Many founders try to build for large markets. But Saahil Goel, Founder, Shiprocket thinks differently.

In his opinion,In other words – Picking your battles wisely.

During this episode, Saahil talks about finding the right investors, current focus of the company, and much more. it’s okay to build small or lesser things and target a core segment of users, instead of jumping into a competition with large players, where you might not stand a chance.

Notes –

01:56 – Finding his Co-founder & brainstorming around data-driven logistics

09:04 – Problem with starting in a large competitive market

12:02 – Focus metrics during the initial journey

14:12 – Current scale of Shiprocket

22:04 – Warehouse as a Service

26:24 – Y-o-Y growth of platform

27:49 – Approach to fixing broken things & building new

32:14 – Raising initial rounds of funding

45:01 – “Unless and until you have clarity about something, it won’t work.”

48:19 – Ensuring focus within the team

Read the transcript here

Siddhartha 0:58

Dear listeners, before we dive into the podcast, I would like to thank our partners, Prime Venture Partners. Prime is the first institutional check in the category for tech startups like Mygate, Niyo, Dozee, Mfine. Prime is now investing out of its fourth fund, which is more than 100 million dollars. Today, I have with me Sanjay Swamy, Managing Partner, Prime Venture Partners, Sanjay, congratulations on the 10th anniversary of Prime. And do let us know how will the next 10 years of the Indian startup ecosystem be like.

 

Sanjay 1:35

Thanks Siddhartha for having us on the show, the last 10 years has just been an amazing ride in India, and it has sort of started getting exponentially more exciting as days go by, and clearly you’re in a podcast is itself an example of that. But what we’re seeing in India are the benefits of three big trends that have been foundationally laid over the last 10 years. The first one was Aadhaar, India stack and of course, UPI which has made movement of money friction free and basically free and in real time. The second is smartphone and internet penetration along with 4g, which is now pervasive across the country. And the third is the entrepreneurial spirit of India, as well as the aspirational youth that we have in India, that has created markets that have extreme depth in India itself. This is something that was not there. 10 years ago, getting to five $10 million of revenue was itself a big achievement. But now we’re seeing that happening in 12 to 18 months, in some cases.

 

Having said that, I think they’re only getting started, the best is yet to come. And what excites us, as investors or as early stage entrepreneurs, ourselves, is really the massive opportunity because what we’re seeing in India is not something that’s been seen in the rest of the world, the Western models, the Chinese models, these daily models are not what’s going to solve India’s problems. And the entrepreneurs in India have a unique opportunity to get down here, and just focus on solving India’s problems first, which may very well be solutions for other parts of the world, and we’re seeing some of that starting to happen. And that’s where we think there is a spectacular opportunity here. So clearly, for us and for this ecosystem. We are off to a great start, but the best is ahead of us.

 

Siddhartha 3:26

So listeners, let’s dive straight into this week’s podcast. Today, I have with me Saahil Goel, co founder and CEO of Shiprocket. Ship Rocket is one of India’s largest data-driven logistics aggregation platforms serving some of the top e-commerce brands and D-to-C brands in the country. When D-to-C brands are thinking of getting the packet ship to the customer, the end customer there’s only one name to think of today, and that is Shiprocket. Sahil welcome to the podcast. Today, I’m going to brainstorm with you and discuss with you the parts of the journey which you have been through. It’s been almost a 10 year journey building Shiprocket. And it’s very interesting how compounding has happened in the last five years and how you’re able to navigate the various set of problems in the E-com domain. And you figured out a niche for yourself and now today, Shiprocket is almost a unicorn. Your recent round of 185 million valued the company at 950 million, that is fantastic to see companies disrupting the E commerce space or logistics space. So welcome to the podcast Saahil.

 

Saahil 4:55

Thank you so much Siddhartha for having me and absolute pleasure being here speaking to you, and thanks a lot for so many kind words, excited about discussing with you about our journey and also learning more about your thoughts and insights.

 

Siddhartha 5:14

Saahil, I would like to start with your journey before Shiprocket, and how you met your co founders. And then how did you decide in 2012, build it, what was the problem you were trying to solve at that point in time?

 

Saahil 5:29

Yeah, so I spent time before founding Shiprocket, in the insurance industry, I worked in India, as well as the US for about six years. And was basically focused on building enterprise tech and products. So I worked in various roles in various companies, but really all throughout got a very good knack of deep product development, software and tech overall. And my co-founder, Gautam, who I have known from undergrad, he and I kept brainstorming various ideas, because we both wanted to break out in some ways of our nine to five, he at the time was working in his family business, which was in the distribution of automation parts. So real solid sort of logistics, understanding, commercial understanding, and he was an SMB himself, I mean, that’s what he did for the last six years at that time. I also used to build websites since I was in high school. So why couldn’t I do it professionally?

 

I kept in touch, kept tinkering around, kept building projects on the side, just to keep me abreast with what was going on. And then both of us, we saw, I was in the US at the time and Gautam was in India. And we saw what Shopify was doing, this was in 2011. So this is long before Shopify was a household name for, building websites, it was long before it was the sexiest talk in the world. And what was beautiful about it was that they had taken this process of building a website, and really made it super simple. It was like a few clicks, and the output was amazing. There were other CMS that had existed at the time, but this was next level. It was mind blowing. And I think that just gave us the initial inspiration, and we felt that India will also emerge as a direct commerce destination at some point. India has so many entrepreneurs, there’s like 50 million MSMEs. And people are going to, sell through demand aggregators, obviously, like Amazon, but they are going to be other channels, which are more direct in nature. And that sort of completed the research that we did in a few months, and then decided to head back home and launch the company.

