early 2018, when he started, completed his MBA.
00:37:25
Speaker
I took him, I started calling him on regular basis. He started getting good offers, but then he convinced his father and he's like, don't worry, he convinced his father. And of course, he came back. Of course, we paid peanuts. We didn't even pay 5% of what he was. In fact, not even 5% lent them that 5%.
00:37:49
Speaker
So he's like, that's what I'm coming for. That's what I'm coming for. Then he came and joined and Shubham Agarwal who became our, again, who formed a great foundation for the founding team.
00:38:12
Speaker
Okay. So by end of 2017, what was your GMV? Like, how much were you doing? Like GST and demonetization of stable log. By December, we were almost at 50 to 60 lakhs monthly. Okay. Okay. And we had lesser money. Now we understood, get the next four to five months. Yeah. Okay.
00:38:42
Speaker
I think a few companies came. In terms of Iran started hopping in, all those B2B companies. The B2B world started talking about B2B.
00:39:12
Speaker
If you have to scale this, then you have to find good investors and all that. So I think I remember in early 2018, I think you were doing almost 50 to 60 lakhs, I think 60 to 65 lakhs in Manpichi MV.
00:39:26
Speaker
and they were good sellers on the platform, good retailers on the platform, trying to maintain a good net market. They told them and we were able to articulate what we're trying to do in terms of clarity in terms of factory, right? Or execution clarity, of course, it evolves. But I think one of our angel called Vikas Kuthyaanav. He actually, you know,
00:39:50
Speaker
kind of, he was on one investor call and just after the investor call, he called me up, he said he had said, I think investors back then were more
00:40:09
Speaker
Now, in the ecosystem, VCs and all the investors are more mature enough to find good fundamentalists, rather than pedigrees. But back then, pedigrees were expected to be higher than anyone else. And you're like, okay, it's fine. But I think you should need
00:40:30
Speaker
He would support 200%. We almost took some, you know, some help from our parents as well.
00:40:48
Speaker
You have to be there. Imagine, imagine 10-15 people who were in the family's house. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention to the family. They had to pay attention
00:41:16
Speaker
So, I and Chitane went into this office and it was a big corporate in Noida and it was the first visit to any such corporate like that. We didn't know about Nokri Sanjeev. Of course, we heard about him a lot because of Somato and policy bizarre in terms of investment that we guys have done.
00:41:34
Speaker
But I think we cast News and G somehow. So he needed to introduce them. I think we had a good conversation for the first two, three hours. We explained. It was a big boardroom. I went to my chapels. So I still, we had a very raw identity.
00:41:56
Speaker
I don't know what the reason for us to invest in that. No background, nothing. And I think, but I think they were, what the good part about them was they were not looking at us from those judgmental eyes. I could feel that at least. They were looking at from actually these basics carrying co-business. And I think that's the difference between a pure investor and a founder investor. So he understands for the fundamentals of business.
00:42:26
Speaker
I think his team was also very much aligned with that approach of looking at businesses from that perspective, what I've said from them. So after two hours of conversation, I think they of course didn't form the conviction, but they were there. These guys are doing something. And of course, we were also surviving a kind of a bootstrap venture since last three years now.
00:42:50
Speaker
2015-2018. So they are like, there is something there. These guys are on it. So, they are like Sandeep and Kitty and Rishabh. There are three people largely whom we met. So, they asked Rishabh to be in connectivity and I took the card.
00:43:09
Speaker
And I came back. This is a normal meeting where he said that he can't cover the road. Of course, Vikas said we keep on talking, keep on talking. And I think after 9 months from that day, they gave us the top sheet. So it was a 9 month journey all in all. So we kept meeting them, kept meeting them.
00:43:32
Speaker
I was talking about the progress. I think I and Rishabh got a good touch. So, think of course, be trusted with that execution. So, I always say, and that is the story even now, right? So, from that perspective, I think
00:44:01
Speaker
That's maybe, you know, that's where we got, we faced expensive delusions in the early phases because of this, but we're fine with it because we know that we're not a big game and it's fine. Let's, let's go with it. So, but you know, I think that was something, a pivotal point in a journey.
00:44:19
Speaker
In late 2018, almost only 2019, we signed the term sheet for 3 crores. They will write a check of 3 crores and come in the company. And I think that was more of a credible situation for us first. Yeah, absolutely. It was respected in West Hill in India. Yeah. And I think, I think it's just DNA of building long-term sustainable businesses.
00:44:47
Speaker
Right. All the people who are building with us, they were good early teams also, who is...
