Making fashion brands agile | Fashinza
Making fashion brands agile | Fashinza
As an entrepreneur, you are essentially building a solution to a problem, a problem that has a large addressable market.
And a truly seasoned entrepreneur would be able to define the problem in a single simple sentence.
Pawan Gupta is the founder of Fashinza - an apparel-tech startup that has raised more than a hundred million dollars in debt and equity to date.
The problem he is solving at Fashinza boils down to a single metric- he wants to reduce the time it takes to release a purchase order in the apparel and fashion space.
This might seem like a trivial problem, but it’s a problem that affects billions of dollars of revenue and can potentially lead to massive competitive and profitability advantages.
Pawan is a serial entrepreneur whose first startup in health- tech was acquired. With Fashinza, he plans to revolutionise the apparel manufacturing industry by leveraging new-age technologies.
In our conversation, he speaks about building and scaling Fashinza.
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Additional readings:-
1.Fashinza: Using technology to empower SME apparel manufacturers
2.Powering sustainable fashion and driving efficiencies with technology
5. Fashion supply chain startup fashinza gets $30m from mars growth capital, liquidity group
6.Fashinza opens design lab in Gurugram
Read the text version of the episode below:-
Pawan: Hi everyone. I'm Pavan Gupta, CEO and Co-Founder of Fashinza.
Akshay: Before we talk about the path, which got you to where you are today help me understand listener, why does Fashinza matter? Why should I care to know more about Fashinza?
Pawan: Absolutely. So Fashinza was one of the first B2B startups for promoting apparel manufacturing, making it easier. Today we work with close to 100 global brands, including the likes of Inditex. And at the same time we work with over 120 factories across India, Bangladesh, Turkey. So it's a big business now and we do over 100 million dollars of business a year. I would say we were one of the first startups in B2B in India who actually started cross border trade. And now we obviously have a flurry of them. So yeah, I've been like, we've been a pioneers at a lot of these things. Yes, there were a couple of B2B startups before us, but I think cross border was new for us. Apparel was absolutely new that we started.
Akshay: I believe you've raised something like $115 million just in the last two odd years.
Pawan: We raised a lot of money. I don't say that we are just proud of the fact that we've raised a lot of money, but I think there's a kind of partners that we have on board, including Westbridge, NASPERS, Accel, Elevation, EDQ. I think these are some of the best names out there. Best people out there. So we are really proud of our cap table.
Akshay: Okay.
Pawan: I mean, arguably like we like to say that we are the best cap at our stage in the market. But again, that's always arguable..
Akshay: Tell me about the path which brought you here. Now you're a serial entrepreneur. What was the trigger to get into entrepreneurship?
Pawan: I think I don't really like the term serial entrepreneur. Even the first startup that we started I didn't intend to sell it and it's a long story, but the idea was always to build a company that lasts for generations. I also believe that as companies become more and more mature, as founders become more and more mature, that is when you start getting the real and the large impact. So it takes time to build a company. So anyways, I think, yes, this is my second startup. Previously, we started back in 2014, two years out of college graduated from IIT Delhi in 2012 worked for a couple of years just to save up enough money to be able to leave my job and start up.
Akshay: What made you so sure that you wanted to start up? Was it the IIT Delhi ecosystem?
Pawan: I think like 2012, I really ecosystem was out probably the best out there, but it still was not like entrepreneurship was never a mainstream thing. Why is it difficult to tell, but somehow something comes from my upbringing. So I grew up in a very small town called Hissar. People there do two things. Either they have a government job or they have their own manufacturing or business. So that is how we grew up. And I think obviously your your upbringing shapes up a lot of things. Government jobs were considered safe rep reputation wise. You were, obviously reput. There was a great reputation in the market. People respected you or you were a businessman. Obviously you had great respect, but at the same time, you were also rich. So I always grew up assuming that businessmen are supposed to be rich. Hence, if you wanted to become rich again, all of us who grew middle class, lower middle class, always wanted to become rich. Like we wanted to have those comforts of life.
Akshay: Was your dad in a government job?
Pawan: No, my dad was actually interesting in a private job. So my dad used to manage a plant, a factory. he didn't own it, but he used to manage it. So everybody would always think that my dad owns that factory because that is the natural thing to be so in any case, I think like I got into college, obviously big dreams, but the thing was key either, so I wanted to have my own thing as simple as that. And that is where I could do. Go big go fast and within a job environment. I would just be stuck with a Natural progression of growth that you can achieve in a job Obviously things have changed a lot since then I think you can obviously join a startup and grow very fast as well but those were the days when from IIT consulting finance or some of the Co tech jobs used to be the most important jobs and which essentially gave you a good career. But I always felt that would be very limiting for me and hence I wanted to start up. So that is how I ended up within fourth year itself, the final year of the college, I decided that I wanted to start up and started planning around like what could be ideas, what could be the sectors. Fortunately, met a couple of my really close friends. We knew each other for a very long time and ended up deciding that it's a great idea to just start up together. But again, we did not have any money. So we decided let's work for a couple of years. Let's keep our dream alive. Let's start building on the side. And then like when we have just about enough money to sustain ourselves for a year or 18 months without a job, that is when we'll go ahead and start up. The funding environment, honestly, at that time, was not that strong, which meant that we did not know how to raise funds. We were not confident of raising funds, but we were confident that what we wanted to build in healthcare would be extremely valuable. And hence, we just wanted to go for it. So that is how we left our job.
Akshay: How did healthcare come as the idea you wanted to build in?
Pawan: I think when we decided that we wanted to build something, we thought that we would enjoy building somewhere where there would be a possibility of a big impact. Not just in terms of how big the company you can make, but at the same time, if you can really impact the lives of your customers, of the people in general. And health turned out to be one thing. We got excited It obviously helped that one of our Co-Founders parents were doctors so we could get early insights from them. We could also get really good Feedback from them very quickly and get connected to the market.
Akshay: You had Nipun as your Co-Founder I've interviewed Nipun also in the past.
Pawan: Nipun was one of my Co-Founders. We were actually dominates for almost four years and then Mudit was the other Co-Founder.
Akshay: So what was the idea that you wanted to build on? Tell me about that journey.
Pawan: We started building in medical tourism. We were very interested about how medical tourists would come to India to get treatment. And especially from lower income countries where the facilities were not available which was a really insightful. And then we are really used to think that it's only the people from US and UK who would come here because of the cheap cost of treatment. But eventually that turned out to be. People from Afghanistan, Sudan, Iraq, Bangladesh were coming here to get treatments. and we thought that maybe we can make their lives easier by getting them really good treatment at Good prices. So that is how we started building on it then one thing led to the other.
Akshay: This was like monetized through a margin from customer or through a margin from hospital?
Pawan: Margin from hospitals.
Akshay: They would give you like a referral fees for bringing them business.
Pawan: Pretty much yeah. So that was the business model. we did that for almost like close to six months or so. but one thing led to the other.
