Episode 112 / April 12, 2021

Inside the mind of Jumbotail Founders, S Karthik Venkateswaran and Ashish Jhina

46 min

Episode 112 / April 12, 2021

Inside the mind of Jumbotail Founders, S Karthik Venkateswaran and Ashish Jhina

46 min
Listen on

In this episode, we chat with Ashish Jhina & Karthik Venkateswaran, co-founders of Jumbotail, a 5-year-old online wholesale marketplace for grocery and food items.

Jumbotail serves more than 30,000 neighborhood stores (popularly known as kiranas in India) in the country with its full-stack B2B e-commerce model, which includes warehouses, a last-mile delivery supply chain network, and a fintech platform for payment and credit solutions to store owners.

During the podcast, they talk about breaking down a problem to its finest version and then solving for it, they also talk about how capital has wrongly been seen as a golden solution by most entrepreneurs for solving all challenges at a startup.

Notes –

02:44 – Karthik & Ashish’s backgrounds as a Major in the Indian Army and Apple farmer respectively

08:55 – First-principle thinking applied at Jumbotail

13:57 – Core-Engineering Principle: Build for utility, not for the use case

19:24 – Problem statements solved by Jumbotail, for Kirana (Grocery Retailers)

23:18 – Capital cannot be an only moat, where “unit economics” are extremely difficult to figure out

24:32 – Rapid scale-up pushing towards $250 Mn

27:25 – Raising first-funding from Nexus Venture Partners

38:16 – Identifying your co-founders at a mature-career stage

Read the full transcript here:



Siddhartha Ahluwalia 00:00

Hi, this is Siddhartha Ahluwalia. Welcome to the 100x entrepreneur podcast. Today we have with us Jumbotail founders, Ashish Jhina and Karthik Venkateswaran. Jumbotail is a wholesale food grocery platform that provides full-stack services for Kirana stores, including storefront delivery, and payment collection for sellers. It is also a FinTech platform that provides payment solutions and access to working capital credit from a third party and credit providers to add customers using transactional data and proprietary algorithms. Welcome, Ashish and Karthik to the podcast.


Ashish Jhina 00:39

Thank you for Siddhartha. Thank you for the opportunity.


Siddhartha Ahluwalia 00:42

So just to share about your background with our listeners. Ashish is a professional farmer, having worked on his own farmland for a year before founding Jumbotail. He’s an IIT D alumnus. He worked for BCG after completing his MBA from Stanford. Karthik did his MBA from Stanford Graduate School of Business as well. It’s that time he met Ashish. Karthik worked at eBay and then joined Flipkart, where he understood the importance of controlling the full stack. Realizing the gaps in the supply chain, he founded Jumbotail along with Ashish. So, what do you learn from you both right? How have you known first Karthik and then Ashish? Well, what was your family upbringing? Like, right? And were you entrepreneurial from day one? Or is it that you wish? It came later on in your career the aspiration to became an entrepreneur. Karthik over to you.


Karthik Venkateswaran 01:40

Thank you, Siddhartha. I think it’s a good question. I come from a very lower-middle-class family, my parents were in the government, and there is no sort to, say an entrepreneurial person. So, prior to entering Stanford, I actually served in the Indian Army for 10 years, I took voluntary retirement, think of major I was in combat some Siachen Glacier, Uri, Manipur name of the place, I was infantry. And, you know, I come from that background. But to me, an entrepreneur is not a person who needs to, you know, found a company is like, to me, if you break down entrepreneurship, in first principles, breaking down, and having a vision, and breaking down that into, you know, smaller steps, motivating other people to join. These are, you know, founding principles and, also working with very, very resource-constrained environments to absolutely achieve the goal and be very resolute and show the perseverance, I think Armed Forces definitely makes you entrepreneurial. Because in almost all the places the situation dawns upon you, and you need to actually make decisions in split seconds, and you have to actually, you know, motivate people to achieve the mission vision, far, far larger than what you what human capabilities can even have known for themselves. So, to that extent, the founding base of my thought process was from these situations. But that said, what, what I would say is that you know, I have come to this journey of entrepreneurship with a, burning desire to solve a problem. To me, that is the end, these are all the means. And I found that today, nobody is pursuing that vision or having that vision at all, in many cases, when we started this company, and to that extent, you know, I have to do it myself. And I have to, you know, find people who like-minded people, and that is all my journey started.


Siddhartha Ahluwalia 03:40

Ashish, What about you? What was your family background?


