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How to Scale Food Like Software - And Still Make Money | Jaydeep Barman (Rebel Foods)
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"I have this fundamental belief that you make abnormal returns not when you are right but when people don't agree with you."
This contrarian mindset from Jaydeep Barman perfectly captures how Rebel Foods built a $1.4 billion unicorn by doing what everyone thought was impossible: decoupling restaurant brands from physical real estate.
Jaydeep Barman is the Co-founder and Group CEO of Rebel Foods, the world's largest internet restaurant platform operating 450+ cloud kitchens across 100+ cities in three countries. Under his leadership, the company processes 3 million orders monthly, generates ₹1,800+ crores in annual revenue, and achieved unicorn status at a $1.4 billion valuation. A former McKinsey Associate Partner with an MBA from INSEAD, Jaydeep pioneered the multi-brand cloud kitchen model that revolutionized how restaurants operate.
In this candid conversation with host Akshay Datt, he shares the journey from a failed Kolkata roll startup to building a category-defining global company.
Key Insights from the Conversation:
👉Contrarian Strategy: Being misunderstood by competitors created a protective moat during Rebel's early growth years
👉Cloud Kitchen Economics: 12-15 month payback periods with 25-30% monthly profits, dramatically better than traditional restaurants
👉Multi-Brand Innovation: Single kitchens operating 15+ brands simultaneously, maximizing asset utilization
👉Technology Moat: Proprietary Rebel OS automates cooking processes, ensuring consistency across hundreds of locations
👉Global Expansion: Strategic approach to international markets, focusing on structural advantages rather than rapid scaling
👉People Philosophy: Hiring for "founder mentality" over CVs, creating an intentionally "abnormal" company culture
#CloudKitchen #StartupFounder #FoodTech #Unicorn #RebelFoods #EntrepreneurJourney #StartupStrategy #FoodDelivery #BusinessModel #StartupPodcast #FounderStory #IndianStartups #RestaurantTech #VentureCapital #BusinessStrategy #Entrepreneurship #StartupLessons
Disclaimer: The views expressed are those of the speaker, not necessarily the channel
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Transcript
Rapid Expansion and Business Model Innovations
00:00:00
Speaker
Like it took McDonald's 10 years to put first 100 outlets. In about six quarters, we took 20 to 0 to 200 locations now. Typically, restaurant businesses are built with the thesis that every brand should have its own infrastructure, identity, management, everything.
00:00:18
Speaker
What we have done is fundamentally we decoupled the real estate from the brand. Will a brand which is your Cloud Kitchen brand be as loved as a brand which also has the real estate.
00:00:37
Speaker
So, Jaydeep, welcome to the Founder Thesis podcast. Can you start by telling me what is Rebel Foods? Well, Rebel Foods...
00:00:47
Speaker
to the founder thesis podcast ah can you start by telling telling me what is rebel food
00:00:55
Speaker
well rebel foods has been different things at different points in time as we as we went on the journey of figuring out you know what it is over the last next number of years.
00:01:10
Speaker
But today I can say it is probably world's largest platform for bringing most loved the restaurant brands to him two neighborhoods.
00:01:21
Speaker
to customers across food missions. Now, I know it sounds a little heavy and with a lot of jargon, but if you really dissect the sentence, so first is platform. So what is the platform? Platform is we've created a tech infrastructure supply chain foundation.
00:01:42
Speaker
On top of that, we want to bring brands. So we plug and play brands on top of this foundation in our kitchens, through our supply chain, using our tech. And then to every neighborhood.
00:01:52
Speaker
Now, today we are in about 100 plus neighborhoods across three countries, including 75 cities in India, where our kitchens are present.
00:02:07
Speaker
So that's the kind of scale, like about 450 kitchens in about 100 plus cities. um That's how we bring these brands to individual neighborhoods.
00:02:20
Speaker
and across missions so we are you know unlike most restaurant companies in the world we are not you know only least serving burger or pizza or something like that we the way we think about customer food missions it's by the way the only consumer goods category where people move from value to luxury, group serve, single serve all the time.
00:02:43
Speaker
you know There is no other consumer category like this. So we have this unique ability to meet the customer where he or she is at a particular point in time for a lunch, for a group dinner, for celebrations, for healthy occasions, etc. etc So if I again go back to that sentence, you know we what we are doing is we're building a platform.
00:03:04
Speaker
on top of which we can bring brands across customer pool missions in every neighborhoods in the world. So in terms of size, as I said, we are 100 cities, three countries, about 450 kitchens. We do about 3 million orders a month.
00:03:19
Speaker
So that's about close to now 40 million orders a year. um Yeah. So we believe in our journey, we we reimagined how the business of restaurants should look like in the future.
00:03:33
Speaker
And we are, we are continuously building on that.
Financial Success and Industry Position
00:03:38
Speaker
Okay. um And what kind of revenue do you clock? Like what's your and MRR or ARR currently?
00:03:44
Speaker
So we're doing about, give or take about 150, 160 crores a month. So you can say that, you know, like in the zip code of 1800, 2000 crore today.
00:03:56
Speaker
two thousand crew ah revenue ah Can you put that number in some context? For example, what would be the revenue of McDonald's in India?
00:04:09
Speaker
It's… Or Haldiram. Yeah. I know Haldiram is… It's not public. But what I can say is we are probably among the… Or Haldiram. Five… ah you know, restaurant companies in India, F&B companies, though we are very, very different from a QSR fundamentally, but but we should be in the top five in India today.
00:04:35
Speaker
Okay. Okay. um So, is there an example of a similar conglomerate of restaurants globally anywhere, which is across the value chain? You said you do across the value chain from premium to value... ah are there any similar examples globally?
00:04:57
Speaker
So, you know, with the thesis that every brand should have its own infrastructure, identity, management, everything.
00:05:12
Speaker
So, like, for example, if you take a young brands, they run Pizza Hut, KFC, KFC, um you know in some cases, maybe Taco Bell, but they're all almost separate companies.
00:05:27
Speaker
The brands are the companies. And that came from this fundamental thing about restaurants was a business of restaurants is a brand and a real estate one and the same time.
00:05:39
Speaker
You walk into a McDonald's, walk into a Starbucks, you etc. So there was no separation of real estate from the brand for like 100 years or whatever many years yeah restaurants have been around.
00:05:51
Speaker
What we have done is fundamentally we decoupled the real estate from the brand. So that's the fundamental disruption we brought to the table. We said one real estate, but many brands. This model before us didn't exist.
00:06:04
Speaker
Though there were companies which are doing many brands, but they were almost like individual companies or individual silos, individual infrastructure, etc. And think, you know, in India, we've seen people doing ah you know what X of a global company. Like for example, oo in the initial days, they say we are the Airbnb of India or Flipkart is the Amazon of India, Ola is the Uber of India.
00:06:36
Speaker
yeah We don't have a comp like that. In fact, I've seen pitch decks where people said, you know we are the rebel foods of US. sure So that way I would say for good or bad, you know I'd say it's You know, one way yeah we take a lot of pride in building something very unique on a global scale, but but it has its own challenges. Like when I go and talk to an investor, they'll say, okay, but tell me where else in the world this has worked.
00:07:06
Speaker
You know, for for a e-commerce companies, very easy to go and tell the investor, okay, we are the Amazon of India, you know, and and everybody knows what they're talking about.
00:07:19
Speaker
But the fact that it took me a few minutes to explain what we do to you tells you that it's ah it's a less understood business. But it also, as a result, it also has its own, let's say, um intrinsic entry barrier.
00:07:38
Speaker
Because people don't understand this. Like Bezos says this, you know, say said this many years back, that when you're willing to be misunderstood, It's a good thing because then you don't have like 20 copycats ah just outcompeting you. and you know And if you think about even Indian startup story over the last 12, 13 years, you know they were like waves.
00:08:06
Speaker
you know Quick commerce is a recent wave. And before that, it was D2C or whatever, like waves. We've never been part of any wave. So that's a great thing because we've never had 50 competitors.
00:08:19
Speaker
um competing companies raising funds at the same time etc anyway long answer but i guess fundamentally we are quite unique and we don't have a global comp as such yeah is the mote the real estate the fact that you don't have that kind of spend on real estate which another conglomerate like say a yum ah would need to have i So, I think the moat is real estate could be a part of it, but I think that the cost arbitrage that we have on real estate is an outcome rather than a core defense.
00:09:00
Speaker
The core defense is the operating system. The ability. So, it's easy to say one infrastructure but many brands.
00:09:11
Speaker
but
00:09:14
Speaker
converting that infrastructure to a multi-brand factory-like situation requires significant investment tech, significant investment in understanding you know how things work, what are the ebbs and flow of the demand,
00:09:31
Speaker
um you know how to staff it in a particular way. jesus So you know my favorite book, One of my favorite books is, you know, The Seven Powers, which is written by hamla Hamilton.
00:09:51
Speaker
and He talks about seven economic moats. and There only could be seven economic moats. There is a process moat, which typically is Toyota. And there is switching costs. There is network, etc. etc For us, the biggest moat,
00:10:07
Speaker
I believe are two. So one is the scale. So as we scale, you know our costs come down and because the scaling is on one in infrastructure. But but a even bigger mode is this process that we have built, the operating system that we have built.
00:10:22
Speaker
Anybody can throw capital and put up kitchens, but those to transform those kitchens, from a thousand square foot to run 15 brands, each of which have its own idiosyncrasy and processes, et cetera, et cetera. This operating system is is our biggest board. So capital, like for example, someone has a billion dollar, you can put 400 kitchens, right?
00:10:49
Speaker
But then, um you know, having that operating, seamless operating. Today, we are able to bring a Wendy's burger, plug and plate, can do a Beirut biryani, some other kind of biryani.
00:11:02
Speaker
You know, now we are in conversation with a global, you know, Chinese brand and plug and play into it. So this operating system is is our ah unique mode, I would say.
00:11:15
Speaker
Okay, umm I'm going to play the devil's advocate a bit. Say, like Uber had a particular way of doing things and then Rapido came along, which tapped into the inherent entrepreneurial spirit of
Building and Defending Brand Identity
00:11:29
Speaker
Indians. And it flipped the business model and is now possibly the second largest cab aggregator and in in India.
00:11:38
Speaker
Similarly, someone, could be, say, Zomato, could... take advantage of the inherent entrepreneurial spirit. a lot of people dream of opening a restaurant and ah provide the operating system to them, plug and play. They decide what brand, what pricing, what they want to make, how they want to make, ah and everything else is done through the Zomato operating system. So so ah how defensible is that operating system mode?
