Vineeta Singh 00:00

Learning TAM for us was the hardest. You know something that’s really easy. And if it is really easy, then organically it’s going to go viral. That time, it was absolutely… there were no examples of couples who raised money and succeeded. The biggest mistake is to try to build a business around what will be cool for a week. Everything’s lost, right? (SPEAKS HINDI) So what’s left, right? The 30 lakhs that are left in your account, what are you going to do by saving it? How much are you going to stretch it? Might as well, you know and do that one last shot of building something. And that’s how sugar came about.

Siddhartha Ahluwalia 00:37

Welcome to the Neon Show, where we talk about journeys of some of the most successful Indian entrepreneurs, their ups and downs and their life learnings. Today on the Neon Show, we have Vinita and Kaushik, co-founders of SUGAR cosmetics. In 2007, Vinita Singh rejected a one crore job offer when she had just graduated from IIM. Ahmedabad. She started multiple ventures before starting SUGAR cosmetics. Now we know Vinita and Kaushik as household names. In today’s episode, we dive deep into the journey of building SUGAR cosmetics together, their relationship as a couple, as well as a lot more insights and stories about Shark Tank, co-founder relationships, and parenting as an entrepreneur. I would like to thank our sponsors Prime Venture Partners for sponsoring the neon show. Hope you enjoy the show!

 

Siddhartha Ahluwalia 01:31

I want to start on a lighter note, Vinita after you, many girls are opting for specially in entrepreneurship Bengali husbands—

 

Vineeta Singh 01:37

[Laughs]

 

Kaushik Mukherjee 01:37

[Laughs] That is a first!

 

Siddhartha Ahluwalia 01:44

You have mentioned so many times, right, that Kaushik takes care of more than 50% of the share… at home [laughing]—

 

Vineeta Singh 01:51

[Laughing] I’m making you famous. I hope you haven’t started getting relationship offers on twitter! (SPEAKS HINDI)

 

Vineeta Singh 01:59

Yeah, I think I should be careful about it because these days, Instagram Kaushik put some posts and you know, people started commenting ‘Your husband is very handsome…’ [Laughs] This whole Kaushik PR, I have to tone it down a bit, it’s getting too much! But no, I genuinely, you know, I stand by that. I think traditionally, if you look back at the last 10-20 years, then one of the more forward states for women has been Bengal (SPEAKS HINDI). I think it’s not just me. I have a lot of other people I know whose moms-in-law, their husbands are from there. I think there’s a habit of, you know, close to 50-50 partnership at home because a lot of women also worked or at least they were treated well at home. I think some parts of India there is still some disparity for women. So yeah, I would not extrapolate that to all Bengalis. So marry at your own risk. I will not underwrite any Bengali for you. [Chuckles]

 

Siddhartha Ahluwalia 02:57

[Chuckles] Maybe you can tell about disadvantages of having a Bengali husband—

 

Vineeta Singh 03:01

[laughing] To balance it out, yeah…

 

Siddhartha Ahluwalia 03:03

So I remember in 2008 I was in IIM Ahmedabad but not as a student. I was doing an internship there under Dr. Sanjay Verma.

 

Vineeta Singh 03:09

Oh really!

 

Kaushik Mukherjee 03:10

Oh wow!

 

Siddhartha Ahluwalia 03:12

(SPEAKS HINDI) So during that time I think IIM Ahmedabad was the place to be for entrepreneurship because two studs had graduated Sanjeev Bikhchandani and Deep Kalra, right?

 

Vineeta Singh 03:23

Or Deep Kalra, right. Absolutely.

 

Siddhartha Ahluwalia 03:25

And there was an entrepreneurship summit happening, which the entire hall was packed, right and on the stage was Sanjeev, Dee[ talking about how this is India’s moment in 2008. It’s been 15 years since they’ve said that! [chuckles]

 

Vineeta Singh 03:38

[Laughing] But I think last seven to eight years a lot has changed (SPEAKS HINDI) I mean,the journey from 2007-2015, I think a lot of companies, internet especially type companies it was like ‘Yea yeah it’s gonna come but it still wasn’t coming’. So I mean, that I think, you know, those numbers really were unexpected, but people expected those to come around 10 years back, which didn’t happen. Because India was late to the party—

 

Siddhartha Ahluwalia 04:06

And even now it feels like nothing has like you know… Nobody’s late to the party because—

 

Kaushik Mukherjee 04:10

Yea yeah we’re just getting started—

 

Siddhartha Ahluwalia 04:12

What next year… 10 years holds for India.

 

Vineeta Singh 04:15

Absolutely.

 

Siddhartha Ahluwalia 04:16

Global recession which India’s almost least impacted by.

 

Vineeta Singh 04:20

Yeah, absolutely. Absolutely. (SPEAKS HINDI) No, so I think even now like people are saying access to capital has reduced but if there’s a place to still invest in, that’s probably still India because you know their… all their hopes on China are not playing out as well. US, Europe 2 percent max GDP growth or flat. India is still at six to seven percent which is a big deal.

 

Siddhartha Ahluwalia 04:42

(SPEAKS HINDI) I want to have ask reunions… I am training just for you for the last one or two years and how would they be before?

 

Kaushik Mukherjee 04:47

[Laughing] Now they look at our faces! —

 

Vineeta Singh 04:49

(SPEAKS HINDI)The thing that people forget is when they read net worth that entrepreneurs’ net worth is not liquid so my batchmates rag me so much saying ‘Why don’t you sponsor the reunion?’ [Cheekily] I reply saying i don’t have that much money. Net worth isn’t liquid, right? Net worth is in shares.

 

Kaushik Mukherjee 05:06

(SPEAKS HINDI) Over the last 10 years there is this closer group of people you’re kept in touch who have been your support system, so with them nothing’s changed thankfully because they saw us when nothing was working. Now also thankful that they are able to just be friends, which is over and above anything else. With the other batchmates, as she said, it’s very different. Over there the people who were very, very successful on campus; Now they are of course successful, but some very, very surprising names come up. And it’s very intriguing. There is also a dark side to this. There are some people I know who don’t attend, and actively avoid get togethers and reunions because they’re like, ‘you know, no, no, I feel the pressure. This and that’ it’s fine each to his own, but yeah that also plays out with each passing year—

 

Vineeta Singh 05:52

Yeah and I still feel that while it’s been 15 years since leaving campus the careers that are there like, when you’re on campus you used to think five year-six year timeframe. I realized that it’s like 25 years, but you know, in 40 year reunions when you think about people then even more things change. So I think that like, this is not the finish line. It’s I feel that you know, at any point if we think that we’re anywhere close to close to the finish line, it’s incorrect. [chuckles] Because, if you know, if you look at Warren Buffett’s whole story, I think he got to a billion by about 60-70, right, and then billion to some whatever 80 billion was in the next 20 years. (SPEAKS HINDI) So yeah, I mean, I feel that like right now the party has just started! And, you know, I think… like to think that where we are and all of like… in startups this is what happens as any kind of success that you have, it is you know, everything can change the next day and no high is ever high as it seems and no low is ever low. We’ve seen three cycles of the market crash and we’re in the middle of the third. (SPEAKS HINDI) It’s from the time we started. I’m pretty sure in our entire entrepreneurial journey, at least six-seven more will take place so it doesn’t matter. You know, you have to just figure out a way to stay alive and do good work, I think.

