10 mistakes and 9 wise decisions of an entrepreneur [The long winding road]

[Editorial notes: Guest post by Abhishek Rai, founder of Vikreyta, two year old online marketplace for mom and pop retailers.]

We are one of those guys, who first jumped out of the plane and then started building the parachute, on our way down, while death stared at us every single moment. I quit my job once in Jan 2007 and worked as semi-entrepreneur for one year and started from scratch. I developed a distribution business of LCD /Plasma TVs, Digital Cameras, Flash Storage devices and Digital projectors. In three months, this venture reached a monthly turnover of Rs 30 lakh. Somehow, things didn’t work and I had to exit this venture and start on a job again.

Freefall, Entrepreneurs
Freefall, Entrepreneurs

After two and a half years, I again had this itch to start on my own. I started on 5th July 2010, along with my engineering college senior Shubhojit Biswas. In mid-2010,we decided to build a portal which would showcase inventory and their prices from local neighborhood retailers.

The journey begins

The rationale behind this was that while there was no affordable medium for retailers to sell their stuck inventory. The customers also did not have access to any utility which could tell them the best prices available at their neighborhood retail stores.

Unfortunately, though both of us were engineers, neither myself nor Shubhojit had ever coded in our lives. When we jumped into it, we thought we can quickly develop a prototype by outsourcing the design and development, testing it in the market, doing a soft-launch and then hire full time resources.

The outsourcing part is where everything went utterly wrong. On 14th sept 2010, we signed an agreement with a fairly large Bombay based web-development company. We paid them a fairly large amount in advance and in cash (to save 12.5% service tax). It was supposed to be a “Time and Material” project with the monthly invoicing cycle. Since we did not have any clue how the outsourcing industry worked, we just fell for it.

Because wanted to get quality work done, we opted for this company which had worked with leading corporates like Mahindra and others, instead of a freelancer [FIRST MISTAKE].

After taking money, they informed that work could not start in stipulated one week time as none of their Project Managers were available. The development started on 8th October 2010.
All this while between, 8th October 2010 and 8th November 2010, this company showed us only a couple of html templates of login, sign-out, contact-form pages (that too shoplifted from somewhere else).

We were wise and sane enough, in spite of being non-techies, to realise in a month’s time that this “Time & Material” and “Agile” method was going nowhere. We figured that if we are not “Agile” now to stop going forward for the next cycle, they would not eventually leave us with any “Material” and we will only waste “Time”.

We lost Rs 67,000 in just one month, but we acted fast and cut the losses there itself. {FIRST WISE DECISION}

We decided not to go ahead with them for the second month/cycle and then again started search for someone who can build us our prototype. Through a childhood friend who once worked with Google, we got to know of a company based out of Pune, whose Directors and CEO were working earlier with top MNC and IT companies. [SECOND MISTAKE]

The entire process of explaining the concept to them and sending them the “Scope Document” and signing the contract started and it took a while.

This company was going to cost us almost double the amount, with respect to the first company (again “Time and Material” method) [THIRD MISTAKE]. We decided to go with them, due to our Google Friend. There was no reason, not to trust his opinion. We thought we were in safe hands.

When I had quit my job on 5th July 2010, I thought that I would have at least a working prototype ready to test in the market, in about three months. Now even after 6 months, I had nothing to show.

In between, the vacuum created by loss of friends after quitting job (my entire social circle were my colleagues) and the absolute repugnance from my parents of my decision did not help either.

I lapsed into depression for few days, but thankfully overcame it on my own.

After the work started, the 2nd time on Pricesticker (That was the name when we started), the developer who was assigned to work, used to always tell me on messenger that everything is going fine and work is on schedule. During my occasional chat with chief operating officer of that development company, she also used to say that she is looking after the progress and it is doing fine.

A couple of times when I asked the developer to show the progress, he used to send me the link of the local hosted repository of code, which I could not understand.

Now after tinkering a bit with programming, I know that, those were the basic configurations of app, which happen automatically when you create a new app installation with Django. Surprisingly even after one month, this company of amazing engineers charging me Rs 1.2 lakh/month + taxes had nothing working to show me.

Oh, I am sorry; I forgot to mention that Pricesticker was being coded in Python during Dec 2010-Feb 2011. [FOURTH MISTAKE]

We were rookies and had no idea of programming languages. We did not know anyone who could help us in web development planning, except for this friend of mine who was a super engineer and at one point of time was employed with Google.