Ashish Jhina 03:43

So, I come from a, you know, I, you mentioned one year as an apple farmer, you know, apples, apples, the trees, they take a long time, you know, long time and you know, to grow. And while I did that, professionally, you know, for about a year and a half before, Jumbotail. I’m a third-generation Apple farmer. I mean, everybody in my family grows apples for a living, you know, has given me a lot of exposure to, you know, the challenges of agriculture in this country from a very early age. You know, and my parents continue to grow apples to this day. And, you know, I think one of the questions always is, you know, when is when are we going to sell apples on Jumbotail? And I think, you know, there’s, there’s a time and place for all of that. But I think both Karthik and I, you know, came to this problem and this particular business, not because, you know, we, you know, didn’t like our jobs or whatever. I mean, we’re doing, you know, went very well, both professionally, but I think for both of us, you know, we wanted to change the way food and grocery were sold, bought and sold in this country, we believe, you know, every Indian is a consumer, a large part of the country is actually involved in production. And I think if you want to really have an impact on, you know, the largest number of people with your lives, I mean, this is the problem that we wanted to solve. And for me, you know, this is a problem that I’ve had both personal exposures because of my family background too, but also professional exposure. So, you know, right After IIT Delhi, I went to work at BCG, I spent about six years prior to you know Stanford where Karthik and I met him to post that. But out of that, you know, nearly three years was spent working on the, you know, on a project with the, with the Government of India and the World Food Program on the public distribution system. You know this is the system that powers the ration shops in the country, you know, nearly 800 million people in this country get, you know, subsidized food grains out of that system. And it’s a system that has a lot of issues, you know, it’s a, it’s an, it’s a pretty old system, you know, there’s a lot of leakages, targeting is a problem, getting the food to the right people was always a challenge. And so, I was very fortunate, you know, over the course of two stints of a year and a half each, to actually work on a lot of problems in that space gave me a lot of exposure to you know, food and grocery supply chains, both from procurement supply chain last mile, you know, all the problems that occurred within that, and also the opportunity to deploy a lot of technology in that space, you know, it’s a space that’s not necessarily known as very being very amenable to technology. But, you know, I worked on, you know, applications of Aadhaar, even before I’ve had a lot of biometric applications on this, and gained, you know, a very deep understanding of, you know, how these ecosystems work. And that only prompted me to, you know, want to want to do this faster, and, you know, with a little bit more control. And that was what prompted me to go back to the Himachal, really, you know, look at this ecosystem, again, from first principles. Karthik is a lot smarter than I am, he figured out very early on that, you know, starting on the supply side was probably not a great idea. I went around, you know, I tried a lot of different things in that year and a half, you know, looked at food processing, selling directly to consumers, aggregation of different types on the farmer side, and came to the same realization that, you know, this is a problem that’s best solved by working from demand backward. You know, agriculture is one of or food is one of the few industries in this country where, you know, production happens without necessarily knowing what demand exists. And that’s actually a root of a lot of the issues. And so, we said, you know, Karthik and I have always been, you know, we’ve known each other for 12 years now, we connected over similar interests and passion to sort of change the country do something big that impacted hundreds of millions of people. And we met at a friend’s wedding in 2014. And we were talking about what we wanted to do with our lives. And this came up again, and so we said, you know, let’s make a great big effort of it, and really figure out if there’s a way to solve this problem using things that we are familiar with, you know, technology, operations, you know, the use of data, the use of e-commerce, and that’s what ended up becoming Jumbotail. And it’s been incredible, you know, five-plus years now, and it’s a dream come true to be able to work on something that we feel so passionately about on a daily basis.


Siddhartha Ahluwalia 07:38

In both of your conversations, you both mentioned one common word, first principle, you know, first principle thinking, and Elon Musk uses this phrase a lot. How do you both encounter this? First, right? I’m really fascinated by an order the frameworks, you know, that you have built yourself for on the first principles thinking.


