The Exchanges

Q Yeah. Yeah. Uh, and, and moving forward, right. Where did you, did your graduation from?

A Yeah. So I was in Puna. We came to Puna, uh, in 97, did my schooling from there. Um, uh, did my engineering from NIT Nagpur, MBA from IIM Lucknow. So, uh, for six years back to back, I was in hostel, uh, which was again, character building and beautiful. Um, but for me personally, I tried to get into IIT, ended up at NIT. I tried to get into IIM Ahmedabad, ended up at IIM Lucknow. So both great institutes, but places which were not top, you know what I'm saying? Uh, I always felt that I punched below my weight a little bit. Um, but from I am Lucknow, I made it to McKinsey and Company, which was, uh, the number one recruiter on all campuses. So for five years I was at McKinsey and it was the most incredible professional, uh, first step one can make. Um, I, I found incredible bosses and mentors, 25 of them invested in Bombay Shaving Company when I left. Um, if there was a job that was made for me, it was consulting, right? Rapid problem solving, you know, advising at the very top, changing of problem statement every five, six months. I served insurance, cement, heavy engineering, zinc mines, uh, you know, uh, agricultural and chemical providers. I served the whole spectrum across a variety of problems. So for me, McKinsey was character building in so many ways. And I think a lot of who I am today, uh, I attribute to my time at the firm, but 2016, I decided that it's time to leave…

AI assessment note: “did my engineering from NIT Nagpur, MBA from IIM Lucknow.”

Q Wow. It's been a phenomenal journey for you. And where, where do you think you want to take it? Right. You have seen the, you know, the market size.

A I think, I think nobody owns hair removal the way we can in India. And you have, you have Gillette for shaving, you have Nivea, you have a VLCC and Kaya for women, you have wheat for hair removal cream, you have Venus in women's razor. No one brand owns hair removal for men and women in India as a FMCG company, right? I think that's the space we want to be in. I mean, that's the space we can really compete and have equity. We, we are at a hundred crores plus one 20 crores. I feel that in the next two years, we can build a 300 to three 50 crore equal brand between men and women. Right. Um, and then at that point, uh, uh, the, the options open up significantly in terms of scaling to thousands. Uh, I think to build a thousand crore business will require a con, you know, combination of product and service business. So it might involve salons. It might involve, uh, clinical treatments. It might involve hair treatments, um, uh, in, in, with dermatologists. So I don't know what that journey is going to look like. Uh, but I think if I were to divide and for founders and you have been one before, I think two year journeys sacrosanct after that, it becomes, you know, uh, it's kind of more ideation. So my belief is long term, we want to own hair removal as a consumer product business in the country. I think men's shaving and hair removal plus women's hair removal together. Online, offline…

AI assessment note: “we want to own hair removal as a consumer product business in the country”

Q And, uh, you know, just, uh, stepping back, right. This has been a phenomenal journey, right. As a D to C founder. So, but if you can lay some, some things, right. The, some first principles, right. When you acquired your first customers, right. What were those things?

A Uh, few things. I think, um, number one is, I think the product experience is, is crucial, right. And small and small things make a big difference. I think keeping it simple and focused on the small things is really important. For example, if you take a shaving cream, When you open the top of the shaving cream, the shaving cream should not spread on the cap. It's a small thing, but it's very important. People in the ketchup industry understand as well. You see Heinz, they do a very good job of how their cap is designed. Second, when you close the cap, the sound the cap makes when it closes is important. The tactile feedback on the thumb is important. The fact that you feel that the shaving cream is not getting wasted is important. The fragrance on your face after you wash off after shave, how long it lasts is important. So, Very important one thing which I tell to anyone who's building a brand, whether it's DTC or otherwise, get the product experience right. Everyone can make a 95% good product. Few people can make a 99% good product. Very, very, very few people can make a hundred percent cool product. And those people succeed a lot. So, founder energy, team energy should be in building out a really good, outstanding product experience. Secondly, I think, uh, figure out where to play. Like, don't, uh, don't, uh, Uh, don't play in super neat, super small category. I think it was…

AI assessment note: “number one is, I think the product experience is, is crucial, right.”

Q Got it. And, uh, you know, uh, if you reflect back, you know, in terms of other decision-making principles, which your team has built, what would they be from which other DTC founders or any founders can, can learn from, from today's podcast?

A Uh, I think one is, um, uh, stay close to the consumer. Go into, if you are in, in, in SMCG, going to the market a lot. Talk to retailers. Talk to, uh, category builders. Talk to competition. Just keep, it's a very fast evolving market. Stay close to the market. You can't do work on a laptop in your office. You have to be in the market and talk to people. It's tiring. In summers, it becomes very painful. You, you feel like you're not getting a lot, but Darshan Bhai is a fantastic example. He built fog sitting in Panwadi and figuring out how the deodorants are sold, right? That's where the insight came. Uh, so do that continuously, stay close to the consumer. Uh, I think second thing is, um, um, uh, trust your judgment, uh, and gut. Don't, don't keep waiting for data to validate what you're thinking or feeling. Entrepreneurial teams are very fast, uh, and they need to be, if they want to make big dents in categories that have big competitors, large size competitors, you can't be too slow and you can never be fast enough. So keep launching products exactly, or keep, you know, kind of, uh, uh, banking down on our communication, uh, strategy to do whatever you can to up, create upheaval in the category as much as you can. And the only way to do it is to be agile. Third thing is in any decision, Uh, be prudent, right? Uh, one, one framework that I found helpful is whether you're lau…

AI assessment note: “I think one is, um, uh, stay close to the consumer.”