00:12:07
Speaker
Yeah, great question. But if you look back, you know if we look back last 50, 60 years, or even even before that, every retailer has a private level.
00:12:21
Speaker
Amazon has a private level, like many private level brands. um Walmart has, Costco has, everybody has private levels. But the only industry where retailer or distributor or an aggregator doesn't have private level is travel.
00:12:40
Speaker
Like, make my trip doesn't have a hotel or Expedia doesn't have a hotel, you know, that's because running a hotel requires a completely different DNA than running a distribution business.
00:12:53
Speaker
But if you think about a phone or a battery or, you know, you know, Then Amazon is great in distribution, go to the same manufacturer that gives batteries to say, let's say Ever-Eady and then pick up the battery and distribute to their channels.
00:13:08
Speaker
But hotels, it's impossible because you need a different DNA. Same with restaurants. The operating system that Zomata has built over time is a logistics operating system and a distribution operating system, not a food processing operating system.
00:13:26
Speaker
And They tried back in 2020 and Zomato is a great company. i have tremendous respect for what they have done. And no point in time, I'm saying we are immune to competition. Obviously, you know someone may do something, but fundamentally, if I if i went to Zomato, I would focus on my core strengths, which are logistics, which is, you know, that's why they went into Q-commerce because it's it's a direct play. I'm good at distribution and so on. But Swiggy tried this, right?
00:13:58
Speaker
Swiggy tried this with Access, Swiggy Access, but it didn't work out. In fact, globally, if you take GoDaddy, Deliveroo, Delivery Hero, none of these worked. Talabat, none of these worked because of the same reason.
00:14:09
Speaker
Because ah food processing operating system is very different from a logistics or a distribution operating system. And that's one. And secondly, if you look at, again, last X number of years of disruption, one after the other, two things get disrupted.
00:14:30
Speaker
And that's why Buffett never invests in these two things. One is technology. like Inherent technology. um If a company is technology, for him, Apple is a brand. That's why maybe i invested in Apple, but he's never, ever in interested in any other technology company, but technology this gets disrupted.
00:14:48
Speaker
The other thing that gets disrupted is distribution. That's the first thing that gets disrupted. Like if you think about Rapido, it's a distribution disruption. If you think about Amazon, it was a distribution disruption.
00:15:01
Speaker
You know, Shopify, distribution disruption. So, Distribution is very susceptible to technology changes. But as they say, technology should not be a horse, it should be a tailwind.
00:15:14
Speaker
If you think about over the last 50, 60 years of disruption, what stood the you know passage of time? It's the brands. Coca-Cola is still, you know it doesn't matter what the distribution is.
00:15:30
Speaker
People would be ordering a Coca-Cola. So our focus as a result is, you know, build the operating system, build brands. So, you know, if we, if we, and either own brands or have that unique reason, like Wendy's, we have India license, you know, whatever be the distribution, like Swiggy's, Zomato, tomorrow something else, Rapido is getting into food delivery now, you know, and, but people will want a Wendy's burger, hopefully. And I know that'll depend on how we execute, et cetera. But in my view,
00:16:02
Speaker
Over a long period of time, over 50, 60, 100 years, couple of things are real mode. So one is a process operating system, which is very difficult to copy as such in terms of complexity, etc. And the second is the brand.
00:16:18
Speaker
Like if you are able to build brands that are loved by customers, your distribution will change tomorrow. Directly in chat GPT, you will have to send me a Behrouz biryani or whatever and Domino's pizza.
00:16:31
Speaker
So distribution might change, but people will have associated, especially for products that are differentiated. Food is the most differentiated product out there, right? And there, McDonald's, even after all these years, you know, health fad, know, this trend, that trend, you know, McDonald's evergreen, doesn't it?
00:16:49
Speaker
food delivery, your drive-through, all sorts of distribution changes happen. But through all of these, that brand is standing tall.
00:17:02
Speaker
So our aspiration, whether we are successful or not, I don't know. Our aspiration is to build an operating system which is you know you almost impossible to copy and keep building brands.
00:17:13
Speaker
you know And then let technology help you. Let tech technology be the tailwind. Don't uh worry about technology that will will come and disrupt you you know uh in fact it will help you with ai it should help us because today for each of our products we know what is the calorie count what is the macro nutrients you know uh almost like a netflix movie you know it has we know all the characteristics so we know people who are vegetarian non-vegetarian usually tuesdays they become vegetarian in navaratri they become vegetarian for nine days so with ai giving us that data and we are our ability to supply with the right food at the right time using the operating system you know these are things that excite us you know and i i think uh uh and but
00:18:07
Speaker
I'm not saying that we'll never be disrupted and we are we have to keep doing and keep moving the bar higher and higher and higher to stay relevant. That's relevant for every business, you know, whatever shape or form.
00:18:25
Speaker
Will a brand which is a pure Cloud Kitchen brand be as loved as a brand which also has the real estate? Like, are you at a disadvantage there? Like, like so what else?
Digital Marketing and Consumer Engagement
00:18:40
Speaker
Yeah, no it's a great question. Now, you know, the way I think about this, like ah if you think about Behrouz, you know, if you look at Google ratings, Vicky Zomato, it's the best rated biryani brand across, um you know, any location in India today, now even in UAE.
00:18:58
Speaker
But the fundamental thesis here is, The same question was asked for every category in the last 20 years of internetization. Like, will people buy clothes on internet?
00:19:12
Speaker
Will, you know, a cosmetic brand can, yeah will it be built on internet? Because people want to try, people want to do this, et cetera. But all those bits have been, you know, let's say broken over over time.
00:19:26
Speaker
Now, also what happened during this time? So what is, How do you build a brand? Yeah, I think there are two things for a food brand.
00:19:37
Speaker
One is ubiquity that people should be able to see you everywhere, which is people should be able to access you everywhere, which is like if you're in New York, you get a McDonald's, you go to Singapore, you get same McDonald's and you know, and so on. So that's why the second is visibility.
00:19:56
Speaker
Now, if you think about like, if I think about my daughter, she's on Instagram. rather than walking the streets all the time.
00:20:08
Speaker
Today, she's more comfortable a voiceless world where she just punches a few buttons and she gets something, you know, rather than you're taking a car ride and, you know, looking at, you know, where to park and how to go, et cetera, et cetera.
00:20:24
Speaker
So I think in today's world, ubiquity. So for example, if you, if you're in Indira Nagar working, or Whitefield working, living in Indranagar, traveling to Delhi or maybe Nasik.
00:20:35
Speaker
Wherever you open Swiggy, Zomato or some other app, you will see Behrou's or Faso's or Wendy's or Owen Story. So
00:20:46
Speaker
you are you are able to access the same product, the same consistency wherever you are. And over time, it will It will even grow. Second is visibility. Our Instagram followership of are off the charts.
00:21:01
Speaker
Like, you know, it's like 10 times the next biryani brand or the next, um you know, wraps brand, etc. So as long as I'm not saying that in the new world, the the the offline will become redundant or anything. But I'm just saying that there is another way to build a brand today.
00:21:24
Speaker
And which is, you know, be visible on social and be accessible wherever where your customers are. So the old tenet of meet the customer where she is, as long as we can do it, keep giving consistent experience every single time the customer orders.
00:21:44
Speaker
um I believe we can build a brand. And today, i mean, just a couple of weeks back, one of our investors did a research on biryani brands across India because there are some regional good biryani brands, etc. Everywhere, the awareness of Beirut was off the charts.
00:22:03
Speaker
That may or may not translate into actual purchase. That's a different thing. But in terms of awareness, in terms of availability, in terms access, in today's world, it is possible to build it like that rather than being on the high street.
00:22:18
Speaker
OK. um the The two kind of different themes I want to zoom in on. Let me start with the first one. um How do you scale brand love? like Like you said, in terms of Instagram, you are much higher than any other biryani brand or in other spaces also.
00:22:38
Speaker
um Is there a science about building brand love that you have discovered which you can share? Yeah. So, you know, very, very fundamentally, every consumer goods, especially in categories which are highly differentiated, which is something like food,
00:22:57
Speaker
There are only two ways to build a brand, either be the cheapest or be the best customer experience for a particular location. And that last part is very important for a particular location.
00:23:08
Speaker
So the way we think about food is yeah it's a two two. There are a lot of two by two at Rebel because I think, you know, somehow I imbibed that during my and earlier stint.
00:23:20
Speaker
ah before Rebel. So, ah if you think about two axes, one axis is single sub to group sub. The other axis is value to luxury. Now, you're there are four boxes now.
00:23:33
Speaker
Your single sub value is a weekday lunch. Your group sub luxury is a weekend dinner with friends and family. Your group sub value is your office snacks.
00:23:45
Speaker
Your single sub luxury, sometimes you want an aji goreng or a sushi.
00:23:51
Speaker
Now we believe but brands are created in these four boxes. So a brand that is satisfying your singles of value is not the brand the customer will order when he's sitting with your friends in the weekend.
00:24:09
Speaker
so ah So for example, we have two biryani brands. One biryani brand is singles of value, which is like quick, very cheap, you know, regular, Nothing fancy, comes on time, every single time consistent.
00:24:24
Speaker
That's that brand. The other brand which is Behrouz, which is people order it when folks are at home. You know, last two last week we did an order for 5,000 biryanis for Amazon Hyderabad office.
00:24:38
Speaker
So where they ordered for a celebration, 5,000 biryani boxes, Behrouz boxes. like If Beiru's has an offering in singles of value, nobody will order Beiru's for those celebrations, just as an example. So we think about brands, when we conceptualize a brand, we think about where in these four boxes the brand will land.
00:25:01
Speaker
Will it be singles of value where price will matter, portion size will matter, speed will matter, or will it be you know luxurious, etc. where packaging will matter, where you know the portion sizes again will matter in a different way and the whole ah presentation will matter and so on. so So that's the starting point. That's how we think about all brands.
00:25:26
Speaker
And for each of our brands, we know where in this 2x2 that brand sits. Sorry, one very quick. The single and group for value wouldn't have... Wouldn't that have a lot of overlap? Not necessarily.
00:25:38
Speaker
See, that is... That is group sub-value, dominoes. Okay, it's not... You don't look at it as single sub-value? Maybe. there I mean, nothing is very... Like, yeah you know, 100% there. But the way we look at it is...
00:25:56
Speaker
party happening or a meeting closure, project closure happening in office, you order a Domino's, you know, they're like four or five different toppings. That's the big use case. You know, obviously there could be also some other use case, but let's say 60% of the time, you know, that's the use case it caters. Or you order, you know, 20 samosas, you know, that's your group sub value.