Akshay: Were you making enough money for you to want to keep doing?
Pawan: Yeah. So money was not bad actually in this. And I think the customers also loved us. The doctors loved us. It is just that I think we kept on questioning, why are we building a commission led model or why are we building a middleman here? Especially early young techies, we started thinking whether there is a technology solution here. Which means that we don't have to do any operations or anything. We just are able to connect them together and from there they can take it. I mean to be honest, it was not the right decision at that time, but we also tried it out with no real success. That is when we got an insight that is actually, if you look at the domestic market, a doctor to doctor referral actually is big especially from small town to big towns. And we thought that, okay, let's forget international from for now, let's just focus on domestic and in domestic such a thing operates less on, let's say a customer reaching out to a solution, but more on a doctor suggesting another doctor. And that is how having one thing led to the other. And we started building a doctor's network, more like LinkedIn for doctors. And hence Curify was born.
Akshay: Why aren't you running Curify today? Because LinkedIn for Doctors as a business idea has merit. I believe there's a company in the US which went public a year or two back. I believe they had a two digit billion valuation kind of a thing. I mean, there is merit in that idea. Why aren't you running that idea today? What happened?
Pawan: Absolutely. I believe it's a great idea and Doximity is the name of the company that you're referring to. They do close to almost 400 billion of ARR, beautiful business has raised less than a hundred million dollars, if I'm not wrong. To build that level of company. So when we raised a seed around about a million and a half and I think at that point of time we got a strategic investor on board.
Akshay: How did you manage to raise you were clueless about fundraisers. How did you crack that problem?
Pawan: So we did a very small angel round initially. about close to $100,000 at that time, $150,000. That got us some really good angels on board. So all those angels came through some network of IIT Delhi or network of from friends and family. and those were the people who were ex entrepreneurs, who had built their own businesses like Rajul. Who now runs his own fund. Capital was the founder of Pine Labs and Global Logic Oop etc... So all of these people came through one place or the other again with very small checks. we raised a very small round but just the fact that those people were our sounding boards really helped us navigate the future ecosystem. Again, having said that, it was India back in 2014,15. Everybody was just investing in hyperlocal e-commerce. Places like that very few investors understood core technology plays let alone a vertical social network. So it was not easy. People would question us on time. People would question us on whether doctors even need something like this, etc.. Whether doctors would adopt technology. So it was not easy. And I think that is why as part of the seed round, we just slightly got frustrated and we got a strategic investor on board. Who understood healthcare market and most importantly, they wanted to build an Indian healthcare for a very long time. And hence we received money from them where we got a partner who understood healthcare.
Akshay: This is which company, which came in as a strategic investor?
Pawan: Roundglass partners. But again obviously getting a strategic investor on board also comes with a flip side that eventually. You can't run a company absolutely independently because they invested in the company, assuming that they are a strategic investor or they have to go and acquire the company in the future or integrate that company within their own ecosystem, which meant that we could not take independent calls on running the company or raising more funds. And hence, we a amicable solution wherein they acquired the company at an all cash tv give us a great exit. And We exited in, so we sold it only for 2017. We stayed with them for two more years as part of the lock in and really getting the company transition. Great thing is the company is still running very well.
Akshay: You know, building a social network is incredibly hard. How did you actually get enough number of users to sign up?
Pawan: Absolutely. I think building a social network is probably one of the toughest things out there. It is not the same as let's say any other operations based startup or even e-commerce, to be honest. Because the value of social network only exists when you have a large portion of your time on the platform. Until then, it is just a promise. Because somebody else can just come up get a large number of users and just absolutely kill you. Hardcore winner takes all dynamics exist in this social networks. So it did help that we were focused on a niche vertical, rather than let's say something like a TikTok. but so it did help. We did not have a lot of competition. We did not have five other. Startups trying to do the same thing. Yes when we once we started a couple of them more pivoted or came into our thing, but again not too much of a competition honestly So we could build at our own pace. We could really work with the users build out right solutions right features for them and take our own time, which I would say was a great help For example for the first 12 months or so when we from the time we started I think we had pretty much nothing I don't think even a thousand doctors were using the platform at that time but we went from a thousand to a hundred thousand within a matter of six months we could take out that time to build out the right solutions with just those 1000 users, which would be beneficial for the next 100,000 users.
Akshay: So like you invested in product market fit first before investing in growth.
Pawan: Correct. So we invested in two things. I think one is product market fit. Obviously that was the key. And second we also invested a lot in just building single person utility tools. A social network will only give you meaning or value when a critical mass of people start using the platform especially if it is user generated content UGC. This is what we defined as single person utility that I don't need you to be there on the platform. I can just open the platform and get some value out of it. For example, in our case, Curify, we just built a news platform. Very hardcore academic medical news. What's happening combined with some medical jokes, humor, or some like really relevant news articles like some violence against doctors and things like that. Now, this was all curated by a content team sitting in house every day we would give you 10 pieces of great news. So you could just come on the platform, read the news, even though there are 5,000 other users are not using it, but still you're getting some value out of it. So that's a good way to hack your initial set of growth.
Akshay: You invested in content as a way to build early engagement until you reach that minimum viable level of network where UGC kicked in. Basically you hacked the UGC by first doing in house content generation until the UGC came in.
Pawan: Absolutely correct.
Akshay: Amazing. For this 1000 to 100,000 journey did you also spend on like paid marketing to attract users or was it all like viral?
Pawan: So we did do some paid marketing. But to be honest like I think paid marketing did not work very well for us. It was very hard to really target doctors on a social network like Facebook Although we did try out a bunch of things there, but I think most of it which work was like something like some growth hacks For example, we use gorilla SMS marketing or we would do let's say paid marketing, but very focused on so let's say for example, a pediatric conference was going on in Delhi. So we would geofence the area to exact that hotel where that conference was going on. Assume that everyone there is a doctor and then do paid marketing and that resulted in very low cost but at the same time, really high relevance.
Akshay: What do you mean by gorilla SMS marketing?
Pawan: So gorilla SMS as in like, when we would ask our doctors to invite other doctors as simple as that. But then we would just use SMS as a tool for that invite. let's say you are getting a message that, Hey, Dr. Akshay, Dr. Pawan and Dr. Neha are inviting you to join Curify. And those Dr. Neha and Dr. Pawan are let's say in your contact book. They're super relevant to you. And suddenly you're like, Oh, great. Okay. Those two people are inviting me. Then maybe it is something. Let's check it out. Right.
Akshay: Right. Which is similar to what LinkedIn does. Like it takes your contact, it imports your contact book and sends emails. Okay.
Pawan: Correct. I'll just think that some of these things might feel intrusive at that point of time. But we're talking about back in 2015, 2016, when these used to be the norm.
Akshay: Yeah I mean, email importing email contacts is still the norm. I think anyone who signs up for LinkedIn, LinkedIn kind of prompts them to do that. Had you figured out monetization by the time you got acquired?