Karthik Venkateswaran 08:02

Let me take this question. All right. So, the first thing is breaking down commerce transactions into first principles, let’s just see what are the three fundamental first principle moments moving parts, right. There’s something called an information flow. So, you list a product on a platform. And if you look at actually any transaction, whether it’s online or offline, all of these three flows are very, these are the fundamental first prints that will break down a transaction. So, there is an information flow, what is the product, what’s the price offer listing quality, all of those things, then once the information is exchanged between the buyer and the seller, it can be an online catalog listing or an offline over the counter or a combination of both, then the material flow happens right? So, somebody lifts a product and gives it these across the counter in a Kirana shop or if it’s a no over a period of logistics from IFC, a fulfillment center to the customer. And then there is a financial flow. So were money exchanges from buyer to seller. Now, if you look at these transactions, if you look at all of these transactions in a prepaid online scenario, financial flow proceeds the material flow in an offline transaction or cash on delivery material flow proceeds the financial flow. When we looked at the problem of food and grocery, initially, in late 2008, I was trying to aggregate coconut farmers and Ashish brought up you know, I learned something so very quickly, is that when I went to the first thought was connecting farmers to end-market using an SMS based platforms. This is pre-Flipkart. And there was nothing called the internet as we know today. And Nokia in 70 was the smartest phone, right? And I was trying to build an SMS-based platform with you know, short code SMS APIs and stuff and extremely costly transactions. But what I quickly realized is you can quickly bring two sides of the bodies together like how we add an eBay or something like that. But then the other two floors, the material flow, and the financial flow would not happen. So, you could somehow cobble together and use the existing Laurie services to do it. interstate transport itself is trying to connect, you know, Mother, I, my hometown was a very large coconut producing zone. And that’s my route. And I started to get orders from Delhi and other places, right? So, you could still connect these two markets, and then you could still find a lorry service to go and deliver. But how is the financial flow going to happen? And I looked at, you know, successful models outside and Amazon was in the, you know, raising and all that stuff, right. So, in the US, so long as you solve for information flow, the material flow was taken care of by the FedEx and the UPs of the world and the and the financial flow, second, cable, Visa, MasterCard, and either digital forms, right, and they were, so, therefore, a marketplace operator, to just need to build only one component, and other ones were fully scaled and readily available. Now, I came to the conclusion that first of all, you know, like Ashish said, aggregating all of these farmers, and you know if you can’t like to make the money move back, and I had no, no idea about them, the latest Flipkart will come and invent the cash on delivery at scale. So I knew that this problem needs to be solved, but I was just not having the idea how to solve this problem. And, and therefore, I said that you know, you can’t make these three, transaction three movements happen. So now I can only do two at best, and one, I can do very well. And then the second one, it’s inefficient, but still can be doable, but cash movement, not possible, right. So, and then I realized that you know, aggregating the demand and solving for all the three flows are going to be important. So, this is one example where I was able to break down a problem into first principles, even at the root and genesis of the company. The second place, I tell my team right now, so many of the times, you know, we have multiple, you know, we have fundamental design principles, and building principles, that we use for actually building technology and products. So, the core engineering principle is built for utility, not for the use case, right? So, break down the use case into underlying utilities, and build for those utilities, then that can be mixed and matched right. So let me give you an example. So we break down in most FC or fulfillment systems and you know, transactions across supply chain centers, right, they will tell you there are a put-away job and Amazon, you probably know, there’s a put-away job, you receive the product. And then there is a picking job, there is a drop activity that needs to do and there’ll be some applications and functions, right? So, we said, okay, what is it? Like? What is this fundamentally trying to do every of this, we found that at the end of the day, it is trying to move a product from place A to place B. So, the processes are called put away when you do it in the context of receiving the product from a vendor. And it is called a pick or a drop when you’re trying to dispatch a product, right? So, when we build the product that way, fundamentally, then we have a very, very, very, very scalable system that we could use, then transform any space today, one of we operate under the lowest-cost supply chains in the world, I would say that for food and grocery, we are an operationally profitable company for wholesale food and grocery with such low gross margin profiles. And you know, I would attribute that because the way we have built our product technology was we broke down those activities into what is it trying to accomplish. So, when you try to say, Okay, this is a component that helps any person move a product from product A to product B, then you broke down the actual utility to the use case. And then now you can actually use the underlying utility overlay on multiple different use cases. Same with inverting, right, inverting is nothing but you know, receiving a product from person A is dispatched to Person B. So, this is the way that we are broken down. And this is how we try to break down things into the most fundamental objects and underlay and discover the underlying utility, and try to build for it.


Ashish Jhina 13:52

And this is Siddhartha, something that we’ve seen across all our teams, you know, be it product, engineering, you know, operations supply chain, the ability to think, and we test a lot for this in our interview process, you know, we test for core values, and we test for, you know, pretty basic principles like, you know, first principles thinking, because, especially when you’re trying to change an industry that already exists, you know, it’s a very large business, you know, food has been bought and sold since the beginning of time, right? So, if you don’t have the ability to break it down into its constituent parts, it’s very difficult because the human brain always takes over and you know, has certain heuristics by which things. And so, and those are often the heuristics that actually need to be challenged if you’re trying to create something new. And so, the ability in all the teams I think one of the biggest signs of success that we’ve seen amongst our teams is the ability to question things, you know, not say, you know, aise hi hota hai or if this is the only way it happens, right and that that is often where the root or the other true ingenuity comes from challenging things that everybody else assumes to be the only way to do that. And time and again, I think we found that that is where you are able to, you know, build additive advantage, that is where you’re able to find unique solutions that either you know, change the level of service that you can provide the same cost or, you know, the cost at which you can provide services or create customer delight in ways that otherwise would not be possible. You know, for us, it’s, it’s a very, very big component of the way we think, as a company. And it’s something that we you know, value a lot in the teams that we build. And you know, in the people that we hire,


Karthik Venkateswaran 15:23

just to I want to add one more thing on this point, right, when you are able to discover the underlying, and you break it down into first principles, there’s also one more thing that I want to add, what is the first principle trying to do is if you then it allows you to discover what is underlying utility? the utility is to move the media or whatever is a wheel. Now, if you are able to get to that point that what this wheel is trying to do in a car, and it’s just allowing you to move in a more frictionless manner, then if you have any other way, then you can actually find better ways of actually moving the car faster like and that could be like your inner, your magnetic levitation-based product or something like that. So basically, that is what is breaking the glass, breaking the points into its first principles, understand what it is trying to do, and separate the form and function and solve for function and utility rather than solve for better forms.