 

Siddhartha Ahluwalia 07:10

One personal question I wanted to ask you both, right, Me and Nansi are also co-founders in this podcast and fund that we run. (SPEAKS HINDI) So our lines get blurred sometimes that I don’t know whether the wife is giving feedback or the co-founder [Laughs]. We struggle a lot with that so how do you both—

 

Kaushik Mukherjee 07:10

[laughing] Oh my god, this is a new question actually that’s why we’re also pausing—

 

Vineeta Singh 07:15

[laughing] (SPEAKS HINDI) I think, like people say, that keep your personal/ professional separately and for the longest time we also believed we should do that. But it is all blurred because it is like, the business is personal and, you know, it’s like, and of course, we are both invested in it. (SPEAKS HINDI) And like, you know, apart from the respect we have for each other as husband/wife, you know, 10x more respect we have as co-founders otherwise could have started it with anybody else also. So, I feel that you know as long as you figure out a way to, like have that respect in place and I think the blurring of lines, and, you know, personal/professional people mixture that happens, all kinds of personal conversation at work and work conversation at home, the latter being more, that’s, you know, so if you try controlling, we tried a lot to say, okay, we will draw this line here, whatever, create those boundaries, like the balance that happens and all of that. But we realized that, you know, that’s really not possible. And just remember the fundamental premise, that, like, you know, have a lot of mutual respect, and enjoy what you’re doing. And after that let it I mean, let those lines blur. I think there is a beauty in those lines blurring because that’s where the, you know, that whole trust comes from, like the trust started with the personal relationship. So I think blurring lines is not a problem—

 

Kaushik Mukherjee 09:01

(SPEAKING HINDI) I think you’re banking on a certain mystery. You can’t be hard-coded in saying that, you know, once I reach home, I will not discuss work, or after 10 pm I will not discuss work… that doesn’t work. But I think because that doesn’t work, on the other side, sometimes it’s happened where in we’re discussing work while driving, and it’s very organic. There are times when one person feels dis-organized and the other person doesn’t feel that. So then I think it’s perfectly okay, like you give her a note say let’s discuss this tomorrow. And that time, it’s a very quick tap out, okay, we’ll do this tomorrow and that happens because of the again, the respect and the chemistry.

 

Vineeta Singh 09:36

The other thing is space, like having something like there are things that you know, like for instance, Kaushik is a late night person. I’m a morning person. So, you know, we have those few hours where there is just like me time and ability to build our own passion, hobbies outside of the stuff we do together. I think and even at work, we have very clearly defined roles so that we can stay out of each other’s way. So I feel that being like doing something where you’re together, like day and night, but still having space and freedom to do your own thing, that is a very hard balance. (SPEAKS HINDI) But we keep you know that balance because the moment that balance, we start interfering in each other’s zones, then it becomes, you know, even one day becomes very tough to get through.

Siddhartha Ahluwalia 10:23

How do you both disagree and commit?

 

Vineeta Singh 10:25

[laughing] We do that a lot—

 

Kaushik Mukherjee 10:28

[laughing] She disagrees and I commit!

 

Vineeta Singh 10:30

No, no, we do that a lot. We, you know, I think we can talk about it, how we divided our roles, but I think almost one or two times a day it happens… disagree and commit.

 

Kaushik Mukherjee 10:40

So at work, it’s easier actually because at work we’ve assumed that we will have a strong point of view on any part of the business. But if the other person feels very strong about it, then we know okay fine. ‘I just want to place it on the record that I’m not happy with this packaging, of this product. It’s okay as risk is yours then glory is also yours.’ [chuckles]. But you know, I mean, so at least, that space we give each other. In personal lives it’s a little different, because over there, there is no demarcation of who does what so—

 

Vineeta Singh 11:10

But we still like… those defined roles like when we started, we made a list that these are things for instance, like marketing, technology, ecommerce, operations, all of this Kaushik handles. I look at retail, finance, product. So there is, I mean, if it comes down to a decision on you know what the script for AD will be, what will the angle be for ADs it is his decision. So I can like, you know, give him like 100 days of nonstop feedback saying that this, this, this, but you know, if he’s like taken a call that this is how it’s gonna be, then, you know, like I have to disagree and commit. And that’s step one. I think disagree and commit are one step (SPEAKS HINDI) where you say that I’m gonna work hard to make it succeed. Second is not trying to be the I told you so person, because I think that is very important that some, you know to let the other person not have to second guess their decisions and I think that respect between any co-founders and forget married, but it’s very important that one is that, you know, whatever, wherever, whichever area whoever’s decision is final, the other disagrees and like, puts in still all that effort to make that decision work, because that’s in the best interest for their, you know, company, but also, if it doesn’t work, don’t be like, you know, so small that you want to go back and say, ‘See, I told you, so I knew that it was right.’. I feel that, you know, that like is a huge, any co founder relationship, and that’s one of those trust disrupters. Because at the end of the day, like, you know, in startups, you’re taking decisions with 60% information. You can’t ever wait for 100% will be too late. So at 60% information, if you make a decision, it can go either ways and in that to you know, be like I was right. I think that need to be right can always impact team severely. And I see that happens so much. You know, like in startups with young founders, because if you have four people from IIT. Everybody’s alpha, opinionated, intelligent, right? So there will be constant disagreements, and in that, that need to say that I was intellectual, you know, intellectual wins, is I think you know comes in the way of building a great team. You should not be excited about celebrating intellectual winner that I was right. You can celebrate in your head, but I think that can bring the morale down of the team.

 

Siddhartha Ahluwalia 13:45

I think one solution to that can be the intent, right of making the person make the decision. If the intent was right, forget about the outcome—

 

Vineeta Singh 13:55

Yeah. Yeah intent and process. After that predicting the outcome is hard. (SPEAKS HINDI)

 

Kaushik Mukherjee 14:01

See, at the core of this is ego. You know, I was right. If you’ve gone through an extended period of failing together, any co-founder that you’ve seen each other breakdown and cry, and you’ve seen each other, you know, struggle so after that the ego goes away to some extent, so you don’t end up loading but yeah initial days, it’s tough.

 

Siddhartha Ahluwalia 14:22

I can imagine right, the 2012 to 2018 part, right? That would have happened a lot, right? Where either person has taken a decision and that failed. Other person would have kept quiet because of mutual respect—

 

Vineeta Singh 14:35

Yeah and you know the decision was not correct. (SPEAKS HINDI) To introspect and learn from that is very important, but to try to show intellectual superiority over your co-founder or anybody in your leadership team… I feel that that is, you know, that’s a cheap thrill which comes in the way of relation— I mean, like solid work relationships.

 

Siddhartha Ahluwalia 14:58

I want to go back to right starting off SUGAR from Fab Bags, because you come from the best institutes, right? Over there you get taught that marketing and after first startup you must have felt ‘All VCs are asking for TAM so go behind TAM, right?

 

Kaushik Mukherjee 15:20

[chuckles] (SPEAKS HINDI) We didn’t do that initially as we didn’t accept it. i remember one of the funds who talks went really, really far which, back to the envelope. This doesn’t look like it’s going to be more than 80-100 crore business. I don’t know about you, but I, it’s sort of whatever they were telling me that, ‘You know, the, it’s not big enough, it’s not going to grow, sort of translated, and I received the message as ‘Listen kid this won’t be possible for you.’ and I was like, how did he say this,and I’m telling you we could have started SUGAR one year earlier. At least I was in denial for one entire year saying that no, no we are going to crack something.