 

And we launched the platform, we built the platform all of 2012 and launched in 2013. Under the banner of Cart Rocket, which was the sort of outward brand at the time, since we were building shopping carts, we built sort of launched it on the lines of Shopify heavily inspired with how they had, built their pricing models, how they had built their app store, how they had built the sort of ease of use to be able to do this. And make it basically democratize for people to be able to set up their own stores go live, in a self-service fashion. And through the journey. In the first year itself, we met with Vishesh, who had earlier sold his mobile app startup and was consulting for large e-commerce brands at the time. We decided to join hands with him and brought him on as a co -founder as a third. And then scaled Cart Rocket over the next three to four years, and raised a few rounds of funding.

 

And over the years, we understood that merchants were actually not struggling with building their websites at mass because they didn’t want to. Most of the merchants were long tails in nature. Amazon and Flipkart had created a certain amount of market awareness both in the merchant side as well as in the consumer side. And people were happier to pay commissions and happier to sort of run it like a transactional business as opposed to building a brand online at least at the time. Which got us to our next prevert which was called Kraftly and that’s the time Akshay joined us from Amazon to basically head the Kraftly vertical for us and Kraftly was built as a mobile first, longtail application focused on the social commerce segment of the market. It was a payment ready shipping ready solution.

 

Soon we added demand channel support as well. And we scaled that to about 200,000 transactions a month by 2017. And during this journey, we started getting very good at managing 3PL shipping. Because as we ran the Kraftly product or platform, we started understanding the nuances around, issues in logistics, pickups, longtail merchants, how they think, issues with RTOS, using intelligence to rank a carrier versus the other building lanes, so there’s a lot of work that went into building a really solid, logistics, enablement tech, for the rapidly platform. So much so that many of our merchants are telling us that we’d like to use your shipping only, in the platform, because it works really well, as opposed to when we try to do this ourselves. And obviously, as a person building a full platform, you want to try and put more into the platform rather than strip it for parts. But then that sort of demand from the merchants kept growing, people started saying, can you integrate my Shopify with this and whatnot, and we felt that this was not built the right way to be able to do any of that.

 

So almost as a pilot to try and test this demand from merchants, in 2016, towards the end of 2016, we wrote Shiprocket as a separate standalone app, a very small pilot to begin with, four, five engineers, half a co-founder, got invested in it and we launched it in 17. And, honestly, that’s how we landed on Shiprocket, which was a series of things we did where we were working with SMBs with direct commerce, merchants, B2C brands, social commerce merchants, across the years, where we basically understood that pulse, understood what kind of business model is going to suit the most. And the market obviously, in the meantime, there was a pre post jio world, there was a smartphone in every hand world, there was a pre, post, Flipkart, Amazon world. And I think all of those forces, in some ways came together to create the opportunity for everybody in direct commerce.

 

Siddhartha 12:19

And to summarize for our listeners, the first version of Shiprocket, which was Cart rocket, was a website builder for small merchants, where they could build their e-commerce websites. The second version was a more holistic platform, which was Kraftly and then the last version, which you launched in 2017, became Ship rocket, which was stripped down of everything and just became the everything which happened after the Buy Now button on D-to-C websites.

 

Saahil 12:56

That’s right. That’s accurate.

 

Siddhartha 12:59

That’s quite a journey, because people want to add, as they are building more stuff. To reduce, during your journey, what helped bring such focus?

 

Saahil 13:09

Yeah, I think we started realizing that, sometimes, as founders, we want to go after really large market size and we should, but the problem with that is larger the market size, at the given time, the more people are going to be there. I mean, if we built a B2C marketplace in 2015-16, I mean, it was a really hard journey, Would have been a very hard journey to sustain that with so many big folks around. So I think we started understanding that we need to find something which merchants really ask for, as opposed to us having to push it to them. And that clarity and it’s a sort of an overused phrase, but one of my investors basically would keep saying, are you a vitamin or your painkiller.

 

And it really, really struck a chord because as we started analyzing our business, we started realizing that this part of what we’ve built is actually valuable. Now, it may be valuable to a very small sliver of the market today. But at least there will be a kind of win, as opposed to, being like a small fish in a really big pond where you can just get eaten. So I think there was no eureka moment. As such, I think it was a series of things that didn’t work, we would try and benchmark our product market fit sort of metrics with other people across the world. And we could see that we were far below what some of the great companies were doing. That was a data point that would tell us what was going on. So I think as a mixture of all of those things, we were able to kind of, zone in on saying that look, focus is important. We would rather do one thing, but do it really, really well. So that we build real value, as opposed to spreading ourselves too thin.

 

Siddhartha 15:10

And what were the metrics at that point in time that you figured out in 2017, 2018 that ship rocket is the platform that you want to focus on or build.

 

Saahil 15:24

I think it was, it was pretty crazy, now that I think about it, we were seeing CACs, like we had never seen before, we were seeing self service, sign up, almost 70-80% of the merchants, they were coming in, signing up putting their address, paying money into a wallet, without a single human intervention, it’s all happening in a few hours of them exploring the platform. And we always thought this was stuff that was available. I mean, that was, visible only in the US where the merchants were more evolved. But we were amazed to see that happening on the platform in such a seamless manner, our leads are converting at 25% to 20%. Again, unheard of in a B2B business. And to be fair, we weren’t really a traditional B2B software business, this was more of a very small, B, kind of a model.

