PMF Convo #12 – Shreya Mishra, SolarSquare, prev Flyrobe

Shreya Mishra now runs SolarSquare, a B2C rooftop solar panel installation company. Our conversation however was around her previous startup, Flyrobe, which was a fashion rental startup that however struggled to find product market fit or PMF. Flyrobe was a company we tracked closely, as it competed closely with a Blume portfolio company, Stage3. Both struggled to find PMF, and have now been acquired. 

In our convo, Shreya talks about the challenges that came in the way of PMF for Flyrobe – primarily a much smaller market than they anticipated. While they tried different tacks at expansion, going beyond the original rotating wardrobe idea for women, to bring in wedding and special occasion wear, expanding into men’s categories and offline, none really worked. The effort to revenue ratio was high, which is her definition for PMF, that you can see PMF when with minimal effort you see sales take off.

She talks about how the line between founder optimism and delusion around sticking with an idea against all odds, is often a very thin one. She counsels founder self-awareness and wishes she had questioned the business model itself soon enough instead of iterating within the bounds of the business model, and realised that they were hobbled by the smaller than anticipated market.

I thought this was an extremely candid and honest conversation, and founders who are struggling with PMF, will resonate most of all. To me, it is also a stellar example of how founders need to get the ‘pick’ right. Building your startup is anywhere from a 3 to 10 year journey (depending on how successful it gets), and you owe it to yourself to get the pick of the space right. Sometimes you will only know about the space after you launch, but more often, you will be able to do low cost experiments to test your original hypotheses out, and this is a must.  What made it difficult for Shreya perhaps here, was that they were seen as a hot team and ended up raising a large amount of capital very quickly (it was also a hot market (‘14-15) and that perhaps made it a bit more difficult to go the slower constrained path that might have unmasked the unit economics and growth story earlier.

(Please find below, the transcript of my conversation with Shreya Mishra. The transcript has been lightly edited for readability. There will of course be errors; please excuse me for them. The interview was conducted via a zoom call on 13^th June 2023.)

How she and her cofounders picked Flyrobe, and the fashion rental space

Sajith: Shreya, broadly I wanted to get a sense of the Flyrobe journey. And I would say the main hypothesis I have (on Flyrobe’s failure) is because we also invested in Stage3, is that the market was fundamentally very small for that. And that set the whole company up for challenges once you  raised funding. But at the same time, I want to hear it from your perspective so if you could share your thoughts, I would be grateful. 

Shreya: Absolutely. Many investors asked that question to me, now what are the learnings you took from Flyrobe as you’re building Solar Square? And the biggest learning was on the market. And I like to put it simply, great market + average team = market wins & bad market + a great team = the market still wins. And we were a great team in a not-so-good market. 

And there were two specific reasons. #1 the idea evolved over time, finally, it became more around wedding-related rentals & the main issue was seasonality. And then on top of that, it wasn’t a very large market either. But I would say the seasonality made it absolutely brutal because in India there are probably in the 365-day period, about 4-5 months where nobody gets married because it’s all inauspicious. In the rest 6-7 months of the year within that also, there are about 50 odd auspicious dates. So, all the events were around those 50 auspicious dates. And so there would be a time where everything would get booked and then there would be weeks where we wouldn’t have much demand. So, definitely, seasonality and market size were big learnings. And business building is hard on top of it if you have headwinds from the market, there’s no way you’re going to make anything out of it. 

Sajith: Yeah, totally. So, just going back, you did this with two other batchmates from IITB, right? 

Shreya: Yeah. There were three founders.

Sajith: And so when you did this space, I saw your profile, you were 2012 IITB, and then two years in one of the consults, McKinsey or Bain,  I forgot. 

Shreya: BCG. 

Sajith: Right, was one of the MBB ones and then one year almost at Everstone as an analyst. So, I wanted to get a sense of how you picked the space and how did the whole idea come together? Were there other things you evaluated around this and how did you chance upon ki Flyrobe karna hai (let us do Flyrobe)? You were doing rental from day one?

Shreya: So, there’s a particular pattern that you would see in first time founders. And now having been an entrepreneur for almost eight years now, first time founders, they’re married to the idea of starting up. And so not because they’re passionate about a particular idea, but they’re very passionate about the idea of starting up. And so, they will go from a first principles basis, they’ll take a white board, they’ll scan ideas to know an industry to become an expert. If something happens when you have many years of work experience, and then some serendipity happens and probably because of that you start a business, right? Because you experienced a problem firsthand or you’ve been working in an industry where you have a unique insight. For me, I had literally a less than three-year professional working career post IIT Bombay and then I turned into an entrepreneur. 

So, for me, I was married to the idea of starting up. And I was always interested in the idea of entrepreneurship even when I was on campus and I had one IIT Bombay B-plan contest, which was called Eureka. It had a 5L cash prize, and the winners would get to attend an entrepreneurship bootcamp at Stanford. So, it was pretty cool. We were 22 year-olds, we had no idea and I had some small startup in college and it was more like a project I would say and then we won Eureka and we went to the US for the Stanford Bootcamp, and there they took us to startup offices. And that’s the first office I visited in Silicon Valley was Airbnb. And I had never heard of Airbnb by then. 

