Of Startup Failure And A BraveTalk By First Time EntrepreneurJune 6, 2014 2014-06-06 10:39
Of Startup Failure And A BraveTalk By First Time Entrepreneur
Of Startup Failure And A BraveTalk By First Time Entrepreneur
[Editorial Notes: Starting up is tough. Staying the course is tougher. That was the whole point behind the Bravetalk at UnPluggd this time. Only about 2 in 10 make it. But what you learn at the startup will stay for life. In this post, Bhuvan Thaker talks about his journey as an entrepreneur.]
Year 2008: The vision of the venture was to create healthy products and build loveable Indian global brands, and hence I started with my 1st product- gourmet Indian cookies.
The brand name I chose was “ba” that meant “Mother” in Gujarati, and it was also culturally neutral sounding name.
Identity Guideline Sheet
I was clear I had to create a differentiated product and hence the product roadmap was based on cookies that had Indian millets and grains as the main ingredient, and since I am based in Bangalore, I felt I should start with ragi (finger millet) based cookies and thus my 1st set range was born. Real healthy cookies made with ragi, whole wheat and ghee (clarified butter).
Purpose, Proposition and Personality
(Product photography, packaging and communication)
Future plans were to introduce cookies based on Indian millets and grains and mix them with tea, cheese and specialty spices of India to create a well differentiated and interesting product range.
Now I needed knowledge to understand basics of baking and so that I could evaluate manufacturers and other vendors in the process. After spending enough time meeting people from the baking industry and different vendors of raw material and as well as learning online, I started hunting for the right kind of manufacturer who would not throw his weight on me regarding quantity, price and also have integrity of quality.
After meeting a number of local manufacturers, I bumped into the bakery department at ISKCON temple. After several requests they agreed to help me produce cookies as per my needs, even though it was expensive; I was relieved that I won’t be cheated on the quantity and quality. And finally, after several months my manufacturing problem was sorted out.
Similarly, after meeting many packaging and labeling vendors, I finally froze on paper tube packaging, even though it costed much more than the traditional biscuit packaging it was a perfect combination of strength and reliability. Here’s a look at the literature we came up with.
I found only one vendor in Bangalore who could do quality work, it was expensive in terms of time and money I had to spend on convincing him to help me with small quantities. Finally, I had to give-in to their terms and place large quantity orders.
I then started approaching MNCs with the idea of regular snacking at the office and corporate gifting. Surprisingly the Yahoos and Googles of the world and other MNCs don’t have the same benefits in India, which they offer in their homeland. I was surprised to see them serving Parle-G as free snacking. However, corporate gifting worked well and I gained some momentum for the festival season.
On the consumer front I was building this brand to serve the niche market – 150 grams of cookies were to be retailed at Rs 180. I was targeting consumers who would purchase imported snacks and grocery products in gourmet stores. And Bangalore being the hub for expatriates, living in Whitefield and Indiranagar areas, I was hopeful of them subscribing fresh cookies on a monthly basis.
The concept of subscribing cookies is unheard in India, but I have heard in the west people tend to place orders for the benefit of lower prices and freshness. I assumed expats would accept the concept of subscribing cookies if someone offered them.
With the help of commonfloor.com I promoted my offers to the residents of Whitefield, approximately 2000 households to understand the responses. Sadly, the efforts did not bring any fruit. It was loud and clear people did not want to commit to the regular ration of fresh cookies, even though they loved the product, i.e. its taste and its benefits to children, and the price was also not an issue once they knew what they were offered as a product. In fact, they insisted that sales be made via departmental stores.
I somehow chose not to listen to them, for the simple reason that I didn’t have much capital left and working out a successful retail model will create a dent in my cash flow. So I continued finding ways to sell direct2consumer and found e-commerce was an ideal option. After few months of pursuing e-commerce companies I was selected as a vendor with ngpay.com, Homeshop18 and Rediff Shopping. Interestingly, the courier system in our country is so bad that it would ensure that people didn’t purchase food items online.
After many months of trial and error selling online, I realized I had to change my direct business model and work with the retail channel, even though I was worried about cash flow issues.
Shutting Down & Moving On
I had committed myself to this venture, and I was in a do-or-die situation, so I started talking to all the distributors of imported products; they wouldn’t introduce the product to the retailer, even the double digit margins as well as the ISKCON brand name wasn’t working with them. Then I started contacting gourmet retailers directly and realized that this channel has tremendous potential but a new player requires lots of capital to play the retail game.
I again started focusing on corporate gifting to sell off existing inventories and simultaneously started contacting early stage investors to invest in my venture. Most investors I met were only interested to invest at the growth stage, and here I was struggling to start.
Passion was running high and I was unable to see the practical side of my situation and continued pursuing various avenues. Now I was focusing on trying my luck on export and travel retail. I contacted importers and travel retail distributors, and in the process sent out many, many samples. I changed packaging, labels, etc to suite their requirements but nothing was working out. In the background, the bakery manager at ISKCON was becoming restless since the partnership was not bringing in the promised volumes and revenues.
I was now left with very little money to pursue my dream any further. I took some time to come to terms with the reality, and I had to convince myself to pause. In February 2012 I closed down my venture and after a few months I started helping entrepreneurs by sharing my experiences with them.
This journey, I think is the most daring thing I have done till date, risking it all; the experience has given me immense learning and has been a fulfilling one. Professionally, it helped me grow and look at situations objectively; personally, it has enriched me and helped me take control of “fear”. In fact it has opened me up to the many possibilities that life brings to us. And along the way I have made curiosity, appreciation for things, and imagination my friends who keep me going.
In your views, what mistakes should I have avoided? What could I have done differently?
[About the Author: Bhuvan Thaker is an Independent Marketing Professional. He was the founder of Divine Food Venture and has worked with creative brand agencies.]