Alright, uh, thank you all for coming here and
thank you Rajeev for being here with us. Thanks, thanks for hosting me. I’m very happy to see this space because it reminds me of, you know, Urban Ladder’s office space sometime back where it was very open and
absolutely great looking at a young audience also. Alright, thank you. Thank you so much. So, I think your journey started off with Naval
Architecture to you heading Urban Ladder. Could you just take us through the main points
of, you know, how the transition happen? So this was quite a long time back, so don’t ask me
right now why I chose Naval Architecture. That was the only branch I got in IIT Madras
at that time, uh, for the rank I got. So this was literally 20 years back. I graduated from IIT Madras. And then I was sometime, uh, you know, I think I was a bit of a nerd, so I was doing a lot of coding for no rhyme or reason. And then went to Infosys, because after IIT
Madras at that time that was the dream job for some of us Naval architectures, so you
can imagine how sad the times were then. Then 2002, you know, the MBA bug stung me
as much as anyone else and decided to do my MBA from IIM Bangalore and luckily for me
that’s where I met my co-founder, because we used to do, you know, we used to just
get enough grades to make sure that we had reasonable grades I would say and both of
us used to be part of literally every other extra curricular activity whether it was you
know for the management festival, whether it was for the alumni fest, whether it was
for placements. Literally for me I would say that’s when
the entrepreneurship journey started, because that’s when both of us really loved creating
impact for a very small community of 200 people and I would say you know that college is probably
one of the best times to really test whether you have entrepreneurship in you. 2004, we graduated. Obviously at that time you know the internet was not so big and we went to our own jobs. I joined Cognizant and he joined McKinsey
(Ashish). So we coincidentally came back to Bangalore
in 2008 at the same time because both of us were sort of tired of the roles and jobs we were doing. Cognizant was great for me, but I think my
heart was in the internet, right, because I’d already coded and I always was figuring
out that you know what was going to happen with internet as a space. So I was actually in Zurich at that time I
remember for a year and literally you know became mad that I wanted to come back to India
and wanted to be in the internet space. And Ashish, coincidentally he took over as
a Managing Director of Amar Chitra Katha – Tinkle, the India Book House group. So we were there, we used to meet weekends
– literally every other weekend and we used to talk about the really up and coming start-up
ecosystem in Bangalore and you know it took us three and a half years to really make any
first steps after that. But for us it was always about, “ok, let’s
do something”, and funnily enough the first idea was not even furniture – it was grocery. Grocery became gourmet food. And it sort of graduated to a place where
we said, “Let’s do something where we are interested, which umm… where that
space is massive, where we are also interested as an area where we’re passionate about. Something told us that grocery was not be
a space that we would be passionate about. And last but not the least, we also wanted something which had a very strong product space, right. So for us again, furniture was a very strong
product space to be in. So we took that first leap sometime in December 2011. And the next 6 months we just quit our jobs
and started off. So, a not-so-short introduction to where I
am today, but I would say that you know I think some of the older stories have a lot
of history to why we do what we do today. And I think for us, it had always been about
creating impact and home just happened to be a space When we were setting up homes in Bangalore, it was phenomenally challenging and this was in 2010. And 2011 when we came back to do something
together, we just felt that home was a space that was really, uh…didn’t have a good brand and was a space that required some level of disruption. So that was, you know, where we landed. So talk us through Urban Ladder itself, right,
so I think over the years the company has obviously grown and you know, a while back
you were talking about how your focus has also changed a little bit in terms of what
you’re going after. So how has Urban Ladder itself evolved as a product and a brand that people need to think of? So I would say, you know, if I were to just divide the journey into broadly three segments right, I would say the first two years for us were a lot
about just establishing product market fit and establishing the baseline for what our
vision would be, what our values would be. And to that extent, thankfully for us, the
vision has stayed constant, which is to say that we want to, you know, we are coming to
India as a brand that wants to make homes beautiful, right, and by extension, offices beautiful. Uhh, but…and the reason for us, that was
very simple, right…In 15 years/20 years after liberalisation, we’d had a lot of international
food brands and India was certainly eating better. India was also dressing better, because you
again had a lot of international and Indian brands that was improving the quality of apparel
that people were wearing. But the inside of the house in India have
really not changed compared to our European
or American counterparts. So for us that was a starting point. And I still go back to, you know, when I was in Zurich
in 2007, I had a house full of Ikea And the furniture shopping as well as the variety as well as the designs were a lot more evolved there to buy. So to that extent we and…you know, Ashish
had also gotten actually his couch from London because his wife’s brother was in London
and he had sent it across, so… he was also very finnicky about the design of the kind
of stuff that needs to be in the house. So to that extent both of us felt that making
Indian homes beautiful was a great starting point. And millions of homes, which is to say that
we wanted to be a brand in – on scale and not something which was a designer brand that