And I was fascinated…that visual is so clear in my head. It was the fifth or the seventh floor or something, the lift opened and two dogs were running. And that’s when I learned that Silicon Valley has these dog-friendly offices and their meeting rooms were named after their most popular listings of the world at that time. So, one of the meeting rooms was named after an Australian designer’s home, one of them was a mushroom house in Boston, which was their most popular listing, so it was very interesting. And there were these Stanford grads who took a session for us, of course Brian Chesky didn’t. And they told us the whole concept of the sharing economy. And that’s when I heard about this whole breed of Uber and Airbnb, etc., and this was the whole world of the sharing economy. So, I guess I was fascinated with that concept right at college. 

And when I decided to start up I said, this sharing economy thing sounds very cool. There’s a utilisation of assets, it’s better for the environment, it’s good for consumers. So, there’s got to be a lot of interesting stuff getting done here, so that’s what we started with. We evaluated so many ideas for e.g., there was Poshmark in the US which was into second hand fashion transactions because people get bored of their fashion purchases very quickly and then it would allow you to sell items. There were luxury second hand markets. Then there was a luxury rental market, which was Rent the Runway. And so, while sort of dabbling into all of those zones, it took us some good 3-4 months to finalise an idea. And we said, okay, let’s pilot the rental one. And we created a WordPress website and we went live. We thought we’ll experiment and then we’ll see where it goes. 

But the research made us very excited and we thought, this is going to be the next big thing. Actually we wanted to have a rotating wardrobe for women wherein women could basically rent 4-5 items a month, which would be for their office wear, their weekends, their evening dinners, etc. So, it wasn’t supposed to be around special occasions. It was actually supposed to be around just having a rotating closet. You get five items every month, you ship back, you get five new items. And because women have this urge of buying something new every month, and they end up buying fast fashion and cheap products, so why not give them high quality products and give them a rotating sort of closet? So, that’s how it started.

One year in and we raised venture funding very quickly. Sequoia (now Peak XV) did a seed (round), then IDG Ventures (now Chiratae) did a Series A. This was a little bit of a heady time also, I’m going to be honest, 2016 was when every kid thought he or she was the next, because the VCs were chasing anybody with a decent pedigree and anybody with an idea, which had some global comparables. Rent the Runway used to be a $300-400 million company at that time. So, there was like a decent international comparable as well. Something was getting built in China, which Alibaba had backed on the rental model as well. But ultimately the whole market turned out to be tough and Rent the Runway did an IPO, but it’s still in a tough space, and had to raise too much capital to get there. The company that Alibaba bagged, I don’t know what happened, I think they scaled down or shut down, Flyrobe exited.

The brand Flyrobe still exists by the way. And there is a small group of investors who had invested in a rental company Rent It Bae. They bought the Flyrobe brand and the management team of their investment, their portfolio company is now running it under the brand name of Flyrobe. So, the brand still exists, it’s not shut down, but this was a tough market everywhere in the world. But at that time, it was a heady time and VCs were chasing it so quickly, a seed happened and there was some traction. So, a Series A happened and we felt more and more optimistic about what this space could be about a year, year and a half into it, we realised that the whole rotating wardrobe, it works in the US because women rent for office, they have to dress five days a week for office. 

And there’s a lot of pressure to dress in the US as well. It’s often spoken about, that women have an added tax to succeed in the workplaces, that they have to dress a certain way and look a certain way in the US. 

Unfortunately, in India, we realised that there was no working women population, it was insignificant. Only13% of Indian women work, and I learned that’s less than in Pakistan. And most of the women in the workforce are in call-centre, retail-staff and stuff like that. There are very few women going to offices and fewer of the type of a professional woman who would have to dress up. They were mostly in uniforms & had a very low income. And interestingly, the higher the income profile, the lesser was the percentage of women in the workforce. That was another thing I learned. Culturally or whatever the reasons, the more comfortable family women come from, the fewer of them work, and those who work in the absolute bottom, they’re basically because they have to, without double income, their families can’t survive. 

So, net-net the market for Western wear and the rotating closet seemed very small. So, the option we were left with was let us rent for occasions. Either you’ll rent for freshness in your wardrobe or you’ll rent for special occasions where the ticket size is too high and you don’t want to repeat that item after one time because you attend a wedding, you put up pictures on social media, you’re never going to wear that item again. It’s also the most expensive product in your wardrobe. So, the pyjama you’ll wear every day, but the 30,000 rupees suit in the case of a man or a lehenga in the case of a woman, they’ll hardly wear again. So, we said, now this makes sense and hence we move towards the special occasion, which was largely ethnic in India. 

In ethnic wear we saw good traction for both men and women. Men absolutely hate to shop for special occasions, Maanyavar has been educating them for decades but men usually hate to shop. And renting was a very convenient choice for many of them who usually turn up in just regular pant shirt to special occasions as well. So, we launched men and women in both categories and it was fully around special occasions. 