00:26:18
Speaker
But between meetings, you order a dal chawal or rajma chawal very quickly. You know, that's your single sub value. You don't order 20 people having Rajma Chowal.
00:26:30
Speaker
So okay so that's that's fundamentally how we think about brands. And then know the big advantage we have is before launching a brand, we don't have to invest in anything. We don't have invest in new real estate, new manpower, new supply chain, nothing.
00:26:49
Speaker
We just launch up. It's almost like a software release where we launch a brand in a couple of locations, couple of kitchens. And we iterate.
00:26:59
Speaker
We see, okay, is the customer loving it?
Franchising vs. Unique Concepts
00:27:02
Speaker
And the good thing about online is for every order, we have data. the What rating the customer is giving. We're not satisfied. You or she would speak out, leave a rating, leave a review or whatever.
00:27:16
Speaker
And we'll look at this very very closely and we'll see okay is the customer love there if it is not there we'll never scale the brand but we will rear but but there are like 30 40 brands we launched and we'd never scale because we know in the beginning okay this is not working and then we change the pricing change the portion size change the taste change the ingredients and keep doing this iteration till we hit that customer love and also the second piece is whether we are making money because there is there could be massive customer love but if you're not making money it will not be sustainable you know the brand will scale but then you know for financial reasons we'll have to track back right so we call it a pm fit for a brand when that brand reaches reaches a threshold of customer love and the threshold of unit economics then we know we have a
00:28:13
Speaker
winner at hand we call it pm fit for that brand and then we from three kitchens we take it to 10 kitchens and then you know 100 kitchens and that scale of war is super fast because you know if you think about a brand that gets law gets to pm fit if you have to do it Real estate by real estate will probably take 10 years to do 300 locations.
00:28:37
Speaker
But for it for us, it's weeks or months, you know, at the most. Once we know there is a PM fit. We also hit some snag at scale. Like, for example, in three kitchen, it's working. But once we move it to 100 kitchen, we see some other problems. And then we solve it.
00:28:55
Speaker
So at every stage, we say, okay, is it breaching the boundary of threshold of customer love and unit economics. And then the next scale-off happens. And this, you can call it science, but you know yeah it's a mix of art and science.
00:29:09
Speaker
But this is how FMCG is operated forever. If you think about it, Unilever or PNGs of the world operated, right? or software companies operated, you know, release, move fast, iterate, take customer feedback, and then keep growing.
00:29:23
Speaker
So that's how it's more of a science, but food is at the end of the day, you know, it's a form of art, you know, so I would say it's a mix, but that's the playbook we play.
00:29:35
Speaker
So ah just to recap, what you're saying is that for brand love, the first thing is clear identity. Like in those four quadrants, where does the brand stand? that That has to be very clear from the beginning. And the second is ah like an agile approach towards scaling up.
00:29:52
Speaker
ah Start small, experiment, fix, experiment, fix, experiment, fix until there is conviction. And once there is conviction, then scale. And if you do these two things right, then brand love is automatic.
00:30:05
Speaker
automatic there and then we put money behind Instagram, social media, some ATL. So we don't spend anything before a brand love is established and it it is at some scale.
00:30:20
Speaker
So, so, so money also doesn't go down the drain. i mean, we've learned it initially. We made all whatever I'm saying, all these mistakes we made, we scale brand before, you know, op PM fit was achieved.
00:30:31
Speaker
We put money before, you know, love was there, but today sitting here, we've learned, you know, you can say the hard way, some of these lessons and that's how we operate today.
00:30:44
Speaker
You're more dispassionate now. Maybe there was a conviction in a brand because of personal conviction because of which you spent money. What's an example of that where you had personal conviction but it didn't play out?
00:30:57
Speaker
See, our second brand, you know people know Beirut after fast shows, but our second brand actually was a continental brand called The Olive Trails.
00:31:08
Speaker
Because of my travel, etc., I was very passionate about like real good uh sort of grilled chicken and broccoli kind of a kind of a thing but it never uh reached that uh pm fit in india and uh now in a new avatar we are calling it 500 calorie project and it's one of our best brands in dubai you know but we launched we don't call it call it the same but we launched this brand seven eight years back it never worked but now
00:31:42
Speaker
you know In the right market, it is flying. So that's another thing. We've also seen it um but so it's a matter of time. Sometimes we too early.
00:31:53
Speaker
you know And over time, trends catch up. And we have another second inning for the brand happen. See, this are the one big difference is most, 90% of restaurants close within three years in India.
00:32:11
Speaker
You know, that's because the cost of failure is humongous. Like you launch something, you take up a place, your dream project, you take up the most beautiful asset on the high street.
00:32:25
Speaker
You know, you spend a couple of crores, build a brand. On day one, lot of customers walk in, but then it fizzles out. all your investment is gone. You know, all your, and you can't change it to something else right uh without spending another bout of crore uh so the cost of failure or cost of experimentation in restaurants is super high yeah we we decoupled the real estate from the brand so the cost of failure or cost of experimentation for us is very very low so and that's the i believe the fundamental disruption that
00:33:03
Speaker
you know, how restaurant businesses ah operate otherwise and how we operate, though we both are like brands and whatever. But is this, you know, behind the scene insights of decoupling real estate from the brand gives us that ability.
00:33:19
Speaker
I guess this is why franchising is a popular route to become a restaurant entrepreneur because the product market fit is established when you're buying a franchisee of a, like a subway, for example. Absolutely. Absolutely.
00:33:33
Speaker
and And then you invest your money. The only thing is, you know, there is another two by two that's very often used at Rebel. Is if you think about one axis, is people agree with you and people don't agree with you.
00:33:48
Speaker
And on the other axis, you have you are wrong or you are right. So when people agree with you and you are right, Your return should be nominal because you know it's already priced in.
00:34:02
Speaker
Like when you pick a stock, which everybody thinks is a great stock and and you know it's a great stock, but it's already priced in. right and And a franchise taking a franchise is that.
00:34:13
Speaker
you know I know McDonald's is great you know and I invest. So I'll have my 15% return. It'll not be abnormal, but I i will not lose money. But the...
00:34:25
Speaker
quadrant where abnormal return happens is where people don't agree with you and you prove to be right because there it's not priced like you know what we have done people didn't agree our investors didn't agree with us you know i'm not saying we've already we're already successful and whatever but you know because people both didn't agree with you and in some sense we we proved to be right that's why you know we we can dream of abnormal returns.
00:34:57
Speaker
And this is how most invention happened. you know Abnormal return went to people with whom people didn't agree in the beginning.
00:35:08
Speaker
And they were right. And they were right, of course. But when you take that decision, you don't know whether you're going to be right or wrong. So many times you'll be wrong. So, you know Howard Marx is one of my favorite authors.
00:35:23
Speaker
So he says... You know, when you want to be great, there are three things that are important. First is, you should think different, which is, you know, you should take a contrarian bet where people don't agree with you.
00:35:38
Speaker
Number one. Second is, you should be willing to be wrong. Because you know when you take that decision, you don't know whether will right or wrong. If you, like nine out of ten times, you'll be wrong.
00:35:50
Speaker
And you should be willing to be wrong. Otherwise you will never never but take a contrarian decision. And then the third thing is you should be willing to look wrong for a long period of time. Because you take a decision, you are wrong and you look wrong for like years and maybe decades.
00:36:09
Speaker
And most times you will always be wrong. But then there will be one or two times you'll be right. And then you make the killing. they So anyway, i you know I've become a little philosophical here.
Global Expansion Strategies
00:36:21
Speaker
But I really believe in this this ah this philosophy that, you know, when we are taking, that's why contrarian baits are a second nature to rebels. Sometimes we overdo it, but and that's why we are called rebels also.
00:36:36
Speaker
But, and um but yeah, you know, because you raised the topic of franchising. So I thought, you know, that's how I think about, like we, we have the option to be a master franchisee of something, you know, and, and,
00:36:51
Speaker
and have our steady return, et etc. But we didn't go down that route. We said, okay, no, let's even for Wendy's. Globally, they have never done cloud kitchens. But we told them that this is how India will be born.
00:37:05
Speaker
Like it took McDonald's 10 years to put the first 100 outlets. In about six quarters, we took Wendy's to zero to 200 locations now. Wow.
00:37:16
Speaker
So, yeah. but Why don't you offer franchises of your brands?
00:37:25
Speaker
See, I think
00:37:29
Speaker
so far we have not, but we have started little bit because we wanted to nail operating system, the science of building brand love so that we know you know what are the key input metrics that a franchisee will be held accountable for.
00:37:50
Speaker
When we didn't know these answers, you know, we could not have franchised. So today we feel more confident of franchising because we know the model. In fact, in UK, we are thinking of franchising and, um you know, we just started that.
00:38:06
Speaker
We know the model now, we know how it works. We know the operating system. We know, you know, how to launch brands, create brand love, two by twos and all of that. We have the blueprint now. Now we we feel we are ready to, you know, franchise.
00:38:19
Speaker
Okay. um
00:38:24
Speaker
I had a ah second question to ask from previously, but I'll come back to that. oh Dubai, UK, you said three countries, right? So the other two are Dubai and UK? UAE and UK, yeah.
00:38:36
Speaker
UAE and UK, okay. um You know, the like Ola, Zomato, all of these unicorns have gone through the route of going global and then retreating and focusing on India. um Do you worry that you might be making that same mistake? Isn't the India market such a massive opportunity?
00:39:00
Speaker
I mean, you know, like 150 crore a month, you could probably hit 3x, 4x of that ah in a year or two in India itself. I mean, there is so much opportunity here. so why ah Why not just focus on India?
00:39:17
Speaker
Yeah, it's a very fair question. See, you know, we actually have been to more countries. Like we we went to Indonesia for five years back, et cetera, et cetera.
00:39:29
Speaker
So there has to be an underlying structure for us to be successful in a market, we believe. And that's why we retreated from Singapore, Indonesia, and and places like that. And also, you know,
00:39:42
Speaker
aspiration is the only thing in the world which has no real limit. like So sometimes you ah you become so ambitious and so aspirational you know that you think you can win the world and all of that. You can make mistakes doing that.
00:39:56
Speaker
So that's always there. There is no like you know so boundary you can define, and so to speak, in an entrepreneur's mind, in a founding team's mind. I'm just wondering if this could be ah the continental food mistake being repeated, you had a lot of passion for continental food.
00:40:15
Speaker
um Similarly, i mean, you've been a jet-setting consultant, a lot of global exposure experience, which might have given you global ambitions. But is there data to back this decision to go global?
