The Smart CEO Round Table

The Smart CEO Round Table

Prior to launch, startups need strategic direction on acquiring customers in their early days. We asked four entrepreneurs on what they did in their own ventures

TEAM SMART CEO

EXCERPTS FROM THE DISCUSSION

TSC: Quickly, describe each of your businesses and what prompted you to start a venture?

Krish: I just wanted to start a business and decided to get into software product development with my college classmate and buddy. At ChargeBee, we do subscription management and recurring billing for customers across the world. It is a software-as-a-service product and eventually, we’ll move up the value chain and get into the customer engagement piece.

Srini: My wife and I have always been enamoured with the idea of building a brand. Working for a company like Johnson & Johnson, the training I had in the consumer products space was phenomenal. This training along with our passion for sustainable consumer products (100 per cent plant-based products like detergents, dishwasher etc.) prompted us to launch Krya. Our first product is a detergent that is made from soapberries.

Anant: We’re a bunch of guys who’re passionate about data, arts, psychology, statistics and math. We wanted to start a product company and looked around for ideas. The first idea was based on the fact that there is lot of data that is generated at schools. We thought why not make a beautiful report card for students. The problem we’re going after is phenomenally tough; almost everyone hates a report card. On the other hand, we’ve neatly designed scorecards for cricket matches and play station games, and children love those. The idea we’ve going after is to make really beautiful report cards that students will love.

Yash: For several years now, I have been the archetypical professional, building brands for entrepreneurs. In both my previous jobs, I felt that while the entrepreneurs made money, I did not get anything for myself. So, the intention was do it myself. Additionally, I have been an avid sports enthusiast and worked in the fitness industry for a while. I observed that there was some sort of a fitness revolution happening in India. Here, people were obsessed with ideas from the West – gyms, boot camps etc. In the U.S., people were turning to other options like yoga and oriental wellness options. I saw an unmet need and decided to start 136.1, a chain of yoga studios in India.

Anant: What is your idea of a brand? How does one build a brand?

Srini: Let me share some of my experiences from working with Johnson & Johnson. For about eight years, I worked on Johnson’s baby products. All the theory you read about brand management comes true at the company. The product is fine, but magic really happens once you put the label on it. That really is the power of a brand. Look at the financial success of the company; they have been giving a dividend since 1948. Really, my job as brand manager was fairly easy to do.

At Krya, our detergent is pretty much made out of soapberries. I really can’t take credit for what is available naturally. I package it, put my name outside, interact with customers and sell it at Rs. 290 for 400 grams. The consumer trusts you and that is really what a brand is all about. Look at Samsung and Apple – the lawsuit suggests that there are quite a number of things that are similar in their products, yet for consumers, both these brands mean something.

Yash: How does one build a brand? In my mind, I’d like to put it in one simple question: am I ready to die for this every single day? As an entrepreneur, you’ve the vision to see a future that doesn’t exist. The question you need to answer with sincerity is: have I done whatever I could do for my brand today? When you contemplate on this, you’ll get your answers.

Srini: That’s a wonderful point. Sincerity is crucial – walking the talk in many, many ways is crucial. Let us assume that you’re selling a physical product in a retail store. The typical strategy has been to design a colourful box, laminate it, so it grabs a consumer’s attention in a store. But at Krya, we are all about being sustainable. So, we decided to use recycled corrugated boxes, with no lamination and only one colour (black). The reason is simple: if we had laminated it, it becomes that much more difficult to recycle. Coloured ink is tough for the recycler to remove. Now, four or five customers might hear about this and they’re blown. They may not contribute to revenue today, but they’ll tell a few people about it. It helps you establish credibility in the marketplace.

Yash: I’d also like to add that your branding partner plays a pivotal role. He needs to feel empowered. For 136.1, I went with 1PointSize for all our design, branding and advertising needs. My belief is, if you spot your agency correctly, 75 per cent of your job is done. The agency guys are detached from your passion – you need a person who is watching you from the stands.

Krish: At ChargeBee, there is very little face-to-face interaction. But we figured that support and the kind of in-depth service we offer to our customers is what is going to make a difference for us. We had a customer in the U.K. who introduced us to multiple new customers even before we went fully live. After a conversation with him, we figured that he referred us primarily because he was extremely satisfied with the support he received from us.

Srini: I agree. When people come to us and say we find your product expensive, we tell them: “Don’t buy it. But let me give you a guide on where to buy soapberries and how to grind and use it as a detergent.” At some level, there’s a twin goal. We are trying to build a business but we’re also trying to help more and more people go sustainable. I’d say our product is an open source detergent – no other brand reveals their formulation to customers.

TSC: All of you here are working on businesses that are new, innovative and different from what customers are used to. How did you acquire customers in the early days?

Anant: Oh, we were just really lucky! Even before the ReportBee product was ready, I made a pitch to a school principal. He was busy checking his e-mail and multitasking as he was listening to my pitch. In a few minutes, he said, “let’s implement it. How much does it cost?” I was taken aback. Even without a complete product, we had our first paying customer. Next week, we signed up one more school. The next three months was tough – we heard everything from “who is interested in data” to “I don’t think it makes sense for our school”. In short, we were pretty lucky. Had we met these schools before meeting the first two, the ReportBee journey could have been different.