 

So some level of consumer influence in the product in the funnels, in the behavior as well. But still, those are the kind of numbers that were just jaw dropping for us. Retention was another big one. In terms of volume retention or transaction retention. That was again something we had never seen, it was north of 150%, as early as like the sixth month into the cohort. So when you look at that staff, you can, I mean, even forget an operator, but even an analyst will tell you that look, if you are able to just keep adding people, this will just work. So then it does go back to the question of, well, how large is the market. Are there billions of people available? Are there hundreds of 1000s of people available? Are there 10s of 1000s of people available? How do we reach them? What’s the GT? And so that became the problem statement, as opposed to, putting out a fire in every part of the funnel, which is what I think we were trying to do earlier.

 

Siddhartha 17:28

And if you can please share some key metrics today of Shiprocket, such as how many DTC brands use Shiprocket? Or overall, what does the ecosystem look like? What is the GMV that is getting translated? What is your revenue in that?

 

Saahil 17:48

So, see, the overall market is probably, maybe 70-80 billion, maybe all of ecommerce put together in India, again, this is just an estimate that could be plus or minus 10% here in there. From this overall market, if you break it up into, let’s say, only two verticals, let’s call one vertical, all horizontals, Amazon, Flipkart, let’s put Nykaa also there, let’s put all of those guys there which are full stack platforms. Let’s put all the big verticals also, let’s put all the horizontals and all the big verticals, just put them in one place. And what’s left is basically all the direct commerce. And direct commerce is, it’s not all D-to-C. and D-to-C is sort of another cut on this market size. But it’s all direct commerce, which is everybody else who’s doing transactions between themselves and the end consumer, could be a very small one person business running only on WhatsApp all the way to large brands like Samsung, who are trying to build an omni-channel business directly as well. I mean, the same folks are selling on all channels.

 

So that’s the other thing I want to clarify, where many of my merchants or larger ones will sell on Amazon Flipkart in other places, because that’s another channel but they also want to have a direct presence where 20-30-40% of the business does get powered over a period of time because they see the value in it. So all of this pie put together, in our opinion is between, 15 to 20% today, of the total market. So it’s between, let’s say 15 to 18 billion market today. And I think this market, this direct commerce market is going to become about 40-50 billion over the next, five to seven years. So there’s a huge headroom. Its huge potential has grown very rapidly out of this market today, we power about $2 billion of GMV right through this sort of direct commerce enablement channel. We work with nearly 70,000 Total sellers every month, about 150,000 sellers a year who are actively shipping with us. Between 10-15,000 DTC brands, working with us.

 

And I know there’s about 1000 brands out there that are prominent, but there’s really these, 10,15, 20,000, newer brands who are getting born who actually use Shiprocket to power their business from day one from where then, they’ll grow, and they’ll become sort of the brands of the future. So that’s the kind of scale we are at. And from our top line perspective, we make up north of $100 million in revenue on an analyze basis, and we’re growing quite rapidly.

 

Siddhartha 20:42

And is it a profitable company right now? Or is it marginally burning some amount of money.

 

Saahil 20:51

So a lot of our newer initiatives, obviously, now that we’ve sort of scaled to a, we actually turned net profitable in March of 2019. And, till about a couple of months ago, that was true for the entire company. Now, for our established B2C business, it’s still profitable. But a lot of our newer initiatives, which obviously, are not revenue generating as yet, they burn some money. But it’s a pretty small kind of number, because the business model doesn’t necessarily require a lot of cash burn. It may require capital for a few things, but it’s not really a burn intensive business.

 

Siddhartha 21:30

So the scale that you share, there are no feet on the street for that you manage. People, merchants integrate your buy now button, and on the back end, they are able to select, which Courier or which delivery partner, they can go ahead with Shiprocket, and then you take care of everything between the merchant and the consumer, the tracking part notification for the consumer. So this is a tech layer, which you have built.

 

Saahil 22:07

That’s right. So the buy button is still under beta, and we’re trying various models there. Really today, the way it works is, once the order is done, we’ll integrate into folks like Shopify, Magento, yother ERPs, like Unicom, etc. And we’ll pull in whatever order information the merchants are generating there to give it to them in a single dashboard. It’s a self-service where you can come and connect your channel, or a large part of our Merchant, almost 40% of our volume of our transactions actually punched in by hand. So there’s a lot of social commerce, unstructured commerce going on. So players, like Meesho obviously, are trying to capture some of that on their platform, but there’s still so much happening on social channels that we are like the app of the hour in many ways for them to be able to help them, process those orders, collect cash on delivery, or whatever it is.

 

So, regardless of where they generate the order, it will, it will reach our OMS our order management system, from post, which the merchant can then allocate various carriers, they can see quality metrics, they can see pricing, we will print sort of compatible labels, we’ll let them generate the pickup, we’ll ensure the ups are working, we’ll ensure the pickups are done, we’ll manage the tracking end to end from that point on, in conjunction with our partners, obviously, at the courier side, and check for any anomalies during transit. Anything that goes wrong, our teams will sync with each other, to make sure that deliveries happen on time. We will help with the last mile workflow, where orders sometimes don’t actually deliver, especially if it’s a COD order. So there’s a bunch of inefficiency at that point, which can result in an RTO, which is the return to origin in an e-commerce parlance. And during this journey, the consumer is obviously kept in loop, we try to engage them through various channels like WhatsApp, email, SMS, IVR, to keep them updated on what’s going on. Wherever we need input from the consumer that’s also automated. So that the merchant isn’t sort of writing emails to and fro going crazy. We’ll take that input, push it back to the cat, so we manage that whole thing.