He suggested Python as the language to us, and then after a bit of googling we were excited to find out that, we would be using the same language which is at the heart of Google and NASA. We did not even blink twice before agreeing to it.

People can be so naïve.

Soon, we received another jolt from this Pune based development company that they only do server side programming and all the client-side work and designing needs to be done by some designer who should also give us the HTML/CSS.

Since the first company with whom we worked was doing everything, including the designing, HTML and CSS, we thought that this is the way it is done and did not even bother to ask about the designing part. [FIFTH MISTAKE]

Surprisingly, my dear ex-google friend never mentioned this aspect while recommending this company to us. Neither did the company tell  us this when we were under talks for this project.

Anyways, we decided that Pricesticker being coded in Python by a team of super skilled engineers, also need a super cool design.

Now, the hunt began for a designer. This Pune based Development Company introduced us to a designer working at a top MNC, who also used to freelance.

We were told that designers typically charge twice the amount of developers.
While this guy, quickly showed us some design, it was way too obscure and cluttered for the product we had in mind, we decided not to go ahead with this freelancer. [SECOND WISE DECISION]

We fell back again on this good friend of mine for advice regarding a good designer. He gave us the reference to a Mumbai based design company with engineers from IIT-Mumbai Design School. [SIXTH MISTAKE]

Third time in 6 months, we started the negotiations, discussion, sending emails to-and-fro. All this in vain hope that this was the last time we are doing this, at least for the prototype.

This Mumbai based design company agreed to deliver the project in 30 days starting from 4th Jan 2011.They also, after negotiation and bargaining, reduced the asking the price to one-third.

They asked half of this large amount in advance, which we paid. When I’d quit on 5th July 2010, and told my parents, I told them that I would give myself 6 months at this attempt and if nothing comes forward in these 6 months, I would start job-hunting again and make an effort to settle down in the traditional manner i.e. get married. (I continue to be a bachelor as this is being written).

Here, January 2011 closed and I was now here. The 6 months deadline passed. Anyway, we decided to keep the faith.

Thankfully, at that time we did not know that this dream of ours would be fulfilled exactly one year later. Had we known that, we would have called it quits in mid of Feb 2011.

After bearing failure for 8 months, the thought to continue to bear it for another coming 12 months, itself would have been enough to break us. The design company was quick to start and showed us some nice templates, after discussion on the same and additions/refinement we principally agreed on one of the designs.

These photoshop images of the design, in late Jan 2011 were the first tangible objects we saw regarding the product in last 7 months after spending considerable amount of money. At the same time we decided to do the first change in product, the name.

Competition was quickly catching up and by then there were already a couple of local price discovery engine online with the word “Price” in their name. Though we were far behind from launch, we decided to change the name of the product from “Pricesticker” to “Kreyta” , which in Hindi means “customer/buyer”.

We were getting edgy with the work at the development company because as far as the design company was concerned, at least, we were shown the photoshop images of the design. There was not even a little to comfort us on the development part.

All this while, my good friend was not available on messenger/email, he was like completely vanished (he is based out of US). We were now completely in the dark and on our own. As the deadline of 16th Feb 2011 loomed of the second month completion of the development work in the “Time & Material” module, a couple of days earlier than the deadline, I asked the COO of the company to stop development work.

The reason was that we had budgeted for only two months/cycle development. The dear ex-google friend of mine had said that, at max this would take 2 months of work for this great bunch of experienced engineers at this company.

We had thought, before signing the contract with this development company that my dear friend is telling us that it would take only 2 months for completion, because he has already discussed it with them. [SEVENTH MISTAKE]

Earlier, we had discussed every scope of work and shared the entire scope document with this friend of mine.

The friend of mine was an ex colleague of the people at the development company. He was the first guy to discuss the project with these development guys. Later, to my horrific shock the COO of this development company, flatly denied that any such discussion took place.

I asked the development company for  whatever code they had finished during the two months; they just mashed-up with the design and help us taking it up online. Now the wait started for the design and HTML/CSS to arrive from the design company. The deadlline passed and we had neither the design nor the code in our hand, let alone the product. 8 months had passed and we were still empty-handed.

The coup that was not

When we signed up with this Mumbai based Design Company we felt like that we executed a coup in our entrepreneurial journey. We got this company to reduce the price by one third, while still agreeing to do all the work and we had to pay only half the amount as advance. Earlier with Mumbai based development company, we paid the amount of a cycle’s development as advance.