Pawan: So we had figured out monetization. We were forced to figure out monetization because we were always like we didn't ever never raise crazy amounts of money. We were very frugal and hence we started monetization just because we felt a need to boost our revenues we didn't want to rely on everything on the funding. And then we started building a monetization layer on top of it using pharmaceutical companies, medical devices companies to for using Curify as a reach out platform, which in earlier days or even today like they use MRs or their... On ground representatives to do that, reach out to the doctors. And this is we positioned Curopi as a platform where they could reach out to those doctors in a very targeted manner like you could even target somebody like a pediatric oncologist which is probably like only 20 exist in India give them absolutely relevant stuff, more advertorials. Less ads, less marketing, which is beneficial for both obviously the company, but at the same time, the doctor as well. That worked beautifully. I think like doctors loved it. Advertisers loved it. They were getting amazing reach. the MRs when they were visiting those doctors were saying that, Oh, I have already read this content on Curify. Tell me something new. And I think that just absolutely blew it. Like honestly, before we got acquired, we could see that if we stayed at it for three, four more years. We could easily build like a 10, 20 million ARR business.
Akshay: Pharma marketing is a massive market, right? Billions of dollars globally. So that opportunity is there.
Pawan: Absolutely. And there's no platform for them to do it.
Akshay: Yeah. Why did you choose to get acquired if you had monetization happening was your runway ending or was it that round glass had such a big stake that you could not say no?
Pawan: So it's a combination of things. I think one is obviously the fact that we are a strategic investor on board. So, sooner or later, the option, that was the thing that we would need to get acquired by them. Or be part of or be integrated into the ecosystem? just that I think we wanted to stay independent, but I think like it was we felt that, I think after talking to our investors as well, that a long term independent thing might not be feasible, and hence we started those discussions about acquisition. So that, I would say was the major goal. Post we had figured out monetization, post we had figured out that engagement fundraising was not that big of a challenge. I think we were getting funds from elsewhere as well.
Akshay: I'm guessing a lot of people would be scared to invest because you already had a strategic investor that might have also closed some doors for you.
Pawan: Interestingly, no. I think even for future investment I think people just wanted to see that. Okay. Like, I mean, just make sure that you guys are independently running the company.
Akshay: Okay. So, what were your learnings from Curify before we come to how Fashinza are got started?
Pawan: A few things and I tell you all the things that we learned and then did differently. I think number one thing we realized that I think getting great people on board, honestly, a lot of times means just like getting really enthusiastic people on board, getting them young. And they can just surprise you if you give them autonomy. Obviously, the average age in Fashinza is much more than Curify. A couple of reasons, obviously we were 23 when we started I was 29 so that does play a part. And the second obviously because we've raised more money, we are able to afford more expensive and experienced people. But it is still much less than, let's say, people in the industry. It's still, I think the average age is still not above 28, 29. Even though the average age in Kirupai was something like 23 or 24, but again, having said that I think Just giving getting young people on board giving them autonomy and giving them resources not unlimited, but very limited resources can really force them to find innovative solutions. For example, if we had a million dollars digital marketing budget, I'm pretty sure we would not be thinking of all these solutions of geo fencing around conferences, doing gorilla SMS marketing, etc... We would still be just doing what everyone else was doing. I think this is what happens when you raise a lot of money. So being resource constrained was obviously challenging, but at the same time, it drove amazing innovation. I think that it was amazing learning. Second important thing was just like taking your time and building out the company. Companies take time to build. You can't hack your way to a billion dollar company in two years If it was so easy to build a billion dollar company in two years in your industry Then either you will get disrupted that easily as well Or you just haven't figured out the product market fit. You have just become big.
Akshay: Amazing amazing insights. Okay The, the hiring and the culture piece that you discovered at Curify did that lead to some, principles that this is how you think about hiring now, and this is how you think about culture building.
Pawan: So it's slightly so Curify was honestly slightly easier because we were all very young people and we were always resource constrained. So our hiring was very slow. But what we realized was that when our hiring was slow and we were hiring people for their mission, their potential, and less about their experience. We were hiring people who were amazingly cultural fits we would just love each other's company. I think we were at its peak, 45 people in Curify, and those 45 people even today are good friends with each other. I think I still end up meeting Curify people every week. So I think just hiring people who you love to enjoy and spend time with does amazing, does wonderful effects to your company because people want to spend more time on problem solving. People love each other's company and hence they want to work with each other and they're also generally end up becoming more, they feel that anything that they want to do becomes less of a risk because their friends are also doing this. That kind of culture is invaluable and very hard to build in companies where the hiring goes very fast. I think every single person at Curify was hired by at least one of the founders. It becomes difficult as you scale up like at Fashinza, I can't say the same. But Just the fact that we've hired the first 30 40 people completely ourselves, and then those 30 40 people have gone ahead to hire the people further, you can't have the same level of camaraderie as, let's say, at a 40 people company in a 200 people company. But I would still say that I think the level of bonding that you find here would be Amazing compared to anywhere else you would find at a similar scale. And I think this is the feedback that we get from people here, rather than it's just me telling you.
Akshay: Okay. Amazing. So let's talk about the fashion journey. So you got acquired and then you spent two years in the business. I'm sure during those two years, you must have also been thinking about what next. So, you know, tell me that journey of figuring out what you wanted to do next. Sure.
Pawan: I think obviously some time was taken out to just breathe and relax and get my head in order. Curify was an exhilarating journey, so it did take a long time to get out of that tensile mood and just be relaxed. But but at the same time, I think I also didn't want to relax too much and just wanted to go straight into the game again. For m, the most important part was less about idea, but more about finding the right person, I want to start with. I was certain that I didn't want to start alone. Lot of second time entrepreneurs we've seen start up alone as a single founder and then go about building their own team, but I was very clear that it's a long journey I'm probably going to spend the next 10, 15 years of my life on this. So I didn't want to do it alone and just wanted to have somebody I can trust as I would trust myself. So to my end, I would say the 18 months journey from start starting, thinking about starting up again to actually starting up again, out of that 18 months, I think about 12 to 15 months was spent just figuring out the right Co-Founder. I was sure that I didn't want to start up with something I haven't known for a long time. So my search was again narrowed down to a small group of people who wanted to start up, and I have known for a long time I mean, ultimately landed with Abhishek and Jamil. But, the idea was that for me, the idea matters less. And more the Co-Founder matters more. Post figuring out the Co-Founder narrowing it down It was more about getting some idea where we had some edge where we were absolutely passionate about we were not just doing it for money, but at least we were solving a large global problem So not a small problem not a local problem, but a large global problem so that The company could continue to grow for 20, 30, 40 years, no matter what. Obviously, there'll be more disruption. There'll be more innovation technology, which will keep on coming in. But if your inspiration is large of the market that you're playing in is large and if the Problems segment problem that you're solving is absolutely massive. Then you'll keep on changing yourself reinventing yourselves to Continue to keep building. So again, it comes down to the same thing that I wanted to build a company which lasts for generations And not just an opportunistic play that was there and I think Again, if you remember my earlier point that what I knew Growing up was government jobs and manufacturing I ended up spending a lot of time at home post acquisition and Got really excited about how my friends how my I mean, my dad was still working in that plant and how my all of my friends were manufacturing one thing or the other And that engineering mindset kicked in and that it's just lovely to see stuff getting manufactured in factories.