00:40:28
Speaker
See, where the data said that we are not doing well, we retreated. In UAE, I think, you know, everything you do you make a mistake for the first time and that is not a crime but if you make a mistake the second time it's a crime right so in uae we went very slow we said that we won't scale we won't you know burn money before we are 100 so the way we think about brand love we thought we thought overall market love unless that pm fit is there we won't scale
00:41:04
Speaker
And because we took that approach in UAE, our business is absolutely booming. you don't In fact, at a per kitchen level, it is you know doing sales that are equivalent well to some of the highest grossing restaurants in the US.
00:41:22
Speaker
um and
00:41:26
Speaker
Because other thing I realized that in India, labor is cheap, infrastructure is costly, which is exactly opposite of US, where infrastructure is cheap, but labor is costly.
00:41:38
Speaker
That's why our business doesn't have a comp in the US because our India is a great market to do this because labor is cheap, you um but the infrastructure infrastructure is costly. Real estate costs are very high.
00:41:50
Speaker
In India, you don't find good real estate, et cetera, all of that. That's why it works. UAE, in fact, is the best of both worlds. Infrastructure is cheap and labor is cheap.
00:42:02
Speaker
So fundamentally, it is a terrific market. And that's why it always works. Distribution may not, like zoma because distribution ten distribution businesses tends to be winner-take-all.
00:42:14
Speaker
like you can't have like five aggregators you know you will only have two aggregators or sometimes one will get disrupted equilibrium is two aggregators you know whatever market you take you know travel car you know uh food delivery every market is a dual policy largely And as a result, it's very difficult. Like Uber came here, you know, had a fierce battle with Tola and then taxi for sure.
00:42:39
Speaker
All these guys folded up. So it's more of a function of that. Like, you know, whether Zomato will survive in a market with Talabat and, you know, Deliveroo were already strong.
00:42:51
Speaker
So it's ah it's a function of that. You know, distribution businesses typically tend to be dopolis. ah That's the equilibrium. But brand businesses are not like that. You know, brand, there could be many brands, you know, equally big.
00:43:04
Speaker
and and so on. so so So that's one advantage that our model has, which we are not a distribution for say business. So brands can flourish and we now have the operating system to create brands that UAE markets will love or London market will love because we we have that wire vehicle.
00:43:24
Speaker
So we learned the hard way, I would say, and I'm not saying we would not go to ah any other country in future. So But we'll take it slow because we shouldn't make the same mistake again.
00:43:36
Speaker
The other piece is that you know people stay at Rebel for a very long period of time. Sometimes I feel that it's too long. Our Execom right now, like they have been here for 13 years you know and we're almost like co-founders.
00:43:53
Speaker
And this gives me an opportunity to tell a guy or a girl and say, okay, you go and open this. you know It's your baby. And when we think of a world, when we have when we know the world is our oyster and we can say, we can you know make more entrepreneurs out of the rebel ranks and say, and that's exactly how ui happened. That's exactly how London happened.
00:44:20
Speaker
Someone was getting itchy saying that, okay, you know I've done this for so for some time. What should I do now? We say, okay, do you want to do London? and do it.
00:44:31
Speaker
you know and and do it So, but that that's, I think, is an outcome of how we build the company. we We call us as founder, a founder factory.
00:44:44
Speaker
So, these are couple of things that came together to say that, okay, we'll do it. But at a slower pace, you know. what's the difference between What's the difference between Indonesia and UAE? Like, you retreated.
00:45:01
Speaker
See, I think with Indonesia, in fact, in the long run could be a good market as well, because it has similar characteristics of India. Again, labor is cheap, real estate costly.
00:45:13
Speaker
um But it was our entry strategy that was wrong in Indonesia. We went to Indonesia with a JV with Gojek.
00:45:23
Speaker
They were 50%, we were 50%. But then when Gojek went public, became, you know, this, this big thing, this piece of business became lower priority for them.
00:45:36
Speaker
So they wanted to exit and it was too far for us to, you know, then manage it ourselves, et cetera. So we had a good exit. So we sold the business off ah to someone because it was too distant, you know, dependent on a JV, which is an aggregator and then aggregator,
00:45:56
Speaker
focusing somewhere else. It's a combination of things. But as a market, we believe it's a good market and maybe that Saudi the Arabia, these are the two markets we believe have the right characteristics for a business like ours.
00:46:10
Speaker
But in time, we are we are not in any hurry to do it tomorrow, etc. As I said, there is no first mover advantage. Like for when you're building brands, there is no Like winner take all. There is no like real first mover advantage. Speed doesn't matter. you know Deliberation matters. Doing things slowly, deliberately, but well matters.
00:46:30
Speaker
so ah So, we'll do it you know when the time is right. Then why UK? UK is like doesn't have any of these ah characteristics.
00:46:41
Speaker
So, by the way, UK, labor could be costly, but infrastructure is also very costly. Unlike US, because of the, like if you go to, like especially London, Birmingham, and you know, these centers, this is super costly.
00:46:58
Speaker
And I look at one data, which is what is the rent to sales ratio for restaurants across the world. u is the cheapest. It's 5-6%. Okay. 5-6%. India is the costliest, 15-20%. okay five six india is the costliest fifteen to twenty percent
00:47:16
Speaker
UK is 10, 12%, so it's double of US. So fundamentally, there is a structural advantage of cloud kitchens where you can reduce the rent. you know b and it's a And because of a you know vertical city structure, you know congested places, et cetera, drive-thrus don't work in UK as much as they do in the US.
00:47:41
Speaker
delivery what's the uk is one of the highest with delivery penetrated markets in the world because of this you know parking problems this that etc all that so it has some characteristics though labor is not cheap so we're still figuring our early days for us and again we are in no hurry so today we put beiru's in about 20 locations in uk doing well um we are using unutilized capacity of existing restaurants at the back end, etc.
00:48:10
Speaker
We'll see. Okay, got it. Okay, interesting. So it's a different model then where the the cloud kitchen is not yours. Okay, interesting. ah This model of using unused capacity could be a threat to your model in India? Like like I interviewed the founder of a company called Ghosh Kitchens and they had a similar model where they would tie up with restaurant entrepreneurs who already had a restaurant and give them the brand and the listing and ah manage their listing to get them more orders from the aggregators and give them the SOPs and the ingredients, et cetera.
Operational Excellence and Quality Control
00:48:47
Speaker
um So like an, you could say an asset light ah rebel foods. So do you see that as a risk? with We thought about this and you know there is nothing in this world we have not tried by the way.
00:49:00
Speaker
so But fundamentally what happens is if a restaurant is already great, a restaurant owner is you're running a great restaurant, and that restaurant is busy at peak hours, like on Saturday night, on Sunday night, depending on the cuisine.
00:49:19
Speaker
But mostly restaurant businesses, unlike ours, where we have singles of value for weekdays, etc most restaurants are you know and people you know where people go on weekends or nights, etct etc. During these hours, the restaurant is super busy.
00:49:32
Speaker
It will deprioritize your secondary brand and not put enough focus. And which is the problem with building any brand if people are not focused on it, people sops are not followed, consistency is not there, you can't build a brand.
00:49:49
Speaker
That's one. Secondly, if the restaurant operator is not good and he is not doing well on Saturday night or Sunday night or whatever, then here,
00:50:02
Speaker
I doubt his ability to do well on any brand.
00:50:07
Speaker
So in both ways, you are putting your brand at risk. Either the guy is so busy that he doesn't have focus on your brand or your guy is not good.
00:50:20
Speaker
you know As a result, he doesn't have his own business. And as a result, it's you know
00:50:28
Speaker
that's how we think about it. But as I said, you know we should make the mistake of saying that no threat is imminent and you know there is not a different model which will disrupt us we are vigilant on these things and you know our job is to strengthen the operating system and bring more brands on the operating system this is our flywheel and we'll continue to that and bigger we become like for example five years back when we had let's say 50 locations in india when we launched a brand
00:51:01
Speaker
it would go to 50 locations. Today, it goes to 400 locations. So the bigger we become, the velocity of our brands increase. That helps us be bigger.
00:51:12
Speaker
And that's the flywheel we are rotating. so so companies So people might do this you know at a small scale or whatever. But the faster we run, the faster we churn our own flywheel.
00:51:25
Speaker
the you know you know, that the more distance we'll put between us and the and the next guy. That's where we should focus on. You know, as Bezos said again, you know, don't be focused on competition, for focus on your customers.
00:51:37
Speaker
And automatically, you will understand that flywheel, churn that flywheel, put all your energy there, and and we'll see. Okay. um and The other thing you had spoken earlier was, again, to my question of building brand love, you had spoken as one of the things about consistency.
00:51:56
Speaker
ah how do you ah in ensure consistency, which also is like essentially quality, you know? So how do you ensure the quality of what is being sent out across 400 locations and multiple brands? I mean, it sounds like a massively complex system to ah in which you have the quality challenge to control.
00:52:23
Speaker
Yeah, see, I think we, first of all, we have a Culinary Innovation Center in Bombay, which is the art side of things.
00:52:34
Speaker
which is this is a place where we have, you know, 10 odd chefs come from different backgrounds. Someone is great in continental, someone is great in Asian, Vietnamese, Indian, so on and so forth. So we assembled this team over a time. And then like this place is managed by a chef who has been with us for 10 plus years.
00:52:53
Speaker
And this person is a magician in terms of creating new you know incredible dishes that's our first love food is our first love so so that's one and then now the second is how to scale this with consistency with process etc what we have learned over time is that making food is
00:53:25
Speaker
you know, combination of three things. One is bilok materials, which is the ingredients. Like even if you go to a Michelin star chef, he or she has a bilok material. Okay. These are the ingredients I'm going to use.
00:53:38
Speaker
Second is dispensing, which is what you put at what time in what quantity. Like a chef or um or my mother would know automatically, this is the time I put some garam masala. This is the time I'd put some cumin. This is the time I would put this tarqa or whatever.
00:53:55
Speaker
So there is a sequence of dispensing that happens. And then the third is a combination of heat and movement. Sometimes it's stirring, sometimes it's low flame from below, sometimes it's a conveyor movement, etc.
00:54:13
Speaker
So once we have the you know art form ready, okay this is the dish that we want. We then break it into these three things. So what is the bill of material? What is the dispensing sequence?
00:54:25
Speaker
What is the process? Now, our kitchens, if you think, you can think of our kitchens as a combination of processes, not a combination of like brands. Like for example, it's, though it's a little stretch, but it's like a,
00:54:40
Speaker
Like any factory where there is, you know, late milling process, drilling process, e etc. In our kitchens, it is stirring process, slow flame process, high flame process, you know, grilling process, etc.