Siddhartha Ahluwalia 16:10

The way you told me is so beautiful that today, one can go about and think about, you know, reinventing every industry, for example, you know, Elon Musk’s example is very popular. He said, I’ll make electric cars because they are good for the environment, we don’t emit gases. Why are electric cars going to be expensive? Because the battery costs are huge. What is a battery made up of? copper, nickel, cobalt? And why can’t we, you know, get our own copper, nickel and cobalt? to what wonderful thinking into the very complex market, as you said, you know, so I will now want to ask you, Ashish, how has the jumbotail journey evolved? Like, what is the challenges you face? on funding? You know, first, then customer acquisition, customer belief? And the third part scale? Right? How do you think about the frameworks for skin?


Ashish Jhina 17:08

So, I think a few things, let me start with things that have not changed throughout the journey. Right, I think we started with the fundamental principle that if you look at this business, the structure of this business, you know, who do you build? Is there one factor that you can build your entire thesis around? Right, and, you know, when we were starting in 2015, you know, everybody was going Gaga about in the future of direct B2C e-commerce in grocery. And, you know, when we started saying, you know, we’ll build for the Kirana people, you know, said, okay, hey, you know, these guys, could be guys are going to be gone very soon, why are you building for, you know, an active in the industry that is unlikely to remain, and they were looking at the West, they were looking at other markets, where, you know, so-called modern trade and, you know, large format retail have taken over, and our food and our grocery as well. And our bet was, you know, again, looking at it from first principles, we said, you know, Indians buy grocery in very different ways we buy, you know, small amounts, very high frequency, the Kiranas actually serving multiple functions, which are, you know, is providing a, I guess, a, you know, a storage space, as, you know, as a service to houses, because our houses are small fridges are small, we don’t have the ability to buy, you know, in large quantities. And similarly, for brands and other people trying to reach, you know, the store, or to the household is providing a warehouse and a sales service, right. And so those principles were unlikely to change. In fact, you know, obviously, now today, you know, with a lot of other players coming into this space and wanting to, you know, recognizing the value of Kiranas COVID, being a, you know, a watershed moment, at least in the recognition. In the public mind, I mean, you know, Kiranas has accounted for 90 plus percent 90-95% of all food and grocery trade in the country, even today, and we’ll continue to do so, you know, in, in large quantum. So, some things around, you know, how we design the business have not changed, right, we said, Kiranas will continue to be the future, let’s build around them. And let’s really solve for the problems of Kiranas, both in terms of you know, how they buy and as well, as well as what they sell, which is essential, you know, what we still do through that process, you know, you mentioned a few aspects of, you know, how we’ve gone about and build that business. And the realization we had was, this, this is a business that has to be built on, you know, incredibly high service levels on satisfaction. And that’s where we’ve gone out in invested efforts on and that, you know, also is the way that we think about scaling, you know, the first few years of the company were really around building technology building, you know, products that allowed us to actually do the seamlessly we don’t have a large salesforce on the ground. In fact, you know, or 100% of our orders actually come through the app with the retailers going and, you know, ordering themselves and we’re pretty much the only, you know, a company of its kind in the world today that actually has that capability. Most people rely on very large salesforces. So, the approach over the first few years of the company was to build all the parts build a supply chain, build the ability to you know, transmit, transport, and communicate information on both staples as well as FMCG Built in a strong private label product portfolio over the last couple of years, built capabilities for Kiranas, to actually be able to sell to, you know, to their consumers more efficiently through our j24. program. And then once all of those have been, you know, put together in our in a product, sizeable, largely scalable format, then scale. And so we’ve gotten to that point over the last year, where, you know, we’re operationally profitable in Bangalore in the surrounding areas, and therefore, now today, you know, the focus over the next couple of years is really about scaling this model as, as quickly as we possible as we possibly can. Now, the upshot of doing that has been that, you know, the amount of capital that we have had to spend in this process has actually been, you know, a fraction of what anybody else in this ecosystem has done, you know, with, we, you know, we’ve companies raised about $54 million over the history of this company, 25 of that has come over the last, you know, three months. And what that means is that with just $25 million, in the first five years of the company, we built a model that today can scale. And now we’re, you know, looking at expanding, you know, 3-4x, you know, over this year, and over the next five years building, you know, seven to $10 billion business, because of the fact that you know, the model is replicable, it can actually be replicated at scale very quickly, without a lot of cash burn. So, from your question to your questions of capital, you know, we have always looked at Capital as something that, you know, if there is a certain amount of capital. capital cannot be the only mode, right? It, especially in a business, like a grocery, unit economics are extremely difficult to figure out, if you figured them out, you don’t actually burn a lot of capital, right? What do people spend capital on customer acquisition, and, you know, and on getting customers to keep coming back repeatedly, we’ve solved those problems through technology and product. CAC is, you know, less than $2, we are operationally profitable. So, you know, we don’t end up spending a lot of capital. Now, obviously, we figured this model out, now we’re going out and, you know, expanding across all of India a, in an extremely capital-efficient manner. The first few years have really been about you know, getting, you know, the hard things, right, you know, getting the operations right there, as Karthik mentioned, we have the lowest cost supply chain for the sorts of things that we do in the country, potentially the world, right, it throughputs, you know, more than a million deliveries every year. And all without, you know, all based on an in-house platform that we’ve built today, that allows when we start a new city, we can do it in the order of a few weeks, right, without spending a lot of capital. And that’s really been the fundamental mental approach with anything that we try, prove it, build a product around it, make it scalable through technology, and then scale it and that’s the stage that we are approaching back now, as far as the businesses


Siddhartha Ahluwalia 22:37

and if you can share, you know, some metrics around where your current scale is, right? How many numbers of retail stores any numbers around GMV or the revenue, as you said?