Akshay: Is Hisar like a hub for textiles or fashion or something like that?
Pawan: No, it's not a fashion or textile hub, but it's a manufacturing hub. So people like Jindal come from Hisar. It's a very large manufacturing hub, but it was never a textile or fashion hub. So I wanted to do something in manufacturing. I was very excited about it but wanted to pick up an industry where India had already an edge and at the same time, the industry was also very dynamic. Abhishek comes from a more fashion e-commerce background. So before Curify, he was at Line Road and before that at Flipkart. So he had seen a bunch of fashion e-commerce. So that is how we started wondering about manufacturing in the textile and apparel space. So that's how we ended up with the idea that we could actually solve manufacturing in apparel and it's an amazing industry. It's Because of e-commerce, because of past passion, because of people like Sheehan, the industry was completely reinventing itself. So now imagine a trillion dollar fashion industry, a global industry, with supply chains having been created over hundreds of years, completely reinventing itself, forced by the consumer demand. Forced by social media's ability to portray your fashion in real time. And now you have an amazing, you have an opportunity of a lifetime. Like the entire trillion dollars of supply chains are going to get reorganized and then you put in china plus one you put in Industries moving out of china due to labor wage Then kovid came in which meant that our supply chain need to be For the reorganize and we just found an amazing opportunity to go out there, build amazing solutions, which people would love to be a part of.
Akshay: I think essentially like the fast fashion trend is like what was driving this change in the supply chain, right? Like you could no longer talk about your line, which you will release after six months on a fashion show. But if someone saw something on TikTok, they would want to buy it the next day. So that whole fast fashion movement meant that the supply chain had to get compressed to deliver things faster. So that was the opportunity which you saw.
Pawan: Absolutely. And I think more obviously that was getting created, but I think what we also really believed is that this is also a better way of running a business. We saw people or brands just like building up inventory for the entire six months, 12 months in advance, betting on the trend that is going to be there in that season. And what people were realizing that half of their inventory was not really, it shouldn't have been made. So either they were selling it at discount or it was not selling and they were. Just putting it at clearance sales or just like liquidating stuff. I mean, from a first principle perspective, if we could not build up that inventory, if we could just be closer to the season, if we could just react instead of forecast. We could solve most of these things. Why would you want to build something about 30% of which is just going in clearance or liquidation?
Akshay: Okay. So January, 2020 you started Fashinza. What was the idea? Like, did you want to do a Shane model where you're directly selling to consumers or what was the plan there?
Pawan: So it seems to me our plan was very simple. I think we wanted to make manufacturing easy, agile and Quick. And we started by making the manufacturing easy, as simple as that now by easy we meant that, okay, let's just say it's an online platform. You can get place your orders easily. You can find factories. You can track your entire production because it's a long lead time thing. And at least just not be continuously worrying about where the next shipment is going to come from. So we said that, okay, let's just take this at once.
Akshay: This you're saying for the buyer, like somebody who's buying from factories you built a platform for them to allow the information to flow real time.
Pawan: I mean, honestly like we wanted, so we were the ones ensuring manufacturing. So it was not just a technology platform. We were a full stack solution from day one. So we wanted to build that commerce module from day one itself. So initially, we were just a commerce platform where you could get your products manufactured. So just making that easy and transparent.
Akshay: How did you crack your first account? The first buyer?
Pawan: So we cracked the first accounts, majorly through our network. And I think we knew a bunch of people who were running their own brands people like soul store, fatherly, etc... and I mean, we knew them for some time.
Akshay: So the D2C fashion brands.
Pawan: The D2C fashion brands most of these brands were also very interested in just like going there and being very, so they didn't want to solve manufacturing. Their idea was that they wanted to solve for customer.
Akshay: They were solving the branding.
Pawan: Correct. Exactly.
Akshay: What was your proposition to them? Like they could upload the design and then you would get it manufactured. Like how do you receive an order? And in general like in the fashion world, how does one receive an order?
Pawan: See, today if I don't know if I talk about how the industry works, It's a lot of phone calls, a lot of emails, a lot of visits. Physical visits when you do all the sampling for months and months, you do the look and feel test. You would be like, okay, I want to have this some sort of like floral print shirt. Here is the photograph of what I want. Can you do something and send me some, let's say samples. So again, all these things we take, we send you people would be like, Oh, this is not, this is slightly hard. Can you make it softer? So it's a lot of trial and error and hence it ends up taking a lot of months for anything to get sorted.
Akshay: You're saying getting the purchase order itself is like a task of a couple of months.
Pawan: Oh, easy. More than that.
Akshay: Wow. Okay.
Pawan: In the offline industry, I think it takes about six months to get a purchase order.
Akshay: Okay. And so tell me what you did.
Pawan: So we started slightly different. So we said that, okay, let's, we already have a set supply chain. But we have, since we have almost I mean, when we started, we had probably 15, 20 factories on board here. We'll figure out the exact things that these factories can do.
Akshay: And your deal with the factory was that you dedicate some of your line to me, like some part of your Manufacturing capacity will be dedicated to me like something like that.
Pawan: So we consciously onwarded those factories who already had that spare capacity available due to underutilization. So we did not have to make any commitments to them. It is just an additional business that we were bringing to them. So now, because the lines were available, our idea was that let's understand what these factories are really capable of. So these factories, let's say, for example, if I'm talking about a t shirt with soul store, now we only get a factory, which has done something like this. In the past very similar product, very similar price point, similar quality levels, similar trends. We essentially turned that trial and error problem into a data problem. So the first thing that we cracked was just matching. So let's get a large network factory so that we can match the exact requirement with somebody who has the experience of working in that in the past. So that reduces the scope for errors by a lot.
Akshay: Okay. Did you solve this matching by having like ready to order products listed, like creating a catalog? Was that the way you did it? Like you created a catalog and then no, it was still custom made.
Pawan: No. So we were never a catalog company. It was, everything was always custom made because we were working with brands. But I think the idea was like understanding what the factory has done in the past to understand, to get more data on them. That was the entire idea.
Akshay: How did this help you cut the time? Like that six month time to get a PO, a purchase order?
Pawan: Yeah. I think what it does is that let's say when if somebody like a soul store comes to us and says, okay, I want to get these 20 designs manufactured. And these are the kind of t shirts that we want. These are kind of fabrics, etc... Then we exactly know that this factory has done this fabric in the past. So that means that we just need to tell them, okay, this the fabric that you have to use is, let's say the fabric A that you used in that previous order. And the type of print that you need to do is a print that you did on the order number five. In the past, which means that the factors are not so that entire point of just like you can feel touching stuff, etc. becomes very quick. So now when you receive a fabric as a brand, you suddenly say, Okay, this is the exact fabric that we wanted.