Sajith: Got it. A lovely explanation. Shreya, 2012, you won Eureka and went to Stanford, that bootcamp you were at Silicon Valley tour, then you parked it on the back of your head and for three years you did not.

Shreya: Yeah. I was already placed at BCG at that time. (When we travelled) it was post my placement, which happens one semester before the end.

Sajith: But when you wanted to start out, Pranay (one of her cofounder) and all you guys wanted to start out at that point, you pretty much decided on this idea or this was already in your mind that if you want to do something, were there other things in the sharing economy you looked at and said no to? How did you chance upon this idea? 

Shreya: There were so many ideas that we looked at. I don’t even remember. There was a super app idea also that we were working on at that time when Haptik was trying to do so many things. And we said, they’re trying to do so many things, can we be the super app of apps, etc. But of course, we were getting ahead of ourselves and we were like, why won’t Paytm do it or FlipKart be the super app? And we were pretty much right, ultimately the likes of PhonePe and Paytm are the super apps, where you can do flight tickets to everything inside one app. So, we pursued that for a bit. We pursued reselling of second-hand fashion and other products, and I don’t even remember now, this is back in 2015. But the longest time was spent on reselling versus rentals. That was the zone we spent the most amount of time on. 

Sajith: Got it. Very cool. And if I may ask, because one of the chapters of my book deals with something called the Pick, I’ll come to it because one of elements of the Pick is the time the Founder spends on the idea. So, how much, what do you think went into the Pick at that point, for the three of you? 

Shreya: Right. So, we spent a good 3-4 months to actually launch. Even every weekend late night we were sitting brainstorming. We all put in together 4-5 months. One of the ideas that we researched, I totally forgot about this, another one in sharing economy was that could you create a sharing economy portal of spaces? And it would be a little bit like, let’s say I am in this apartment in Bangalore and there is a lobby space and I have 500 flats. So, can somebody book the lobby space to put up a standee for a new restaurant, for marketing, or let’s say if I wanted to do a popup of D2C brand or I’m a boutique owner or toy maker, and I just want to put up a little popup. 

And we learned that there are a lot of retail stores that actually operate pop-ups. Where they don’t have a permanent tenant, they charge slightly higher, but they give on a per day basis, they give their storefront for rent and people can come in and set up a pop-up there. And similarly, could you book a popup at a DLF cyber city? Could I book a marketing space in a row housing colony, housing society lobby, hotel etc. So, it would be like, anybody could put up their spaces which are available either for marketing or booking event or whatever purposes and on the other end, marketeers or small business owners could book these spaces. So, this was again on the concept of sharing economy. And it’s said that there’s so much demand supply gap in real estate or so many people want to advertise in different places, but there’s no way to advertise in the lobby of let’s say hundred societies or in corporate areas, etc. 

So, that’s a marketplace for shared spaces for commercial and advertising purposes is something that we spent a fair amount of time on. And I remember I would go to boutiques and shops and I would take my business PPT and ask them for their feedback that if they got to book a space like this, would they like to book it? And I searched for all the pop-up store owners across Bombay, and understood their economics. How many bookings do they get in a year or what is the daily rental and why do they not give it to a permanent tenant? Why do they keep it a pop-up storefront? So, we spend a fair amount of time researching that. 

Sajith: What was the key reason for that? Why don’t they give it to a permanent tenant? Is it higher rentals from popups?

Shreya: Yeah, higher rentals. 

Sajith: Okay. Yeah, so interesting. So, 3-4 months, but very clearly it seemed like you guys decided on the sharing economy maybe that was very fashionable then Uber was doing well etc. Airbnb had taken off and then decided between reselling or versus rental for fashion and kind of honed down into that. So, at the time, did you try to research out if there is potential for this, etc? Did you quickly move into it?

Shreya: Yeah. So, I ran 2-3 consumer surveys amongst my friends. Each idea I would make one survey, we would circulate it to friends. So, we surveyed both the ideas. We tried to read as much as we could about companies in the US that had similar models. On the resale side there were a lot of brands. There was The RealReal, Poshmark which became very big, it also IPO’ed recently. And there were a lot of brands like ThreadUp and a bunch of others on the reselling side; on the rental side it was just Rent the Runway, but it was coming up in a big way. So, we did all of that research, spoke to a few VCs. I remember I randomly pinged Kunal Shah on Facebook and he’s well known to respond to aspiring entrepreneur requests. And he gave me time to come to his office and tell him all my ideas. And I remember writing in his Bandra office of FreeCharge, I wrote on his wall that I have these ideas and I’m unable to decide and there are so many ideas. And he was like, no, no, no, you’re going about it the wrong way. You should take one idea at a time, reject it, move to the next. So, he was also somebody I bounced it off with. So, that’s how the research phase went, just speaking to as many people as possible, prospective customers, etc. 

How she decided to go all in on Solar Square

Sajith: Got it. It fair. So, just a little bit on comparing it with Solar Square, do you feel like you did something else this time when you decided to pick this space? Was this process similar? Was it longer? How was the process different as a second time founder? 