00:54:53
Speaker
Then we decide, okay, this dish, this is the bill of material. This is the sequence of dispensing. And these are the combination of processes you will have to go through.
00:55:06
Speaker
And then we do it in one place. Then we fine tune it, as ah as I said. you know Like for example, biryani. Biryani is made fresh in each of our kitchens every single time.
00:55:20
Speaker
Now, you know I remember first biryani that we made 12 years back where I asked the biryani chef, How will the biryani be? He told me, but thats that depends on the on God.
00:55:32
Speaker
you know I don't know how the biryani will be because my job is to put it there and then you know rely on the almighty. and But today, if you look at our biryani process, there are 36 different spices that go into biryani.
00:55:47
Speaker
So we create back-ended sashes of these prices spices. So the dispensing at the kitchen is put one or two sachets of these spices at a certain point in time, etc.
00:56:03
Speaker
That's how biryani is made fresh. But following a sequence of dispensing, we created a specific cooker for biryani, which is the process part of it, ah which which gives the automatic gum that our old vessels used to do.
00:56:21
Speaker
So this is just an example. So similarly, we've done it for everything. So that's why it sounds very complex from outside. And it was complex when we tried to decode this, ah but we put our head together and we kept on, and we still have some distance to go.
00:56:38
Speaker
Like today, if you go to our kitchen, 100% of things follow this bill of material, this sequence of dispensing and a standard process.
00:56:49
Speaker
Some of them have become automated today. Like for example, frying. you know Earlier we used to have a timer, like fry these French fries for two minutes or fry this hara-vera kebab for 50 seconds.
00:57:06
Speaker
Now if you go to our kitchens, the person says, okay, I'm frying a hara-vera kebab. The fryer automatically dips, automatically comes up, automatically sets the oil temperature. So once we've set the process, it was SOP driven and then it became automated.
00:57:23
Speaker
And our effort is continuously automate more processes without taking away the sequence of dispensing, the without taking away the core process through which the dish has to go through and the bill of materials that makes a great dish.
00:57:39
Speaker
So, you know that's how we we thought about this and that's how we, you know, we we tackle this. ah So, typically, it's not necessary that one person will make one dish because you're saying there are different stations.
00:57:53
Speaker
So, a dish could be made from station one, then it goes to station two, and then it goes absolutely to station three. Okay. It's like when you launch a new SUV or a car version in a factory, you don't need another factory, right?
00:58:08
Speaker
You follow a certain workflow, you certain follow a certain process. It's the same, you know, same team. You know all of that. How do you ah manage aspirations of people in this kind of a setup? Because it would not necessarily attract someone who's passionate about cooking, right? This would attract someone who's looking for a stable job.
00:58:33
Speaker
um Like the guy who ah wants to be an accountant, you know, adhere to a process, not necessarily be creative in cooking. So, you know...
00:58:46
Speaker
We think about this as a combination of art and science. So our Culinary Innovation Center where we attract, you know, artists, people who love cooking, the creation process, et cetera.
00:59:01
Speaker
But we don't want that in our kitchens because then it will depend on you know, whether you feel good or bad, you know, whether we had a fight at home or not.
00:59:15
Speaker
and you come to the kitchen and you bring your mood with you and the customer suffers. So it's like the variation will be at the source, but the consistency will be paramount at the edges.
00:59:36
Speaker
So that's how we think about this. Then do whatever experimentation, creativity, everything at the Culinary Innovation Center. But once is at the kitchen, which is when a customer orders is hungry, depends on you, whether you are giving that great dish that the person has tasted last time or in a different city, there cannot be any variation.
01:00:03
Speaker
It's got to be standardized. It got to be same every single time and and so on. so So that's how we think about this. How do you staff your kitchens? Like you four-night kitchens to staff. How do you staff it, keep the people motivated, engaged in very factory floor kind of a work role?
01:00:26
Speaker
See, the way we think about this is, and again, over time we've learned this, is is that every kitchen is a center for delighting the customer. That's the mission of that kitchen.
01:00:38
Speaker
So every kitchen is run by a person called CDO because that person is the CEO of the kitchen, but a special focus on the delight. So we call it call him or her chief delight officer.
01:00:51
Speaker
So today all our 450 kitchens are run by a CDO, each of them. And how does one become a CDO? Today, 80% our came through the ranks.
01:01:04
Speaker
Started as a team member, typically, you know, class 10th pass or or matriculation, etc. Should be able to read and write But that's it. But then we build these people. Today our CDOs can run a P&L, can do Excel work, can manage people, can manage inventory, can manage customers and all of that.
01:01:26
Speaker
So we have a very strong CDO development program through which we take people who come at minimum wage as a team member in our in our company, but they over a period of time So there are six layers in our kitchen. So one is team member.
01:01:41
Speaker
Second is a product expert where that person knows how to run all processes, etc. The person becomes a product product expert. Then the person becomes a coach in the kitchen.
01:01:52
Speaker
So this person then We have new team members come, this person then trains those people. And then coach becomes an MT, management training, which is when the coach then starts looking after people, inventory, et cetera.
01:02:09
Speaker
Then that person becomes an ACDO, assistant chief delight officer, and then the CDO. and it's And so it's a structured program. People get motivated. you What I've realized, you know today we employ about 5, 7,000 people on our roles.
01:02:24
Speaker
There's no gig working here. People have yeah insurance life insurance for family, for parents, for children. So internally we call ourselves that we are transforming lives.
01:02:38
Speaker
you know What is transforming lives? Transforming lives is, i have seen you know coming from a background where my father could not afford things, but then all his life he tried his best so that we could come up in life.
01:02:53
Speaker
And in India, every generation is like that. So today's CDOs are thinking, you know, what should be best for my children? you know, how can we give them the best education and so on and so forth. So we believe that we have a big role to play here.
01:03:08
Speaker
So we take people and transform their lives from team member to a CDO. And as a result, we don't have any attrition. Like at a We have some attrition, it's like a light bulb. People come in, our biggest attrition happens within the first three months.
01:03:22
Speaker
People just don't like yeah know whatever they're doing. But once people go through that three months, become a product associate,
01:03:32
Speaker
um It's, you know, it's a terrific journey that they can have over the next few years to become a CDO, really transform their lives, start earning good money, you know, spend for their families and so on. so So that's, that's how we operate.
01:03:49
Speaker
Fascinating. Uh, this brings back memories, uh, I started working at McDonald's while I was doing my graduation. i wanted to buy a two-wheeler. My dad told me, earn the money for it. ah So there was a McDonald's next to my home, and I joined there. Very similar approach that you start as a crew member, and then you work your way up. and Yeah. ah You're fascinating.
01:04:12
Speaker
and And I assume you you would have a lot of like training and s SOPs, et cetera, to make a 10th pass really be capable of...
01:04:22
Speaker
Reaching. Okay. Okay. Interesting. You know, sometimes I feel the CDO job in our kitchen is the best general management job that could ever be.
01:04:34
Speaker
You know, and obviously not everybody becomes a CDO, whoever comes through. But when we see that spark in someone, that entrepreneurial spirit, someone who is good with people, someone who is good with numbers, and they didn't do graduation or become an MBA because of opportunity, not because of some inherent...
01:04:52
Speaker
ah capability gap. And when we spot that, it's a joy to watch, you know, a 10th past person become behave like a CEO, you know, doing a great general management job and so on.
01:05:09
Speaker
What is the ah typical economics of a cloud kitchen? Like how much is the investment you do for every kitchen? How soon does it break even? What kind of margin
Cloud Kitchens and Market Opportunities
01:05:19
Speaker
does it earn? What kind of revenue does one cloud kitchen do?
01:05:22
Speaker
ah Can you take me through that a bit? like ah A bit of it is slightly confidential because, you know, we also have competition. But atta at at an overall level,
01:05:36
Speaker
It takes us 12 to 15 months to pay back the Capex for a cloud kitchen. At an overall level, our kitchen makes 25 to 30% profit on monthly level. ah but i'll on on a monthly level ah Yeah, and kitchens become profitable very, very quickly. Unlike, you know, restaurants, high street restaurants, because the initial costs are the OPEX is low and rental cost is like, I give you this example of 15, 20% rent to sales ratio in India for us, it's 3%.
01:06:07
Speaker
So, so the ability to recover that. fixed cost rent is a fixed cost is is is very high for us and we don't have a ah location risk like typically our high street is a very location dependent thing football that corner of this road or that doesn't matter for us we can take a ah first floor back and the you know it will not matter in terms of the So, I say, you know, there is a saying at Rebel that putting a restaurant is the riskiest thing you can do in your life.
01:06:43
Speaker
Especially so a higher on a high street. We don't have that risk. So, it's on one end have the reward of the economic economics. The other end is the risk. You know, a great restaurant on a high street probably does better than our cloud kitchen.
01:06:57
Speaker
But the risk that you take is humongous. But for us, the risk-reward ratio is beautiful. you know so what's an average revenue of a kitchen monthly or daily i would say about 500 000 annual annual okay how does that compare to say a domino's outlet we had double of domino's in india wow like on a per kitchen revenue per kitchen business yeah okay but they have 2500 we are you know in india 400 so
01:07:29
Speaker
yeah So, we're still some distance to go into the revenue. Like, we are half of Domino's revenue today in India, roughly, to give or take. But our footprint is, you know, 1.7 or Okay.
01:07:46
Speaker
but Where do you see the opportunity now? Is it in tier 2 or more like tier 1 itself fully not serviced? or Yeah, it's everywhere. Like, If you think about dominoes, today they are in 250 cities in India.
01:08:00
Speaker
We are in 75 cities. so And by the time we reach 250, there will be another 100 cities that can that will be ready. Today, we see wherever we go because India is a brand starved market.
01:08:13
Speaker
And we are talking about 250 rupees, 300 rupees, 400 rupees order. We are not talking about lakhs of rupees. So some of our highest grossing kitchens are in Amritsar, Banaras, Raipur.
01:08:26
Speaker
rapipo so It's absolutely fascinating, you know, what the depth India has. And today, Bandra supply-starved.
01:08:38
Speaker
You can imagine how supply-starved Amritsar is. you know When we bring new brands to these markets, it's unbelievable. So, yeah, I think like even if you take Bombay, Greater Bombay, Domino's are like 150.
01:08:51
Speaker
locations. We are like 45. so So, not only new cities, but also existing cities, the opportunity is humongous. We can keep doing it for, you know, 10-20 years and still be not exhausted.
01:09:08
Speaker
What's the science behind opening a new kitchen? How do you decide what location to open it on and things like that? Two things. So one is ah almost like an amoebetic behavior, which is, you know, we we we studied this in our biology that how amoeba duplicates.