Akshay: Okay. So what you're saying is that the prototyping problem exists because if you go to as a buyer, if you go to one factory, that factory may or may not understand what you need in the first go. But as a buyer, if you come to a platform, that platform will have access to multiple factories and then choose a factory which can create the right prototype in the first attempt itself. So therefore, that Okay. Multiple iterations of prototyping get cut down the first prototype itself ends up getting approved by the client.
Pawan: Absolutely. That becomes a critical thing. Yeah. So once the prototype is logged, then the job becomes how the job is done.
Akshay: Right. absolutely. Because then you're clear. Then you can document exactly what is needed. This fabric this is what, and you know, you can. major stuff, like whatever, there must be some yarn count and stuff like that for that. And so, so everything can then be like computer readable which can allow you for better quality control at a later date.
Pawan: And yeah, I think what we realized in manufacturing, and I mean, Elon Musk tweets a lot about this, that manufacturing is a lot of art. And there's a lot of experience, as techies and software developers, we are programmed to think on variables and their values. But the reality is that in manufacturing, the number of variables that can impact your production is absolutely like. For example, yes your yarn thread count and your quality or the construction of the fabric could always be the same, but let's say if they are manufactured in different mills, which are situated in different cities of the country, and hence the temperatures are different. Their flexibility might vary. I mean, you can't program it in your computers and hence I think like manufacturing is tough and hence it comes with a lot of experience So that is why you will see so many jvs entering in manufacturing wherein somebody comes with an experience Of manufacturing that product in the past and this is something that took us some time to really appreciate and understand coming from more software background. But I mean, this was very exciting, like when we understood this, and hence we started valuing the experience these factories had of manufacturing. And hence I said that, okay, if somebody has manufactured the same product in the past, At least they can replicate the same product because they would know where to source the raw material from what to order to that mill that so that they deliver the same thing which printing unit they need to go and tell them what to get the same print done. Because most of it is not about variables. Most of it is just about reducing the number of variables by going doing the same thing again.
Akshay: Okay. Fascinating. Can you give me examples of some mistakes you must have made in those early orders? You must have screwed up some of the orders and what you learned from them and how that helped you find product market fit?
Pawan: Oh, yeah. I think the initial mistake that we did was just assuming that if I have given the exact variables, then I should get the same product. Okay. For example, if I'm giving the order for 100 gsm, 100% cotton tshirt, then there's no reason I'm not getting the same product that I wanted. when we started understanding, there are five more variables, there's a yarn count, there's a construction type then we started understanding, okay, which mill is also important, that there's a VF fabric, there's some other fabric all of these things started becoming important. and the last thing was just like if somebody has been manufacturing a 100 rupees t shirt and suddenly if you give them the order for 500 rupees t shirt, they can't switch their mindset overnight. The quality control requirement for 100 rupees versus a 500 rupees t shirt is very different. So you can't change the factories overnight. So you have to play on their experience.
Akshay: Okay, amazing. When did you feel that you have reached some sort of product market fit? You know, like say in Curify, you spent almost a year with just 1000 users until you were satisfied and then you press the pedal on growth. Tell me about like, what would be like a comparable journey here?
Pawan: So in our case, I think so it was slightly different from how we ran Curify. Obviously, a lot of this was due to, to do with because we started in January 2020 and suddenly COVID hit. So we were pretty much a remote company for a very long time. Almost all of our hiring was done remotely. We set up the team remotely, we set up supply chains remotely. so that was tough.
Akshay: But I'm guessing during lockdown, even manufacturing would have shut down, right?
Pawan: No, so that was interesting. I think they did shut down for the lockdown period. But then they opened up very quickly first to manufacture PPS and mass which we did in huge numbers Yeah, and then obviously the government realized that you can't shut manufacturing down There's a huge employment at stake and these guys can't do their work from home So the manufacturing opened much quickly compared to other industries and at the same time e-commerce boom, so everybody was purchasing stuff online There was a lot of revenge shopping.
Akshay: Okay. So this actually like worked out perfectly for you. I'm assuming that initial downtime would have helped you build up your systems processes, hire the right folks so that when the boom came after that downtime, you were prepared for it.
Pawan: Yeah. So I think that is how we started preparing for all of these things. But more importantly, I think it also meant that we were forced to build the company in a very different manner than we were used to we were Used to running a company like a family sitting in the same room running the business like a family Stuff I think like that moved to zoom and which is just not the same thing Interestingly, I think that is one of the reasons we were one of the first companies to completely move back to work from office after the lockdown got over but that is the thing. And I think we were also inundated with huge demand because everybody was struggling to find a supply chain that worked during those times. So we scaled up really quickly during 2020 and early 21. Absolutely. Very, very quickly. And that did mean that multiple things broke. That did mean that we were not ready to handle that level of volume. Obviously it was very exciting that we got so much demand, which we never expected to get so early on. Obviously the money and the funding also followed, but that did mean that we just did not get time to breathe. So 2022, when the things started going down honestly I was very happy. I was really happy that now we have time to breathe. Nobody's questioning us on growth. Nobody expects us to grow. And we can just take our time and really focus on building the right solutions. Even if that meant that we were sacrificing the growth for a few months.
Akshay: This scale up, which you saw was it human driven? Like say if you're learning Your SAS product scale up means you maybe deploy more cloud capacity or whatever. And, you know, so that scale up is of a different nature in this kind of scale up. This sounds like a very operationally heavy business. Help me understand what kind of people were you hiring to handle the scale up? What does your org chart look like? Like, do you have a lot of on ground people who are going visiting factories or help me understand that. Like the, how does the business
Pawan: Yeah, so yeah, absolutely. I think so. We have a Obviously, there's a central team, people are account managers, our sales teams, our technology teams, etc.., etc.., design teams. But then we have a large field force on the ground, whose job is to go and manage the factories, oversee the quality there, oversee the production, daily production there. So it is not like we are running the factories there. It is also a lot of it is just monitoring. Some of it is just like the the typical operation stuff for pushing the people on the ground, getting stuff out getting stuff done doing some problem solving. And the third key part is getting a product adoption there at the factory so that we can increasingly rely less on human power and increase the efficiency by using technology as a monitoring tool. For both the quality as well as the production. So those are broadly the three types of people, three types of teams that we have on the ground. And yes I think like you said, so scaling up for us means that we have to obviously set up people on the ground, train them well, train them according to what we require in our ways of doing work, which is very different from how typical industry would work.
Akshay: So these are like, what are these like textile engineers or are these like production guys.
Pawan: Correct, Textile engineers, so textile engineers who have been in production for a long time, who have been handling quality production for a long time on the shop floors. So these are really experienced people.
Akshay: Okay. Okay. Right. Because that, like you said, manufacturing is 80% art. So you need experience there too.