00:45:06
Speaker
And I think sometimes naturally you touch upon a person who could help and who could not change your originality, who would just enhance the originality.
00:45:23
Speaker
I think because they were also very first principle guys. They also didn't want this and they also didn't want to. The team's DNA was not too like, they like to be on it, find a great BMF, who could find a great customer value and then scale it to leave the connection balance. Right. So they were patient with us. And I didn't remember still, it's been five years with Infuit, believe me. I don't remember, I think, if they had called the meeting.
00:45:53
Speaker
I have called a meeting because it's not, I mean, it's not, they've always helped us in many ways, but what I'm trying to say is, I am, I'm trusting you guys, you have a vision. And if any help, we would love to help you. That's what the other philosophy was right from that perspective. And I think which, which, which entrepreneurs who love executing and building from those basic first principles would like that.
00:46:18
Speaker
Because it's always difficult to convince an investor, because the investor always knows 5,000 feet of things, right? So it's, you know, it's other than better to execute the market value revenue, telling people, yeah, how was it you dilute for three colors? And that line, it must have been different valuation by tricks. No, I'll ask you by tricks, like very different from that time. Yeah, we dilute tripping percent. Okay, not bad. Okay, so that works.
00:46:47
Speaker
So then after, I think, I think we didn't look back yet. That was the thing that we were looking at. Someone could, because already team Salka execution basics got clear. It was not like the conventional journey. We were trying to do something and really executing hard.
00:47:09
Speaker
Right. So, we had a basic strategy. We were not very afraid about, I think, Iran got a lot of investments, billion dollars of funding, billion dollars of funding. Of course, you know, interesting investors were like, what are you going to do? But we were like, come down, I think. We never lose our come with competition because we know then what is our game.
00:47:32
Speaker
We were very clear that we were not running behind those ease of allegations. It was because we had never been polluted with that mindset.
00:47:42
Speaker
Everyone has their own game and we were very clear about that's perspective that if they will come, they will even disturb the market for a short term. But they are also coming from their burdens of running of Flipkart. So their burdens, their mindset is customer like demand acquisition. And their mindset is supply.
00:48:08
Speaker
They wanted to build a demand-first B2B and we wanted to build a very extremely supply-first B2B. And we think that the B2B company could only be creative if you have supply-first. Otherwise, B2B companies can't be agreed. At least, because I think in that, back then, we had a lot of issues, but we didn't have much credit for it.
00:48:28
Speaker
You know, Iran was spending so much money on credit. AGI also came in, Reliance also started coming in B2B. We understood that we had no problem.
00:48:58
Speaker
I think we are doing almost 108,000 days more than that. And we are still not a single percent of transaction on credit.
00:49:24
Speaker
Amazing. So, we still don't use credit. So, the point is that, the first fundamental is basic credit. We really thought, and I think companies who came in and acquired our credit, they also learned the hard way.
00:49:42
Speaker
except non-performing assets being created to a large extent, right? So the point is credit is a false way of giving in B2B and PMF. Other app execute Karoge Binar, like just coming with a baggage of accumulating demand, I don't think so, it will work.
00:50:17
Speaker
So now expand our needs and understand to think how it should be skilled. So we understood manufacturing first approach and factory first approach can play out in the next two, three years. Of course, we had clarity, but we understood get executed.
00:50:25
Speaker
So I think we then understood our good fundamentals.
00:50:32
Speaker
And we started eliminating the middlemen that we on-boarded because of solving the check-connect problem. And then we started going to factories, factories, after demonetization, after GST started loving us. Like we even registered on a platform and everything. And we started getting welcomed from them, which was our ultimate thing. We wanted to do that.
00:50:57
Speaker
And then we take that more. It makes a lot of sense because there is no credit that they are giving. They get paid instantly. They get paid. I mean, I'll tell you, from saying almost 90 days of working capital cycle, they come back to almost 15 to 20 days, which is incredible.
00:51:15
Speaker
So plus, plus five to six percent additional profits. So there's no how. And then they get complete view of demand side. So middlemen created opaqueness in front of them. We gave them data that they could use to increase their efficiency, so on and so forth.
00:51:32
Speaker
What kind of data? How many people are viewing a product? Demand analytics, the entire demand analytics. And from that perspective, product usage on both the ends was significant.
00:51:52
Speaker
That was giving us confidence. I can't tell you the entire team. I am the only one on the ground. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team. I am the only one on the team.
00:52:21
Speaker
We were operating, I think we all didn't have, we didn't have that corporate experience. So we could come in with threshold. Right. Well, I think that way we ran. And I think from that perspective, it went on from that from that journey.