Ashish Jhina 22:48

Karthik, you want to take that?


Karthik Venkateswaran 22:49

Yeah. So, you know, we are having over, you know, 50,000 retailers on our platform, and we have just started scaling. So, Bangalore used to be our largest market until about two months ago. So, post completing the $25 million fundraise, we are quickly lighted up three more cities, we are going across you know, South India, and then we are brought up into North India, from Bihar, Jharkhand, UP, Himachal Pradesh, Ghaziabad, Uttarakhand and Jammu area under tier three tier four towns. So, the rapid scaling has begun. And, you know, we will be by end of this year, we would well cross 250 million dollars scale. And that is where we will be. And, you know, you guys opened up a market, and there are no other players. So, solving similar. So, isn’t that the Kirana store? is ordering from multiple players? Or is it have to be exclusive to you?


Ashish Jhina 23:46

There’s no requirement at all. But yeah, I think you know, that this is one thing that people need to understand about businesses, right, and especially Kirana, Kirana store in, you know, on a typical basis actually deals with the word 100 to 125 different suppliers today. Right. So unlike consumers who say, you know, I, I’m either, you know, a customer of x platform or y platform, Kiranas are on used to this, and in fact, you know, really want the ability to actually choose across multiple platforms, and all across the world. I mean, you know, this is a case where no retailer wants to be subject to, you know, only buying from one or two people because they feel like they’re losing control. To the point about, you know, other people opening up the market, I think it’s actually a really good thing. And we’ve seen this, you know, across the board, wherever, you know, there are other platforms or other providers trying to, you know, solve similar problems, what they’re essentially doing is educating the retailer about alternate ways to actually do business. The retailer has been doing business in a certain way for hundreds of years, right? It’s actually the biggest shift is actually a change in mindset to try the platform once right, try a different way of doing something once. Once they make that you know, the moment you are able to provide a differentiated level of service, you know, higher convenience, more trust access to more products. It’s a no-brainer for the retailer, and we’ve seen that wherever other platforms are have done that job. It’s actually easier for us to go in, you know, actually, take on, you know, more share, because we, you know, somebody else has done the hard job of actually educating the retailer and you know, getting them to change their mindset.


Siddhartha Ahluwalia 25:11

So going, going back to your, you know, roots. How was that, you know, you got your first funding round, who connected you to Nexus, and how has that partnership blossomed over a period of years?


Karthik Venkateswaran 25:25

So, Nexus reached out, Samir is still one of our sponsors, supporters, he has invested in every round of ours, we raised $2 million dollars of capital from Nexus, Samir you know, is joining the journey with us, even before we incorporated the company. So, you know, we have been very fortunate to work with really good people. So, when do I it was a starting point, itself was, the starting point itself was at a different level for us?


Ashish Jhina 25:56

I think when Karthik and I were starting out, you know, we didn’t really know about, you know, raising capital, etc. You know, I remember, we met Samir, you know, and he said, Hey, why don’t you come into the office, and let’s just talk and we went in, you know, we went in through a whole bunch of stuff on the whiteboard. It’s funny, though, that, you know, what we do on the whiteboard five years later, is actually what we build. Right. And I think that was, you know, one of the benefits of having thought about this and really spent, you know, this is not, you know, Jumbotail’s journey didn’t start in 2015, late 2015, right jumbotail has been something that’s been growing in, you know, in different ways in our minds, and we got to talk about his experience in 2008. It’s been something that’s a labor of love for a long period of time. And so when we went out and do this thing on the whiteboard, you know, today I can look, it’s interesting that you reminded me, you got to go back and look at me, one of the photos that we had, but the network that we have to build today, the business that we have built today, in large part is what we do out on that board that day, and to you know, you know, Samir and Sudhir, you know, the Sandeep, you know, clearly, they looked at that, and they were like, you know, hey, this, this looks interesting, this is something that we believe we, you know, we can be excited about in that noon. That’s where the journey started. And we raised this money without even having a, you know, having a PowerPoint presentation or a model. I mean, he was just, you know, on the back of a conviction about, you know, a business in the way that we believe that it was, and to their credit, they took that leap, and I’ve been extremely supportive to the work that we’re doing.


Siddhartha Ahluwalia 27:23

So, when you drew that model over the board, was there Jumbotail already in operation or it was more in the plans.