 

And then more recently, we’ve also launched a self service returns. So for merchants who want to power returns for the consumer directly, rather than having them send an email, make a ticket and sort of involve humans. Consumers sort of feel much more, I guess they trust a website much, much more if they know that there is a self return possible and they can just do it without like Amazon, without having to talk to anyone. So now we’re starting to power that as well including refunds.So again, the view is to be able to build the whole stack, which is the post purchase stack and and give information to the consumer to the merchant, and really build a seamless platform between the retailer, the carrier and the consumer so that all of this can, all of this can happen without any manual intervention.

 

Siddhartha 25:18

And recently, you have launched warehouses as a service for your merchants, or the D-to-C brands where they can enable same day or two shipping to their set of consumers where they can choose one of your warehouse partners to keep their inventory.

 

Saahil 25:36

That’s right. So it’s launched as a, see our hypothesis, again we were an integrations company, we were building software to help merchants integrate their shipping in a better way. From that we sort of grew to becoming a merchant experience company. We started focusing on all of the In transit issues, post transit issues, and whatnot. And from there, we are now on the journey to say, look, we should be a consumer experience company. So we can give CX on a tap or CX as a service to our merchants. Just plug us in, and we’ll take care of this will give you better NPS scores than you were before, better repeat than you had before, and so on.

 

So, as part of that endeavor, one of the things that, you’ll appreciate is the fact that, faster delivery is, is becoming hygiene, to be honest, that’s how we look at it, it’s no longer a luxury, because if everyone’s doing it, then if you don’t, then you lose out. And we saw this, we’ve seen it with the horizontal commerce stack as well. I mean, you look at 10 years ago, and you ask somebody, would you buy clothes online, no one would buy clothes online. So I read books and electronics, then clothes became real. And then books and electronics were coming in two, three days. Then two years ago, everything was coming the next day, or two days. And now everything is coming the next day, at least as consumers, we want that because now that becomes a habit.

 

So it’s clear that getting things faster is definitely a big experience builder. And the world is moving in that direction. Now, when it comes to smaller brands, if there’s a coffee brand in Bangalore, and they process let’s say, 1000 transactions a month, it’s not easy for them to figure out where to put their stuff, how to rent warehouses, how to operate them remotely. And that’s where we can step in saying, you know what, we’ll help you place inventory across various locations in the country. And then as and when your orders come in, we’ll allocate them to the nearest point of supply. So that same day delivery, next day delivery can be managed. So think of it like building a prime like experience for the direct commerce part of of the market, using third party warehouse partners who actually do again, sort of on ground stuff, and then we stay in the tech layer, we help manage the entire stitching up of this, the in house, warehouse operations, all of that stuff is managed through tech, which is what we control.

 

And in a more recent, there’s obviously this, this whole 10 minute, 15 minute 30 minute delivery, around grocery that’s going on, a lot of D-to-C brands have expressed interest in trying to do something like that on their own channels as well, again, similar thought process that consumers will eventually, their buying behaviors will shift, they will want things instantly, they will not want everything instantly. But if you’re a brand with 100 SKUs, they may want the top five, or you may want your top five SKUs to be available in a matter of a couple of hours as a great value added service to the consumer.

 

So we’re on that path now to basically say that, okay, well, we’ve already cracked same day next day delivery, how do we now bring the stuff even closer to consumer demand pockets, using micro fulfillment centers or dock stores, and then use a hyperlocal delivery network to be able to make the final mile and make it happen in two hours. So that’s sort of the evolution in some ways of the speed of shipping. And we think that it will keep moving, like a lot more of it will start moving into faster commerce or faster deliveries, I think that’s that’s the way the future is going to look in our opinion.

 

Siddhartha 29:30

And if you can share how, in terms of GMV or in terms of revenue in terms of merchants, either one of those, how has the platform grown year on year till now since the launch in 2017.

 

Saahil 29:45

Yeah, so, in 2017 I have some recollection, I think the first year our number of merchants was maybe like 2000 or something like that. From there, it became like 4x to 8000, again, like a three and a half x to 20-25,000. And then from there, we’re now sitting on 75,000. So it’s been growing between three and four, I mean, now let’s say two and a half and 3x every year. GMV, I don’t remember, I’m not triangulated. But I remember, when we crossed our first million shipments a month mark, it was not very far back, it was only two years ago, or two and a half years ago. And today we are processing in excess of 7 million shipments a month.So it has grown pretty rapidly as a platform.

 

And then also, as a company, we’ve had to kind of reinvent every few months, because hyperscale, things like whatever you design today, it’s the after three, four months, it doesn’t work. So you have to get better at being able to design 12 months ahead. And we had never had to deal with that problem earlier. So I think in the last six to 12 months, I’ve been focused on planning ahead in terms of what’s going to be needed, as this as we keep scaling the platform and the company overall.

 

Siddhartha 31:07

But how do you do that, because that’s such a scale that you operate in, many things break on a daily basis. So as founders, how do you dedicate your energies to fixing those things, as well, as then spending time towards building the processes for the future.

