It's been quite a ride - a rather bumpy one, but I wouldn't have learnt these lessons any other way! Exactly 5 years ago, I was at my study desk, preparing for my CA Finals, due in November '15. With a reasonably strong track record in academics, I was confident of clearing one of the toughest competitive examinations in the country.
Just then, a childhood friend of mine pinged me about an idea pitching competition organised by Google for Entrepreneurs for tech startups at IIM Calcutta - Startup Weekend, where over a 54-hour weekend you bring your idea to life. Starting from elevator pitches to team building, product development, market validation, launching an MVP, getting traction and finally pitching to potential investors - all of this happens in 54 hours. Something of this scale never happened in Calcutta. Being an extreme opportunist, I closed my book on Indirect Tax Laws and began writing a 'paper napkin' business model, literally. Not knowing that I wouldn't appear for CA Final exams ever!
The idea was a simple solution to the every day commute problem I faced during my Articleship training, where my travel allowances were more than the stipend. So I decided to pitch the idea of building an 'Uber for Shuttles' - 5x cheaper than cabs, but a comfortable AC ride with the advantages of location tracking, seat booking and cashless payments. The idea got selected, along with 124 others - never knew Calcutta would be ushering with ideas. For the next few days, I prepared myself for the battleground.
Even on a rainy weekend, the turnout at IIM-C was overwhelming. It was a real test of mettle to fight some brilliant elevator pitches and stand amongst the Top 10 pitches to move into the final round. Built a team of 5 extremely talented folks who hustled along for 52 hours and that's us just before investor pitching:
Although we didn't emerge victorious, we bagged our first cheque from a mentor at the event who found our idea promising. We set an ambitious 6 month timeline for commercial launch in January '16. Three months into product and business development, news flashed that a Gurgaon based company, has raised its 3rd round of funding - $23M more than what we had - boom! The team stood strong and our CTO said, "We will ramp up our product development and launch 2 months ahead of schedule." While our counterpart was fast expanding its presence, we focused on being the first in Kolkata and rolled out our beta version in October.
After multiple iterations, we commercially launched our services in November and we hit a milestone of the first 1,000 paying customers in the first month itself. In December we were tagged as "Startups to watch out for" along with a flurry of media coverages. While our product and tech was not at its best, we were still loved for the initiative. We doubled down on our marketing efforts to acquire customers quickly and started running our fleet at 75% capacity. Soon we started attracting interns to work with us.
They say, 'Best things don't last forever'. In January, 2016 we hit a massive roadblock. We were slapped with a legal case from the Transport Authorities for not carrying the required permit to run such operations. We had to immediately suspend operations until the issue was resolved. Evidently, our services were hurting the state run buses. After getting a legal opinion and several negotiations, we were ready to hit the roads. We were about to sign a term sheet with a reputed investor for a bridge round before raising institutional money. Just then a mail flashed - Legal Order to stop using 'Hoppr' as a brand name. An IPR case was a disaster at this juncture - we had to strike off our company name from RoC records, change our brand name and re-incorporate a new company under a different name to continue operating smoothly. Sceptical about the situation, investors started pulling out funds and I had to personally clear pending liabilities. Impressed by our work, the team started getting proposals for getting acqi-hired but we turned them down.
It is okay to fail - as long as you fail fast and stand up stronger
I had rarely experienced failure in 23 years - this one came as a shocker. It took me 3 months to come out of it, by when I had completely lost touch with my exam preparations. Decided to drop CA and prepare for CATs instead to pursue a management degree. Meanwhile to keep myself busy, I joined one of my father's diversified businesses in Ayurvedic and Herbal products. Due to lack of supervision, the business had been gravely mis-managed and was running into losses. With little knowledge about this field, I took about 4 months to understand the business before challenging myself to turn the business around in the next 3 years - this time not committing the mistakes I made in my previous startup. Lessons:
Continued preparing for competitive exams
Kept IPR and legal trouble away by filing for trademarks in advance
Keeping a check on cash flows
Building a sustainable business, not overly dependent on external funding
Never launch in haste - it's never too late
Entrepreneurship is more than just featuring in articles
Respect your investor's money - they're not running an NGO
Team is everything - have the best people and always stick together
CATs were due in about 7 months and the business required full time efforts from my end in the early days. I had inherited a business with huge inventories, lack of systems and infrastructure, massive fixed costs but a potential to come out stronger given the rapid acceptance of alternative health remedies. While 12% of sales were coming from own brand products, the rest came from selling other national brands through 3 small retail stores, one in North Kolkata and two in South Kolkata. Although strategically located, two of the stores were not attracting enough eyes so we decided to shell out unproductive assets and reduce fixed costs. A large part of the inventory was approaching expiry so we had to either sell it off at lower margins or write it off over the next 2 years. We also shifted our focus from other brands to own brands and reduce further inventory blockages.
Instead of applying for a full-time MBA programme, I decided to go for a part-time programme and manage the business alongside. So I applied for XLRIs PGDM Weekend course, where I needed to travel to Jamshedpur every weekend and during weekdays I could travel back for business. Although the degree was equivalent to a regular MBA, it would stretch across for 3 years and involve over 900 hours of course work. The need for a professionally managed business required me to pursue the course. CAT preps didn't go to waste and I made it to the first batch of 52 students amongst thousands applying for the course. Turned out I was one of the youngest in the batch, scheduled to begin from July, 2017.
During this time with little investment, I rebuilt the infrastructure and gave the company a fresh new look with a brand overhaul. From selling products directly through the store, we began channel sales with a 4 member marketing team. The focus was on selling products in the rural market which was picking up the Ayurveda trend faster than the metro cities. A basket of 12 products in chronic diseases, like diabetes, arthritis, constipation, common cold, immunity, etc. was launched in January 2017. Orders had only started coming when the GST-bomb fell in July, 2017 and our rural channel partners were reluctant to order until the cloud was cleared. For a few months, with negligible sales and fixed marketing and administrative personnel costs, the business started facing challenges. We added a consumer products division in 2018 to improve inventory rotations. Demand started picking up in second half of 2018 again and has grown stably since then.
Two years hence, today the business is profitable clocking $100k annual revenues with over 80% coming from CG division and the rest from Medicine division, growing at 11% y/y, without any external funding, inventory turnover ratio at 11 times and a lean team of 5 people managing business across Bengal, North East, Odisha and Jharkhand with no additional marketing expenses. A small personal achievement of being in the Top 10 of the batch at XL does bring a smile, although due to the COVID situation we did not have the privilege of attending a formal convocation. Lessons:
Entrepreneurs need to be persistent - get things done approach
Keep a team as lean as you can
Recession-proofing your business is important
Have a pivot strategy in place all the time
Know your key metrics and track them constantly
Keep up-skilling yourself - never stop learning
Build a business with technology as the key enabler
There's feeling of accomplishment to have kept my promise of turning around the business and making it self-sustainable from here on. After 5 years of learning, thrilled to venture out again and solve bigger unsolved problems.
It's always Day 0 when you're an entrepreneur. Keep hustling, keep learning!
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