Karthik Venkateswaran 27:32

It wasn’t in the name itself was not there, and we have done a WhatsApp exercise. So, Ashish, and I was sort of, you know, in it, and I, and I was on paternity leave, my daughter was just born like one month before. And second, I already had a son three and a half years old. So, it was all like, kind of, you know, it was, is it the right time, or all of those? You know, a typical entrepreneur ross, right is only the one question, the market is ready. And taking a cue from Paul Graham’s, you know, think about five years from now, imagine the world and build, start building what’s missing. And both Ashish and I were very convinced that, you know, the fact that the Kirana stores will be an important part of the economic engine of this country, their market share may come down from 95% to 80%, but then the market itself is going to double from 400 to $800 trillion. Therefore, the overall market will be extremely large, and we got to solve for them was very, very counterintuitive. And, you know, I had come back from the US the year earlier, and I had already seen 4G, so there was a bet on 4G and smartphone. And, you know, we were asked some questions around that. And, you know, we never expected a JIO windfall and all that stuff. But then with conviction, we started at one night, said, Ashish, I know enough of planning. Let’s get started. I know, we went and recruited about five retailers nearby our homes, and then we sent out a message at 10:40 and 10:42, we got an order. All you’re looking for at that particular point in time was does retailer uses the internet as a medium at all. So those days, detailers used to use this WhatsApp 2G pack from Vodafone and you know, this thing, right? And then they will switch on and off the mobile data. So, they will not have always one mobile data like what we have today. So, all our intention was when I send a WhatsApp message, what time does the double tick come that means that he has switched on, and the message has reached and what time the blue tick comes, that means he has read the message. So, at 10:30 we send a message, and at 10:40 we got an order. And that was like, you know, extremely, you know, interesting for us. And then we did it and over and over again for 3-4-5-10 days it happened and all the people were extremely excited and they were able to you know, order, the only five. So, at that time, Nexus was also invited to call and I was like I have to give 100 percent credit to Ashish. And at all points in time This company has taken very, very major terms. And Ashish is the single-handedly is, you know, turn the direction of the company. So, I was not very keen on going and raising VC funds. I was saying I need more proof of concept and stuff like that. So, Ashish said, let’s go and talk. And then we went and talk. And it just, you know, we went, the whole day at the meetings continued at night 1 am, in the night, we signed the term sheet and went for dinner, along with the new investors on board. So it wasn’t that it wasn’t a planned journey for us. But yes, we had done some proof of concept. We had some conviction that we could demonstrate, at least 5 customers on WhatsApp, and things like that. So, it was good.


Siddhartha Ahluwalia 30:46

Also, if you signed a term sheet on the same day when you present it to them?


Karthik Venkateswaran 30:50

The same day, yeah, we landed in a Mumbai morning. It was a series of meetings. It was supposed to be one meeting. So it was series of meetings, one meeting, they were so impressed, then I think at the end of the meeting Sudhir asked me, you know, what would you do if this fails, and without thinking I just said, I do it all over again. Like I’m believing I know, I could get the timing wrong, but the market is there. And I will try one more time. And I have the perseverance and the energy to go the full distance. It doesn’t matter to me when I came here to solve a problem. So that is all you know. And then that led to the second and that led to the third and then more whiteboarding. And then the US team on the other side joined the Nexus or the US office, and then they joined in the evening. So, we presented the US team, and then at night 1:30 am, we actually signed it for $2 million and intense one full day. And you’ve already done this before No One the entire world was taking a counterintuitive better world was saying it is you know Gofers Pepper tap Local Baniya, Zopper. So, everybody was going on B2C Grocery and a Nexus had a conviction that Grocery cannot be won in this model. And we had the same conviction to today, it is very obvious that Kirana store billions of dollars are flowing into this market, At 2015, we were able to see something that the world was not able to see.


Siddhartha Ahluwalia 32:06

And you were on paternity leave Karthik and Ashish were already full-time in your own business, right?


Karthik Venkateswaran 32:13

Ashish was a farmer, He was a full-time farmer, he was running his farms.