00:52:46
Speaker
I think we've changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name. We've already changed our name.
00:53:08
Speaker
I don't have any business, B-I-G-N-N-S, you know, business, you know, so business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business, business.
00:53:32
Speaker
We don't, so that's what our idea was. Although it was a tricky name to pull off. If we are able to create a great product, then this name might be a great recall value in future.
00:53:51
Speaker
So I think we were able to recognize the brand value of creating Uniqless with this name. So we went ahead with this name and we got from Shupnak to Visions, B-I-J-N-I-S. And that's where we launched our understanding of how to, we've both framed our vision into one line, which is taking factories to the world.
00:54:12
Speaker
And why I focused on factories, I'm not focusing on retailers. It's not like the vision doesn't focus on retailers. The vision focus on factories because retailers should also create benefit. So the idea was against factories.
00:54:44
Speaker
How did COVID impact you? What was your GMV by the time, let's say by 20 to see beginning like that, make it a GMV or something?
00:54:53
Speaker
So I think two years after InfoEdge, possibly I think Huskibar, I think one more round happened. InfoEdge kept supporting us, kept investing. And I think one more investor came in the company called Waterbridge, like seven months, 10 to 11 months before COVID.
00:55:13
Speaker
You know, of course, you know, we had, we had like this, like that we want, you know, of course, existing investor was someone who could think that kept now. But we were, of course, not getting much, much attraction then also as well.
00:55:30
Speaker
So, but I spoke to this person called Saravi Singh. He's right now CEO of PolicyVizar and he was then a partner at Waterbridge Mentos.
00:55:48
Speaker
So, I spoke and within 3 days of talking, we had the conviction of coming in. So, we also raised a million dollar almost around with Waterbridge and in Poage boat.
00:56:03
Speaker
And I think seven to eight months down the line, which we spoke about early 2020, our GMV was, our gross merchandising value was around 10 to, we know it's not, 12 to 15 odd crores, 15 crores, gas plus.
00:56:20
Speaker
per month, and categories were only shoes, like only footwear, you had other categories also. Back then, only footwear. So, 10 to, I think, gravity degree, like, so retailers were, retailers were spreaded pan India, almost.
00:56:39
Speaker
They were from all the corners of India and supply clusters were like Agra, Delhi, Jaipur, all these three clusters where Fotome Factories, Flash, Middleman, some lesser but more strategic. And mostly Fotome Factories were there on the platform. And I think COVID came when we were in talks and I think only
00:57:05
Speaker
I think early 2020, we also signed a term sheet with Metrics and Sequoia. Both. So, I think that was... I think I asked them. So, but I think both were generous investors in terms of giving a long term short rather than very short. Right.
00:57:35
Speaker
So, I spoke to me. I think Matrix and Sequoia both were also. I was talking to these guys there since 2016-17. They know that, you know, Sadad is doing something on base and I think Matrix, of course, these guys didn't trust me. As I said, I'm not going to mess up my execution. I'm not going to do anything.
00:57:53
Speaker
I think they also keep sending them monthly numbers like growth and stuff like that. What's in a year or something?
00:58:11
Speaker
I think the execution of the focus is other than eating them much and much. So my focus was to create a very differentiated product value creation. And I think Infoid was also supporting that force and customer value creation first and anything that I ate.
00:58:28
Speaker
I think we created a good distinctive understanding in U2B because Quran also after and they were companies, all those companies came, they spent so many dollars. Whenever competition came, I increased my margin to 2x. So, I think in the last 2-3 years, whenever competition came, we have increased our margin, which is counterintuitive to many things. Why did you do that? And it sounds risky.
00:58:58
Speaker
It doesn't because we understood that what is our supply first philosophy is saying, no matter what they are coming in, but we are getting deepening into our supply. After every six months after we were running, we were deepening into our supply.
00:59:13
Speaker
We were pushing our game-scare up, factory is tough. That's what, now we want to get to that clear customer love. Customer is the factory and that love, if that love is there, then margin is there. We understood very clearly that if you don't buy the product, you will not achieve PMS ever.
00:59:37
Speaker
So I think pricing that product well was helping us creating a decent organic skin in the game from both the parties. Not just retailer, but factory as well. So of course it was difficult, but it was not just helping us increase our margins. It was also helping us creating value creation. Factory is like whoever is coming, it is serious. It is not like cataloging a game, a GMB game.