 

Saahil 31:27

I think it has to be done with a team, it’s impossible for one person or a team of founders even to do this, till about a year and a half ago, we were primarily a founder led, and operated company where we were saying, oh, we’ll fix the present, clean the past and dream the future and do pilots of the future and build the future. And we will be HR and everything else. And then you realize that you just can’t. I mean, it’s as simple as that. So we invested in a rock solid leadership team that sort of came on board, we already had great people working with us, we just sort of augmented that even more, to bring in newer leaders more experienced than us, leaders who understand the market better than us, who have seen scale much more than us. And we are learning from them, they are helping us kind of shape up into what we should look like, if we are to achieve the kind of goals that we are setting for ourselves.

 

So I think it’s a constant learning, to be honest,it’s a constant act of deciding what you are not going to do. It’s a constant act of prioritizing, focusing really hard on actual outcomes, and not sort of, what you feel like doing. So I think that’s sort of the big insight, personal insight, if I can share with the viewers, on this show.

 

Sidhhartha 32:52

And how’s your typical day split, like, On the work side,

 

Saahil 32:57

That also changes every three months; that lineup is also changing. But over the last six months, I’m trying to do a lot more Birdseye stuff, I’m trying to do a lot more external meetings. Because from being a pure operator to sort of becoming much more strategic is a very interesting ride, because it’s polar opposites in some ways, and I’m a fairly detail oriented guy. But I’m constantly working on trying, because there’s so many threads now that are happening in parallel. So typically, I think I spent a lot of time doing one to one with my team, I spent a lot of time doing monthly reviews, weekly reviews with a bunch of core team members. Core functions of the company. And I think that that pretty much works.

 

And we also follow the OKR process, which the company has been doing for about three years now. And that’s immensely helped, because I’m so happy we put it in place when we did, and saw the results also very early, like we saw the results in about 6-12 months of implementing it. So it just became part of the company culture. And then, as we scaled from that 300, 400 people to 750, 800 people now, it was much easier to at least align everyone on, where are we going? What are we doing, why are we doing it? And what is the expectation in terms of outcome. So, I think that some of those frameworks and structures have really helped to kind of focus on what matters at various various levels in the org.

 

Siddhartha 34:33

And currently, you charge your merchants a SaaS based revenue or a fixed fee or a mixture of both?

 

Saahil 34:41

It’s a mixture, so it’s a freemium model. You can come into the forever free plan or whatever and then you pay per shipment. And then you can also buy one of our membership plans that helps you lock in a better pricing, it helps you get access to a better level of support. It will give you more features On the platform and so on.

 

Siddhartha 35:01

So essentially, let’s say if you’re doing a $2 billion of GMV, and you are taking 100 million as your revenue, essentially you are making on a wholesome 5%. And would that be correct?

 

Saahil 35:19

Yes, that’s right.

 

Siddhartha 35:24

And today, you have raised a very large amount of funding. But if you can go back, from 2012, how did you raise your first rounds, and then subsequent rounds and along with the timelines for our listeners?

 

Saahil 35:38

Sure. So when we launched the company, I think I was telling you or someone the other day, we didn’t know we were a startup. We were just building a business, we said, look, this is interesting. Let’s do it. We didn’t understand VC, we didn’t understand it even existed to be very honest with you. And honestly, there it was also, pretty early. There wasn’t that much going on. Especially compared to like, now back in 2012. So on one of our scouting trips for customers, we ended up meeting Pearl Uppal, who was the ex CEO of Fashion&you at the time, and she was launching her own D-to-C brand. So we basically met her to say, Okay, well, we should build her website. and that was the purpose of the meeting. And by the end, she basically said, Look, do you have to raise some money? And he said, I don’t know, how does it work? And then we had a follow up meeting. And that’s it, like we, there was so much value that we could see, she would add in our thinking, and when we met her husband, Gaurav, who is the other partner at the fund, got in 5ideas startup, I mean, we had to raise about a crore in funding in middle to end of 2013, I forget exact dates.

 

And that got us the first sort of taste, I guess, of what VC meant and, how it could help us scale much faster, how it could help us scale the business, our thinking, get access, because there I mean we’ve been very lucky to bring on folks who’ve acted like two partners, we haven’t really looked at capital without looking at the color of capital from day one. Because, again, we were so focused on saying that, look, we need to build this business, and whatever we need to build it. We will try to acquire, and capital as financial capital is part of it, but it’s really the folks who can, who can help you operate better, who can make you better thinkers and that that filter still continues to date, by the way, as we think about, who we want to bring into the cap stack.

 

From there after a year or so, we met Rajan Mehra . He was one of the early founders at Bazi, sold it to eBay and ran eBay for like four or five years as a country head. So really, really solid on-the- ground experience, entrepreneur at heart, operator at scale. I think it was an instant click, like, he just got our business in 15 minutes, as we pitched it to him, and we love the fact that he was asking such meaningful questions and automatically tells you that this guy gets it. And that became our whatever series A, pre series A kind of around, we raised a million dollars from him, brought in a few other folks at that time, we brought in Vnext at the time as well, along with Rajan who connected us to Terusan there. So I think from there, obviously, I moved on to a further number of rounds. I don’t know if you want me to enumerate them here,

 

Siddhartha 38:52

Sure, would love to.