01:09:26
Speaker
So it goes and then the cell separates out and that becomes a new thing. So when we put our kitchen, we we have a polygon, like a Google polygon, let's say, the delivery radius.
01:09:40
Speaker
And we observe where the maximum orders are coming from. Now, if we see a corner of a polygon, which is far from our current kitchen, but has a lot of density of orders, it's a great place to open a new kitchen.
01:09:53
Speaker
So it that's how, especially existing, when we enter a city, we go with one kitchen and then that's how we spread. Almost like that amoebotic behavior. And that's why, and when we...
01:10:06
Speaker
One, new cities. Today there are special tools available, technology available to know, density, delivery orders. you know It's all available today. AI is is ah is a big enabler on this where we can pinpoint a location right to the pin code as to where the density of orders are coming from and all of that.
01:10:29
Speaker
so Okay, okay. oh What is the economics of working with food aggregators? Does most of your sales come through aggregators? or A significant now portion now comes through our own channel, which is EatShore, which we call a food court on an app.
01:10:49
Speaker
So basically on aggregators, you can't order a biryani and a pizza together, or no you can't order an ice cream with a biryani. You have to place two separate orders, come in separate times, two delivery costs.
01:11:03
Speaker
But on each short, this is the use case we went after. And today that has really found a resonance with customers and the volume of that really came up.
01:11:15
Speaker
But even otherwise, you know, Fundamentally, the value in any value chain accrues to the rarer commodity. Like for example, if you Saudi Arabia, you know ah you have 50% of the oil in the world.
01:11:30
Speaker
So distributor makes X amount of money, but most money is made by Saudi Arabia because it controls a unique resource. In India, unlike US, there are very few brands.
01:11:44
Speaker
You can count in your hands which have 70 city presence. you know Maybe McDonald's, KFC, Domino's, Burger King, that's it. So we run India's largest biryani brand, run largest wraps brand and so on and so forth. you know in the in the value chain, we are very important.
01:12:03
Speaker
We are largest on Swiggy's market, for example. so Our economics is very symbiotic, let's say. It's not... ah The power dynamics is more symbiotic rather than um you know
01:12:24
Speaker
are there any any any other way. So it's good because when we open a new city, Suikish Omoto orders go tremendously because we bring new supply to a new city. um and And that's the power we have in ecosystem today.
01:12:38
Speaker
yeah Do they also advise you on where to... Absolutely. Okay. Absolutely. like that That data they share with you that these are unserved opportunities. Unserved opportunities.
01:12:49
Speaker
You know, Biryani will do great here, etc., etc. So it's a very symbiotic relationship. Okay. but What percentage of your orders from each shore app? Now on third.
01:13:03
Speaker
Wow. Okay. But like, does it... take a lot of spend, like ad spend to drive downloads? No.
01:13:13
Speaker
See, again, anything will require marketing when the value proposition is not differentiated. um Fundamentally, that's where people burn money.
01:13:26
Speaker
Like if you launch something, the only way people will try you when it is visible, because they are not feeling any pain. But we were solving a particular pain point. Like if you are three people in a room, everybody wants something else.
01:13:40
Speaker
You know, we were catering to that pain point. And as a result, you know, our economics and Swiggy's reminder is very similar to our insured app.
01:13:52
Speaker
So, including marketing and, you know, ad dollars and everything. Ah, okay. Okay. Like instead of commission over there, here it's marketing spend. Got it. Okay. okay Something like that.
01:14:03
Speaker
Yeah. And you're replicating the logistics stack of Zomato. How do you handle logistics? Yeah, we have... a because See, over time, what happened is the logistics have become a commodity layer in India.
01:14:14
Speaker
So every person, like an Uber, Ola, a driver, a gig worker with a bike does Swiggy, Zomato, Itchior, Zepto, Blinkit.
01:14:27
Speaker
So that's a commoditized stack. go And then your API integrate, it's very seamless. So, you're working with like, say, Shadowfax or something like that? Shadowfax, yeah.
01:14:37
Speaker
Exactly. Okay. Okay. Okay. But do you plan to build your own logistics network? or We have. we have A part of it is done by our own logistics.
01:14:48
Speaker
I would say out of... So, there are also orders that come from Sugi Zawadu, but we deliver. Like, for example, all our pizza orders, we deliver because we believe they're... Controlling the customer experience is very
Innovation Focus: Beyond Logistics
01:15:00
Speaker
important. Like Domino's delivers all its orders, even if it comes from Ziggy Zomato. So for our pizza, because pizza is very susceptible to a good delivery.
01:15:08
Speaker
You can't put it horizontally, vertically and things like that. So so our actual number but percentage of orders we deliver is probably fifty sixty percent of our total orders.
01:15:19
Speaker
And as a result, we can afford a fixed logistics stack. And on top of that, depending on demand, we integrate with Shadowfax or even individual gig workers.
01:15:31
Speaker
ah Do you see logistics as a moat you want to invest more in? Or is it just a No, logistics is a commodity which ah which is solved.
01:15:44
Speaker
We don't have to solve it. Okay. Okay. Got it. Okay. We would rather focus more on um the processing side, the operating system side, the brands, that's where our focus is.
01:15:56
Speaker
Supply chain. Okay. Okay. I'm guessing the reason to go global is also because you want the brands to be global? is it yeah Is it driven by but but Because, you know, every country that we travel to, there is an Indian restaurant. But where is the Indian McDonald's? Where is the Indian biryani brand?
01:16:15
Speaker
Like, you know, we believe Beirut could be the McDonald's or or even Shake Shack of Biryani across the world. So, like in India, your return on capital employed comes in, you said, about 15-odd months from a cloud kitchen.
01:16:32
Speaker
Do you get a better return on capital employed outside India? UAE is better. Okay. okay UAE as a market, you have solved. So, now it's just about scaling it up.
01:16:44
Speaker
okay We already are in Sharjah, Abu Dhabi, So, we we are we have about 20-odd kitchens already. And each of them, on an average, they do like um ah million um million and a half dollars. So, very good.
01:17:01
Speaker
It's a pity that it's not as large
Founder’s Journey and Entrepreneurial Insights
01:17:03
Speaker
as India. but That's amazing. Okay. ah Are you PAT positive now or EBITDA positive? or No, not yet. But we are almost there. Would you need to raise more funds to ah for the expansion?
01:17:17
Speaker
No. As in, you're at 400 kitchens right now, which I think probably you could take it up to 1,000 kitchens. So you can fund that internally through accruals. Okay.
01:17:28
Speaker
Amazing. Amazing. And so what's the next step then? Is it an IPO? And when is that like on the roadmap? See, I think the opportunity in front of us is humongous. Like, you know, at a bare minimum, 200 plus cities, you know, 2,000 plus locations will continue here.
01:17:48
Speaker
I think at some point you do an ipo maybe and two three years is what we are thinking uh but it will be a pit stop rather than a destination for us i believe because you know our work will for many years to come it will still be like we're scratching the surface on this we would do an ipo to give exit to our very uh you know very vintage uh ah investors, also our employees, you know everybody at Rebel has ESOP, everybody, including the team member at Kitchens.
01:18:25
Speaker
So we want to create wealth for the liquid wealth for these guys, because that's when we can really transform lives. and And for those reasons, we'll do an IPO.
01:18:38
Speaker
you You seem to be super inspired by Amazon. Like I see a lot of those parallels. We are inspired by Amazon, by Buffett. Okay.
01:18:49
Speaker
ah and Take me through, you know, a little bit of the journey of reaching here. You said you come from a fairly middle-income family. Tell me about growing up here. is what What led up to you first starting FastWords as a side gig and then deciding to do it full-time?
01:19:08
Speaker
See, I think, you know, I didn't have any entrepreneurial spark when I was... I was young. my my Both my parents are professors, you know mathematics and economics. So for us, it was you know study, do well academically and that kind of thing.
01:19:25
Speaker
Also play football. I come from Calcutta. And also that's where egg roll comes, which is our first side gig. Egg roll and chicken roll and and all those things. A very, very you know usual common upbringing, I would say, went to a good school, went to Jadapur University for engineering, then you know joined a job, ah you know went to IM, Lucknow.
01:19:52
Speaker
Very, very standard. A million people in India would be an engineer and MBA today. And there's all these years I was only... so the one thing that I was really passionate about was mountaineering. So I started climbing when I was in...
01:20:05
Speaker
engineering and I did some serious climbs back then and last seven, eight years I've started again. between, I was you know a little bit tied up, I would say, but that's um that's a lifelong thing I picked up from my early days.
01:20:22
Speaker
It's also taught me a lot about how to run businesses, how to run business, that whole act of climbing, mountaineering, not in the way that people usually associate, but you know in different ways.
01:20:35
Speaker
But other than that, era it was football. i was ah you know I was admitted to SAI Sports Authority of India as ah as a ah defense, but then I couldn't continue because I had jaundice when my training started.
01:20:51
Speaker
Probably the only other thing I could imagine is I could become a footballer, you know maybe, you if I had not been down this path. ah Yeah.
01:21:03
Speaker
So, and then usual job. Then joined BrainVisa, which is the founder was Supam, who is the founder of First Drive. Supam and Anand.
01:21:14
Speaker
ah Anand Lunia runs India Cushion. And that's where the entrepreneurial spark started in me. Because you know there is a BrainVisa mafia, by the way, like a PayPal mafia.
01:21:26
Speaker
And today, I think there will be a rebel mafia also at some point in time. So Supam himself created you know two unicorns. first friday First Cry and Global Bees and spawned a couple of others like me and you know others.
01:21:42
Speaker
There was this entrepreneurial spirit. you know One fine morning, Superm asked me to go to London and start selling e-learning software. So I picked up my bag and just I was like 26.
01:21:53
Speaker
Just went there, went abroad for the first time, built that market. And I really enjoyed the process of ah you know doing something on my own and creating something from scratch.
01:22:06
Speaker
And then came back and then did FASO as a side, then went to INSEAD because I was i had this reach of ah you know ah having a, let's say, a multicultural environment, ah a global education.
01:22:22
Speaker
At INSEAD, one year, sounded great. went there, went from there. and i And for the first time in my life, I did well academically. One of the reasons I had taken a huge rule loan, which I had to repay at some point in time, i knew that if I don't get a good job right out the bat, then I'd be in deep trouble. so So i did I was on the Dean's list for the first time in my life. My parents were proud of me because of my academics.
01:22:49
Speaker
And then I went and went to McKinsey for four years in the London office. i There I did really well. And I saw the other side of me, which is I could think, problem solve, come up with conceptual frameworks, simplify.