was just making a thousand homes beautiful. No that was not us, right. So the vision statement became pretty clear. We felt that we were going to do something which was very different from what had already been done before. There had not been a single brand in the whole of
the world which had been built in the space of furniture
purely online. Or using online as the fundamental platform. Ikea was extremely offline, there was
Wayfair which was a market place, but there was no real brand that had in the US, in the
UK, anywhere in the world really made a dent in terms of being an online first brand. So for us, that required for us to really learn and do things, crazy things which might work, might not work. So I would say that became sort of a
big anchor for the way we recruited people also. So for us, for the first two and a half years,
we had a very strong set of people. And those people were people who’d breathe
that value system. For us it was extremely important to create
an environment where people would come everyday and would want to come back every day, right. And so to that extent I think we got that
right in the first two years. I would say, we also got…you know, we were
in three cities at that time. We started online, we did a lot of missteps,
we made a lot of mistakes, we pulled back thankfully on time. But at least the first two years we got the
semblance of what the brand would be. To be around design and trust as the two pillars,
to be around making homes beautiful, and to be something which was driven online. The next two years is what I would call the
madness in the Indian ecosystem where every single Tom, Dick and Harry was raising
tens of millions of dollars. So this was, I would say…so the first phase
I would say was from 2012 till 2014, very curtailed growth, 2x growth, very thoughtful,
profitable…all of that stuff, right. 2015 is when I think the madness started,
somewhere late 2014-2015-2016 and I think a lot of people burnt their hands – we were
also one of those. And to that extent, that would be the phase
of extremely rapid growth. I think those two years we grew 4 and a half
x and 4x, uh, suddenly from growing 2x on smaller basis to growing 4 and a half – 5x on
bigger basis. We also burnt our hand in what is your fundamental
business which was TV advertising, that was a disaster. We had suddenly 4x our products, we increased
our catalogue size 4x, we suddenly got in 3 times the number of people we had. All happened in the span of around 12 to 18
months, right. And when a company suddenly grows, goes through
that kind of a phase, you start losing control of who you fundamentally are. And I would say, though our vision continued to be the same, I think our values were a bit all over the place. And you just lose control of the way you grow. And I think we tried a lot of things, we got into new categories, we got into the whole modular kitchens and all of that stuff. And I would say those two years while we grew revenues a lot, we also completely lost track of profitability. We started burning too much money, we moved to
a fancy office, did all of those mistakes. I would say from around September 2016 is
when – what I would call for us to have pulled back and really established the basics
of being a profitable, sustainable brand. So the last two years have been for us more
tempered growth, have been to pull back on design and the kind of stuff that we have
done, and have also been a complete new direction in terms of pivoting to offline retails as
well. For us, the last two years have been coming
of age, to be a real business and not be dependent forever on venture capital. Unfortunately, some of the mistakes that we
did were not things that you could pull back overnight, it’s easy to stop spending crazy
amount of dollars in marketing in Facebook and Google overnight, but you really can’t
pull back products which’ve been introduced in your catalogue – that takes 6 to 9 months. You can’t just let go of people suddenly overnight, you need to sort of make that transition over time. So I think for us, we moved from a fancy office
to a more regular office. So literally act as how a retailer which needs
to be profitable act. And that’s been the journey for us in the
last two years. I would say we’ve done a pretty fair job. I think it’s somewhere 70% done. I would say the next year-year and a half will also test us as to whether I’ll be able to take that journey fully. For us we want to go for an IPO in our 10th
year, which is let’s say three years from today. Can we do that as a profitable company – maybe
a 500-600 Crore company in India – as a brand which stands for something for the mass
affluent audience, which is omnichannel retail in the top let’s say 15 cities…I think
this is the story that we’re trying to paint in the next two years. So a lot of focus on getting into retail. We are only in two cities today, we want to
be in the next 7 cities. We want to also make sure that our product
line that we’re getting into is catering to this retail audience that’s coming to
us new. And we want to do all of this sustainably
and profitably so that we have a story where we can say that we’re one of the first e-commerce
companies which were venture funded, which have actually been able to build a sustainable
business and go IPO. So I think that’s sort of the story at least the
next two and a half years that we want to drive. That’s quite interesting and I really hope
that it actually happens. It’s inspiring to everyone else if you know
things can move on from a funded company to an IPO and actually show that the ecosystem
kind of makes sense to do that. Alright, so maybe on just aspects of marketing. In terms of how you’re looking at building a brand, right, so how do you look at B2C marketing as a whole? What are your most pressing challenges today in terms of reaching out to people and then making sure that you know, one, that what you’re spending is actually effective and that you are able to bring in new people
into your account? So I would say if I were to look at the evolution
of our marketing, I think the first literally six-seven months was all organic, right, we
did not really go market because we wanted to test the product market fit and thankfully