01:00:02
Speaker
It's not like that. And I'm guessing margin entries factory could have passed on to the retailer by increasing the price now. They would not necessarily need to absorb it. Yeah, of course. So every time they don't, but we understand that we are talking to a factory boss. Why are you earning so much? When you, so first getting them to offline benchmarks. See, we always said internally our deal competition in news and between companies.
01:00:30
Speaker
So, what is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem? What is the problem?
01:01:04
Speaker
If we are not able to create a 10x meta product than those guys, we will not be able to sustain, no matter what. So I think that perspective helped us getting pricing neutrals in the market. So we used to 10 a factory, if you are earning X in offline,
01:01:26
Speaker
Earn X plus 5% in online. Don't earn X plus 50% because it won't make your situation advantageous. Neither is ours. Right. So necessarily the price was not going to retailers. It was actually being absorbed, but they were understanding why this price needs to be reduced. Right. So if he's earning 50% gross margin, he's not serious on a platform, basically.
01:01:52
Speaker
He just wants to try. It doesn't work. It's just for the sake of listing that he's listed with unreasonable pricing, which we'll never sell. Exactly. So I think from that perspective, we were clear. And that's how we were able to utilize pricing while increasing our margins. And we were able to create a product which is better than the middleman, existing middleman, right? For both the buttons, factories and retailers. And so when COVID hit, what happened?
01:02:23
Speaker
Of course, of course, of course, of course. So GMU was badly hit. Our money was still not in the bank. Three months, we were forced to leave. Everyone was inside houses and we were actually trying to raise the round.
01:02:38
Speaker
And I think, but first the interesting, the investors who were coming in, they trusted us with the execution and they knew our story of last four years and five years. And they understood that, okay, how these guys are executing. And I don't think that Mahaparku was a hindrance. I think, by the time first we ended, we had the money in the bank. So Bilkul right time, we got the money because then we had the time to actually push up and recover to our previous code levels.
01:03:08
Speaker
Now, of course, pre-post COVID levels were very exciting because adoption was increased, you know, offline market took time to recover. We recovered faster and we were able to, I think in that timeframe between first wave and second wave, we were able to onboard factories.
01:03:25
Speaker
10x better than before right in terms of the time to onboard and the number of factories that could hear us that okay how to use business now even because the target because the customer was almost 40-45 years in age and now I think people from our age also was entering the businesses so it was becoming easier for us.
01:03:47
Speaker
And, but I think they were, they started asking, they started coming on video calls, started asking how to use it. I think that is very encouraging. I think for a factory owner, they would have also seen their sales get a hit because retail stores, but the way though they would have used it for ways to offload inventory. So for them, it made sense to experiment, try online platforms.
01:04:12
Speaker
Absolutely. After that, they were like that, you know, offline would take time to come out. And retailers have started going online. Yeah, yeah, yeah, yeah. More sales of shoes would be happening through e-covers, platforms. While we were going in that loop, you don't want to change. When you stop,
01:04:41
Speaker
The ability to experiment increases. The risk power increases. That's the idea. So of course, because of those factors, it was encouraging to see those numbers and I think we recovered back to pre-COVID levels like during 4-5 months of first wave.
01:05:04
Speaker
Do you also spend on demand? Yeah, is it like purely you spend on supply? I want the best factories on my platform. No, of course, we have to spend on demand because retailers are mature. Retailers are another task, right? Because if the retailers platform takes time to get a register and get mature on the platform, although the competition was spending enough on demand so that we could leverage that money to use into ours,
01:05:34
Speaker
No, a lot of scheme of things. So like that, they were educating retailers on the online sector. So therefore, it became easier to say online player. Awareness and education, they were spending, which you could piggyback on. Yeah, they were investing a lot in demand. We were investing a lot in supply, but their investment could be of use to us.
01:05:58
Speaker
Right. Amazing. So I think, and it was not that vice versa. So I think from that perspective, we were okay. We were clear that okay. You know, but of course we were investing massively in that demand channels as well. And I think after that, there were good investors on the table also. Infant was there, water vision was there, matrix was there. All that was not used. I think 10 million dollars.
01:06:27
Speaker
Yeah, $10 million, correct. Okay. So I think that was, it was the first time we had some money in the bank that we could comfortably execute because in the last two, three years, always after seven to eight months, we thought we need money, we need money and so on and so forth. So we could, we had comfortable cash and we were, and I think these COVID waves helped us because, and we didn't lay off any team, we didn't do anything. Because we were almost
01:06:57
Speaker
You never had that kind of money to do industry tiring. Exactly. But of course, we learned to spend wisely after that. Because it was actually about investing in the right channels. So from that perspective, we learned it. But what did you invest that 10 million dollars in?