 

Vineeta Singh 15:51

Yeah, I think TAM learning for us was the hardest. Even like in SUGAR’s journey, we made mistakes on first going after a smaller TAM, etc. And I think, you know, the fact that like in the VC hierarchy of things, I mean, there is of course, founding team. There is execution, you know, execution excellence. Then there is like, you know, traction, like how it’s growing, right? And then there is TAM. It is so hard for any entrepreneur, even now, I see so many entrepreneurs even with so much being written about it,you’re not understanding that this TAM comes above all the others. It just seems so illogical, right? You’re like it’s a good business, our founding team is amazing and numbers are awesome, growth is amazing, amazing execution and yet if TAM is not there… but you know, their whole fact that VCs make money out of businesses, which potentially are going to be like a, you know, few billion dollar exits, and you know, that’s hence, nine out of 10 failing is a part of their thesis. All of that understanding and putting yourselves in their shoes, and then trying to understand that decision is very hard. And I feel that you know, even like after getting hundreds of rejections, it’s difficult to shine because you’re like ‘I am building such a great business. Can’t you see the traction? Can’t you see the NPS? Can’t you see the reviews?’ Right? But I think we’ve just learned in the last two, three years, the very hard way. But I feel that you know that when we started Fab Bag, we were in that, you know, zone where we were because of the fact that we came from these legacy colleges, where we thought that a good business is a differentiated business. In the process of differentiation, sometimes you end up creating something that is so complicated that your consumers also don’t understand and that’s what the mistake that we did with Fab Bag was. And so I think the one learning we had from Fab Bag to SUGAR was that you know make something that’s really easy. And if it is like really easy, then organically it’s gonna go viral and the initial traction that zero to one will happen without any strain and it was I think, for the first time because we’d struggled so much to sell various things because as an entrepreneur you’re always selling right? So every time you’d like struggled so much in our previous versions of startups that it was like it’s flying off the shelves or ecommerce shelf as you call it without any push was crazy. Also that feeling of product-market fit, you know you feel it in bones… that’s how you see traction happening. (SPEAKS HINDI) So that I think was a good thing but still I feel that the TAM learning came even later in life because you know even in like in SUGAR’s own journey like right the price point at which the TAM is massive. We took a while to figure that out and we’re still like learning about it, how to grow the market. I think it this TAM also is a conundrum. You know, one is that like without a good TAM you won’t raise money. The other is you can’t always go after the big TAM. (SPEAKS HINDI) You have to sometime like go after a smaller TAM and then expand the market. So it becomes a chicken and egg situation as to what to do first.

 

Siddhartha Ahluwalia 19:10

(SPEAKS HINDI) And already 50 people are chasing a bigger TAM, right?

 

Vineeta Singh 19:13

(SPEAKS HINDI) Yup running behind it.

 

Kaushik Mukherjee 19:15

Yeah, but there’s one more thing about India that today’s newest is tomorrow’s market. So especially the beauty and online we got lucky of course, but this point about make something easy to understand. For Fab Bag, the whole selling process where I remember, we used to explain to them what a subscription is. ‘No, it’s not, you don’t have to pay every time. We charge one time, but we’ll send you a questionnaire. Fill up your questionnaire preferences. We will take that and send you a bunch of products. No you can’t see the product. We are going to curate the product. I said a lot of things, and this was very normal to us. We used to do it for a living everyday. [chuckles] I remember the first time we tried to sell our first product for SUGAR it was a kajal. It was one of those Twist and Shout fadeproof kajal and we were talking us on Cargile… The person just asked ‘How much is this for?’ (SPEAKS HINDI)—

Siddhartha Ahluwalia 20:02

(SPEAKS HINDI)[chuckles] He understood it already and you wanted to explain the concept even further—

 

Kaushik Mukherjee 20:08

We’re like what. We just skipped the second part and I mean that I remember so clearly because I was like what were doing for three years… (SPEAKS HINDI)

 

Vineeta Singh 20:14

(SPEAKS HINDI) Yeah, I think we need to apologize to a lot of entrepreneurs whose life we ruined because since we started subscriptions, forget just beauty… food fitness education, what all categories brought in subscription and everybody used to reach out to us to say that you know, advice and we would be like to everybody that we’ve learned the hard way. It’s very hard to scale subscription in India. It’s not going to work especially with paying money in advance. It’s just and you know, like for every entrepreneurs like me ‘We will prove it to everybody no matter what!’ and I think we also went through years of saying VCs are wrong Galatia, we will crack this market. In India, the subscription revolution we will bring—

 

Kaushik Mukherjee 20:56

We overestimate I think the individual brilliance and excitement and underestimate TAM’s importance. I was just explaining to someone that you may be the world’s best high-jumper, right? (SPEAKS HINDI) Imagine if your competing with somebody who just 1/6 high-jumped on the moon. With mediocre talent he or she is going to overshoot you. TAM is just that so once that was clear in our mind… it took many years—

 

Vineeta Singh 21:18

And even when you do those consumer conversations and all that… all of us are living like Bangalore, Mumbai, Delhi. Sitting in Mumbai, you speak to people who are earning 20-30 lakhs per annum. That is I mean the average household income if you look at it is like so low. (SPEAKS HINDI) In India, you know average is $2,000 average per capita income right? So, when you’re looking at that, you know, that is and you don’t go to a Yavatmal and a Siliguri to do your consumer research and you think that you can build like a 1000 Crore business based on the insights you got from the people you spoke to in Mumbai, Delhi. I think that is the root cause of a lot of underestimation… sorry over estimation on TAM, because what works for that Bombay, Delhi consumer is so different from what you need to build 1000 crore businesses with consumers coming from tier-two/three cities so that evolution I think every founder will some point have to figure out.

Vineeta Singh 15:51

Yeah, I think TAM learning for us was the hardest. Even like in SUGAR’s journey, we made mistakes on first going after a smaller TAM, etc. And I think, you know, the fact that like in the VC hierarchy of things, I mean, there is of course, founding team. There is execution, you know, execution excellence. Then there is like, you know, traction, like how it’s growing, right? And then there is TAM. It is so hard for any entrepreneur, even now, I see so many entrepreneurs even with so much being written about it,you’re not understanding that this TAM comes above all the others. It just seems so illogical, right? You’re like it’s a good business, our founding team is amazing and numbers are awesome, growth is amazing, amazing execution and yet if TAM is not there… but you know, their whole fact that VCs make money out of businesses, which potentially are going to be like a, you know, few billion dollar exits, and you know, that’s hence, nine out of 10 failing is a part of their thesis. All of that understanding and putting yourselves in their shoes, and then trying to understand that decision is very hard. And I feel that you know, even like after getting hundreds of rejections, it’s difficult to shine because you’re like ‘I am building such a great business. Can’t you see the traction? Can’t you see the NPS? Can’t you see the reviews?’ Right? But I think we’ve just learned in the last two, three years, the very hard way. But I feel that you know that when we started Fab Bag, we were in that, you know, zone where we were because of the fact that we came from these legacy colleges, where we thought that a good business is a differentiated business. In the process of differentiation, sometimes you end up creating something that is so complicated that your consumers also don’t understand and that’s what the mistake that we did with Fab Bag was. And so I think the one learning we had from Fab Bag to SUGAR was that you know make something that’s really easy. And if it is like really easy, then organically it’s gonna go viral and the initial traction that zero to one will happen without any strain and it was I think, for the first time because we’d struggled so much to sell various things because as an entrepreneur you’re always selling right? So every time you’d like struggled so much in our previous versions of startups that it was like it’s flying off the shelves or ecommerce shelf as you call it without any push was crazy. Also that feeling of product-market fit, you know you feel it in bones… that’s how you see traction happening. (SPEAKS HINDI) So that I think was a good thing but still I feel that the TAM learning came even later in life because you know even in like in SUGAR’s own journey like right the price point at which the TAM is massive. We took a while to figure that out and we’re still like learning about it, how to grow the market. I think it this TAM also is a conundrum. You know, one is that like without a good TAM you won’t raise money. The other is you can’t always go after the big TAM. (SPEAKS HINDI) You have to sometime like go after a smaller TAM and then expand the market. So it becomes a chicken and egg situation as to what to do first.