Later we realised that it was actually a coup executed by the Design Company on us.

Things were very frustrating, lonely and sad. By mid-March 2012 the friends and family were asking about the product, as we had enthusiastically told everyone that we would be online by mid Feb 2011, 8 months after we started.

When I quit on 5th July 2010, I was due for a promotion in my earlier organisation. All interviews, reviews were completed. I was cleared through central HR of the organisation and was awaiting official communication. After about a months’ time, the rest of the guys got the official document, the arrears and a jump in their salary.

I was feeling like sh** and like the biggest fool on the planet.

All of March and April of 2011 just went by, calling and following the design company.

Finally, after being a good guy for months, and trying to do the things amicably, one evening, in late April 2011, I shot a very angry email citing the agreement clauses to the design company.

I asked the company that agreement was now null and void and they should return me the advance amount and stop work on the project. This did the trick and in about 7 days I had HTML/CSS. I wish, I would have done that long back. [EIGHTH MISTAKE]

In fact the designer agreed to build a couple of more pages which he earlier had denied and do the complete implementation. I introduced the design and Development Company together and it seemed, finally we can see something out of Kreyta.com.

Sometimes, during mid –May 2011 Kreyta.com was online (I don’t remember the date because we were not at all excited ,as we knew that our baby was retarded and not going to live long).

And we were perfectly right about it.

So while stuff was online, hardly anything worked, either on the client part or on the server. And then during the later half of May 2011, began the frustrating chain of emails with the development company. All these emails and chat conversation ended from the development company with three words “out of scope”.

When I had send my PDF document, containing the scope of work, to them in late November 2010, they agreed to everything. Our misfortune that we did not included that “Scope of work” document in the agreement. [NINTH MISTAKE]

Something inside me wanted to kill them all.

All this while, my dear ex-google friend was still incommunicado.

We were devastated, to say the least.

Slowing the burn

Finally, I could not take it anymore and told the development company ”Ok,thanks. You Win !”
Exactly 2 days after that, Kreyta.com on www showed apache server error and the retarded baby died.

My expenses of living alone at Bombay were not helping. Also both professionally and personally, it was not making sense. All the friends were busy and in fact, I was now too ashamed to go and talk.

Late May 2011, I decided to leave my dear city of 8.5 years, Bombay and shifted to Pune at my parents place. [THIRD WISE DECISION]

The objective was to slow down the burn-rate and try to find out some freelance engineer who can put us back online, with the code and design which we already had on server. Also during this course I started tinkering with programming so that I can understand bits and pieces of stuff.

With so much rejection all through this while, it was difficult to concentrate on learning programming. Thoughts always used to go back to what will happen?

Any Python engineer, I can find on startup groups, forums and twitter; I would write to and fix up appointment for meeting. Would run them through the product and solicit paid technical help which I needed.

We never asked for FREE technical work from anyone.

In June 2011,I managed to meet few guys who were good engineers. Someone agreed but then backed out, some refused citing the professional change in near future .Someone wanted to be paid $ 50/hr for work, having no idea how long it will take.

We would get optimistic before the start of every meeting and will come crashing down after it.
These meetings in Café and Restaurants also cost us money, apart from emotions. We were getting dejected, every single time.

And then proverbially we decided to “Pivot” as they say in this world.

Competition was now, way ahead and our dream of building a local price search engine was almost over.There were some very experienced engineers who were already online and were funded by now. From the start of 2011 the deal sites were in vogue and were doing great business (that’s what we read).

In India, the deal sites were doing business primarily with manufacturers and wholesalers and not with local small retailers. We discussed and decided to build a prototype which would showcase the deals from local small retailers (without any ecommerce activity inbuilt).

The thought-process remained the same that we would collect the data from field-force and publish it online; the user can see the relevant entries and base their purchase decision on the same. We would make money by charging retailers a subscription for the deal posts.

We decided to junk the Kreyta.com code and design (it still resides on our server though) and build a very simple prototype and fast and cheap, so that we can move with it in the market and test it. [FOURTH WISE DECISION]

We did three things :-

*Switched from Python to PHP.
*Changed the name of product to “Vikreyta” which means “Retailer” in Hindi. {No one seemed to identify with the name Kreyta. While Vikreyta, almost everyone understands, specifically there was a strong connect with our customer, the retailers. It was for them, after all}
*And decided to work with a freelancer, instead of a development company.