 

Saahil 38:54

Yeah, so then we met with Bertelsmann about a couple of years post raising from Rajen and where we were trying to do the longtail app pivot, when we’re trying to build Kraftly, which is when Akshay had joined us as the CBO at the time, by the way, he got elevated to co-founder in 2020. Because he just sort of stuck it out through thick and thin he was, I think he was already in that mentality day one, but I think he just kind of built his equity over a period of time in every fashion with us, and I think he deserved sort of more, deserved to be a co-founder the company. But anyway, so Bertelsmann came in 2016. We raised about 8 million between Nirvana and Bertelsmann and Recruit Strategic Partners. Went on to raise from Tribe capital in 2019 further, I think we were at that point, we had sort of already scaled Shiprocket to like half a million to one million transactions a month kind of number.

 

So there was now clarity in the business model, it had proven some level of scale, it was like, now it was really about going for the big target of saying, Well, how do we expand our thinking? How do we go after newer market segments, do we build more features? Do we add more service? What do we do? I mean, that was the time where Tribe really helped us, kind of narrow down on that one thing that can help, they call it an atomic unit, at the firm, and again, really, really helped us focus very hard on what was going to matter for the company. So we said our atomic unit is shipments. And that’s all we did. Everyone in the company soon was talking about shipments, no one talked about revenue or anything else, because the rest of it honestly was designed in a way that it would work. But when everyone is focused only on one metric, it does start to move, and that was a great learning opportunity for us as well.

 

Siddhartha 40:57

How much did you raise from Tribe at that point of time?

 

Saahil 41:00

So we raised about 13 million from Tribe.

 

Siddhartha 41:04

That is Arjun Sethi.

 

Saahil 41:06

Yes, that’s right. This was in late 2019. I think, again, I’m just trying to recollect in my head, and then in 2020, we raised from March capital, who basically is a US based investor, they do a lot of tech investing. They had a lot of views on global tech companies and how they are built and what they should be thinking. They have a big India to world team as well. When it comes to tech, they’re doing deep tech Data stuff. So we found them to be a great fit. And so they came on board. Driver invested, Bertelsmann reinvested there. I’m just trying to get my timeline correct. But I think we raised 27 million at that point. And then further on in July of 2021, we ended up meeting with the PayPal folks, who along with Bertelsmann and Tribe, and Info Edge ventures, did a round of about 45 million. And then obviously, after that, we did our most recent one in December, which was with Temasek, Info Edge, Lightrock, Zomato . So that’s sort of been the journey.

 

Siddhartha 42:27

And how did you get Dipendra Goyal interested in the business?

 

Saahil 42:31

Yeah, so Info Edge came in, in the July round. So they got us to kind of meet with him. And we were anyway, we didn’t have a very good reliable, logistics, I mean, hyperlocal logistics partner yet. So we just out of a brainstorm, kept thinking that, well, they’ve got such a great fleet, they have hundreds of 1000s of riders, why couldn’t we use them. And obviously, initially, their view was, look, we are not in the logistics business, there’s not a job, happy to guide you. And Dipendra put in an angel check at that time, just so we could be in touch and then post that as we started racing around, and then I think things just transpired, one thing led to another. And they said, like, we’re happy taking a position in the company as well. And we’ll help you as financial investors, but we’ll also help you as operators. And then finally we do run a hyper local fleet, maybe we can add some value there. I think we love the team there. And I think it was an instant click for us again. So I think for us, we are a very gut based operator, we don’t over optimize too much of this, because I think our historical learning has been that, if it feels right, it probably is right. So we don’t try to overthink some of these things too much.

 

Siddhartha 43:53

So essentially, in all the rounds that you have mentioned you raised, there would have been like, the minimum kind of a negotiation to and fro between you and the venture partner. And if it’s extending to a large point of negotiation, it means something is not right.

 

Saahil 44:12

Yeah. So at the end of the day, we have very rational folks. If the ask is rational from either end, there is no need to get into a negotiation, to be honest, negotiations are really, when there’s some irrationality, in a discussion, otherwise, it’s a discussion. It’s just somebody, one person trying to make the other person see their point of view when, so I think that way, it’s been pretty straightforward. We’re not had a lot of negotiation in any of our rounds, by the way. It’s been quite straightforward in terms of structuring, quite straightforward in terms of, because like I said, we cared more about the color of the money, always than just what the capital alone could do for us.

 

Siddhartha 45:01

Got it, if you have to summarize your learnings, Saahil, over the last 9 to 10 years, and give three to five pointers to our listeners, who are all entrepreneurs, or what would they be on building business on scaling business, from your experience?

 

Saahil 45:23

Yeah, I’m trying to think of the top three or four, but one that comes to mind is just on focus, we addressed it earlier in the call. It changed our life, in every way, think about it. So getting that sort of narrow razor sharp focus, and it takes time, because you could be focusing on the wrong thing. And then obviously, it’s not good. But if you keep edging, everything you do, then you will basically be all over the place. So basically being true to yourself and saying, Look, I’m going to focus on one thing at a time, and then either kill it or scale it, or whatever it is. That is one big one for us, and it can be a small niche of the market, it can be a vertical segment that you break, it can be a horizontal sliver of segment that you work on. But really try and pick something small, I always advise people that don’t worry about the market size. I know, every VC will say the other way round. And they are right, they’re not wrong. But I’m saying as an operator, when you’re about to build a business, you should worry about how deep is the problem that you’re solving, and whether there’s at least enough customers that can help you pay for your business. If that’s true, then it’s worth going after. Because what’s your downside, really.