 

Siddhartha Ahluwalia 19:10

(SPEAKS HINDI) And already 50 people are chasing a bigger TAM, right?

 

Vineeta Singh 19:13

(SPEAKS HINDI) Yup running behind it.

 

Kaushik Mukherjee 19:15

Yeah, but there’s one more thing about India that today’s newest is tomorrow’s market. So especially the beauty and online we got lucky of course, but this point about make something easy to understand. For Fab Bag, the whole selling process where I remember, we used to explain to them what a subscription is. ‘No, it’s not, you don’t have to pay every time. We charge one time, but we’ll send you a questionnaire. Fill up your questionnaire preferences. We will take that and send you a bunch of products. No you can’t see the product. We are going to curate the product. I said a lot of things, and this was very normal to us. We used to do it for a living everyday. [chuckles] I remember the first time we tried to sell our first product for SUGAR it was a kajal. It was one of those Twist and Shout fadeproof kajal and we were talking us on Cargile… The person just asked ‘How much is this for?’ (SPEAKS HINDI)—

Siddhartha Ahluwalia 20:02

(SPEAKS HINDI)[chuckles] He understood it already and you wanted to explain the concept even further—

 

Kaushik Mukherjee 20:08

We’re like what. We just skipped the second part and I mean that I remember so clearly because I was like what were doing for three years… (SPEAKS HINDI)

 

Vineeta Singh 20:14

(SPEAKS HINDI) Yeah, I think we need to apologize to a lot of entrepreneurs whose life we ruined because since we started subscriptions, forget just beauty… food fitness education, what all categories brought in subscription and everybody used to reach out to us to say that you know, advice and we would be like to everybody that we’ve learned the hard way. It’s very hard to scale subscription in India. It’s not going to work especially with paying money in advance. It’s just and you know, like for every entrepreneurs like me ‘We will prove it to everybody no matter what!’ and I think we also went through years of saying VCs are wrong Galatia, we will crack this market. In India, the subscription revolution we will bring—

 

Kaushik Mukherjee 20:56

We overestimate I think the individual brilliance and excitement and underestimate TAM’s importance. I was just explaining to someone that you may be the world’s best high-jumper, right? (SPEAKS HINDI) Imagine if your competing with somebody who just 1/6 high-jumped on the moon. With mediocre talent he or she is going to overshoot you. TAM is just that so once that was clear in our mind… it took many years—

Vineeta Singh 21:18

And even when you do those consumer conversations and all that… all of us are living like Bangalore, Mumbai, Delhi. Sitting in Mumbai, you speak to people who are earning 20-30 lakhs per annum. That is I mean the average household income if you look at it is like so low. (SPEAKS HINDI) In India, you know average is $2,000 average per capita income right? So, when you’re looking at that, you know, that is and you don’t go to a Yavatmal and a Siliguri to do your consumer research and you think that you can build like a 1000 Crore business based on the insights you got from the people you spoke to in Mumbai, Delhi. I think that is the root cause of a lot of underestimation… sorry over estimation on TAM, because what works for that Bombay, Delhi consumer is so different from what you need to build 1000 crore businesses with consumers coming from tier-two/three cities so that evolution I think every founder will some point have to figure out.

Siddhartha Ahluwalia 22:21

I think this is a very delicate problem because you become founders only when you’re super confident, right? You need belief right? At the same time, when anybody questions you about TAM, that he or she is not questioning on TAM. They’re questioning on you, right? (SPEAKING HINDI) The finger is pointed at you that you aren’t looking to improve TAM and that you don’t know all these things.

 

Vineeta Singh 22:41

[laughing] No, no, I know. (SPEAKS HINDI) I mean, we take all rejections personally as entrepreneurs. And there have been so many rejections which is why it’s such a hard, I think it’s one of those things, which, at least, like, I have learned after being on the other side of the table for a bit with this whole angel investing piece that, like there is just so much that goes into, you know, making that decision to invest. It could be like, you know, and it’s so all those times when you don’t decide to invest it has nothing to do with the person’s capability, but a lot of other things playing. But when you deal with those rejections, it’s very hard to not take it personally, you know. (SPEAKS HINDI) But the good thing is, in entrepreneurship, that passion is required and many times you get that from the rejections, like so many times, we are like, ‘We will make them regret this that they have passed on and some point we should be on their anti-portfolio.’ At some point, we should be in their anti portfolio. So I think it’s as long as you can, like Michael Jordan used to do that, right? Like, you know, somebody used to say something to him. He used to use that as his fuel and like, go nuts on the court. And you know, just so if you’re able to let that fuel you into more action and more aggression, then that’s great. Then you should take those rejections personally. But there are a lot of people that get the rejection; It sends them into inaction, where they stop taking risks. Where they go back into their shell. Then I think it doesn’t work and I think great entrepreneurs figure out a way to use that ‘I will prove them wrong.’ in a positive way rather than like, putting them into believing they can’t do entrepreneurship or they don’t know how to do anything.

 

Siddhartha Ahluwalia 24:26

I think one commendable thing, you know, that happened to sugar IQ was that IQ was one of the VC funds that started in India right? (SPEAKS HINDI) If you speak to Anand (Lunia) and Madhukar (Sinha) they feel like desi-people. First to believe in the Indian consumption story and you guys returned 6x of their entire first fund.

 

Kaushik Mukherjee 24:44

I think the last number exit they made… The most recent one was a 117x on their investment so yeah, I have nothing but deep, deep love and respect for them because—

 

Siddhartha Ahluwalia 24:58

That must feel like really… Firstly the feeling of gratitude and those who trusted us in the beginning, right? —

 

Kaushik Mukherjee 25:06

To do right by them.