01:23:05
Speaker
And two by two metrics. Two by two metrics. Exactly. yeah I did well there. I was a fast tracker. i became an AP very, very quickly. um But then again, you know i my daughter was couple of years old and I thought you know maybe India is the right place for her to be raised. then And that's why I made a decision. I could continue with India Office of McKinsey, but I took a sabbatical, just wanted to see things. you know And then the entrepreneurial itch was coming back.
01:23:38
Speaker
That's why I picked it up back in 2011. The Fasos by that time was a couple of locations. I could see the brand love and I saw that there is no brand across India, you know, a homegrown brand.
01:23:53
Speaker
Food was always a personal passion. And then Kollol joined me who also a foodie like me. He's actually a better cook than I am. um Then, know, we started... When you started Paso's, it was solo thing. Like, you started it on your own.
01:24:10
Speaker
No, Kallal was at BrainVisa also with me. ah but But he always sort of was one year behind me and everything. So, he joined one year behind. Then he went to INSEAD one year after me.
01:24:29
Speaker
And then he went to Singapore after INSEAD. And then when I started... Within a year, he said, okay, you know, let me come and join you. And then he came in 2000. The second, that the full-time gig I started in 2010, October, Kallal joined by 2011. How were you able to scale Fasos to multiple locations purely as a side? You were not even in India and Fasos were still running? It was three locations.
01:24:54
Speaker
Okay. So, it was not like a massive. So, we we gave it as a franchisee. We knew couple of people who… of wanted to do something on their own. But we had the brand.
01:25:07
Speaker
So... All three were franchisee-run. Therefore, right yeah you were you were able to do it ah passively. Okay. Okay. Okay. so And at that time, we were not thinking about making a you know making a global business or even a national business out of it. we were just We started Faso. We were missing Calcutta and chicken rolls.
01:25:28
Speaker
And we thought... And why call it Faso's? So there is a lot of backstory, but, you know you know, it's actually two things coming together. So one was, it's actually an acronym, which is fanatic activism against substandard occidental shit.
01:25:46
Speaker
So, uh, uh, ah but at it ah Such a Bengali name to give. say Yeah, very, very Bengali name to give.
01:25:57
Speaker
yeah Also, you know, there was this country called Burkina Faso. in in And we were just searching for names, etc. It's single But we found that the meaning of Burkina Faso is the land of the incorruptible.
01:26:15
Speaker
And we thought... There are few things about Faso that we would never use artificial color. We never use preservatives. You know, till to this day, we don't use any of those things. So we'll always remain a like a pure food company. We would never, you know, sort of corrupt the food for margin or whatever.
01:26:37
Speaker
So, so yeah, it's couple of things sort of came together and, you know, so. So 2011, when you came back to India, you had three franchisee-run outlets of FASOs.
01:26:51
Speaker
What did you do next? like How did you ah get into it full-time? like like Did you open more outlets? or Yeah. So 2009 is when Jubilant went public.
01:27:03
Speaker
and um And then the stock was doing really well. And if you looked at... you know what Jubilant did with pizza. They were the original cloud pictures, by the way. you know Small format stores, not big stores, etc. Delivery focused from day one.
01:27:21
Speaker
So I thought Faso's could be that in a different product. And I had this, the economics of Faso's because they never could afford high rents. We were always you know small side of the street rather than on the front, etc.
01:27:35
Speaker
So it looked like there is there are some parallels. So I wrote a cold email. So I put a couple of more with my own money and some friends and family. And they also started working well.
01:27:49
Speaker
um And then I wrote to GV, at that time Sequoia Capital, a cold email saying that I wanted to build something like Domino's. And the economics looks very similar.
01:28:00
Speaker
So they came on board, Sequoia, our first institutional investment. And then we you know um we started putting more. But then by that time we reached like 40, 50 locations, I realized that I started feeling that real estate costly pinch.
01:28:20
Speaker
um And that is the reason India never had a homegrown a national chain because this real estate was a big drag on everything. Like I remember in Kalina, we had a like 100 square foot place. We were paying like 2 lakh rupees rent.
01:28:36
Speaker
So we were like, you know, this cannot continue. And and then we pivoted and so on. By the time, there was a tailwind of delivery and and all of that.
01:28:48
Speaker
So couldn't you have increased your prices to manage rent? or like See, I think India is a market... See, the other thing we've realized and another inspiration from Amazon is that everything has to be customer first, then working backward.
01:29:04
Speaker
Things cannot be supply forward. Rent is our problem, but we cannot pass on that problem to the customer. Then we are being, you know, supply forward. And many companies fail because they are supply forward because it might make money in a small scale.
01:29:18
Speaker
But if you're not customer backward, eventually that's... That's what matters, right? And then you start with a customer. maybe you make a little less margin, but then you figure out your margin structure, all of that. that's you know That's a better way of thinking about business rather than passing on everything to the car, because it will not succeed in the long run.
01:29:40
Speaker
you know that's And then these are some of the, like we have seven values. And the one big value in the in our company is that this customer first, then working backwards. Everything like,
01:29:53
Speaker
when we start a brand we think you know where in that two by two it lands on the customer's table in a perfect way and then go backward and see okay how much margin will make and you know all those things okay okay uh how did fasos become uh like you know you had like a single brand focus uh how did it become instead of single brand focus like ah but process ah focus. and So I mean, today you have a process focus. You have an operating system which allows you to manage. I think we still have a brand focus and operating system. Both are important for us. As was saying, without strong brands, it will not work. So it's ah it's a combination of these two things.
Strategic Inflection Points in Rebel's Growth
01:30:36
Speaker
So I would say there were three inflection points at Rebel. One was our decision to go cloud back in 2014, 15, delivery increasing real estate cost we are not being able to afford.
01:30:51
Speaker
said, okay, you know, and then we experimented the cloud model works and you know, that's what. Second was when we discovered this two by two back in 2016, 17, we launched.
01:31:07
Speaker
so yeah So our initial problems went away. Real estate became not a big problem. Delivery was growing. But we saw rolls is a 200 rupee OV item.
01:31:20
Speaker
You know, average order value. How can I go to, let's say, 300? Again, customer first working backwards, say, let's launch pizza. So we launched pizza under FastSource, but nobody bought. Because then we realized that did food, one brand, one product.
01:31:34
Speaker
Like Starbucks is coffee, McDonald's is... No company in the world. There is no famous multi-cuisin restaurant in the world. So it launched... We thought, but so we discounted that pizza. We launched two brands at the same time because we also realized we don't have a facade, so we don't have like a faso store.
01:31:53
Speaker
It's a kitchen. so we launched Olive Trails, this continental brand and launched pizza after a couple of months under a different brand. Olive Trails didn't work, but pizza worked. And that gave us this idea, which was the second inflection point, which is we could have one kitchen, but multiple brands each one kitchen, but multiple brands operating out of those kitchens.
01:32:16
Speaker
So we got really excited. We launched very much, etc. But then we realized after some time, which is the third inflection point, I would say around 2018-19, pre-COVID, we realized that this is becoming very complex because we are launching brands. We're very excited that we found a new way to do it.
01:32:34
Speaker
And then we started focusing on how can we create a process and operating system to then handle this complexity. And then those thought process came of, you know, ingredients, bill of material, dispensing.
01:32:50
Speaker
Yeah. The science part of the brand playbook, all those things, this, then we realized, okay, this is not a brand business alone or or not an operating system business alone. It's a,
01:33:01
Speaker
Combination of these these are our two modes, operating system and brand. And this is the flywheel. Stronger the operating system, more brands, more customers, more insights, more stronger operating system, ability to more brands.
01:33:14
Speaker
So this has been the journey. you know Cloud, multi-brand, then this realization of this combination of operating system and brands. Okay, fascinating.
01:33:26
Speaker
oh Isn't Haldiram offering multiple cuisines within the same brand? like Like they have North Indian, but then they also have Italian and they have South Indian and pizza also and sandwiches also.
01:33:43
Speaker
See, I think if you look at the ODP restaurants in every locality, they do the same thing. You know, ah you have, but mostly vegetarians. and you know everything so they will always have some takers but haldiram when you list your haldiram you will never think it's chinese or pizza or or italian would say good street food so there is an association and street food can come in different from form it could be pav bhaji it could be you know fried noodle or or water so
01:34:21
Speaker
See, you know they have built a fantastic company. but you know But it I think the DNA is different. it's it's it's It's more like starting small. And that's how entrepreneurship happened in India before they all these startup web. Family-run businesses and that.
01:34:43
Speaker
you know They're tremendous. I have humongous respect for Haldiram. But DNA-wise, maybe we are slightly different. than you know, how we built it.
01:34:54
Speaker
Wouldn't your marketing spend be spread over so many brands? Like, instead of, and like, even each or why not call it Rebel instead? So, and then every brand can have Buy Rebel or something like that. where Yeah, but but that, again, I say that doesn't work in food.
01:35:13
Speaker
Like McDonald's used to own Chipotle. There was a tank. But Victor never said we want Chipotle because then people will say, how can you make a great French fry and a salad?
01:35:26
Speaker
So we don't want to bring rebel on this. We don't want to say that everything is rebel. We want to say every brand is great for its product.
01:35:38
Speaker
So that's important. So that's why we we would never go to this you know umbrella brand, let's say. ah Sorry, what was the other question you asked? And for EatShore also, like why call it EatShore?
01:35:54
Speaker
Because EatShore today, EatShore is a food court. like Now, today there is a set of brands. Tomorrow there could be another set of brands. Today we also partner with Madowa Donuts, Natural Size Krim, who operate out of our kitchens.
01:36:09
Speaker
Like during COVID, lot of these guys came and told our offline stores are shut. Can we run out of your kitchens? So we opened a new business line during that time. So today if you open it, chances are if you're ordering for natural size cream or sweet, it's coming from a rebel kitchen.
01:36:27
Speaker
And on each year, it might, the same thing can happen. So it's when we, each year is distribution. Kitchen is separate, brands are separate. The way it keeps it segregated, the more leeway it gives us to navigate ah better. So it sure is not tied to any brand, right? It is a food court.
01:36:49
Speaker
And similarly, each brand has to stand on its own. and And in terms of marketing, think about this, you know, as I was saying in the beginning, you know, every consumer good in the world Consumers are segments.
01:37:04
Speaker
Like you if you are a Maruti customer, you are not buying a Mercedes.