 

And obviously, go after a growing market don’t go after a declining market. If it’s a growing market, and you found your niche, then at least that’s what worked for us. And I do believe that it keeps life very simple, it becomes very decluttered. If you focus on one thing, you can actually go deep and execute really well. I think the other thing is sort of just having a very first principle mindset to problem solving. If you can’t explain it to yourself, then it’s probably wrong. I mean, if a team of founders and leaders in the company, if you guys are not able to explain why something will work, or it won’t, it’s probably not going to work. Because, just because four other people are doing it or X company raised Y dollars in Z economy, it doesn’t matter. But as long as you have conviction, then go after it. So being very first principled about that, and being honest to yourself saying, Look, I don’t think this will work. But let me build this anyway, because it will help raise money is a bad idea. Eventually, it won’t sustain.

 

The third thing is, when, again, we use this a lot within the company, we like to think of every transaction as a win win, We don’t believe that businesses that are value transference businesses are very sustainable or meaningful, businesses which are value creation businesses, which means that every stakeholder should be better off after their interaction with you. In our case, if it’s a carrier, or a merchant, or a consumer, or my employee, or my shareholders, anybody who interacts with your platform should be better off. So we live in this dream, we believe this to our core, and every decision we make, every new strategic move we make everything we try to do at the company will put that sort of litmus test to say that look, who’s the loser here? And if there’s even one loser will say that look is not worth it, because it’s going to be short term.

 

And the other thing I often talk about internally is that, and it’s true for us as well. We always believed we wanted to run this company forever. We’re saying, Look, we’ll do so next 50 years, 20 years, whatever long, however long it takes. And that brings a great amount of freedom in your thinking, it actually decluttered a lot of the unnecessary stress that you may be taking on as a founder. Because, again, assuming that is what you want to do, if you want to build it quickly and sell it, that’s fine, too. But at least for us, what we learned is by pushing out the sort of outcome, in your head to 20-30, you start thinking of things very differently. You start looking at your decisions very differently. You won’t worry about oh, but I have a board meeting coming up next quarter. What am I going to do? It doesn’t matter. I’ve been doing this for 20 years. I better do what’s right for the long term.

 

So I mean, in short, it’s long term thinking, but just saying it didn’t work for us until we started telling ourselves that everyone in the company that we will do it in 20 years should be doing this today. And that just changes how you will approach a problem, it will change the decisions you make. And of course, you have to be very patient. It’s also sometimes it will lead to a lot of opportunity missed in the short run, but then again, if you’re doing it for 20 years, then it’s fine. So I think those are a few things that come to mind. The rest, I think I spoke about sort of prioritization, some of the more basic ones, it’s a must, don’t build lists for yourself that are unachievable. They’ll only make you depressed, they will not give you any, it will not push you to do more, believe me.

 

Small advice that my wife gave me a few years ago, and it works wonders if I should build a list of 20 things, like a brain dump, and I know I can’t do it. But I would write it anyway, just saying, there’s so much to do. And then you just feel like shit, at the end of the day saying I’ve done one of these 20. So then I started writing only to say, Okay, I’m just going to put what I can do today, and forget about the rest. we’ll deal with it one day at a time. It worked wonders for my morale, it was super, I don’t know if that’s helpful. Maybe it’s just me, but I thought I’d share anyway, it’s something that really helped me out.

 

Siddhartha 51:24

And as a team, say of 750 people, how do you make sure that nobody is running after the next shiny object? And people focus on the process rather than on the goal?

 

Saahil 51:42

I think the OKR process just does that, because it’s a cascade. So when you set OKRs for the year, and OKRs always top down, So you said, here’s a rant today, here’s where I need to be in 12 months as a company. And the process is pretty simple. From an output perspective, but to get to the five things are six things you need to do, it does take a lot of focus and thinking and brainstorming, discussions, debates. But once it comes out, you’re like, Okay, these are six things, here’s how we’re going to measure them. And nothing in the company that is being done should be outside of these six, they should all roll up here. So that really brings in some level of guardrails in terms of, well, what are we going to do this year, this quarter, this month, this week.

And if there’s any item or any tasks that’s not rolling up there, it’s not going to get done, like it won’t get picked up, no one’s going to approve it, because it’s going to cascade down.

 

So I think that process alone has been very, very helpful in terms of just aligning everybody to this common goal. And again, initially, we had a lot of trouble adopting OKRs, and I was about to write it off. But then as I started seeing the results, it was just like, Okay, let’s take the pain to implement this, because this really is very, very useful for us. So I think that alone, I believe, brings a lot of focus into the company. And then obviously, you need to do innovation as well. So one of our OKRs, by the way, is to innovate for the future. So we have a set of people working on a lot of stuff that is completely experimental, I call it the minus one to zero, which is saying that look, there’s going to be a high death rate in some of these projects, but we got to do them anyway. Shiprocket was a minus one to zero project at some point. So I think it’s important to do it, but then they have to be limited to that bucket. And then that bucket has its own tenets. What does success look like? How much time do you invest in what, and you can wear a different hat when you look at that particular bucket, but for the rest of the org, and the rest of the five OKRs, let’s say you want to just make sure that they are focused only on doing.