 

Vineeta Singh 25:07

It was so hard to do what they did. They invested in us in 2013 which was firstly Fab Bag, subscription-based, which was you know, where they also intuitively I think thought ‘This isn’t going anywhere.’ but they said ‘that founder bet’. They said that ‘No, we believe in you two as individuals and that’s why in spite of people not doing we’re doing it, right. So like the extreme to contrarian investment was couples. You know, a woman founder. One of the two founders being a woman you know, category being subscription. A category serving women like just think in 2013, the audience of ecommerce in India at the time, only 11-12% were women. That number today is 45%, but who would have thought it’s going to become 45%? So I think they took all kinds of contrarian bets, which is one thing because as an angel, you do take all kinds of bets on people and then things go wrong. The craziest thing is that, you know, they were part of that journey where we finally got the guts to launch SUGAR with very little bank balance left and they were a core part of encouraging us to do it. (SPEAKING HINDI) They’re like ‘You know, everything’s lost, right? So what is left. What are you gonna do by saving this 30 lakhs in your bank account and how much are you going to stretch it? Might as well, you know, do that one last shot of building something.’ And that’s how SUGAR came about. And then after that, even for SUGAR, nobody was ready to give us money, they loaned us one crore from their management fees. I mean, you know they also said that ‘Listen we can’t put from the fund because every fund has a thesis that after bad money we can’t put good, right? After that saying that we can’t put through funds so our personal that we have saved we will give as loan at that time. Oh my god, I really feel that and you know, and I talk about this that in 2015 we had our first child and which was the point where SUGAR was born, right? So you know that and I really thought that as an investor, they would be like, you know, at the lowest point in the entire journey where our money’s been, you know, almost like written off and like you failed as an entrepreneur. You have decided to prioritize your personal milestone by having you know, raising a family. Instead of that, Anand came to our house to meet my little one and he was so supportive in that whole process. I think… There are no words to describe the kind of you know, just incredibly crazy human beings both of them are and that’s what we learned in our journey that those ups and downs will always happen but when you get a chance to work with these, you know, people who are genuinely like kind people who really believe in India. They are like this bunch of like you said, they just want that India will be amazing so India thesis is it, right? So there I mean, I really think that only 20% of their brain works on maximizing value but 80% is also making India great. And it is just the way they are as people right? And all of these contrarian bets that they took us all part of that. So that I feel is what they did is nothing compared 117x or 6x or whatever because you know, that kind of belief changes the entire trajectory of an entrepreneur and the entire like their entire portfolio. I have told so many people that listen that if you get a term sheet from IQ then take it blindly because it is not about that one round. It is about that 10 year journey, and they’re still invested in us over 10 years.

 

Siddhartha Ahluwalia 29:06

(SPEAKS HINDI) Most important thing is right example because most of the people who became VCs in India are cookie cutter in nature. [chuckles] I told you right that VCs rejected me when I applied even after an exit because I didn’t have an exit like Kunal Shah!

 

Kaushik Mukherjee 29:19

That was the reason they gave? That is crazy! Oh my god…

 

Vineeta Singh 29:23

[laughs] I won’t be surprised if someone gave Kunal Shah a reason that you didn’t have an exit like Flipkart…

 

Siddhartha Ahluwalia 29:28

(SPEAKS HINDI) So cookie cutter VCs, right, the templates that people think have shined that B School, consultancy, right? And then after consultancy you go into McKinsey. Breaking that template is very important India because innovation will stop and new business models will stop being made. People have finally started acknowledging it. I remember back in 2012 to 2015, everybody was trying to copy the US model or China Model that whatever is working there, let’s try and do it here in India and nothing was just getting talked about today, right? [chuckles] Make 15-20 urban plaques, and in mobile applications, crowd it with Dow. Today, nothing is relevant. So as an entrepreneur, it’s very difficult for you when you’re fighting your battles alone. Sometimes even VCs don’t know what they are doing.

 

Kaushik Mukherjee 30:18

True. I think before access to capital was limited to people from maybe three to four funds at max and all of them were from the same schools: IIT, Bhargavi school or IIM, and now the access to capital is not limited to these people. (SPEAKS HINDI) People are getting funded; Firstly, it’s you can build businesses frugally as well and now crowdfunding is happening so there are a lot of funds which are led by non IIT people also. So I think we’re gonna see a lot more diversification and now it’s showing on mainstream TV that ahh this is how unit economics is made [chuckles]. I think as you said; You started this by saying that, you know, VCs are getting stuck and India’s time has just started.

 

Vineeta Singh 30:59

Yeah, and with VCS, it’s like always been like flavor of the season. And then all of them invest like if food tech is big then everybody invests in that, to some food tech, if prop tech comes then everybody invests in that, AI then everyone invests AI. And because that’s their job, right? Because VC also have to figure out, as to what they’ll put their SoftBank into so they have to plan because that’s where their exit comes from. So I understand where they come from. I think like, in our own journey we’ve seen that the biggest mistake is to try to build a business around what will be cool for a VC because there is no way you can be the smartest person in the world, but to predict that, you know, at that time, where you know, what flavor of the season will be because if you start when the flavor is on, too, then it’s too late, right? Because there are already 20 people there so the only ways to build a business around consumers, and then like hope it comes but otherwise have alternative ways to fund your business and luckily, like he said, now it can happen through angels. Like when we first started SUGAR in 2015, the whole D2C as a term… the first proper VC thinking about all of that was I think in 2019—

 

Siddhartha Ahluwalia 32:13

When Fireside started—

 

Vineeta Singh 32:14

(SPEAKS HINDI) Yeah, when Fireside started so it started in ’19 right? So 2015 to 2019, we had no idea that this whole brands, we used to call it consumer brand business, but now it’s called D2C that will become a VC investable space and there will be funds which will be dedicated to building brands. That was an unheard concept. But that was also good thing because from that ’15 to ’19 journey, we were able to build it with, you know, great unit economics, not burning cash. You know, like, I think until ’18 we were also profitable, building it with, you know, just like, like very frugally in terms of saying that, ‘Okay, where is it that the consumer is going to organically buy it and we will not spend.’ Our whole concept of performance marketing and burning money in CAC, it didn’t exist. And it was very lucky for us also, because we started you know, building brands from first principles, saying that give value to the consumer, invest in packaging, communication, wow the consumer because there was no pressure. Now it was like how much budget is there on Facebook, Amazon and ATL. When you don’t have budgets, you think about how do I make my product go viral? How do I you know, beat all the other brands in terms of quality? Those I think, like that, all of that happened… that innovation and learning happened because there was no capital. And that I think was a great thing. And then when the capital was there, it really helped us accelerate and grow. But I think that time has come again where where D2C is also not the flavour of the month which is good, I think because again, now when we see businesses coming up, they are now thinking about, ‘Can I have a different way of delivering value to the consumer in terms of you know, can I like counsel the consumer before selling it to them? Yeah, or sell it to them over phone? Or can I try a different kinds of an offline model? Or can I have a product in a certain niche where nobody is? So people are back to speaking those things, which were the only way to build a D2C business back in 2015-16 and I’m glad because one thing is that the copy pasting on Facebook ads and burning money on that I think doesn’t help in building a brand anyways.

 

Siddhartha Ahluwalia 34:38

(SPEAKS HINDI) One more important thing for an entrepreneur is when to take feedback and when not to. For example, many people told you about TAM. It hit you later in 2015, right, that this is not right but then everybody said that D2C is also not a category [chuckles]. So how was that feedback because that was also very contrarian to go into building a consumer brand?