01:07:25
Speaker
Yeah, I think, as I said, we were running in an industry and we understood and B2B is not any, like it's not that game boss, right? You have to create certain and we were forming and we were fixing our leaky buckets. We know it's a repeat driven game. We know it's not an acquisition game. You are just adding more responsibility on you.
01:07:54
Speaker
It's B2B may acquisition investment here, acquisition here. So if you acquire a customer in B2B, be it a factory, be it a retailer, be it a brand, so on and so forth, it is a responsibility. It is an investment. It is not, it is not our sale factor, right? Because that investment will only give you return after five to six of transaction after certain day of time when the customer actually is mature on your platform. So,
01:08:22
Speaker
This is not an acquisition game. This is a repeat-driven game. We invested 10,000 dollars in the team. Although, you know, matrix in Sequoia and all these investors, they have helped us build teams as well. They have understood our requirements. Initially, we had a lot of money. We had a lot of money. We had a lot of money. We had a lot of money.
01:08:47
Speaker
I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you. I am going to interview you.
01:09:09
Speaker
So, we are not building to just increase our cosmetic game and we have never been a very PR-first company. We have never been that kind of company and I don't think that was required for us. Our first phase was into execution and we were focused on
01:09:30
Speaker
getting our heads down in just executing and we were trying to build and fixing our growth and talent engine both. Like after getting 10 million in the account, we didn't invest immediately. It took four, six months and say, we are getting 10 million in the account.
01:09:50
Speaker
We understood the importance of getting new talent, of course. We understood care. Now we need people who have done that 1 to 10 or 10 to infinity kind of a journey. But we understood that can be to be because you are using that product.
01:10:13
Speaker
But only 1% of audience might have seen factories. So we understood that there are only some set of people and I was very clear that key in the first round of leadership discussions was whenever we had
01:10:35
Speaker
I used to understand as well and not just sin. I was always cognizant of the fact that I would rather sin because it was glamorous because it was glamorous. So, the reality check is very important. Right. And early teens, I think people who came leaving companies, leaving things, they came with that approach of, you know, we have to do this. We have to be able to do this on a Saturday night.
01:11:18
Speaker
Now you have to come and see us and see that we can
01:11:22
Speaker
By the way, you know, that is our DNA matching. So we know the good senior, early senior leaders who joined, you know, are today leading the businesses. And I think people have, all people have helped us and then they've joined. Like one of our business leader called Sachin, he was from coming from future group, CFX, a good logistic guy. We couldn't handle logistic, understand logistics.
01:11:49
Speaker
And he had this one year, I was behind him, in fact, in all his marriage, I was calling him badly. And after that, I think after one or two years of helping us from outside, he joined.
01:12:11
Speaker
And then I think, you know, and then Tori is leading most of our businesses, you know, our four businesses well and scaling that business. I think both the raw team will perform correct and apply DNA form correct. I think for six months we took, yeah, this is our talent engine, this is our growth engine. And then we went on to that increasing and getting to know our talent funnel and then making our talent funnel after knowing our DNA.
01:12:37
Speaker
Okay, amazing. But the state of India wouldn't have all got a talent alone, right? Like, you would have used it. No, no, of course. In the first six months, we didn't invest much. We were, I think, we didn't invest much. But the point of view was, we then we invested much in getting talent, getting, you know, a strong demand to acquire concept.
01:13:01
Speaker
The reason money was getting into demand acquisition, but the bottom line is that retailers don't want to get into it. So, if you want to get into the relationship management, you have to go to the ground. Because B2B is an action, and you have to get into it. But the first five orders, if you want to get into it, you have to get into the dispute, and you have to get into the dispute, and you have to get into it. You have to get into it, and you have to get into it.
01:13:29
Speaker
So first, like for example, if you use any app, you also take as a consumer five to six orders to just understand how our dispute journey will work and so on and so forth. After five orders, it doesn't matter, it will be low touch, otherwise it is not much required. So from that perspective, we increased our bandwidth and we had the capacity to invest in great
01:13:55
Speaker
We built and created a channel feed on streets in India rather than clusters. We could onboard retailers. Most money went in there. Most amount of money went to factory acquisition. We were now going to clothing expansion as well. We launched clothing factories, launched clothing retailers.
01:14:17
Speaker
By the second day, we already did all this. So this would be like, say, Salwar Kabis and that sort of stuff. So brands were always more from the more perspective of building trust and credibility on the brands.