Shreya: Solar Square was a lot of serendipity, but with serendipity, well you need to just keep at it for some time for serendipity to happen. So, for Solar Square, I’m not by the way, the original founder. So, when I started Flyrobe, my husband started Solar Square, which used to be a B2B solar company. And when I was raising money and building Flyrobe etc., the solar space was seeing great traction at that time. And he was doing B2B solar, so his clients were like Jindal Steel etc. He had large publicly listed Fortune 500 companies as his clients. But I used to think like thin margin business hai, ismain to koi non-linearity nahi hai, (it is a thin margin business without any non-linearity), how will he create a billion dollar business? 

I thought anything less than a billion dollars was beneath an IIT Bombay graduate. So, everybody quietly kept building it. His reasons are very different, very, very different. He always wanted to do something extremely meaningful. He did two years at Deutsche Bank, which post IIT, was his first job. 

Sajith: He’s also IIT Bombay? 

Shreya: Yeah. He and I are batchmates from IIT Bombay. So, for him it was more like sustainability sounds like a great thing to build a career in. And most sustainability businesses have a very strong finance angle to it. Because sustainability, given the high price, etc., had a lot of just financing-related business models being built. So, even on the B2B solar front, there was a fair amount of power purchase agreements and opex models and leasing models and all those things, which was like project management and solar engineering on one end, but also finance on the other end. So, he knew finance, he was a CFA, worked at Deutsche Bank, financially he had a very strong acumen and he learned everything from scratch about solar projects, building these large projects. What safety does it take, what engineering does it take? How to procure from China, Vietnam, etc. And he quietly kept at it. He put all his money and his dad’s money collectively, he borrowed ₹2 crs from his dad and put all his Deutsche savings and he started Solar Square. First year it did ₹2.5 crs and by FY 2020, I exited Flyrobe in 2019. So, that financial year, he did about ₹100 crs in his business and he was ranking amongst the top five solar companies in India ahead of the likes of Mahindra, Bosch, etc. So, at that time, I wanted to start up again, but I was too weighed down by my Flyrobe experience. And I was like, this time I want to crack the market, because everything else can be done, but I want to get the market right. 

So, Neeraj was doing B2B Solar, and he said, I’m looking for somebody to do the residential side of things. Because he was like, ab residential market explode hoga and he said, mujhe solar aata hai, financing aata hai, (now the solar residential market will explode; now I know the solar biz, I get financing) I don’t know anything about building a consumer business because this will require direct to consumer marketing, customer acquisition. It’ll require a very tech enabled backend operation. In B2B, it was half a million-dollar ticket size. So, it was a 30-member team doing ₹100 crs a year. But when you started residential, it would be tiny projects. They had to be very standardised operations, tech-enabled workflows, tech-enabled customer acquisition, you had to build a product team, tech team, marketing team, sales team, etc. Solar Square had none of it & Neeraj alone had sold like ₹350-400 crs worth of solar in 5 years. 

They did a hundred (₹100crs) in the last year itself. So, the other 4 years they did about 250 (₹250crs). Because the clients were big, it was Reliance, Panasonic or Johnson and Johnson or TVS Motors on the other end. So, that is how he scaled it. So, when we joined, I knew that there was a very clear reason for us to succeed #1 because this market is so large. So the energy market, we’re talking of energy here, no consumer brand ever got built in energy. Because energy was never a consumer business. For energy, Sarkar (government) will put up power plants they’ll put up discoms and consumers will buy it. So, as consumers, you had no choice there was one distribution company, there is a fixed rate, they can increase it, decrease it, they can add a tax, you have no control, you have to buy it there and nothing else. 

So, this seemed like an opportunity to create a home energy brand for future India where homes would have their own private solar power plants. The entire home will be powered by solar. And so, it was like this new age utility company, a new age sort of electricity company. So, it was very interesting one could either see it, like bijlee main (in the electricity space) what business, what consumer affinity will or what differentiation can be there, right? It’s ultimately electricity or one could say that no, this is going to be a big decision a family takes. They want a service provider who will reliably install a solar system, then offer 25 years of good after sales who will ensure performance of solar and ensure that electricity is being produced, who will give them good service, repairs, warranty claims, etc. So, we said, this seems very interesting & I joined him for that. I said, B2B solar mujhe to kuch aata nahi hai (I know zilch about B2B solar), what will I do there? But let me try and build this side of things.

So, that’s how I joined. And I said two things. #1 I saw a very clear right to win because I knew that the Solar Square team had something special going for them. To scale to a ₹100 crs and to be ahead of the likes of Mahindra and Bosch in an EPC (Engineering, Procurement Contract) business was no mean feat. And everybody would say, kya yeh 28-30 saal ke ladke hai (these are 28-30 year-old kids), what reason do they have to succeed? But they did because they were very good at solar engineering. They had very strong project management and very good referrals.

Sajith: They were into corporate installations right? 

Shreya: Factories and colleges. They did for Narsee Monjee (College) in Bombay, they did it for Johnson factories. 