Pawan: Absolutely. You need experience there. Like a lot of these people are also involved in product adoption on the ground with the factories, with the people inside the factories. so our idea is that we don't want to be an operationally heavy company. And honestly, like in our case with similar comparables, either in the legacy industry or the new age, our level of operations are much smaller than theirs, just because we have a strong focus on technology from day one. our factory base would have doubled. While at the same time, our team has pretty much remained the same.
Akshay: Whom do you include in your comparable set?
Pawan: Especially takes a single name and say that, but I would say that on an average, we are a much lean over.
Akshay: Okay. How did you do this? Like, can you gimme some examples of the how you productized the operations so that you need less people, like you double factories without increasing your headcount? how did you do that?
Pawan: There are three parts to their jobs. So one is monitoring, whether it is quality what is happening in the factory, etc... Second is communication, coordination with the factories. And the third is problem solving. Now, what we feel is that the first two jobs does not really require somebody to be there. It is a data problem. The first is if we can get data from the shop floor on what is happening at the factory, what is the quality level. We can take the actions and initiate the actions accordingly. So we don't need somebody to just go there and get the data. And second on the coordination part, like if we just want somebody to be there in the middle and act like a postman, just because they're on the ground, it is not a good use of their talent and their time. So now these two are key focus areas on solving, them. First by using technology, then the third part of real problem solving, wherein custom cases arise but what we saw was that in the industry and even with us, when the technology was not there, only 20% of their time was actually spent on the third and 80% of the time was spent on the first two.
Akshay: How did technology solve this? Like, did you use computer vision and put cameras or like, give me some examples of what all you've done here.
Pawan: I mean, honestly those are also smaller parts of it today, but I think the initial thing was just creating a, I should say, a very small SaaS like solution, an ERP like solution, which can be easily used by the workers there on the shop floor. So the idea is that make it so easy, make the UX and UI so easy that people just are able to use it. And then we build solutions so that the factories are not just using it for us. The factories are actually using it to improve their own operations and their own PNL. For example, if we reduce wastage in the factory by let's say, getting, trying to get the quality right in the first go, it is a direct impact on the bottom line of the factory. Yes, we are able to get that visibility, but factory is able to solve for its wastage. Now getting those factory that selling that dream to them, that this is what it is going to help them is how we initially got the initial adoption. Again, I'm probably making it sound a lot easier than it actually is. It does require a lot of effort on the ground, but our mindset is from day one has been very clear that we are doing this to help the factories and not just to help ourselves.
Akshay: The behavior change would have taken a lot of effort, like getting them into the behavior of documenting, taking a photo from a mobile app and updating numbers and things like that.
Pawan: Correct. It does take effort and you have to sell them the vision.
Akshay: Someone produces 1000 t shirts and then they get a feedback from the customer about some quality issue in your case, maybe after the 100 t shirt, only you're able to tell them that this is not right. And so instead of wasting 1000 pieces, only those 100 pieces are wasted. Something like that would be like one of the benefits.
Pawan: Pretty much like, I think, we are getting real time data on what is going wrong in the quality. And just because you're getting real time data, you can take real time action.
Akshay: So you have like cameras installed on the lines that allow you to do real time quality control.
Pawan: I mean, so that is there in a very small setup, but I think like I said, the idea was just like, use a very simple SaaS solution, not going to fancy solution. So whatever that quality control person was doing earlier, let's just ask them to do the same stuff, but on a screen. Instead of a paper.
Akshay: Right. So that it can become a centralized function then instead of having one quality control in each. Amazing. Amazing. And that also gives you more data to train your algorithms. You can eventually have more quality control done through algorithms because you're able to train it with that data because you're doing it centrally. Okay, tell me about your like the demand side of the journey initially you had these D2C brands, which you had signed up with how did you scale on the demand side?
Pawan: So a D2C brand, I think like so we initially thought that we'll build a great solution for small to midsize D2C brands as we started getting more inbounds from the larger customers we started understanding that. Okay. I mean, that might be a great solution for them as well. When we started working with them, we realized that it was pretty much a great fit the larger customers also wanted great solutions. So one of the use cases for them was just being able to work with smaller factories. Because smaller factories can be more agile. While the large factories are not agile, they are built for a lean methodology.
Akshay: What does that mean, lean methodology?
Pawan: For example, if you're manufacturing iPhones, now it's the same SKU, which is getting manufactured in millions and millions of pieces. What you need there is the high quality standards that you need. There is consistency and you need predictability that your factory will be able to produce a million pieces per month. So that is when it makes a lot of sense to go and work in large factories. And now, for example, in our case, if I'm wearing this..
Akshay: Which doesn't work in fashion!
Pawan: Absolutely. It only works for certain things. Like for example, this black, the black shirt, this black shirt is going to sell in huge numbers for years to come.
Akshay: Yeah. It's predictable, right?
Pawan: It's predictable, but increasingly as the world becomes more fashion oriented, as world becomes, people become more comfortable wearing quirky stuff. That is when you start entering into a world where you cannot predict for a long time, and hence you need to experiment a lot. Hence you need maybe a 1000 t shirts to try it out, try out the design. And that design might become obsolete two months down the line. So your large factory format just does not work for that.
Akshay: This is exactly what Shane is also doing, right? Taking small factories and aggregating them giving them designs and using data it has on consumers to decide what to produce and like producing small lots and if they work, then ramping them up quickly.
Pawan: Absolutely. That is what Shane was doing.
Akshay: So your like entry into the enterprise segment happened organically, like through inbound leads and all..
Pawan: Correct. So that's how we started working on that. And eventually we realized that it's a great fit. We enjoy working with them because a lot of our solutions are also custom built. For customers and with larger customer. It does make sense that we are able to spend that time and effort in building out those custom solutions And they also stick with us for a long time so that is now the 90% of our business obviously we still dream to build for the long tail, but I think that is going to take us Some more time to really work on that long tail.
Akshay: For the long tail i'm guessing you would need to have a more self service approach like this, ops heavy Account manager showing you prototype, that kind of approach won't work for the long tail.
Pawan: That is tough.
Akshay: How do you envisage that to happen?
Pawan: I think like nobody has really figured it out. my sense is that either you end up becoming a more catalog like thing, where you create, show your designs and people select, let's say, More of a wholesale model, I would say, or you go and find very small factories, which are just able to, let's say, do those very small quantities for you. To be honest, I don't think we have really figured out the custom manufacturing part of it. Let's say you have a design in mind and you want to get it manufactured because you're a small player. You only want to do 50 pieces. Now, how do you do it? So print on demand of t shirts has been there for a very long time, but that also runs when, where the basic t shirt is already there and you just print on top of it. Now, how do we extend that to other more custom products? It's an unsolved problem. We have some insights on how to solve it, but I don't think that, so I think a lot of manufacturing technology also needs to evolve to be able to achieve that.