01:14:35
Speaker
So brands come and we used to build their distribution. So that's how it touches the entire journey. And I think by the second wave, we were able to acquire, then again, the market hit, we went down. And of course, that journey kept on till third wave. But as the waves got in, we used to recover sharply. What does your factory app have in it? I mean, how are you helping factory owners?
01:15:06
Speaker
So, production platform, which is what we are trying to build for the factories, what we have built and largely building, I think the production platform helps the factories in three particular ways. One, it first gives the factory key what is the factory's real capacity in a view. Because factory has a real capacity view. If the factory has a real capacity view, then the factory has a real capacity view. If the factory has a real capacity view, then the factory has a real capacity view.
01:15:37
Speaker
But when Koni Bata Shagunki factory, the labor and machinery is just optimized to produce 350 at a certain quality rate. Right. So first, so see, I'll tell you what, then the success of the production platform is consistency. The North Star was consistency. If you are a factory owner and
01:15:58
Speaker
There is no universal logic of how to get a consistent capacity utilization.
01:16:22
Speaker
Now, we wanted to solve that. We wanted to solve that perspective. We thought that here was, yeah, this is not right. I think we, can we create a platform which could give capacity, consistent capacity utilization? Can we create a logic which can give consistent capacity utilization to not just two factories, but maybe 200,000 factories over next five years?
01:16:40
Speaker
Can we build that algorithm? Can we build that logic that it can happen? And we were trying to solve that. So there were three things which could solve that. First, we really need to understand and factory owner need to understand what is the real capability of the factory. Capability means two things. What can factory make? And how much can factory make? For example, a sleeper factory can't produce sand and a sand and factory can't produce slipper. But a factory owner can still decide I want to produce both.
01:17:09
Speaker
because of hunger to do more business. But the existing resources doesn't let him do that. He does that sub-optimally. To give him a real view, to make manufacturing data-driven was a task. And we don't want to, we don't want to do it for large, we want to solve for small, small, long-pane of people.
01:17:30
Speaker
We are already solving, some big brands, large retailers also came on business to source. We said, no, we are going small to be. B2B, I think the better strategy they took is going small to be. Today we have 100,000 retailers.
01:17:45
Speaker
Tomorrow, the sourcing platform that we're trying to build on the other end is not just for small, it will be for big and small in future. But building from small to small... Nikkah, this future growth on big bazaar could be sourcing their food well from... Of course. That's it, because that's it.
01:18:22
Speaker
So, going small to big will make us learn and will make us more defensible in future.
01:18:29
Speaker
Second, from the factory side, as I said, solving for operative capability and giving factory a view, debt and planning. So, we will say to a factory owner, we don't want to open a factory.
01:18:51
Speaker
We want to build a long-term factoring platform and say that we are at a 30% or 20% sweet spot. We're like, we want to get your mind share. We don't want to get your ownership. Right? There is a good integration of raw materials factory which is coming.
01:19:17
Speaker
Because I am building for factory. I am not building for output factory or input factory. I am not building for... When we are trying to build a production platform, we are planning in a way to get the idea of a factory, a factory, a company, a company, a company, maybe a factory, a company. Maybe a foolish point to just think about, but a good point and a curious point to think about.
01:19:39
Speaker
Why? Because large factories, key efficiency, solve karneke liye. There are big clients and consultancy companies are trying to solve their problem. But no one is trying to productise the solution for the whole deal of factories, which is very important. I'm telling you, next 10 years will be about these factories.
01:19:57
Speaker
It was about solving these for factories, because big to be the real value creation of the US sector is against the factory's efficiencies. The factory's efficiencies are at a lower cost, but at a good profit. And that's what the idea was. So can we be a bitter middleman?
01:20:22
Speaker
Can we be a better middleman who can help factories, who can help brands, and who can help retailers? We don't want to become a retailer. We don't want to go on the demand side. We don't want to become another Amazon, another Flipkart, another Michelin, so on and so forth. We want to have a retail side for innovation. We don't want to supply it.
01:20:46
Speaker
That's the idea. And one tricky and one clear solution was create love among those factors. That's what we're trying to do.
01:21:04
Speaker
What about giving factories access to Amazon Flipkart? Is that in your roadmap? Yeah, of course. See, it's not about Amazon and Flipkart platforms. There are retailers sitting on Amazon and Flipkart, who are selling to consumers. Yeah, right. Amazon. Amazon retailer, they are individual retailers on the platform who are selling to consumers.
01:21:39
Speaker
See, it's an integrated journey. For brands, we don't solve the problem of production. For brands, we solve the problem of distribution. As I said, we take a role of a traditional middleman action. No rocket science.