for us, I would say the single biggest advantage for our MBA networks was that our friends became our earliest well-wishers, the first customers, the first referrers, literally everything happened through the friends and that entire network, right. After the first seven months I would say 2013, we were just lucky to hit upon Facebook as an arbitrage channel. So the first two years literally 80-90% of
our marketing used to be on Facebook. And at that time Facebook had just about starting
to open their newsfeed for advertising. Today though, it’s just advertisements,
right, you don’t…I mean, I don’t know, less than 5% or less than 2% is organic traffic. You have to advertise for you to get any kind
of traffic from Facebook. But thankfully at that time they had not done
that and we literally used to be a role model for Facebook to present to international brands
as a case study as to how to use Facebook as a platform to get traffic and to drive revenues – so I would say 80% of our revenue at that time. And also because Google was not yet famous
for this category. Because this category, you know, when you have search intent for a mature category then it makes a lot of sense for Google. For example, today a lot of our digital spends,
pretty much 90% of it is Google. Right, maybe 15-20% is retargeting on every
channel and 80-90% is Google. But it was completely different because at
that time search as an intent was much lower in the purchase life cycle funnel. After furniture online built up as a category,
thanks to us and a bunch of ot hers, it took 3-4 years I would say for search as in intent
to be much later in the funnel, right, to really be much closer to the buying process. So we were lucky and, you know, a lot of people
ask what is that one arbitrage channel. I mean, you have to try 10 channels. Unfortunately, there is no one arbitrage channel
and the more people realize it’s arbitrage the more people will start advertising, right. So to us, the first year-year and a half,
Facebook to that extent was arbitrage but the cost started shooting up. Because everyone saw us advertising, everyone started advertising and then it became no longer arbitrage. Then it slowly,…2015 was the year when we
burnt our hands with TV because one thing we’ve figured is changing behaviours, TV
is a very expensive medium. You know, if there is already a behaviour
you can tag on to which today is what online booking of cabs is or lets say ecommerce is
as a horizontal, then it’s great because you can reach an audience like never before. But at that time for us furniture buying as
a category was really not yet online and we, really I would say, burnt our hands there. The brand got built, but it was too expensive
to build the brand on TV. So that was a phase when we tried TV for a
year-year and a half. And then we shifted to Google a lot because
SEO and SEM became a much bigger part of intent. The last year and a half I would say offline
for us has been about building a brand right. So I would say we have used offline retail
as literally a brand channel. Because if you are offline on retail, people
consider that as a testament to you being a brand that’s not going to run away. And for some reason that’s, you know, it’s
just something that’s in the mindset right. So we use offline literally as our retail
stores as a point of sale as well as a point of conversion as well as a point for selling the brand. The last part there is I would say what technologies are going to be very important in the next 5-6 years, and we’ve had sort of pockets
of experiments, would be VR and AR, right. Because to me that’s a field that’s going
to be as big as what mobile phones is today, maybe in the next 7 years. It’s sort of… you know, Facebook just
two weeks back shipped the Occulus I forget the brand name that they’re using for that, but they’ve shipped the cheaper version of Occulus, which doesn’t even require a
computer. And now people are saying that they can actually
see where this is going, right, because they’re able to wear that and really visualize the space. Now you come to our store, now let’s say
for the next 2-3 years this device is not going to be that inexpensive that everyone
is going to buy. But let’s say you come to the store, what
is possible for us to be able to do at the store? The store for us is 5000 sq. ft., at max,
it can have 10% of the products. There’s still 90% of the products you can’t
visualize even in the store. So we can actually make you visualize the
rest of the 90% of the products in VR and make you convert for something that’s
not even in the store. Today we do that with the iPad, where we’re able to cross sell products which are not in the store. Only 40% of our products are actually products
that happened in the store. 60% of our sales in the store is for products
that are not in the store. Now can we make that even much higher,
by giving a real-life experience on VR? What we call the infinite isle or the infinite
space, because you pretty much can see any product to life size, and real texture as if… you know, other than simulating touch, you pretty much can simulate size and look. And at the end of the day, you come to the store
to understand these two. I mean, you can look at it even on the phone and on the iPad, but you don’t really get a sense of size. And can we simulate that in your living room
in VR? And we actually have an app that does all of this, which can simulate it not in your living room, it’s a simulated living room so you can actually see that, you can change the wall colour, you can change the ceiling colour,
you can change the side table, so you can do all of that in VR and actually look at it. The thing is today it is still intimidating for the common user, so we’ve done a bunch of experiments we’ve not really rolled it out because users after 4-5 minutes, get that sort of vertigo. But I would say that’s just a matter of
time before these devices become a lot smarter, a lot smaller and are able to process without
even the need for a computer. So I would say the next 3-4 years there’s
going to be a lot of innovation on that space also. Interesting. So I think this thing which you described as to how people dissociate, if I were kind of furnishing my home I think that sounds
something I would very much like to do. It’s quite hard otherwise right. Thank you so much for sharing these thoughts
with us. I think a lot of it was very insightful, reflective of
a little bit of our own journey. All of us can learn a lot from your experiences.