Q Got it. And I think unlike in, in case of America, when they invest invested in Beardo, right? The eventual goal was to absorb the brand right here. There are two brands, right? So they can't.

A I have always been very careful about strategic investors. I think for two reasons. Number one is the institution is huge. Unlike venture capital or private equity, but the number of partners are very small, right? So continuity is easy. In large businesses, the number of stakeholders is very high, and if the person who's sponsoring your investment leaves, then the next person you may or may not be important to that next person. So you have to be, you have to be, you have to, you have to insulate yourself from these kinds of risks. Uh, second is strategic investors are, are scary to financial investors. They, they seem, they exactly what you're saying, right? They seem like people who will gobble you up, right? So we wanted to do two things. We wanted to bring in these folks with a very clear long-term view. Number two is, and they're very strategically important to us, like, They're both highly penetrated brands in India offline. They will do things for us that we will never be able to do on our own. So their value to us is immense, but that value comes with a cost. So we said we will never allow, unless we are sure that we want to sell to this company long-term, we will always keep them under 15, 16%. So both of them have minority holdings. The rights are very limited. So our financial investors have higher rights, our strategic investors have lower rights, and they're very m…

AI assessment note: “we will always keep them under 15, 16%. So both of them have minority holdings.”

Q And then how did you, uh, do the market research for what to start? Right. Can you share, you know, your process of discovering consumer insights and how to bring them into action?

A So I think, uh, the most, um, uh, the most rich source of information is always conversations with people who are in it all the time. Right. So I had, like, my friend was a brand manager at Axe when they were getting rogered by fog. And it was, it was absolutely phenomenal. Every Friday evening or every other Friday evening, we would catch up in Chakala, go to a bar, and he would tell me all the things that are going, going wrong with, with his work and how a new, a company, it was a two, 20, 15 or so, right? How fog is kind of taking market share in the deodorant market. And I, I found that fascinating. I spoke to clients in retail and they were telling me about how, uh, how, Loyal, loyalty driven categories are suddenly seeing consumers pick up new things because they're getting bored. Uh, discovery is happening online. Um, when I spoke to Saiki who had gone to Flipkart, he was telling me about just the insane growth that is happening in across subcategories on Flipkart and also on Amazon. So I think overall there was a huge market, which is now, which has now started becoming hungry for newer things. So there was that. The second thing I think was Siddharth was that I think it was finally time. One thing that I realized was finally time for a brand for men, uh, to make them feel good. The time had come. Personal care industry is a two 50 year old industry. It has evolved bec…

AI assessment note: “the most rich source of information is always conversations with people who are in it”

Q And, uh, if you can share, you know, we are reaching towards the conclusion of the podcast. How do you best derive value from your financial investor? So what value you derive from this, a fire side and six cents, right? And how do you keep them aligned to that?

A So financial investors are, uh, are, uh, in my view, they are cheerleaders, right? They don't add and like Colgate and record can add tangible impact to it. Colgate, for example, they're, they're, they, they make their tubes in a company called SLPropack, which is owned by the Z group, right? Uh, we now work with SLPropack. All our tubes are made by SLPropack. So that's a huge cost advantage. Distribution through Racket and Colgate will be huge for us. So they can, financial investors cannot do that, right? Uh, what they do, do extremely well, both of them, is that they are very sharp problem solvers. They are very good at pattern technology. Uh, they are, Very, they know me very well now personally to know when I'm making mistakes. They help us a lot with recruitment. They, I trust Nikhil, Kaval, Kanan, Nimisha's, um, assessment on, on new people, especially senior folks. So they have, they have a big role in bringing in some of the people we have hired in the, in recent times. Um, and, uh, they, they, they keep us honest. They, they are cheerleaders who keep us honest and they, they, I'm a big believer because I come from McKinsey. I'm a big believer in problem solving, uh, uh, you know, problem solving support continuously. I'm a big believer in advice. Uh, I think it changes the way you think. If you talk to someone very smart of questions, uh, a lot of your assumptions or …

AI assessment note: “what they do, do extremely well, both of them, is that they are very sharp problem solvers.”

Q And some of the other gestures, which, which you did right over, I think important in the journey, uh, uh, the fact that, you know, you gave your earlier angels, uh, a 20 CR exit in the last round. So how did that happen? Right. Because they would have liked to have stayed as much longer in the company and emotional attachment is there.