01:21:55
Speaker
We compete with that, we head-on-head compete with that traditional measurement. But the product and the technology leverage that we have, we are trying to create a 10x meta part for all the people. B2B is just about these three stakeholders. If you see from 10,000 feet, factories, brands and retailers.
01:22:18
Speaker
Retailers are small to big brands. There are so many D2C brands coming. I think we might be interacting with so many of them. They have understood the importance that D2C is just a challenge. In the channel, D2C is a brand new one. In India, there is a large market to keep up with the retailers and customers. Who is the retailer who has the consumer control?
01:22:40
Speaker
So, we are generating a lot of data on all the ends. In fact, our sourcing platform will register retailers.
01:23:11
Speaker
Again, see the biggest of businesses have built from insights and we go back to the fact that we have a team, a factory owner, a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner. We have a brand owner and a retail owner.
01:23:36
Speaker
But Kuchpichi's office is made in Yogi. He is not a social worker. He is not a social worker. He is not a social worker. He is a better product. It's not a short term game. It's a long term back. But in next 5 to 10 years, we can see something large if we go by the support. What's your current GFX?
01:23:55
Speaker
So right now, we are almost on the range of 100 million annually. Wow. Amazing. And you raised another pretty big round of this $21 billion. This is after that COVID round, which you did.
01:24:13
Speaker
Yeah, exactly. So, after six to seven months, seven to six to seven months, when we, I think we raised almost 30 million from Westbridge. So, Westbridge led the round. And of course, existing investors may pick Sequoia and Forage, one original part was bigger. And this was again the round that we did almost a year back. And Westbridge keep, it's a large private equity based out of US. And we intentionally wanted to take it from a private equity firm.
01:24:42
Speaker
Although we had multiple term sheets that time, but to be understood that KRS we want to take a very long term approach and people who have a very long term profitability and approach you want to go with that. We don't want to, I always adhered, I always been adhered to 5K mojo's fundraising su pasi mani pandha.
01:25:06
Speaker
We are taking the way that we really want to build business with, a great B2B company. And then the fundamentals, I think we want to be on that. And whoever wants to play a long-term game should be a part.
01:25:31
Speaker
So like with VCs, typically they have like a seven-year period within which they have to return money with a private equity that constraint is not there. So they are more patient investors. Yeah, they are more patient and I think...
01:25:44
Speaker
I think to some extent our investors are, I mean, I don't think so. There is some, there is, there is anxiousness around that. But yeah, yeah, yeah, yeah. Structurally, I think it was better for us to take a very long-term view right now because we, that team, I think, you know, we are, because if founders and the entire founding team is taking that long-term view, why not? I mean, you know, what is that? What is that a problem? So that's the point.
01:26:12
Speaker
And this round, you raised the big round, so that next couple of years, there is no fundraise pressure which you need to... Yeah, exactly. So, of course, this was an opportunistic fund raise. We never wanted to go in the market because I think 80%, in fact, 75% to 80% of our previous money was in the bank.
Navigating Uncertainties and Growth
01:26:33
Speaker
So, there was no point of view, but we thought that both, I think some of our views were good. It took a partnership, but it was like COVID. We don't know how many inconsistencies would COVID will create in the future, right? And how many natural circumstances will come and disturb the environment?
01:26:57
Speaker
Let's be the safer side, if you're getting a good partner, take it and it will just be a very good safe side for the company. Let's do that. So I think that was the idea. Okay. So besides footwear and clothes, what other categories do you want to get into? So in the first phase, we're trying to capture all the categories, which are a very high movable, jokey, low barrier to entry categories, upper factories, coffee, long-term scattered, which is footwear, apparel, accessories, lifestyle, you know,
01:27:27
Speaker
Home accessories, fashion accessories, sports, bats, balls. It's just, it's the same playbook out there, right? So initially you want to stick our game to there and let's see how it runs. Are we able to, there are around 150,000 factories approx across these categories. So in the next three, you want to focus on these. In the next three year domain at least. Let's see if we're able to create factory, trust factory now.
01:27:56
Speaker
and the skywheel gets magnified bigger and bigger as you are able to break running. Today, we really can see that we can think 10 years backward.
01:28:06
Speaker
It's not 100 year backward. We can really see that we can think 10 year backward. I think we are in a great position to see that, that we can think 10 year backward. What advice would you like to give to founders on organization building? Because I mean, you started literally as teenagers, right? Or like you were just out of your teens when... Yeah, 20 to 23. Yeah. And you must have had to learn through a lot of hard lessons. So, you know, what are some of those lessons of building an organization?