Ashish Jhina 32:17

So I will tell a little bit about Karthik a risk-taking ability, right? Most people are like, you know, get a nice cushion, get to a place in life, you know, his daughter Kavya was a month old when we started this company. Right. And I think we took a call saying, you know, let’s do it. And I think that’s been our approach to pretty much all the major decisions in the, in the history of this company, I think we’ve just said, you know, at some point, you know, there’s a logical way of doing it. And the logic gets you to a few options, but at some point, you just have to take a leap of faith and say, you know, if it feels right, just do it. You know, not everything can be modeled out on an Excel sheet, many of the things that were you know, your any, any, any big change in life, right? It challenges the fundamental assumptions around how you think. And, you know, we found that approach to be really, really helpful, which is, if you spent enough time thinking about a problem, it may not show up on an Excel sheet. But at some point, if you’ve done enough preparation, your gut is actually something that you can actually listen to, because it’s not just an aimless thing, right, that the mind does a whole bunch of subconscious calculations. And, you know, you come up with an answer. And you know, more times than not, I think, when we’ve done that, we’ve come out ahead and the company has taken, you know, a very different taken on a very different trajectory, a lot of choices with we made a very counterintuitive, you know, we started with staples as a category, everybody used to tell us, you know, go to, you know, FMCG companies and you know, play our belief is yes, you know, FMCG is going to, you know, there’s an increasing prevalence of FMCG in the country as you know, GDP per capita goes up, as the country becomes richer, more and more staples will become, you know, processed, etc. And therefore, it is a very important capability that we built. But on day one, we said, you know what, let’s go and solve the biggest problem that the retailer has, which was you know, unavailability of, you know, staples at the doorstep. That was another counterintuitive call that we made initially. And, you know, it wasn’t, it was based on having been in the market. That’s the other thing that you know, both Karthik and I try and do as much as we possibly can and encourage our teams, even our interview process, a lot of people come back and tell us, you know, we take all people who are interviewing with us sometimes even, you know, engineers, who are interviewing for us early on today with COVID. It’s a little bit more difficult. But, you know, early engineers have been gone out in a call to go out, go to the APMC yard see what’s going on. It was you know, it was a real test for everybody to see, you know, are you truly motivated by this? And are you willing to do whatever it takes to actually achieve the outcomes that we set out with you?


Siddhartha Ahluwalia 34:46

Wonderful. This sounds quite a story in hindsight, or Karthik do you remember the date you put in your papers?


Karthik Venkateswaran 34:55

I think I put in my papers. April 14 or April 3, or something like that. And I had given a four-month notice to Flipkart because I was a director. And I had to hand over my charter to three more directors that I had to hire or find inside the company. So I built a fairly large team, including business product and more product marketing, product management, and even some parts of engineering that I, you know, built. So, it was sort of a long gestation period for me.


Siddhartha Ahluwalia 35:23

And what was the date you got the term sheet,


Karthik Venkateswaran 35:26

September 16, 2015.


Siddhartha Ahluwalia 35:30

It’s been a fascinating five years.


Karthik Venkateswaran 35:32

Well, but I got to his credit, Samir reached out one week after I put in my papers. At that time, they told me this thing, and, I did not agree to meet him. Because I said, my idea itself, I have to go on the market. I’m a very, you know, I have to have the clarity in my mind, I need to go. So, Samir did not know that Ashish is going to be my co-founder. Samir already knew Ashish from a different context. So around July or something is the first meeting we had after my daughter was born. I started focusing on this whole thing fully. But I think it was it has been a good, good journey for us.


Siddhartha Ahluwalia 36:08

And, you know, and one thing on finding co-founders, right you will you guys, right? Not, you know, 20 2021 College buddies who fall in love with each other and then start together, right? That’s how usual college startups happened. You were fairly mature, right? And build businesses like you build your own professional farming business. Karthik was the director at Flipkart. How did you each identify, you know, let’s take one first principle that you will both fit for each other as co-founder, what are your criteria for evaluating co-founders? Because you knew that so long journey, you want to go ahead Ashish First?


Ashish Jhina 36:48

a Karthik is a much more meticulous person on this one. I will tell you to mine afterward, Karthik actually has a structure and a formula.