 

And the other thing is that you separate those teams out, one of the things I’ve learned is, it’s not a great idea to put like a growing franchise with a very different rhythm and focus with an experimental research oriented team in the same team. They need to be a dedicated, separate set of people, even physically separate, if possible, I just feel that it’s a very different rhythm. So you need to, or at least we found the need to let them operate a little bit in silos until of course, something comes out and you know, okay, this is worth putting back into the main platform or this is worth doing X with or Y at that point.

 

Siddhartha 54:44

And OKR is one thing, but aligning the company for the long term, and would love to learn more on that and this minus one to zero part in on the experimental things. We’d love to learn more on that

 

Saahil 55:00

Sure, so I think we, we have always been a very people centric company, we were 300 odd people. Between the four co founders, everyone knew everyone, we had personally interviewed most of the people, we understood there was a unsaid, but very strong shared culture, and value system in the company, whatever our values were, everyone knew that this is sort of acceptable behavior. And this is not. As that scaled, obviously we brought in better people processes, we hired our people leader, who’s now helping us sort of propagate a lot of those things in a more scalable fashion. So I think that just binds the company together, because hopefully, everyone is thinking from a common place of values. And we don’t see how you can build common goals if you don’t have a common value system, like a language of emotions. And people have to have the same language and similar language, even if not the same.

 

So that’s something we really focus hard on, whether it’s during making hiring decisions or performance management, we make sure that the sort of value system and the culture system is upheld, because we understand how important, it is a glue. It’s very important, no matter how someone’s performing, if they don’t sort of understand or buy into the whole value system, then we’re probably a bad fit for each other. And other than that, sort of having a clear strategy, being extremely transparent, about successes, failures, we have a town hall every month, it could be a small check in 30 minutes, but we do it, we’re open about saying, Look, this has worked, this has failed, we’re open about the strategies, every time we made a pivot or expansion as well, we’ve been very vocal about it, so that people can, understand what’s happening. And I think that brings transparency, it brings a certain amount of trust within the company.

 

And along with that, as I said, from a more operational perspective, the OKRs really helped the task management well, so it’s a good blend of keeping everybody focused on that long term, vision and goal. The minus one to zero is, actually, we’re a company that thrives on innovation. So we’ve always done it, we just never been able to articulate it that well to ourselves or to our team. And now externally, it’s something we just have in our DNA, we’ve always done it from day one, we look at it, it goes back to solving problems from a first principle perspective, and not caring about, how others did it, etc. So I think that thinking process, as it started translating into business, or translating into a growing scaling platform, we wanted to replicate it, and keep on doing it so that we have a growth engine of the future.

 

And our fulfillment network, for example, two years ago, it wasn’t minus one to zero, there were only three people who were trying to build the mini stage to see what happens, it was just a test that could have failed. And many projects do. So everything we do in those programs, they’re supposed to have a high death rate. If they don’t, then we’re just not doing enough, we’re not taking enough risk in experimenting, the whole point of experimentation is to set a hypothesis. So we’ll say that if you’re trying to build a new feature, or a product, if it doesn’t reach X, adoption X million dollars in half, a half a year, nine months, then we’re going to kill it because it’s not worth spending more time and energy on. And if it’s able to graduate from that particular milestone, then we can put it into a zero to one bucket. And then there’s a different set of targets and then one to 10, and then so on.

 

So we think that everything every workstream in the company needs to fit on one of these classifications, so the right treatment, the right kind of people, the right kind of freedom, the right kind of processes can be put there. Because if you imagine trying to do a, if you put a guy who’s great at doing 100,000 journeys, and you put them on a minus one to zero, they’ll fail, because they and vice versa. Because it just requires very different skill sets and very different kinds of DNA to do any of those components. So we like to think about things on that sort of spectrum, and then put in the right folks at the right place at the right time to try and solve some of these problems.

 

Siddhartha 59:40

I would want to continue for more and more because it’s amazing that at such a young age, you have so much clarity, Saahil. Is there a method to this madness, like you read a lot or you spend time in meditation a lot,

 

Saahil 59:55

I used to read a lot in the early days, I spent a lot of time reading all kinds of anything, business books, fiction, spiritual books, whatever it is, I haven’t been able to do a lot of it in the last few years, but I think I’ve been blessed with having sort of just amazing mentors, and I have team members, who mentor me, people who worked at a larger scale than me, I’m quite introspective as well. I, my founders, we keep each other honest, just kind of sharpening each other all the time. And then our investor, some of our investors are very close, have become very close mentors to us. They obviously have operated, most of them have operated at some point. But they have a very keen sense of strategy, they have a keen sense of how other companies work because that’s what they do, they analyze that. And that’s been, that’s been immensely helpful as well.

 

So I think in short, it’s about having a very open mind, Knowing that you’re gonna have to learn constantly. Because you need that, and you can learn from anywhere, it’s not like, constantly learning. Everything you do every time you’re learning constantly. So just being cognizant of that, so that you can try and influence more of your time towards learning more and more, and then obviously being sort of trying to synthesize that into whatever is your problem and how can you apply all that you’ve picked up to your set of problems?

 

Siddhartha 1:01:24

Thank you so much Saahil. It’s been a great learning experience for me walking in your shoes. I hope my listeners are able to take away the same kind of lessons that I took from this conversation. I would have wanted to record for a few more hours, but time is a limit. Thank you so much again.

 

Saahil 1:01:45

Thank you so much Siddhartha for the kind words and thank you for hosting me. Really appreciate it and look forward to staying in touch

 

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