01:37:10
Speaker
If you are if you're wearing a 200 rupee t-shirt like this, you are not buying a 5000 rupee Hugo Boss t-shirt, right? Not at the same time, maybe over a period of time. but so the marketing happens by customer segments in most consumer goods but in food you have the 20 rupee chai you have your quick lunch you also go to a five-star hotel and you do everything right so you go to all with this two by two with these four boxes so if i recruit you through fasos you first the first time you came on fasos but i know
01:37:49
Speaker
that you will you order Behrus on weekend. So I don't have to spend another money on Behrus because I already have you through Fasos and I can move you through these four boxes.
01:38:01
Speaker
Over time, I know whether you become vegetarian on Tuesday, you know, or you observe Navrati or you observe Ramadan. We have all this data, like whether you do fasting some days, you know, our fasting menu, we would,
01:38:16
Speaker
we would send a notification to you when we launch a new fasting mail. So for us, marketing is different. For us, marketing is not each brand because we are not, for each brand, there is not a separate customer segment.
01:38:28
Speaker
It's the same customer that goes around. And as a result, we have humongous synergy in marketing as well. Fascinating. ah How do you manage it all? As a founder, you have like,
01:38:43
Speaker
So many brands, so many kitchens, not just India, but multiple countries. What kind of cadences do you observe? you know How do you stay on top of such a complex organization?
01:38:57
Speaker
See, I think, you know if we go back the history of Rebel, there was one other thing that had happened in Rebel in 2012, we had a far-reaching impact on our company.
Talent Development and Organizational Culture
01:39:12
Speaker
before 2012 I was trying to recruit people from Domino's and McDonald's etc. But that time we were a small company so i was getting mostly the rejects because nobody would want to join a new company from an established brand etc.
01:39:29
Speaker
So one fine morning in 2012, Kallor and I decided that enough is enough. We are not going to hire from restaurant industry. We are going to hire people like us, hungry, love food, think customer first, lot of ownership, entrepreneurial in nature.
01:39:47
Speaker
and we did a, we sent a letter that I wrote and it's still and on the internet to all our groups, like all our MBA groups, et cetera, et cetera, that if you're an n engineer or an MBA,
01:40:04
Speaker
been working on you know on making PowerPoint slides or Excel, e etc. Here is a chance for you to come on board and do something extraordinary in your life. Build the first nationally built brand in India, run it like you know your own company, etc.
01:40:20
Speaker
So what we got like hundreds of applications. And then the other thing we said was don't send us your resumes because Looking at your resume, we won't know anything.
01:40:32
Speaker
Instead, you send us, you know, why we want to join. Simple. Any resume attachment, it was direct reject. Because that means, you know, you're just applying for the sake of applying.
01:40:43
Speaker
And we selected eight people in two rounds. Out of those eight people, three have gone out so far. Five are still here, 13 years down the line.
01:40:54
Speaker
All three have started their own companies. One is Sashank, who's done The Whole Truth. Ravant, who runs Adarsh, who runs Fable Street as a co-founder.
01:41:07
Speaker
So that decision that we took back then gave us a blueprint for building our company, which is why we call it a founder factory.
01:41:19
Speaker
So we built you know entrepreneurs from within. And as a result, scale up. big you know Sometimes we have to scale up because we have to give someone an entrepreneurial opportunity.
01:41:31
Speaker
Like from that group, people said, okay, let me go to Bangalore and start Rebel in Bangalore. Someone went to Delhi, someone went to Bangalore. And even today, five of these over time, we added two more who like a CFO and CTO who came on board five, six years back.
01:41:50
Speaker
So we have this solid team and you know one of our values is customer first. The other very strong value at Rebel is ownership. so And this is my favorite interview question to anyone, you know, describe a failure.
01:42:06
Speaker
There are people who describe, you know, I failed because the company was wrong. My boss was an asshole or whatever. And there are people who describe I failed because I made this mistake.
01:42:16
Speaker
So the second type of people have the ownership of results, good or bad. And that has really worked for us. You know people with ownership, you give them something, you know, give them freedom, magic happens.
01:42:28
Speaker
And that is how we, Then this group recruited the group under, the group under, following the same blueprint. Like hire entrepreneurs, hungry people, young people, you know, who are were the itch of building. Not every time we got it right, but mostly we got it right.
01:42:47
Speaker
And that gives me the bandwidth to think big and then have people. so So over time, my job became from how to what to who.
01:42:58
Speaker
Like initially I used to think, you know how to open a kitchen, how to create this, et cetera. Then I said, okay, no, we have to go here. This is the what. And I let people decide the how. Today, my only job is to decide on the who.
01:43:12
Speaker
Who will manage India? Who will manage supply chain? Who will manage UAE? And that person decides the what and the hows. You know, that has always scaled. It could be right, wrong. Sometimes I have to get in the in the details of things.
01:43:27
Speaker
But the option. Over time, that's how I can have, you know, time to think a bit, you know, go for my mountaineering trips nowadays again and and yeah.
01:43:40
Speaker
Phenomenal. ah What does your typical week look like? Like, do you have like ah review calls with people about what is their P&L and so on and so forth? Or is it mostly just like free-flowing conversation? What challenges are you facing? How can I help? Or like...
01:43:55
Speaker
So first of all, I live in Pune because my wife, when we came back to India, she doesn't didn't want to be in Bombay. So I live in Pune. I come on Monday afternoon, go back on Thursday, same consulting routine, you know, I still do it.
01:44:07
Speaker
And Pune gives me ability to you know go out on a trek card on the weekend because there's like about a hundred treks around Pune. that's one. But typically, you know, the other thing that we took from Amazon was the dock.
01:44:24
Speaker
the the do doc way of reviewing rather than PowerPoint. So every meeting is on is a written document. um And that made it very, very sharp, very, very focused for all the good reasons. Because PowerPoint was created to make the presenter look good.
01:44:44
Speaker
And it is not the right tool for reviewing. When you write a doc, the person is writing, thinking, you know, and everybody knows if the doc doesn't cover the pitfalls, the the weaknesses, yeah then it's not a good job.
01:45:01
Speaker
so So once we, have about seven years back, we shifted to the doc mode of re reviewing. So now it's like very sharp. Usually these are QBRs. So I don't want, because there are people who are doing their WBRs, you know weekly business reviews, et cetera.
01:45:17
Speaker
I want to do QBRs. I want to be on top of things once a quarter rather than every week. So typically, that's how it happens. you know Typically, there would be a QBR for each your supply chain for you know brands, et cetera. And that's how we work.
01:45:37
Speaker
OK. I want to ask you one last question. Maybe another five minutes.
Fundraising and Investor Relations
01:45:40
Speaker
Are you OK? Yeah. OK. ah Can you give me an introvert's guide to fundraising? And because you said you're an introvert yourself. So I'm curious how ah you navigated the fundraise journey and you have raised like a I think something. A lot of money.
01:45:58
Speaker
Yes, a lot of money. ah Almost $587 million dollars as per traction. So ah how did you do it? Do you have any best practices? I would say two things.
01:46:09
Speaker
One is have a long view because if you don't have, so so there are two types of investors in this world. One is your speculators, the other is the Warren Buffett.
01:46:22
Speaker
The Warren Buffett types are thinking long and it's a self-selection. If you give a long view and and then the investor in front of you has a short you will not invest. I'm good i'm happy.
01:46:33
Speaker
I don't want that person's money. Because we are doing something very you know first principle based. There is no blueprint. there's Not like 20 other companies did it before us. so The reason we had to raise so much money because we had to figure things out you know and all of that.
01:46:54
Speaker
So I could never afford investors that are ah you know short, five-year, three-year horizon investors. know I always wanted 10-year, 12-year, 15-year.
01:47:05
Speaker
That's why Sikhoa perfectly fit that bill. And over time, if you look at our, like they must say, they came on board last year. I asked Vishesh, you know, how long, what is your horizon? He said forever because it's a sovereign fund. They don't have exit pressure.
01:47:21
Speaker
So that's self-selection. You know, go only for long only investors and have that long view. You know, if you look at our business for the next quarter, you may have a have an opinion, like whether it will do well, not do well.
01:47:36
Speaker
But if you have a 20-year view, your conviction increases because obviously there will be more people will be eating out. Obviously, India is under penetrated. Obviously, you know, we have so much growth room.
01:47:48
Speaker
So that's one long view, long investor meeting of minds. That's one. Secondly, I believe that an insight, you know, an insight about an industry, which is not obvious.
01:48:05
Speaker
So this two by two I was describing that, you know, how that consumers are segment, not segments, their use cases are segments. It's an insight I think the restaurant industry was missing.
01:48:17
Speaker
And whatever we have built, we built on this insight.
01:48:23
Speaker
And it resonates with people, with people who are thoughtful. You know, there would be again self-selection. There will be investors who are like trying to, trying to see, okay, what's hot, you know, Q commerce is hot and, you know, there'll be five companies. If I can bet on one and I'll make some money, cetera.
01:48:46
Speaker
But that is not insight backed. That is what everybody is doing. Let me do that is in the quadrant of people agree and i' am right. But fundamentally Unique inside has that quadrant of people don't agree, but chances of that are chances there that I'll be right.
01:49:03
Speaker
And that's when the abnormal return happens. I think I have been lucky. So honestly speaking, you may say that I've raised a lot of money, but it was not easy for me because we don't have a comp.
01:49:16
Speaker
You know, there was never a time there were like thousands of investors chasing up chasing me. Unlike Zomato, Oyo, Ola, where they raise rounds in two days. You said, okay, you know, I'm raising, you know, who is coming?
01:49:27
Speaker
eight It never happened like that for me. Because, you know, we never had a call. So it it might sound like we raised our money, it was not easy. But I was very deliberate on who to raise money from, who to pitch.
01:49:42
Speaker
And who will understand that one insight? So i need I didn't need 20 people. I need one person in a particular time who would understand that insight, align with me on the long view.
01:49:54
Speaker
and you know And then it will happen. How hard was it to get the first big check? Because that's typically the the hardest, right? Once you have the first big check, I assume. Actually, first check, institutional check was Sequoia.
01:50:08
Speaker
And I think it was one of the easiest. Because I actually wrote a cold mail to JV by saying why FASOs will work, what is the insight, the Domino's insight that time.
01:50:21
Speaker
Small format, low rent, high delivery, you know sweating of asset. And that resonated with him. And and you know that time there was a comp, which was Domino's.
01:50:34
Speaker
Today I don't have a comp, but there was a comp. So it was slightly easier. And GV could see that, you know, I give it to him that he saw that, you know, there could be something.
01:50:47
Speaker
Fascinating. Fascinating. ah Thank you so much for your time, Jaydeep. I'm going to let you go and catch your flight now, but I had a lot of fun. Yeah, same here.