 

Kaushik Mukherjee 35:00

So I’ll tell you how at least I thought of it. At the end of the day you’re doing it for yourself. So when we first started, we started building right in 2012. Our objective was to build a large business. And after by 2015, the whole large business, the problem statement itself changed. It was like, how do you stay afloat? How do you survive? And if you just forget everything else, and say you want to stay alive and survive. The only way to do that is to do by doing something you enjoy and find happiness in, because if you’re not enjoying it, you will not be able to keep doing it and survive well and everything else people say, ‘Arey this will not become a big business.’ Doesn’t matter. You will not be able to raise funding. Doesn’t matter. You know, ‘What will you do in a beauty business?’ Doesn’t matter. [chuckles] You just have to survive then so and we literally solve for these two questions that if I’ve been doing this, are we excited about this? It was super exciting. Some of the things like she said currently problem statements the channels are different. What will the media mix be? Back in the day you’re optimizing for our logo size and positioning and placement on our packaging. So that when people scroll through that on social media feeds, the logo pops. These sort of questions when you have nothing else to think about optimizing and that played, I think that played in making SUGAR clutter breaking when we started showing up on social media feeds.

 

Vineeta Singh 36:16

Yeah. And you know, when you speak about feedback, I think a lot of entrepreneurs and we’ve also gone through this in our own journey are influenced a lot by feedback from VCs and feedback as in you know, what they see competitors doing. (SPEAKING HINDI) And I think honestly, neither VCs know what to do always because nobody can predict things 100% accuracy right? Nor, competitors have guarantee where the market is gonna evolve. So I feel that you know, all of this, like, the only way to get real feedback is your consumer. And like, the more you obsess with feedback coming from investors you know, sometimes even like public market on social media and all the conversation from what is my competition doing and all of that. I feel that you know, you’re not being honest to your consumer, because at the end of the day, the real honest truth is that moment where you are there in front of your consumer and she evaluates you know, what you’re building and then decides whether it’s worth what you’re trying to sell it to her for. And that I would choose that over and over and I think in our own journey also like when that feedback from VCs was sort of fitting with the feedback that the consumer was only giving us by not buying our thing then it made sense. But 2015 to 18 was a time where like the consumer was telling us that the very big brands in India don’t get me. I am a 26 year old woman who is ready to now wear makeup to work and which is why I want products which are going to be like long-lasting, made for my skin tone including even if I’m deeper skin tone. I want products which will you know let me stay on global trends quickly and I want convenience right? I want all these things and I want a brand that I don’t want my mom’s generation’ brands because I don’t connect to them. Over and over if your consumer is telling you that and you know you’re seeing that in terms of traction where you’re able to like you know, like your products are going viral without spending anything because influencers are putting on lipsticks and when you talk to brands they’re like, ‘I don’t think Indian women will wear lipstick and make a reel on Instagram.’ (SPEAKING HINDI) I mean reels didn’t even exist then but photos they’ll upload, right? So then you realize that somebody has to solve this right? So why not us because we are so close to this consumer and I think that’s how 2015 to ’18 we had that conviction that there is you know, we don’t know if VCs know what changes are being made because it hasn’t been reflected on the numbers yet. (SPEAKING HINDI) It will reflect in your numbers, TAM, etc very late so for now they don’t know the real movement that is happening currently, right? So our only conversation was this has been cracked, we need to solve the money situation which is where the hacks were. Luckily Anand and Madhukar helped. Then RB investment came in which was not like a mainstream investor but they said to me, alright, we’ll write a small cheque. All of these things happen. But I feel that we had a very strong feedback and that feedback entrepreneurs can’t afford to ignore because that’s really consumer behavior and you know how her response to your products is the ultimate truth and nothing else comes close. After that, whether this consumer will sell and become a large enough category that yeah, you can’t predict, right? (SPEAKS HINDI) For us, luckily 65% demographic is very young and 65% women are under the age of 35. Like I said 45 percent of the online shoppers are now women so young women are consuming— so that was lucky because those market trends changed but consumer feedback was solid.

 

Siddhartha Ahluwalia 40:09

(SPEAKS HINDI) And on day 1 when you started SUGAR, you wouldn’t have observed that I want to serve only girls below 25 years of age right? When that understanding start coming into play that this age group is my target customer.

 

Vineeta Singh 40:24

We actually built SUGAR for women under 35 because—

 

Vineeta Singh 40:28

Yeah, yeah day zero because our core thesis was that if you ask anybody they say ‘The most crowded market is in makeup.’ If you go to a mall there are so many makeup brands so like obviously having the guts to launch you know makeup brand that is generic and solves all age groups was impossible because you know then you are competing head on with the big guys. Our like thesis was that they… because the average age of consumption of makeup was much higher because of you know affordability, etc. they were missing out on the point that younger women will per capita consume a lot more because their use cases will be different. It’s not just for marriage uses. Now it’s everyday use case. The use case is for this consumer and for them the product is not perfect.

Vineeta Singh 41:21

So I think for SUGAR we knew from day one but for Fab Bag we had compiled three years of data so we had like 200,000 women who are giving us feedback every month. We had their age, which city they live in, what do they shop, what kind of makeup they like… all of that of course was our secret cheat code to you know launching.

 

Siddhartha Ahluwalia 40:28

From day zero?

 

Kaushik Mukherjee 41:40

I think Fab Bag by design… the price point. The value prop that for 500 bucks we’ll give you products worth four times the amount. The fact that we promoted it online. It attracted a very unique demographic people who could spend up to 500 rupees they were okay but they were very experimental. They were okay receiving a box without knowing what was in the box. So that helped our shape.

 

Siddhartha Ahluwalia 42:01

That period also like the insights you had from Fab Bag, right? The quiet period of building just focus 2015-2018 is what made SUGAR it is today.

 

Vineeta Singh 42:12

100%. 100%. Things like you know like skin tone, that beauty was always in India that apply fairness cream and you know a specific definition that the fact that there are so many different ways for Indian women to feel beautiful and their relationship with the makeup that you know makeup is one of those things that they do for themselves. They don’t care if you know their boyfriend doesn’t appreciate that makeup. This is one of those few things because girls have to follow everything so this was one of those few things we did for ourselves. All of those I think we learned that.

Siddhartha Ahluwalia 42:46

And you might have not predicted that fair and lovely, the most used cream in India would drop fair from their name [chuckles].

 

Kaushik Mukherjee 42:52

That awareness and activism… that we never saw coming.

 

Vineeta Singh 42:57

Yeah. (SPEAKING HINDI) Absolutely I mean the fact that so much would happen that big brands would have to… when we were in our journey in Fab Bag, we didn’t think we would do SUGAR but we had told those brands that listen the consumer is evolving so you have to make dark skin tone foundation as well now. But they weren’t ready to listen, right? So which is why we said that if they’re so close to that idea, then you know somebody has to do something about it. But I feel that you know I think the demographic in India, the median age is 28, right? So it’s changed so quickly in the last seven to eight years that I think all the brands are forced and social media is so loud, right? Now brand building is not about television, before on television there would be narrative control so if you put like a superstar celebrity who was a way or certain way looking, people assume this is the definition of perfection but social media has democratized that right? Now there are influencers who are body positive, skin positive, deep skin tone positive, so you know like young girls now see ‘I can be beautiful like this like this like this’. That suddenly changes how the beauty industry is and yeah, we never expected that the big brands will adapt which they are which is why all of us also have to pull up our game now.