Akshay: Maybe you will reach a stage where you'll have, let's say, 50,000 SKUs that you have worked on and those 50,000 SKUs then are compelling enough for self service, something like that, maybe.
Pawan: Maybe that, yes. But I think this is what requires a lot of skill before you can build..
Akshay: So how many SKUs do you currently handle?
Pawan: For example, right now we would be handling almost close to 5,000 SKUs.
Akshay: Wow. Okay. And in lifetime how many SKUs have you created?
Pawan: We have created more than 25, 000 SKUs.
Akshay: Okay. So you already have a fairly big catalog?
Pawan: I would not say that we have a big catalog because all of these designs are owned by the brands and not us. We're just producing them, so that's not our catalog.
Akshay: I wanted to ask you this. You said you have a design team. So why do you need a design team?
Pawan: Sure. So what we have seen is that a designer at our end can hand can do two things for a day for a brand. First is because the requirement for the number of designs has increased many folds in the past few years just because of fast fashion just because of the customers requiring more trendy designs and hence like for to get designers in house who can do design from scratch is something that is becoming troublesome So our designers what they can do two things for you So one is they can look at let's say the designs which are there in the catalogs Tweak them a bit look at the fabrics that are there in the stock and design on top of it so that you can design Very wide, very quickly. And second, you can incorporate the manufacturing requirements into the design from D1 itself. So whether a design is feasible or not whether the cost that we have, we are targeting would be achieved in this design or not. And hence, like that becomes key thing, wherein the execution and the manufacturing becomes linked to the design process.
Akshay: So this again solves that purchase order problem. If you have in house designers the time needed to get a purchase order is reduced further because they can do faster prototyping and it can get manufactured very quickly because the designers have kept in mind about the manufacturing capabilities that are available in the system and so on.
Pawan: Yeah, absolutely. And I think like this is where we see that because the designers are not part of it. And we are the ones doing the design. Then we already know like who will manufacture it? What is the fabric going to be? we also have CAD patterns of the construction of the garments. and because all of these things are already in place, then effectively we're not doing that in that trial and error of getting a design out to five factories and then asking them, seeing who can do the best sample.
Akshay: How much of your purchase order process is currently productized? Like for example, Could your system throw up the price, given some inputs of like I want this t shirt, then could your system generate the price for it automatically? Or does it still need human intervention..
Pawan: Sure. So there are multiple parts to doing that pricing. So those multiple parts are like, say, for example, how much fabric is going to be consumed? What is the price of the fabric? How much time it would take to many for a worker to manufacture that garment, etc. And then where it is going to be manufactured. So there are multiple parts to it. So it is a scientific process, but you need to have data on each of the parts The more you use technology to build that garment, the better data you can get. For example, we start by making a cat. Now, because we start by making a cat, we already can calculate the consumption of the fabric that is going to go in it.
Akshay: A cat is like a 3D model of the loads.
Pawan: Yeah, it's a 3D or it could be a 2D as well, but Essentially, it knows that what piece of cloth is going where. So multiple things like this essentially enable us to calculate the value of a garment. Now, as we also get more data, as we get more experience of execution, we are also able to get better quality of that data. For any new product that comes in, our systems gets becomes better and better. So now we are interested that in multiple categories, not all. We're able to easily identify the right price. So that pricing also does not take a lot of to and fro, even though right now, we have not completely automated it. But let's say if The earlier process was actually creating a garment Then seeing how much consumption would be there how much time it takes and then giving a code which end up taking four five days We can get turn it around in let's say 24 hours Wherein we have a system throwing up some number somebody checking it as well and then confirming it to the customer.
Akshay: Amazing. Okay. what are the problems that you're currently trying to solve? Does the purchase order problem remain the biggest problem you're still trying to solve further or what are they like?
Pawan: It Is definitely a problem and it will take its own sweet time. And for example to current process to get a sample, if it takes anywhere from three to six months for others, it probably takes like two to four weeks for us, maybe six for a complicated stuff. And the ideal is like, we want to get it down to three days or two days. We are able to do two days even for some parts, some products today, but not everything. So the amount of improvement that one needs to do is just absolutely humongous. Like this is not going to happen in a year or two. This is probably going to be a continuous effort for five years, where we keep on reducing that.
Akshay: Because this is dependent on how much data you're able to generate. So if there is some category, like, say, a t shirt where you have a lot of data, so there you could do it in a few days. But if there's category where you don't have so much data there, it takes longer okay. Fascinating. Tell me about your margins.
Pawan: So our margins are slightly blended because it's not a direct take rate business we incur some cost and then we sell the product. So it is not just a pure marketplace in the sense that something sells on the platform and we take a 20% commission or 10% commission. So our costs also get distributed at multiple places. For example, we might be procuring the fabric for five orders. together and then let's say distributing those fabric to five different orders. we get some scale benefit there so it's more of a gross margin business than let's say But let's say today our gross margin would be somewhere around like close to early double digits.
Akshay: Interesting. So it's not like you are just giving an order to a factory, but you're actually involved in the procurement of the raw materials for that. And you're paying the factory for the labor basically. And that is generally the case, or it's blended. Like in some cases, you pay for product. In some cases you pay for labor.
Pawan: You're right.
Akshay: This service.
Pawan: Yeah, correct. So there are multiple parts there. So one could be, like you said, we just give the entire order to a factory and they do everything. But in some cases we procure the raw material, they do the labor or the service. I mean, at the end of the goods to the customer. we figure out what is the best path to take.
Akshay: What's the ratio between where paying for product versus paying for service?
Pawan: So almost close to 30 percent of our business is where we pay for the service And we pay for the material separately and 70% where we pay everything up front.
Akshay: I'm assuming pay for service would give you better margins.
Pawan: Honestly, it does.
Akshay: I mean, Because you can control raw material costs because you can buy in bulk, get better prices and all those economies of scale. Are factories happy with getting paid for service? Does it make sense for them also?
Pawan: To be honest, yes. So not all factories so it depends on what kind of a factory it is. Because getting a raw material, buying a raw material also involves working capital. So for factories, which are cash rich they love it. They want to do the procurement themselves, because then they can make their own margins and put their capital to use. Also increase their revenues and hence increase their balance sheets and P& L statements. But for factories, which do not have capital they would much rather do the service part rather than get involved in the raw material procurement.
Akshay: Interesting. Do you see a fintech angle in this as well?
Pawan: B2B and finance goes hand in hand. You can't build a B2B company without.
Akshay: Yeah, absolutely. Working capital is like the...
Pawan: Correct. Now, personally, we are not a credit company. And hence we are not the best at it. So we work with multiple NBFCs, banks, etc. for all of this. But at the end of the day, because we are controlling the supply chain, we are able to provide them great data on who the eventual customer is, where the cash flow is and where the factory's execution capability is so as an NBFC or as a financing partner, instead of taking exposure on a small factory, which is always risky, you are effectively now indirectly funding the eventual buyer. Which could be let's say more credit worthy somebody like Aditya Birla now because Fashinzaa is also part of that cash flow It like it becomes much more risk free For the financing provider. So there is a great financing fintech angle here we have not truly explored it But I think like these kind of supply chain solutions will eventually incorporate Some of it into their own ecosystem.