Sajith: Tell me, I also saw Elevation (Capital) has invested in you. So, you spun this consumer business out? 

Shreya: No, we pivoted. Oh, that was a big decision. That was a big inflexion point in our journey and that was a tough one as well. So, when I joined in 2020, we were piloting residential, like a small business. So, we had the profit from the B2B business and we were piloting the residential business with that. The reason to join were twofold. One, I thought that the Solar Square team had something very special going for them. This tiny team which had scaled to ₹100 crs, it was no mean feat and bootstrapped and, in a business, where the biggies existed, right? There was Sterling Wilson and private equity-backed, CleanMax, plus Tata was competing and so they had a 1% market share on the B2B solar thing. The other thing was that the residential seemed like a much bigger market and also seemed like a market where a sort of differentiated player brand could be created. 

On the B2B side, there was this realisation that yes, you’ll get to $100 million, but you’ll probably always be 1% of the market and there’ll always be a fight for margins. But the residential market, it felt like, currently it’s unorganised, but it has all the reasons to be very consolidated. So, you could be this one brand with 30% of India’s market share. And so the right to win was strong, market was large, and we said in business we could see clear moats, legs. Also, to me, it’s very important to know whether internationally something has gotten built in the space. So, I did a lot of research on international comparables, and there were so many large businesses, many of them had gone with venture funding, then became unicorns then publicly listed, then stock went through ups and downs was the whole real businesses got created with the test of time, if I may say.

What she would do anew at Flyrobe today if she were to restart

Sajith: Yeah. Okay. From here Shreya I just want to segue a little bit back into the Flyrobe journey. And also we had about 10 minutes more. I hope you can extend it by maybe another 5-7 minutes more.

Shreya: Yeah, sure.

Sajith: So, I wanted to segue back to Flyrobe now and in Flyrobe, if you can share what are some of the things that you would change if you went back now? Of course you can’t change the market, but are there things that you would do differently now knowing the challenges of the market, etc? 

Shreya: A few things that I did well. And the catharsis had to happen for you to go through the learnings and to come out stronger at the end of it. So, one of the things though I would change would be that I would iterate faster. The concept of product market fit is spoken about, not understood very well, we would measure product market fit on clicks and conversions, but  clicks and conversions come later. Unless you’re a social media where your entire business is 5% versus 8% of CTR?  e.g. in any other business, so we were e-commerce, here whether people wanted to rent what were the patterns around it, what are the seasonality, the use cases around it? We would’ve gone through the entire iterations and pivot faster and been a lot more objective. 

One of the mistakes was that many founders think that the only way to keep going is, you’ve raised money, you’ve a team that relied on you, you’ve sold the story to the world. And so, it’s a sign of resilience that you know are going on and you are trying and you’re hitting again and you’re hitting again, versus that your job is to find the best PMF and iterate fast with the least amount of capital. So, if this is not working, iterate, that’s not working, iterate, that’s not working, iterate. And so many of these legendary startup stories are companies that started with completely different business models. Swiggy started with some couriering model or something like that, if I’m not wrong. Paytm was a (mobile) VAS company before it became Paytm. I think there was that lack of awareness in me. I don’t know if other founders who are young today have it because startups are so mainstream, there are so many podcasts and articles and incubators around it. 

But I personally took it like just keep going at it and keep trying and iterate, but iterate in the zone of this business model which I never questioned, I never said, okay, it’s time to sit back and question the business model. There were enough signs to say that 1.5 years into the right that this is probably not going to be as large or it is good. There are too many headwinds. So, Rent the Runway also, the founder kept at it. It took them some 8-9 years to get to an IPO and they also raised too much capital to get where they did. So, the capital raised to valuation ratio showed signs of a business model issue. But there’s no right and wrong; these are all judgement calls at the end of it, whether to keep going or to quit or to pivot. 

So, that was my learning, that I would iterate very fast and I would be super objective. I know of some founders who are dispassionate about their first idea. They raise a seed funding on the first idea and they’re like this is not working. They transparently tell their board, they transparently tell the employees and they go on and say, I have burnt 30% of my seed money in this, I will do two more experiments. So, I’ll take one third or 30% for my second idea if it works, great. If it doesn’t, then the third 30% tranche I’ll use for the third idea. And that’s not bad when smart people put their minds to it and they get better with it. And that’s why second time entrepreneurs are so much more successful because they have so much that they’ve learned from the mistakes of the first one. So, it’s a little bit like that. 

Sajith: Yeah. Thank you for this. When you say objective, can you just double click a little bit into what you mean by objective? Is it data oriented or what does it mean?

Shreya: I mean just look at it, optimism and delusion has a thin line. And for most entrepreneurs, they think what they’re doing is being optimistic. And anybody who would speak otherwise is wrong. There’s also that thing where the board has also given you money for a business idea. Sometimes even for the best investor, it’s tough to say, it’s time to pivot. Because they may also be like, I sold this idea to my board, so what do I say? I gave you money 3 months ago and now you’re pivoting. Even investors have gotten really mature, the Indian ecosystem has gotten mature in general. When I hear investors being very comfortable with it saying thik hai (alright) we backed this smart person it’s been 3 months since we gave them money & it’s not working so we will pivot.