Siddhartha Ahluwalia 44:10

It’s been a beautiful journey right? I think even if Shark Tank wouldn’t have happened right? It would have made a miniscule difference to your numbers.

 

Vineeta Singh 44:19

Yeah

 

Siddhartha Ahluwalia 44:19

(SPEAKING HINDI) The brand would have gone on television organically, right, wouldn’t have dependent on Shark Tank—

 

Vineeta Singh 44:24

(SPEAKING HINDI) Yeah, I you know, to define the business impact of Shark Tank is very difficult, but I feel the only good thing is that, you know, our 18 to 35 year old audience we had already done a lot of work in. The 35+ you know men like all of these I think SUGAR’s awareness has risen due to Shark Tank—

 

Vineeta Singh 44:25

Yeah, and non-social media savvy—

 

Vineeta Singh 44:39

Yeah the core television audience still did not know SUGAR as much and although they are not our consumers, they are still in the ecosystem. So they matter like our retailers, distributors care about all of this. There is a difference in gifting also from this. So definitely there’s been a positive impact because I feel that like brands of today are built on authentic storytelling and you know, like who the founders, what their story are. That matters to younger people so I feel that way it’s made a difference but yeah, if Shark Tank hadn’t happen then would our numbers be any different? I don’t think so.

Siddhartha Ahluwalia 45:24

I think what made a difference, right… I have been following SUGAR very closely, because at the same time I started my podcast right. The time you open your first offline store. That was like a really pivotal moment as you guys thought ‘Only D2C wouldn’t work to create more awareness and narrative.’—

 

Kaushik Mukherjee 45:39

I think one of our board meetings… somebody asked us ‘What do you guys want to be? Do you want to be a large digital brand? Or do you want to be a large beauty brand?’ This question I remember very clearly, because then that’s when we realized, if you look at the data, no brand in any consumer sector has become very, very big, with the internet of that time and what we treated it to be. It would be only a digital brand. So that’s when I realized we don’t know it. We’re not comfortable with it but we’ll have to learn. I remember the first interviews we took for beauty advisors. We were taking the interview, we were learning more from interviews, because the person would come and say ‘ Yea I’ve worked in GT.’ We would wonder what is GT? [chuckling] Oh general trade right, right. So it literally started from scratch, but it sort of helped us during the COVID ’20 to ’22 phase because we were like a balanced plane with two engines. When one shut down like when retail shut down due to COVID we kept flying because we are the online store online. But when COVID ceded then retail came back very very strong. So that time all the online-only brands-that were having a brilliant run, they were like ‘Ah sales is about to depress but okay retail is back.’ For us it is an added advantage and so that’s why that kept us… we never had extremes that in one year we’ve grown four times but last couple of years like every year like 90%, 80% apart from the FY ’21 we’ve been increasing I think because we are balanced.

 

Vineeta Singh 47:08

Yeah, and we always built the brand as a brand which will not only be digital. We you know, like while we thought that digital is the cheapest way to build awareness. (SPEAKS HINDI) We always like when we design products, we always thought that what will happen if it looks good on instagram but also on our shelves. In terms of pricing, you know, we for us it was like we won’t do like deep discounts on market places due to pressure because there will be consumer shopping at full price in retail someday, even when we weren’t there in retail. So you know, we don’t want there to be this disparity that online is selling for this much and offline is selling for this much because for brands trust consistency is important. So these smaller decisions, which we feel have a big impact in you know, the kind of trust people have on a brand. That I mean we always I think looked at it as a long term game and we looked at it as saying that you know, this consumer we will be lucky to get her at 21 age. She’s gonna continue using us for two decades now. So you know we want to do right by her and we don’t want her to second guess her choice, which is why these small things are important and you know, which is why we built a business which wasn’t designed. (SPEAKS HINDI) There are a lot of businesses are now getting designed that we will keep MRP at rupees 1000 and constantly sell it at 60% off so at price 400 because ecommerce behavior shows consumers buy it more at 60% off. We never thought of it like that. We always thought that you know we will do right by the consumer and in 20,30,40 years we wanted to be young India’s most trusted and favourite brand so we can’t take a shortcut for that. I think that really helped us because there will always be these phases. (SPEAKS HINDI) I feel that you know during COVID suddenly so much D2C funding had come that, more than the growth of the market on our Amazon page, our capital had increased which is why like you know, there is a joke that Aman often says ‘That the keyword for shampoo is often more expensive than the shampoo itself!’ [chuckles] So and that really we started seeing that happen right so all those times you know, like in those cycles we never got carried away because we had clarity that our consumer cares about quality and you know value for money and she will shop us anywhere and we want to be there for her in like our best way on all channels whether it’s offline, online, market place, D2C. Like when we started we said okay, D2C has to be encouraged so we’ll have some special kits on the SUGAR app, you know, to bring behavior but we won’t say that if you buy it on our app then you will get it for half the price. That we won’t do.

Siddhartha Ahluwalia 49:55

One thing that you have done recently, I think will pave a way for a lot of brands, right? You guys went to Dubai and then it will be another market and another external market. Till now it was all about noticing Indian consumers prefer makeup brands like Bobbi Brown, right and the likes. They want brands from outside India to come but now people believe that in India the consumer compromises with the quality. But now you are exporting SUGAR outside India.

 

Vineeta Singh 50:25

(SPEAKS HINDI) So product wise we always said that we will create product which is like in that particular category, the best in the world for our skin type and weather condition where of course Middle East just fits in because the skin types, weather conditions are similar. Now we’re beginning also think that, you know, based on the feedback that we got with our international launch, we’re beginning to think that, I mean, you know, we should look at becoming a global brand and that’s what our ambition now is. You know, when we kept the name SUGAR, a lot of people asked ‘Why SUGAR?’ We always knew that someday we’ll be global. That point will only come when you have the ability to sort of you know go after some of those markets because you have to create products and you know marketing and communication around those market. That we don’t know. But since the day we kept the name as SUGAR, we’ve known that even if that day comes in five years, or 10 years or even 20 years but SUGAR will be a global brand.

 

Siddhartha Ahluwalia 51:22

And both of you in your interviews use the word compounding long-term quite a bit, right?