Akshay: Do you want to monetize this FinTech angle or do you just want this as a value added for your factory partners?
Pawan: I think like if we even today what we see is that yes, the idea to always begin anything internally is also adding value to our partners or customers. But eventually if the value is there, we figure out a way to monetize it.
Akshay: I wanted to understand if you think you could eventually become a Shane, you have the backend of Shane already. Thing is that your margins are early double digits and your customer's margins would again be maybe 20, 30% or 40%, something like that. if you're selling to your customer, if you go directly to the end customer, it would double your margins easily or am I being very naivety of an outsider kind of a thought process.
Pawan: So two parts to that question. I think I'll start with the first one. So a brand ends up taking a, taking risks, which eventually it turns into greater rewards for them. And the biggest of them being the inventory risk. So they are taking a risk on whether the trend is actually going to happen or not. And if the trend is going to happen great the inventory sells if the trend is not happening the inventory does not sell So while at Fashinza, we do not take that level of risk for us. It everything is contract based We don't deal with returns like B2C companies do, we're not investing in marketing like these companies do. Yes, I agree. If you build a great company on the great brand, there are rewards to be had there, but then you also end up taking a lot more risk, which justifies those rewards. So it's a different DNA and to service every B2C company, there has to be a B2B company, So that's first on the DNA and the risk part. And I think I have great respect to, for anybody running a brand, because it's not an easy business and itself. So that's one. And I think second, whether we will do it or not, and comparing ourselves to Shein, yes, we do have a great supply chain like Shain. But I think Shain obviously started with a great supply chain. That was the differentiation. But now Shain sells because they have a great connect with the customer and they have a great data on the customer. They have a great content platform, content strategy, which the for example, they do so much investment on content on TikTok they have that level of intelligence and learnings there. So for us to go and compete with Sheen is not just about the supply chain it is going to be about the content, which again, this is not our DNA, or this is not what we were made to do. So it's going to be a very different level of learning and very different level of, Execution that would be required from us to compete with them.
Akshay: Okay. Interesting. The amount of money that you've raised, you know more than a hundred million dollars in the last two years, somewhere the investors must be comparing you with Shane, right? That would have driven some amount of interest in this, or is there another reason for that?
Pawan: I think the bigger thing is that people have seen the success of Shane and what people, including me, realize that the world is going to move towards that direction. So currently probably Sheen is 20 times ahead of anyone else now to bridge that gap, people would at least need to be, let's say 5x behind Shane because 20 times is just like too big of a gap to even survive in the future. So that is where people believe that the industry is going to reorganize. Whether slowly or fast or anything, but people will be forced to reinvent themselves in the next 10 years.
Akshay: Interesting. So if Shane is like the Amazon, then you're like the Shopify in the sense that you are arming the other brands to compete more effectively with the Shane. Fascinating. Okay. So my last question to you, what's your advice to founders, you know, in terms of things to avoid pitfalls to avoid or things that they must get right, or, you know whatever advice you'd like to share to aspiring founders.
Pawan: I mean, these days, I think the biggest advice that I give to multiple founders is just be patient. It takes time to build a big company. Don't get influenced by the amount of funding that people raised or how big they become so quickly. Nothing beats product market fit. Very, very very few industries have a winner takes all mindset mode. I mean, it's much less than what we assume it to be. And if that is the case, I think the one who spends time listening to their customers, building out the right solutions is the one who will succeed in the long term. I think like my thing is if you are building a great monetization layer, for example, for a social network, just be enabling monetization early on. and if it is something like a commerce platform, just being unit economics positive, I think that can really help you increase your lifetime. And personally, I don't believe any smart founder who keeps on building for at least five years will build a less than a successful outcome.
Akshay: Amazing. Okay. Cool. As a B2B founder you would have I mean your last venture was a B2C kind of a venture for social network. Now you're doing a B2B venture. You must have learned some basics of B2B like building B2B businesses. What are the things you must do? What are the metrics to track? So can you help our audience understand that?
Pawan: Sure. I think one thing I really appreciated transitioning from a B2C founder to a B2B founder was. Finance, respecting the finance a lot more especially when it comes to B2B companies. So any B2B company is not just about selling technology. It is also about selling goods. It is about managing your working capitals, managing your PNL statement, your balance sheets, your cash flows. Now, I mean, for example, if because credit is involved, you might be, invoicing a million dollars, but are you even getting that million dollars in the bank? How soon are you getting that? Who is keeping a tab on it? And till the time you are not getting it, how are you financing your operations? What is the cost of funding? Because all of these things are going to be extremely crucial. For the profitability of your company. Now we are all low margin businesses. we're not 80% cross margin business like a SAS. So every penny counts. To the point that okay, how much is the travel going to cost, For us in the next month And how much as a percentage it is of the revenues that we are making and can we you know even afford that? So every single cost head counts And for that you need to respect from day one respect finance from day one itself I understand that most of the founders do not come from finance background They might not understand the intricacies of working capital the rotation the inventory turnover, etc so maybe like it makes sense to invest a lot more in getting a great financium on board from the initial days itself and then keeping the tab on all of these things I mean to be honest like cash flow in a b2b companies matters much more than what is your top line number?
Akshay: Okay. What about, say, a go to market for a B2B business?
Pawan: It's a good point, Akshay. I mean, to be very honest, I don't think anybody has really figured out the best go to market. Especially when it comes to more startup approaches, my decent industry people are experimenting with multiple go to markets, for example, getting industry people on board who have already gone and sold the same product in the past people are also experimenting with digital marketing or using content as a hope for Onboarding b2b customers. I think honestly nobody has the right answer So and it also depends a lot more a lot on the industry as well So a chemicals might not have the same go to market as a textile. somebody doing the go to market in India might not have the same go to market in the US. So the answer, I don't think there's a one size fits all. what worked for us was a beautiful combination of doing content marketing as well as getting people who with similar sales experience in the past. and I think that has worked very beautifully for us. But that might be the case absolutely.
Akshay: How did content work for you? Like you're saying, like, say the buyer of Inditex, goes on fashion blogs and you also have a fashion blog or something like how did you make content work?
Pawan: Absolutely. So our target market, like our content marketing strategy is all about educating people. It is all about adding value to their lives. And it may or may not directly talk about passions or supply chain or anything. So a lot of content marketing, especially in such a big, such businesses is about building out a brand that we understand this, that we are there to help you.
Akshay: Right. What Curify was doing for pharma companies.
Pawan: Absolutely. Very good example.
Akshay: Interesting. Okay. What percentage of your customers are outside India? Like what's the mixed domestic and export?
Pawan: So about close to half of our business comes from outside India now.
Akshay: Anything else you think I missed asking?
Pawan: No, I think there's really some complete fit.
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