There are now instances of founders returning money saying, this is not working. And being very objective about it, not optimistic beyond reason. And any young founder who’s in there,  it’s also tough because since you yourself don’t know whether it’s delusion or optimism, you think you have so much resilience in you that there came a point where I pumped in my own money in Flyrobe after two rounds during a bridge. And by the way, Neeraj had made his first profit in Solar square. First time he drew out cash from the company, otherwise he was investing, he was also young. And I took his money and put that also in Flyrobe. So, I was willing to walk through walls and I would still not change that. The whole believing in something, giving it your best, walking through walls, still failing, going through the catharsis, then looking back objectively. So, it took me about six months to really become dispassionate about what happened at Flyrobe. Right? And that bit I would not change because  there’s no other way to know. You give it a hundred percent and then you know, so it’s okay. 

Shreya’s definition of PMF

Sajith: Do you have a definition of product market fit or it could be a very intuitive touchy-feeling definition, if you have, etc. 

Shreya: No, actually.  

Sajith: That’s fine. I always feel that PMF is something that investors put on Founders. Founders think about growth, they don’t think about PMF. 

Shreya: Yeah. And this is something I’ve struggled with because let’s say I’m six months into business building and I’ve gone through a million dollars and I am at ₹1 cr a month. Is it good? Is it bad? There’s no right and wrong answer. Maybe you’ve proven something, maybe you’ve gotten some traction. I have a reference point because of Flyrobe, because that definitely seemed hard. Just getting more customers was so much harder compared to Solar Square. And so for me, I had that reference point because things were happening here so much more quickly and the positive word of mouth was happening quickly. The CACs were very low. We could make money, we could win market share. So, as a bootstrapped company, having the B2B business, we actually scaled to ₹2 crs a month on the residential business through pure experimentation & from one market. And we were locked down in Madhya Pradesh, this was Covid time when we were expecting our first baby. So, sitting in Madhya Pradesh with very little investment in 6 months, we got to ₹2 crs a month. So, we were like, this is traction. This looks like traction. I mean, it took me 2 years to get there at Flyrobe and many millions of dollars to get to ₹ 2-3 crs a month. I knew this was traction.

Sajith: I love your definition when customers are hard to get, bahut kuch karna pad raha hai customers laane ke liye (you have to do a lot, put in a lot of effort to get customers)  it’s not PMF and when customers come a little bit easy and there’s some word of mouth and clearly that it’s PMF, it’s an intuitive definition. I’m a big believer in founder intuition. So, that’s something you get when you’re close to the ground. So at the peak, Flyrobe never exceeded ₹2-3 crs a month?

Shreya: At the peak it was ₹3-4 cr a month, at the peak. 

Sajith: But obviously it came at a cost burn, negative margin etc., whatever. I kind of broadly got what I wanted, justone or two more questions and I’ll complete. 

But broadly I get the sense that I think you are fated to have challenges the moment you pick that market. Because everything in that market was not easy. You try to grow a tree or crop in banjar zameen (unfertile soil), it was hard. You need fertile soil and fertile soil main koi bhi seed daalo (plant any seed in fertile soil) it just grows, right? It’s a bit like that. 

Shreya: Kunal Shah used to be my favourite angel investor at Flyrobe and he had just exited Freecharge at that time. So, he had a fair amount of time and I would just ping him and he would be the one guy I was very honest with. He’d be like kaise chal raha hai (how is it going) & I used to be like ekdum bakwaas (terrible), you can’t tell that to investors that comfortably. But he was an angel, he was a business builder, he got it. And I remember he told me this one framework, and I still use it at Solar Square, it was called India main bahut saari muscle to ban jaati hai fasal nahi ugti. So, he’s like muscle mat banao like mehnat mehnat, yeh bhi karenge who bhi karenge, itna saara paisa bhi raise karenge best tech bhi banayenge (Don’t expend too much muscle or energy such as we will do this and do that and put in more and more capital for less fasal, or crop in Hindi) versus where with little effort, you have a lot more revenue, you know that there is natural momentum here. So, I always say it in a simple way bahut saari muscle aur jarasi fasal ya (lots of muscle, less fasal or crop) that’s like no PMF. 

Sajith: Yes, “less muscle for a very good fasal” is a very good definition of PMF, I might use it. Kunal is very bright and I love his insights. But ek baat batao (tell me one thing) Kunal didn’t tell you yeh market gadbad hai Shreya, ismain mat guso (this is a bad market, don’t enter it) or he trusted that it was a big market..

Shreya: No. So, Kunal believes in consumer psychology. So, he thought, ki growth hacks se kuch hoga (we will get it to work via growth hacks), sometimes you only colour all your investors like kuch to hai (there is something here), something will work here and something worked there. I don’t think he ever said, this is not happening. 