 

Kaushik Mukherjee 51:28

Yeah, yeah very true! [chuckles]

 

Siddhartha Ahluwalia 51:29

How did this term get drilled down as part of your thinking? It wouldn’t have been on day one I believe…

 

Kaushik Mukherjee 51:38

There are two different playbooks. One is raise funds and go for a six on the first ball. You’re a very exciting batsman or entrepreneur, right? You’re like you know you’re making moves. Every six months you’re raising a fund and there are people who’ve done that in the past and there has been a lot of awareness about it in the last 10 years that this is not our game [chuckles]. So that is one way you can play the game and then you exit. Maybe start something else. The other extreme is wherein you say that your time will come and you keep believing that chanting it so that someday you know it comes true [laughs]. So that’s what I think because the first one didn’t work out and were also in a category which was not like like, you can’t forcefully put in money and make a brand. The brand is when the customers choose your brand so you will have to love the brand now. It takes time to get that trust. So we’re in a category which plays very well longer, and we’ve read books and are inspired by brands like Nike, Richard Branson, and Virginia also so these are all 40-50 year old you know stories. So we’ve just completed 10 years of the company and seven years of SUGAR so we have a lot of work ahead of us I think. So, the good thing is now we have a large number of customers who understand what the brand is about and we will not compromise on the quality. We will not be available at the cheapest price and we just have to be consistent. The belief is that over 10-20 years this is going to play out to be lasting brand far beyond each and every one of us—

 

Vineeta Singh 53:04

(SPEAKS HINDI) But I think we realized that our strength is not being a sprinter. We are marathoners and our core strength is that you know, people can at various points of time be smarter than us raise more money than us, be like more aggressive than us. Do, you know various things which could be better than us, but no matter what we will be the most persistent and we will like, you know, stay the course. And when you stay the course, even if you’re not the fastest on the field, and like people overtake you at various points of time, you know, that whole, like the magic of compounding that ends up playing out. So nobody’s gonna beat us in that persistence, you know, and that that is really like the core philosophy of marathoners that you cannot use sprint for five kilometres, there is no way you can finish for 42 kilometers. So the key to is you know, spacing, you know, each kilometer, ensuring that like you’re, you know, you’re really conserving and like, you know when to really go fast and when to go slow. But whatever happens, even if the world goes upside down… just don’t give up quitting.

Siddhartha Ahluwalia 54:17

I think this is a very important quality to not be distracted. How did you build this strength. It’s very easy right when a funding boom comes and your whole world changes around you—

 

Vineeta Singh 54:28

I think luckily our partners or investors… I think many times even more than the entrepreneurs, there is a weird pressure on investors that we need it to be 10x in one year. If you’re building a brand business in India, it is… brands are trust, right? Trust takes time to build. You cannot build trust on steroids. You cannot. You can acquire customers on steroids but you can’t build trust, it’s a mindset shift and I think luckily we had you know our board and our investors or people who got that and you know, I think IQ is obviously there, but even like a A91 elevation. These are boards, which are not like, you know, putting that kind of pressure saying that, okay, can you like be the largest in the market in two years because they have seen a lot of businesses burn through cash. And I feel so one big difference has been that our board doesn’t allow us to get distracted, you know. They’re very particular about fundamentals and that also, you know, helps us stay the course. And second is, I feel that, you know, in our culture, in the organization is more value, which we talk about, and if you look at any person who works here, you will see that same value getting deflected, and that is humility. You know, like humility, of saying that, you know, being grateful for how far you’ve come, and having that respect for the consumer for, you know, the opportunity that we have, and not like, you know, giving all that up for a distraction. I feel that because of the fact that we’ve been around for so long, and we’ve had the ability to realize that a lot of power comes from gratitude and humility. I think that probably is a couple of the reasons.

 

Siddhartha Ahluwalia 56:06

I have a personal opinion, right. Companies in India should go public as early as possible. [laughs] So in my opinion, SUGAR is already ready to be public. You create wealth for your retail investors, right? So I think you’re sitting at the right place, right time to be an IPO company. And you have talked so much about it, right? Because you want to create the wealth for your early employees and everybody that is part of the SUGAR ecosystem. So is this the right time you think for because every week in India’s… whatever is happening globally, at least three to four companies are going public every week.

 

Kaushik Mukherjee 56:46

I think we’ve discussed it in deep detail. The question is, why? Why you IPO? So if you’re not able to raise funds for offside so that’s why you’re going IPO. For us the reasons are very clear. We want to run it over the next 20 years as long as possible. So we have to give an exit to our investors. Our investors are… sometimes investors are in a rush that, we’ve seen our markup now let’s exit. Strangely, our investors are very excited that ‘You are trying out this new thing. A new challenge in the Middle East right now. Let’s continue to stay invested in the game.’ So we could have filed our papers this year. After you know, the way the business grew, there’s one beautiful thing we’re realizing that the cost of advertising and marketing which basically sits below the contribution margin at a company level and pushes a company into the negative. All this talk about you know, ‘You aren’t making profits. You are making negatives only.’ I mean, it’s like you can’t explain to everybody but you realize that take it that out of 100, 20 goes into marketing. When that 100 becomes 200, the 20 becomes 22 and from 200 to 400 the marketing goes to 30 percent. So percentage wise, in a consumer business with the kind of gross margins we have… we have about 70% gross margins. There is no way this company is going to be a loss-making company by the time so we want to take a strong story into the market wherein we say that okay, this is our journey. We’ve scaled. We’ve built so many brands. We’re sometimes in losses. Now we are at a stage we’re in a new phase of the organization wherein we are hoping to continue to work profitably over the next 20-30 years. I think that’s a good time to get the retail investor in because selling a story to retail investors that we are currently at a loss but let us go through the rough patch. Let us through go through the patch which they can’t explain to themselves because we will not always be around to explain to a retail investor. If some narratives are left missed… why do that? We have diamond hands so we have a great story on our hands so that’s why maybe we’re not in a rush so yes, I think we can go IPO definitely but we probably will wait for a couple of years so maybe 2025 and until then we have a lot of work to do and we’re not burning as you know money so that’s what I think the board is aligned to.

 

Siddhartha Ahluwalia 59:00

I have a different view, right? Why is Reliance the reason Dhirubhai Ambani was known? Reliance very quickly went IPO right?

 

Kaushik Mukherjee 59:10

Value for… He created value so yeah that is a very fair point that the value that is created—

 

Siddhartha Ahluwalia 59:14

Can’t do it at 5 or 10 billion because… {Inaudible} is still at 70 billion dollars.

 

Kaushik Mukherjee 59:20

Agreed, agreed, agreed.

 

Vineeta Singh 59:22

The trade off is that you’re creating maximizing value for private investor versus public investor and you’re right.

 

Kaushik Mukherjee 59:29

I see the point where if you have to live in the public domain for next 20-30 years we have to become part of their lives. What better way to be a part of their lives than by building value and in this the sooner you do it better. That’s actually a food for thought—

 

Vineeta Singh 59:42

But even if we do it at… You know even if we do it after two-three years, we’ll have still have like that compounding power of 20,30,40% growth year on year for the next two decades available because we’re playing in such a like amazing category where no matter how much you think it has evolved, actually the party is just getting started because that whole like still… just think the makeup industry has a big connection with participation of women in workforce which is at 20% which will go up. There is no doubt in the next two-three decades that this number will go up to 30-40%. When that happens, beauty and fashion are two categories that will be heavily impacted, right? So this is a powerful compounding ability for the Indian public market investor to make 10-20x on their investment in SUGAR. There is still a lot of opportunity in that as I feel we’ve still just scratched the surface and you know, like Kaushik said, it should also be from their equation which is that you know, that multiple making sense. All of that should be aligned if not unnecessarily, I think it becomes a very negative sentiment.

Siddhartha Ahluwalia 1:00:54

So, thank you so much. You know, this is an interview that me and Nansi have treasured for the last two years, right, and finally making it happen is like a dream come true for us!

 

Vineeta Singh 1:01:04

This is for Nansi but… because she was so persistent in making sure that this happens and we are, of course, very active listeners of the podcast ourselves. But just getting both of us in these chairs, only a Nansi can do. [laughing]

 

Kaushik Mukherjee 1:01:22

Thank you!

 

Siddhartha Ahluwalia 1:01:23

Thank you so much for making this happen!