01:28:38
Speaker
So, again, there are two perspectives to it. One is from the customer first, and second is from the team. I think when I talk about customer, I think most important is, first, go back to basics, learn from the customer. I think people say that you're taking seven years, you're taking so many years, but I really believe that I think it takes a good, takes a decade to build a good company in India, right? And I think it takes time to create that solution.
01:29:06
Speaker
Our vision has, maybe our why might have stayed constant, but our house and what have changed constantly. They even changed today, which is fine, which is okay, right? And I think one thing which has been our competitive advantage and which we know, which will always be, that we are damn close to customers.
Customer Feedback and Team Development
01:29:25
Speaker
We learn from customer insights day in and day out.
01:29:28
Speaker
As I said, in our team, we really say, there will be some retailers, there will be some brands, and there will be some factories. If all of us can run in the team together and we can run those, you know, real those hats, I think that would be great.
01:29:45
Speaker
We can build that show, right? Being as close to customer as possible. I mean, I think having my father who could just call me each and every night and tell me that, okay, boss, you are fucking up here and you're not, I think that has been a biggest privilege. Having customer closer to me was a biggest privilege, right? Similarly with Sid and Chaitanya and all these people, they have also been in those backgrounds and early teens, in fact, Shubham, you know,
01:30:10
Speaker
All those early people you have joined in, I think all of them were very, very close to fond of being close to the customer and they were also being wired to think like that. So I think that has been, so being closer to customer is most important.
01:30:22
Speaker
Everything is jazz. Everything is just jazz in the first five to seven years. You just don't have to focus on that because it doesn't matter. I mean, I really think that if I spent few times in marketing events and investor events and in the early days, I think I'm just wasting that time.
01:30:41
Speaker
I mean, not devaluing the importance of those events, but I really feel that wish I could have spent more time, even more time, which I could with the customers. So I would just, I think, give plus one to that. The second point around all building is people.
01:30:59
Speaker
Right. How to deal and how to create. I think that has been the most important part. We have never put filters. Because again, as I said, we were not coming from corporates. Now people are helping us get into the lock structure. But we have built teams, we have given high ownership to people, even have states in the company.
01:31:27
Speaker
All the early teens, most of the early teens have stayed from the company. It's not just founders running this show. There are many people who have good heart and soul and blood. I don't say that 100% of our people maybe are very much aligned with that vision. Today we have a big team now. But I really believe if 20% and 30% of our team is really working with that heart, soul and blood, that's a privilege.
01:31:50
Speaker
I think Sid, who was not coming from a tech background, like today he runs a great engine. Today we have a CTO. Imagine we were able to hire a CTO after seven years. I tried to get a CTO for six years.
01:32:06
Speaker
Really, more than an investor, it's really hard to type a stock on an individual. But in disguise, one thing has happened good. We could never find a CTEU in the early years. But Siddharth could become a great technologist. Because we could never find a CTEU in the early years.
01:32:28
Speaker
But that could be the biggest trend today, right? So today we have a great city, of course, but we joined in just six, you know, almost a few months back. But I think Siddharth, having self-learned everything, from engineering to product, everything, and there are some good worldly people who have helped us, helped that and helped shade also. I think we were able to create that DNA, which is important to us.
01:32:54
Speaker
I think it's very important to have that kind of reality check. These are the people who will be with you. And these are the people who can build this, right? So we have taken our time. I think last six years, last one year, one and a half years, we have got some good leaders. We've seen you, got success with you, understood that where we are feeling, where the DNA is matching, where the DNA is not matching. And we were able to find that, okay, these are the people
01:33:22
Speaker
I mean, people are not wrong, their situations are wrong, circumstances are wrong and natural marriage doesn't happen, right? So, I think from that perspective, we are more clear now, or we are evolving, but to get people with high ownership, make sure that you are there, they are just bent in with your DNA, and we were raw
Authenticity and Audience Engagement
01:33:42
Speaker
as a DNA. We are not very honest people getting to know that for the upper professional run companies, they are mainly young.
01:33:49
Speaker
But it's fine. I think that rawness leads to a creativity that we have. We want to maintain that. We don't want to ruin that. So of course, we are getting better because there are certain scales, certain processes which leads to be built in Azure scale. But we are again, I'm being more cognizant of not leaving our rawness and authenticity at all.
01:34:13
Speaker
Build on it improvising, but not leaving that at all. So I think these are the two things which are really being cognizant of trying to build that one. And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at ad at the podium dot in. That's ad.