I’ll tell you who told me that this is not happening, and that moment was a big one for me. It was Abheek (Anand) from Sequoia (now Peak XV), and I remember that it had been 3-odd years and we had started to think about pivot kar lete hai ab to (let us pivot). And I remember we met at Taj over Coffee and he said, Shreya, forget all of us, forget the employees you have, forget the investors, forget the customers you have. He said, this is not worth your life’s opportunity cost. He said, you could build something much larger. The investors have no problem in writing off, and moving on, we’ll write this off and we will forget this, but your life’s opportunity cost is much bigger. That was big, to be told that from your investor.

Sajith: Was he the original investor in you?

Shreya: Yeah, he was the one who did our seed round. So, the first person to call a spade a spade was Abheek and I really value that.Those were also heady times. Now when somebody calls me, I very strongly tell them, boss, I can sense there’s no PMF here. I can sense your objectivity is not…. and I have friends who are going at it for 3-4 years. And I tell them, you have no PMF quit, quit, quit or pivot. But sometimes they’re going at it because they’re very passionate about it. There’s just the space or the idea, which is okay, but at least I feel like somebody has to tell the founder that. 

If after that also the founder still wants to go for it, no problem. Sometimes, like I said, delusion and optimism, you just don’t know and somebody can shake you up and tell you, Hey, this doesn’t seem right or I’m looking at 50 other companies in my portfolio and this is not how tough it’s supposed to be. And in hindsight, founders also take it a bit personally, how can this now fail and what will I tell my team, who trusted me and joined us. So, a lot of that is also self-created pressure. But I don’t think Kunal ever said that. He was always the one brainstorming on or aur kya kar sakte hai (what more can we do?) like okay, what new marketing hack? What new viral gimmick we can do? So, he was always that. 

What worked for them at Flyrobe?

Sajith: Yeah. Were there any interesting marketing gimmicks that worked? What you tried? You seem to have tried a lot. Advertising of course you tried. 

Shreya: Yeah. So, the one thing that really sort of clicked was moving from online only to offline retail, that was a clear step. The whole offline retail thing meant better customer experience, higher order values, good conversion, it led to good AOVs etc.  And there used to be days during the wedding season where each of our stores would have 100-200 walk-ins a day. So, in a brief period, there was that kind of demand. A typical retail store would have 20-30 walk-ins a day, on a good day, on a weekend. So, there used to be those crazy times where the whole store would have no space for people and there’d be queues outside the trial room. So, the whole offline thing definitely did work, that was one. 

A lot of gimmicks, marketing things tried but what worked was adding the men’s category it definitely had a bigger market than the women’s category. Men were just a lot more comfortable in renting. And interestingly, about 30% of our customers were grooms themselves who were renting for their own wedding day because they’re like, main kyun khareedu Sherwani (why should I buy this Sherwani), I will never wear this in my life. And they had no emotional attachment to their wedding clothes. 

Sajith: Interesting. Yeah, great, I got it. I’m also talking to a few other founders. Where I see your story coming in is in something called the Pick. So, the Pick is not my original idea, the term came from First Round Capital’s Josh Kopelman who says, investor ke liye pick important hai (picking the right co matters for investors). But like Abheek said, you are one of many for us, aapke liye aapka life hai (for the founder, the pick is her life). I always feel if a founder is picking an idea, it’s for the next 7-10 years of her life. So, it becomes very critical, it is worth taking a few more months etc. So, one of the chapters in my book is called the Pick and I am looking for examples, but I’ll reach out to you with two paragraphs on your journey, see how it makes sense, no pressure enough examples, examples ka kuch shortage nahi hai. But I feel like it’s a very interesting story. Very good team, very good capital also, very high quality capital, but in a very tough market like absolutely running into the wind. 

Shreya: When Elevation invested in us, when we signed the term sheet for Series A for Solar Square, Mukul (Arora) from Elevation who is on our board, and who had met me many times during Flyrobe, I remember, he was like, you know guys, as an entrepreneur, I liked you, but I could never build comfort on your business. So I’m very glad that in your new avatar now we are finally getting to partner with each other. 

So, the whole thing, as you said, one founder, one life, but one VC can go for 100 bets. So, this is something that so many founders don’t get and to your point of view, also take more time to decide. And there’s this podcast by Abhiraj Bahl, again, an Elevation interview where he basically said that for 1.5 years they were brainstorming, brainstorming he and his friend in the US and they were both not quitting their jobs. And then he finally said, nahi ab quit karte hai aur start karte hai (let us quit and start something), because otherwise we are intellectually just questioning everything. So, there’s a fine line between thinking long, then testing, testing with small money, then testing some more, then pivoting, then iterating. But the whole process of coming to what I want to now scale, even the first few experiments or iterations are also a part of you getting to the pick.

How she learns

Sajith: Yeah. Getting to the pick, you’re right, some experimentation is fine, it can’t be everything intellectual. I agree with you. Yeah, just a few things as a founder, how do you learn, etc. do you like to watch or podcasts? You mentioned Abhiraj Bahl, that must be the Elevation Summit podcast. Any other ways in which you learn, are you into reading? 