Back to basics

In late June 2011, on one of Google groups related to startups, I learnt of a PHP freelancer in Pune. I met him the very next day, discussed our minimal requirement and the price.

This guy said, pay me only after the product is complete and asked for only 17% of the amount, which we paid to the Pune based development company for one month/cycle development.
This guy in fact later also gave us almost 3 months of credit. The work started bang at 0000 hrs. of the day before which we confirmed on email the terms and conditions.

No one was ever so interactive and prompt. We had a URL to track the progress of Vikreyta.
We were just dying to go out in the market with the proto and test it with retailers.
In between, 5th of July 2011 came and went away, one year and we were still empty-handed.
Vikreyta (now www.1.vikreyta.com) went online at the mid-night of 28th July 2011.

I myself put it on the server. By this time I had learned a bit of stuff. It still took us sometime to remove the bugs and test it, even though it was very minimal. We hassled over a lot of small things, and wasted time. We could have gone out much earlier. It was not needed. [TENTH MISTAKE]

I scoured the local market in Pune, clicked the Photographs of deals being offered by various merchants and put them online on the site for testing. We started showing the so called MVP to people and explaining them the product and our vision. The product was actually very dull and lousy, but they did not know that, it was all that which we could manage in more than a year, and we did not give up.

People were bewildered on seeing the product, which is currently online on www.1.vikreyta.com.
The rejection of this product pushed me to another phase of depression.  Especially when the circumstances at home weren’t getting any better and there were pressures at home. I was almost on the verge of giving up.

Also in July 2011 we started our incorporation process. This first process failed because of my depression. The submission of two documents were  delayed. Incorporation failed, but we got the name of the company “Pricesticker Online Media Private Limited” registered and also our DIN (Director Identification Number).

Ground work and grunt work

I once again managed to pull out of this depression, and on 5th October 2011(sadly the same day, on which Steve died I went out in the market to demo and pitch the product to retailers.

I signed up 5 merchants on the very same day, came back and put their data online. The single most valuable feedback we received from a very small retailer was that on www.1.vikreyta.com, there was no way they could  sell their inventory and complete a transaction.

This hit  us like a hammer on the head. There was this small time merchant, who has probably not even completed his schooling, but who wanted to sell products of his store on web.

We decided to pivot for the second time in our short entrepreneurial lives. This was 12th of October 2011.

We decided to scrap www.1.vikreyta.com and build afresh, a simple web retail portal on which small retailers can sell their merchandise. [FIFTH WISE DECISION]

The thought process was to make it very convenient for even the smallest of the retailer and merchant to be part of www revolution.

We decided to do it in this way -:

1. Collect inventory details from retailer through field force.
2. Publish the inventory details on Vikreyta.
3. Buy the product from retailer, once the order arrives from the user.
4. Pay cash up front to the retailer for the product we bought from him.
5. Deliver to the ordered product to the customer and collect cash.
Now the billion dollars question came again: whom to approach for development ?

In October 2011, I joined a one month PHP development course, which was aimed at freshers like me. [SIXTH WISE DECISION]

This time, I wanted to do the classroom way as this way I would be more disciplined and would not get distracted by everything happening around me.

Also, I wanted to learn enough of the programming part, so that I could effectively judge the cost and time parameters of development, quoted by others, so that we do not get fooled again.
This course was run by two engineers who had completed their degree from one of the top colleges of India, and worked with a top IT company for a few years and then decided to start on their own, imparting training and doing web development.

While taking this PHP class I not only learned about PHP programming, but also I was able to analyse the level of expertise of these guys and their knowledge of the subject. While doing the course I never told them about the product, or my botched up history of last 15 months.
Once the course was finished, around mid of November 2011, we decided to approach them.
By this time, I knew very well, what amount of time and effort would require for these guys to complete the project.

So since our handicap was gone, we were able to negotiate the best from these guys, both in terms of “time and material” :-}

They agreed to build the project www.vikreyta.com at the same cost as www.1.vikreyta.com and only in flat 7 days. These guys at that time were a bit tied up, finishing one of their existing project as they were only 2 member team.

We started discussing scope, structure, data model and finalising everything. Shipping of code started on 2nd Jan 2012 and on 9th Jan 2012 we had the new Vikreyta for testing.

Testing, iterating, bug-fixes and doing a bit of modification based on some feedback, took some time and the present www.vikreyta.com went live on 12th of Feb 2012.