Karthik Venkateswaran 37:01

I’m a hard person, even though about all of my data, and crunching and everything, it is the final, the two seconds because I’m trying to pull the trigger within two seconds. And I have to make a choice, is it the enemy or the friend, and that’s how I live my life always on the edge. So I have to make a when I look at a person, I need to know whether or not an enemy. So to me, the only criteria is how long? You know, what are the choices that person has made in life. It’s not about what this, this person would say I learned this, I learned this technique while I was actually writing my essay to Stanford. So the first essay for Stanford Business School is that what matters to you and why. And I was writing multiple, multiple essays. And you know, I wasn’t too happy. The final essay that I actually submitted, was the one that I rewrote, in the very last hour. And without proofreading, I submitted, to be very honest, this is actually my story. And it wasn’t coming. It wasn’t coming. I was not I was creating this stuff. And I was not very happy. So, one night before I went and showed to somebody I knew. And he was also saying that this is not you. So, then I came to what could be the framework, and I stumbled upon this thought with deep thinking, and it has actually happened, this is how I’m thinking and thinking today, if something matters to you, every leg of your journey, that would have been an important part of a decision-making framework for you. You did something because it matters to you. So, you’ve demonstrated. So, I went back and said, Okay, what are they, in my, in my 30 years of existence, or major terms I’ve taken in my life? What were the fundamental founding principles? As you know, I was basically basing my decisions on what was a willingness to sacrifice everything for that one thing. And I arrived at that thing. So, I started using this principle for actually evaluating even today, if somebody says to me that, oh, I want to do a startup, I wouldn’t believe that. I would say, Okay, what have you done in your life so far? That actually gets you to where you got today. Right? When I looked at Ashish, I had a lot of people to approach, you know, because I came from Flipkart. And today, you know, if you look at it, people find co-founders more within Flipkart, or other, you know, classmates and buddies, right. So, I wanted to find this one person, I knew this journey is going to be very hard. And you know, especially when you’re going on very hard journeys, you need missionaries who are driven by the mission, and you know, economic incentives will follow. But I want to find out how these people have made the decisions. And one thing that actually stood is because Ashish and the way he had worked was, you know, he’s a farmer himself. So basically, he understands the farming problems there. So that’s the first part. The second one is the choices that he has made in his even in a career like BCG right. Little known fact about him the project, you know, that he worked on actually changed the biometric identification system in India and served as the base for you know, what eventually turned out to be Aadhar and he has worked on you know, enroll first, you know, a million enrollments will happen under the edges of this project that he learned from the BCG So that is about, you know, solving leakages in public distribution systems. And typically, when you look at a consultant from the top three big three BCG, McKinsey, Bain, right, the first thing that comes to your mind is suit buit ka Sarkar. So, Ashish, by the way, is actually called Sarkar in his IIT D, you know, campus hostel, but he’s not the suit buit ka Sarkar right. So, he was actually traveling in some of the, you know, vehicles and sitting and trying to find these vehicles from moving from state to state understanding where the leakages are happening in a vehicle containing a food grain, all of this stuff. In my school at Campus at Stanford, he was so passionate about water and sanitation, I don’t know how many people know there is a sanitation plant right outside my apartment complex of the apartment complex itself. And I’m telling you that you can’t go near it. It’s we all have this supply thing. There’s a regulatory requirement if you have the plan. Ashish actually, did is all of us are going on a global trip, and he was doing some project and water and sanitation in California, and stuff like that. So, I was seeing him consistently making choices for what he truly believed. So he was also the convener of the India sanitation coalition, the conglomerate of all FMCG companies that advanced the costs of Swachh Bharat. So, when I looked at the person, I had to find that, you know, a demonstration that, you know, this person has actually lived, what is he going to claim Why, why he wants to be a part of the journey is very important. And then, of course, at that particular point in time, he was actually, you know, solving the problems for the farmers in Himachal Pradesh, you know, albeit, he was repeating some of my own learnings. But I was also taking much more comfortable than what I learned in 2008, which was similar to what he was actually seeing in 2014, as well, right, things have not changed much. And that also gave us a conviction that we could go forward. That’s only, you know, the only thing that I saw him live, what he was saying. And I saw that harmony, and that was the most important thing for me.


Ashish Jhina 42:07

I think the only thing I would say here, Siddhartha right is Karthik and I think I have very different people in the way that we approach the world. But I think, what, what we spent a lot of time on, you know, really, once we said, okay, you know, this is an interesting problem, we’re both interested in solving this was also about, you know, what are our goals in life? You know, a lot of, you know, the entrepreneurial journey, right? I mean, there’s a lot of big choices you have to make along the way around, you know, what do you want this company to be? What, how do you make decisions? You know, how do you think about, you know, the future of the company? What are your core values? What are the things that you hold true to, you know, and really care more about, and other things? And I think that was what to me was, was really important, right? Because a lot of people have a lot of classmates who’ve come in or gone out and run very large companies. And when I talk to them, I think the biggest, you know, thing for them always was, you know, will you guys think in you know, similar ways about the important problems, right? It’s important to have, you know, a diversity of views, different ways of thinking about it, because you challenge each other, and we definitely do that a lot. But when it comes to, you know, things about what is the culture of this company, right, what do we stand for? What are the goals that we’re going after? You know, what do we want this company to be in, you know, 10 15 20 years, that’s where, you know, I think, for me, it was really important to have clarity and alignment on those things. Because, you know, you have to be able to trust the other person blindly on those big things. Right. And, and that’s what, for us, you know, for, at least for me, and I remember Karthik and I had long, detailed conversations about, you know, a series of questions. And, and it was very comforting and really important that while we could disagree on a lot of things on the really, really important things, we had very clear alignment. And that’s been, I think, a very important part of this journey. There are ups and downs are a lot of difficult choices to be made. But if you have trust that the other person on the other side, you know, is thinking in many holes, holes, you know, sort of, I guess a thing allows a lot similar and a lot about in the same way. Sorry, let me rephrase that. Right. If the, if your co-founder has aligned on the things that matter, right, the values what, how you want to do business, how you want to build a business, what tradeoffs you’re willing to make, what future you aspire towards, you know, creating it through the company, if those are aligned, everything else actually is easier to solve for and I think that’s been probably the most fun working with Karthik last year, you know, over the last five, six years is that that part is sorted. And to me before making that decision, I think that was the thing that gave me a lot of comforts.


Siddhartha Ahluwalia 44:45

Thank you so much, Ashish, and Karthik, you know, I mean, I’m really enamored by our journey inspired. And it’s so much giving me the joy to know who you know how you think how you make decisions; I think entrepreneurs have learned from this podcast so much. Right especially you know the thing, how you describe solving Jumbotail first with first principles, how you choose co-founders. That’s so important. Thank you so much again for being on the 100x entrepreneur podcast and wishing Jumbotail a 100x journey from here.

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