Shreya: Yeah, we’re big on learning. I’ve always felt at Flyrobe especially, I felt I was walking into the dark and we are very big on learning in Solar Square. We do a few things as founders, we read a lot of books. I reach out to my set of mentors, which is usually entrepreneurs. So, I’ll ping Vivek from Licious, Vidit from Meesho, I’ll ping my other angels, which is the NoBroker founders and Harsh Shah from Fynd etc. So, I definitely have folks that I regularly talk to. I also just randomly ping leaders in other startups. I wanted some gyaan on marketing and I ping somebody in marketing at Acko because solar and insurance, both are cognitively slightly overwhelming, not very intuitive, not very simple. So, how do you make it simple and what are the things Acko learned while selling insurance? So, I would ping random people, read a lot of books, listen to a lot of podcasts. Also undergoing leadership coaching, which is through the Asian Leadership Institute, that is pretty good. As a part of our learning, we did xto10x, which was immensely helpful. Binny Bansal’s xto10X, especially in our case,  the whole FlipKart mafia has started it and they are so good at operations excellence, just making tech process, product, everything, incentives, designing the whole operations like a scalable engine, smooth & scalable.

Sajith: Now or earlier? 

Shreya: In Solar Square. So, we did that. We also have a continuous learning programme called KaizenX inside Solar Square. So, we also call and organise things for the leadership team. So, for example, for our marketing team, we organised a masterclass by this author, Aashish Chopra. He was the CMO of Ixigo. He wrote a book on content marketing. So, we did a 2-3 hour masterclass. And these things are very expensive more often than they are not. But that is something we really do because otherwise you become a frog in the well, you don’t know what others are doing. 

And xto10x taught us that everybody’s struggling with the same problems. Your problems are not unique, there’s nothing special about it. So, it also gave us a framework where our team no longer feels from anything is a big challenge because they’re like after xto10x and telling them 10 of our problems, we realise that there is absolutely nothing unique about our problems and everybody has solved it in the world. So, we actually now quickly connect with other entrepreneurs, and say we are suffering from this. And they share how they go about it. So, it’s really helpful, the xto10x thing didn’t exist when I was doing Flyrobe. Recently started, it’s very good. 

Sajith: Yeah. Favourite books? Something which hit you on the head and you went wow. 

Shreya: Sure. Zero to One (Peter Thiel), every entrepreneur will give you that. Ride of a Lifetime by Bob Iger, I really liked it. I read Principles by Ray Dalio, it’s really big, it has some fantastic insights. Measure what Matters (John Doerr) for OKR those are some of the books. 

Sajith: Any podcasts that are top of mind for you? 

Shreya: I really like the one that Elevation has done with their founders (Elevation Summit). I usually like the ones that VCs do with their own founders. 

Sajith: Yeah. So, if I need to talk to somebody else who gets PMF, one is who gets PMF and who you think I should talk to? Is there someone you can recommend and one successful one & another a failure or struggling a little bit, because I’m trying to get to both. I’ll reach out to them. I won’t rely on you, but I might tell them that Shreya mentioned. 

Shreya: I’m thinking, you should talk to the guys at Porter. They’ve been at it for long and they’ve finally struck something. You definitely talk to the guys at CityFlo. My God, you will know what resilience means.

Sajith: CityFlo?

Shreya: So, there’s this company called Shuttl, which you would remember, Sequoia-funded company, the bus service company. They were their less funded younger sibling and CityFlo survived with lot less capital and Shuttl didn’t. And it’s just an incredible story of resilience these guys, not many VCs believe in them, but it’s a slightly tough business though. But now after eight years, they’ve gotten to something. Do listen to their story from the horse’s mouth. IIT Bombay founders again. I think about failure, you can talk to the Doormint founder because he’s also at his second stint, Abhinav Agrawal of Doormint.

Sajith: Yeah, I’ll talk to Abhinav. This is great, love this. Thank you so much for being so open, candid, but our industry is a bit like that. Yeah, I so enjoyed this conversation and I would love to just keep in touch with nothing other than that. And occasionally invite you to some of our events to talk to younger founders and inspire them.

Shreya: Absolutely. I’m still building my own company and still trying to catch up, but definitely, I mean a lot of founders, like young founders do call me for advice and if I feel somebody could be relevant for this book, be happy to connect. You picked up a great topic Sajith. And most of this is the make or break, right? Because if this happens, a lot of smart people out there, a lot of great investors who can help you navigate. But PMF is part serendipity, part science. It doesn’t happen easily. 

Sajith: Yeah. I also feel, I’ll talk for hours on this, but I feel some parts are like Rubik’s Cube (workoutable) but some parts are luck. So, I feel top-down B2B motion startup’s PMF thoda sa formulaic kar sakte hai (can be made a bit more formulaic) & that is sort of becoming known, there’s certain ways in which it can be done. Consumer is harder. Udhar thoda jyaada art hai (There is a bit more art there). So, this is absolutely good stuff. And enjoyed this, oh it stretched on for much longer. You’re so kind. Have a great holiday. Okay. Thank you.

Shreya: Thank you so much.