It was one hell of a journey. We were happy but we did not celebrate. By then our excitement had fizzled out, for us it was now, just a mile-stone.

We put the links of the new app on Facebook and tweeted a bit, as we had to show that we have now something reasonable.

The first feedback was very encouraging compared to the www.1.vikreyta.com and that definitely made us feel better. Immediately, I went out into the market, signing up retailers, collecting their inventory and putting products online.

Hiring, selling

Now, we wanted to test ourselves against the biggest challenge. Could we sell our dream and company to prospective hires and employees? And we did not waste any time doing that, as we knew that this would be as tough as it was for us, building a working product. And if we had to fail at this, we just wanted to fail very fast. [SEVENTH WISE DECISION]

At one tier-two B-school, we pitched twice, took interviews and hired 3 paid interns to work with us for 2 months. [EIGHTH WISE DECISION]

I trained and coached these guys and they did a tremendous job by signing up more than 250 merchants in less than a month and putting more than 4400 unique inventory products online.
This allowed us to quickly validate that we can train people effectively, who can go out in the market and sell the product.

As of now, we have about 300 merchants and neighbourhood retailers of Pune , signed up with us, from very diverse categories. And many of them, still contact the interns on regular basis over phone, enquiring the progress of Vikreyta.

We decided to start and focus on Grocery and Household items to begin with.
For grocery, though the biggest opportunity in web-retail, no-one has found the recipe yet.
We tried to search and introspect the reasons for it.

Grocery could not be successful in the traditional web-retail way, because grocery needs are sensible needs. Most of the time, if you require grocery, you require it as quickly as possible.
Also we thought that, we cannot be “Your friendly neighbourhood retailer” until we crack this delivery conundrum.

A friendly neighbourhood retailer, after all has the product and delivers super quick.
So we worked on, to be super-quick in delivery and change the paradigm. [NINTH WISE DECISION]

Reaching out to the VCs

This was not entirely our invention. We wrote to one of the biggest VC Funds of the world, when we launched in Feb 2012. And one very kind gentleman from this capital fund, wrote to us the same day and gave us this advice, that working with small merchants, we should focus on being quick, rather than on being cheap.

On 12th Feb 2012 our pitch was “Pune, buy product from your favorite neighborhood store”. In April 2012 it changed to “Pune, get the product delivered at your door-step in 24 hours”. In late June 2012 our pitch changed to “Pune, get grocery delivered within two hours”.

And we were crazy enough to do that, without being having even a single full-time employee. I was the single full-time resource and from Feb 2012 to Sept 2012, I myself did delivery of all the orders that came through.

Though we had 3 interns for two months period, but still even during those times, they were not put on the logistics task.

We want to become the single largest retailer in the country without owing a single warehouse.

Though we started with Grocer, eventually and slowly we started to sell and deliver almost everything sold by a neighborhood retailer, in flat 2 hours

The first permanent hire of our company, joined us on 1st September 2012. In fact, there is a story to our first hire also. Sandip, our first hire, confirmed that he would be joining and we were glad. I sent him a reply, detailing the documents he has to bring, to complete the joining formalities. To this email, there was no reply. We got a bit edgy. The evening before, I sent him a text message, reminding of my email and the documents he has to bring for joining. There was again no reply. We thought that this guy would also not join.

Sandip was supposed to come at 0930 hrs to our office. By 0935 hrs, he was not there. I sent a text message to Shubhojit, saying that Sandip has not yet arrived and it seems he changed his mind. And as I hit the “Sent” button, there he came climbing the staircase.

A couple of days later, Sandip told me that his family members were wondering what kind of company he was joining where he was the first employee? At present we have 4 full-time employees in operations and sales, and 3 more joining before 1st October 2012.

Presently, our orders have come through pure organic traffic and we have not done any consumer marketing stuff, not even basic SEO.

As we have now some infrastructure in place in terms of man-power, we have now started working on taking the site to users online and below the line methods.

We sincerely hope that in continuation, the  story would be as interesting as it has been till now.
We intend to release a monthly edition of this story, which shall serve as an “Official History” of the company, primarily to serve as an internal document for team, but we can share with it anyone-else who shall want it.

In the end, The only thing we are proud of what we have achieved so far, is that even after coming to so many times almost at the brink of doing it, “We did not quit” in last 2 years and 2 months.

It is as simple and as difficult as that.

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