The Exchanges

Q worked, then perfecting, you know, the marketplace. Because now in the first four years, you would have an idea, right? If you invest X in a marketplace, you could get Y. How do you scale revenues on marketplace? Uh, the most interesting part is how did you figure out that, uh, these are the two categories that you want to stick to or launch, which is smartwatch and wireless earbuds.

A So Siddharth, you know, uh, okay, let's call it, let's go back to the drawing board, you know, uh, uh, we, we were bootstrapped, so we had no external funding, which means we had to do something differently. I mean, there, so at that time, the wired earphones was a very big market, but if we had to go for a wired earphone market, then we had to fight with big giants like JBL, Sony, Philips, and we realized that Amit, it is not, me and Gaurav realized that it's not easy for us to do, and if we go at, It's, what do you call it? It's a red ocean. You will get volumes, but they're gonna be no profits there. So from there on, you know, the hunger was there to get a differentiated offering. And fortunately we were a little bit into fitness. So we wanted a smartwatch for ourself. And we realized that there's only a Fitbit in India and there's no other option. And I said, by the way, I got my first Fitbit, a Reefer Fitbit from a US market. I was like, if this is a problem, let's solve for people around. And that's all. We started with the smartwatches in here as a space.

AI assessment note: “we realized that there's only a Fitbit in India and there's no other option.”

Q textile and you married it with, uh, the demand happening in the, the explosion of mobile devices in India, but electronics can't be wrong, right? And it, it's much more difficult to build a smartwatch, right? So what time, right, to get the right first smartwatch, how are the first few returns like, right, where the customers, and how did you, you know, make sure that the journey of perfection

A So, uh, you won't believe you are, I think the first two generation of smartwatches, we had very high, very high returns. I don't remember the numbers, but we had very high returns and you won't believe the second batch, what we've ordered, those are still still lying in my warehouse. Because there were, there were so much of quality issues that we couldn't sell them. We didn't want to sell them. So we dumped them in a warehouse. We said, okay, we'll not sell it. So we have, so yes, you are very right. Uh, uh, electronics is a super technical category. It's, it's, it's just not design. It's hardware, it's software, it's performance, it's data accuracy, it's mobile app. There are, there are five, six components to it. And And we honestly making mistakes. Uh, we spent a lot of time in, uh, you know, investing ourselves into R and D learning the trick and it happened with time. I would honestly say, I mean, we kept learning with time and that's why it, it helped us actually. I mean, we made mistakes early on.

AI assessment note: “the first two generation of smartwatches, we had very high, very high returns.”

Q If you could share, right, uh, because you have been bootstrapped, so, so there's a limitation that, uh, you know, you have to invest very wisely, uh, and that, uh, leaves room for, uh, less experiments. Uh, so what has been the secret to the growth from one 50 crores to closing last year at 800 crores?

A So first of all, uh, I, I, I give credit to success of, uh, uh, noise for being bootstrapped because being bootstrapped, you know, it pushed us to become innovative. I mean, uh, we, as maybe as if you're funded, you can focus on 10 categories. We had no choice as then working on just one and being the best at there. So being bootstrapped helped us, uh, to solve the problem in real. I mean, we couldn't just address the problem superficially. We had to solve it to the bottom and, and, and, and take it to the, I mean, if there is a problem in the watch, for an example, a bigger company might just scrap it up for us. It was first making it right. And if it's, it's something has gone wrong for us, it was fixing it right also. And second, since we were bootstrapped, we always looked at avenues in marketing, which were cheaper. I mean, how can we acquire a consumer in a cheaper way? And how can we build a brand? So, which means the creative plays a good role. I mean, you can't just bombard IPL. If you have money, then I mean, we don't have that money that we can buy entire property of, uh, of IPL and just bombard all the consumers. So we in, uh, it, it helped us to look at categories which were not present or had a scope marketing and people also then, I mean, you have to find people who are right, uh, right mix for you.

AI assessment note: “We had no choice as then working on just one and being the best”

Q And how did you solve for manufacturing, right? Third party contract manufacturing is a hard problem to solve for all D to C brands.

A We honestly made, uh, a set of mistakes in the beginning where we tried to work with manufacturers who were cheaper, but, uh, okay. By one learning to all of, uh, Which you asked me, which is, which will come out of it. Everybody asked, we wanted to buy cheaper actually to reduce the bomb cost. So we moved on to manufacturers, which were maybe not the best one, but maybe the scale was also too low, but gradually we realized that, you know, customer experience is the key and we can't give a product, which is not performing up to the mark. And then we shifted the entire supply chain to a consumer base, which makes for bigger brands like JBL, Herman, Fitbit, sorry. So we, we, we are produced in these factories because the processes are already set because they're already making for the, for the global brands.

AI assessment note: “we shifted the entire supply chain to a consumer base, which makes for bigger brands”

Q So, uh, ultimately, as you said earlier, the product wins and, uh, recently you onboarded, uh, Taapsee Pannu, Rishabh Panth as brand ambassadors. What was the thinking behind that since you had already been frugal, didn't it make sense to just scale digitally, uh, without these brand ambassadors?

A So, so in, in every, in every phase of, if you look at it, we started engaging with endorsers two years back. Into seven, eight years journey. So still six years, we didn't have budgets to invest there. But lately we realized that, you know, when you're growing, you need some kind of trust also on the brand. And these ambassadors really help us building that. But yeah, we were very choosy while picking the people around. I mean, we don't have an army of, let's say, 20 influencers who are, you know, talking about noise. We have Uh, people like Taafsi, Rishabh, who are doing good in their life, they all had their hard times and, you know, they have heard their inside noise. You know, just cutting out the outside cutter, they did it.

AI assessment note: “we realized that, you know, when you're growing, you need some kind of trust”

Q Got it. And you had mentioned, right? So the, the revenue share always has been 20% your website, 20% offline. 60% marketplaces.

A So this year we have, so no, uh, from, from early on, from the daytime we started, uh, 20, 25% is the revenue from which comes from our website. So why website? First of all, we need to look at it, Siddharth. Uh, website really gives us, uh, a leeway to talk to the consumer first. To engage with them, to own them, and more importantly, to offer a product to them, what we think is right and what they feel is right. You know, when we work with marketplaces, they drive what to sell. Their KPI is not to build a brand. The KPI is to, uh, do GMV for them or, or get a consumer for, for the brand. So that's, that's why we, we always built our website and off lately, uh, we, we started offline business this year onwards in 20, 22, what you call. And from, from now on, from two percent of overall business, it is close to 20% of our revenue.

AI assessment note: “no, uh, from, from early on... 20, 25% is the revenue from which comes from our website”