A So actually what we did was, and there's a, there's a question that is not done. Thank you so much for asking this. Right. I think we don't discuss exits. Uh, and we kind of think of them as taboo topics or, you know, look, when you have a large cap table with large number of people, right. Uh, and people who, uh, who care about the business, yes, they will stay for a long time. They feel like they're a part of the business. Uh, but when an investor wants to come in and wants to hold higher percentage of the company and your return to shareholder value is satisfied for your angel, for example, you need to take a step back and say, if someone had put in X and is taking out six X, Do I need that success today in the company?

AI assessment note: “when an investor wants to come in and wants to hold higher percentage”

Q And how is your thinking on distribution evolved over a period of time paid versus organic, right? When to, and what are the channels you as a founder discover for organic?

A Yeah, I think, uh, I think it's super critical to understand where the category sits, right? So we have realized men's shaving is a category that sits offline. So our ability to create distribution offline is very important. So large relationship management efforts are working with, uh, procurement managers at large chains, making sure that our merchandising and in-store activations are extremely high quality. Uh, we are competing well. Our brand block is good. Our shelf floor is high. It's a pure brick and mortar business, right? But when it comes to women, I think it's super critical to understand engagement online, create brand pool through storytelling and community building, which allows people to come onto your brand destination. I think organic traffic is a proxy for brand strength, right? If you have more organic traffic, then that means the brand is creating full on its own. Uh, a lot of it is front loaded. So it becomes scary sometimes because you want to index on brands rather than performance. Um, but I think performance is important because you continue to acquire consumers to continue to, uh, I think, I think what, what, what paid channels have done very well is that they have created a habit of addiction of marketing spends. If done well, your, your engine keeps churning, right? Uh, so they're important, but I think long-term vision should be on equity building f…

AI assessment note: “I think organic traffic is a proxy for brand strength, right?”

Q Got it. And, and, uh, when was the time, right, uh, that you brought in the first institutional investor and who was that?

A So we have always, uh, we've always raised capital Siddharth very conservatively given, and you know, you would know this about brand building in personal care space is it's high gross margin business, right? Um, if your, if your, if your brand premium can attack, uh, good prices, you have, you have a big cushion to play with. So you don't need a lot of money. So consumer brands in India, when they cross one 5200 crores, they're mostly profitable. Many of them are profitable from the day one. So my belief was always that we should never raise money, uh, to buy revenues. You should always raise money to build brands. Which is why you should always raise small amounts of money and not a large. So we raised four crores from, uh, from our angels. Then we did a two million round with fireside. Uh, ventures. Then we got in Colgate Palmolive a year later.

AI assessment note: “Then we did a two million round with fireside. Uh, ventures.”

Q And when did you quit your job? Uh, like put in. So six months was roughly a period you take for product experimentation, hiring an initial team, thinking about the market, raising some money, all of that stuff. When did you raise your first money?

A We are my, so my exit from McKinsey was kind of complicated, right? Because the firm invests in you for like four, five years. Unless you kind of go around the world, you know, fly, live in great hotels, you know, do what you want. But then at the five year point, they start thinking of you as an investment, right? Okay, now you've kind of made all this investment in you and you've done well. So now you start returning it back as a partner. So those discussions had just started happening for me a little bit at the firm, what my client platform is, what my knowledge platform is, And that's when I started to decide to leave. So my exit was kind of prolonged. I had, and I, I owed it to my mentors and the senior partnership of the firm to have conversations. I also felt that if there was merit in what they were saying, maybe I'm taking the wrong decision and maybe Miklin V is the place for me. So, uh, those conversations took like almost half a year and I wanted to have them. Um, and, uh, by the end of those conversations, like all those 20, 25 conversations, right? Because over a period of five years, you've worked with a lot of people. Uh, uh, they also kind of read the same conclusion as me.

AI assessment note: “my exit was kind of prolonged... those conversations took like almost half a year”

Q And from 2016, can you share, share your yearly milestones? Like what, what were the numbers that you used to measure yourself by?

A Uh, we obviously top line was a critical one. Um, our, uh, marketing to next sale was another one. Our cohorts and repeat rates were important. We, we moved around a lot, right? So we kind of went from men's grooming, men's shaving to men's grooming, to like, in men's grooming, we had like a, 500, we had hair oils, we had beard, we had, you name it, soaps, body washes, we had all that. Now, over the last one and a half years, we've realized that, okay, this is, our core focus is hair removal. We know how to do hair removal for men, we know how to do hair removal for women. We now know also what channel product market fit is. So men's shaving is something that we will build Offline more than you will build in e-commerce. The category sits offline, right? Consumers buy the stuff in stores. Uh, women hair removal, the category sits online and offline both, right? You will find it in health and glow, but you'll also find it on an icon. So our strategy for these two different businesses is very different. Uh, and for us revenue, uh, marketing to net sales, uh, NPS, cohort management, uh, on online, we have obviously some metrics around conversions, number of sessions, brand strands and so on. Offline again, we have, uh, repeat courts for, uh, localized stores and so on. So, so I, it's very standard. We have kind of, uh, good part is working with companies like Colgate and record. Yo…

AI assessment note: “top line was a critical one. Um, our, uh, marketing to next sale”