One of our focuses is to serve each and every school that uses ReportBee really well. We’re doing a pilot for five Chennai corporation schools and the level of customer service we offer them is the same as that we offer our highest paying customer. In our first year, we signed up five schools and each of them renewed their contract in the second year. Gaining acceptance for our product is crucial.

Yash: The key part of our strategy in the early days – and even right now – is about how yoga can meet retail. Location is crucial for any retail business. Our first location was right in the heart of Chennai in Nungambakkam. Six weeks before launch, we painted the whole Ispahani Centre (the complex where the first outlet was located) with innovative ads. We targeted customers within a two kilometre radius and left no stone unturned. Even before the studio started, we had over 500 prospects. Facebook was – and continues to be – extremely useful. The most important part of our strategy was that we’d ensure that our first 100 members will be our sales people. Within three months, we had 500 members. Evening yoga classes were crazy – 25 people packed into a class almost every day. In a few months time, we decided to launch our second studio in Chennai.

At a very broad level, we like to acquire members through referrals and retain current members through a great offering. Our yoga teachers work closely with our members and ensure they have a great class experience. Any member who hasn’t attended even 12 sessions a month is sent an SMS reminder. At the end of the day, we want our members to experience the advantages of yoga.

Srini: That’s wonderful. Just a thought: you could use the help of both ReportBee and ChargeBee in your business.

TSC: Krish, you need to close a sale here. Our first round table is turning out to be really useful!

Krish: Since the early days, we’ve been doing standard stuff – no advertising, build a solid product and build our credibility. We were a highly capable team that had tremendous experience building all kinds of software. We wanted to showcase that and build our trust factor. We blogged on various topics: articles on payment gateways, merchant accounts etc. and tried to get the message out that we were subject matter experts.

In our website, which really is the face of a company like ours, we conveyed that we were people with experiences. My co-founders come from Zoho, a company that is known to build great products. One thing we also did was to say ‘yes’ to our customers as much as possible. If he wanted us to do something different for him, we have the engineering capability and so, we implemented it for the customer.

Srini: Krya’s model is similar to ChargeBee. Preethi (my wife and co-founder) and I were sitting in a room and building a product. All these things take time, but we figured we just couldn’t sit in a room and build a product; we had to get out. We created our blog and our Facebook page. The idea was that we’d discuss sustainable urban living in our blog and elevate the discussion to go beyond products. We saw a lot of traction. The focus was on selling a higher principle rather than hard selling our product. We’ve had lively discussions on Facebook and we use it as a platform for customer service. The recommendation rate we’re seeing is fairly high. We’re probably the only detergent in India that gets gifted. If someone gave me a pack of Ariel detergent as a gift, I’d be disgusted.

Anant: For us, the model was completely unique. I sell ReportBee to school principals. Now, principals don’t read blogs or spend time on Facebook. It is a process of direct marketing. A study that we conducted for the Tamil Nadu government came in handy. We did this data analysis on 10th and 12th standard examination scores and presented it by district. One observation that stood out was that children born in certain months always performed well. The curve was the same every year. We said, “This is great. Let’s throw our old brochure and use this data analysis project to showcase what ReportBee does.”

Krish: There’s this TED Talk by Hans Rosling that is titled ‘Stats that reshape your worldview”. You should watch that video; it is pretty amazing.

Anant: He’s our guru at ReportBee.

TSC: On that note, let us wrap this up. Thank you all for making the First Smart CEO Round Table meaningful and relevant. We certainly believe this discussion will be extremely useful to early stage entrepreneurs, especially those in the pre-launch phase.


The Entrepreneurs:

Srinivas Krishnaswamy (Srini), founder, Krya Consumer Products 

A consumer goods company that makes sustainable goodies

First product is a detergent made from soapberries

Twin goal of building a business and spreading awareness about sustainable, eco-friendly living 

Yashwant Saran (Yash), founder, 136.1 Yoga Studios 

Started a chain of yoga studios with three retail outlets in Chennai

Believes India is going through a fitness revolution and yoga can fill an unmet need in this revolution 

Anant Mani (Anant), founder, ReportBee 

An IIM alumnus who is extremely passionate about data

First product is a report card for school kids that, he believes, students will absolutely love 

Krish Subramanian (Krish), founder, ChargeBee 

Former Cognizant professional who decided to start a venture with his college classmate and friend

First product is a subscription and recurring billing management solution

Eventually wants to get into the customer engagement space 

The Setting: 

The four budding entrepreneurs catch up over a cup of coffee at Eco Café at Chamiers in Chennai and indulge in a freewheeling discussion with the goal of exchanging ideas with each other.

The Result: 

Some very interesting insights on early stage brand building, clinching and managing the early customer and why every business has its own unique constraints that a cookie-cutter approach almost certainly never works.