In this episode, Manish Taneja of Purplle tells Ashish Fafadia of Blume about the perils of moving away from your vision because “some VC told you to” and the mistakes that entrepreneurs should avoid in their journey.
This transcript was AI-generated and went through multiple rounds of proofreading. However, there might be a few errors that may have slipped through the cracks.
Ashish: Hi everyone. We have Manish today with us as a part of the X-Unicorns podcast series. And, just a quick background about Manish and Purplle before we get started. Purplle early this year became the hundredth-and-second unicorn in India and they started off their journey more than 10 years ago. And Manish, Rahul and Suyash are the founding team. And today the idea would be to discuss with Manish about his personal journey interspersed with the growth journey at Purplle, the early days of Purplle, what they thought about it, how they grew it, the testing times, and so forth. And as somebody who has known Manish for now almost a decade, I've seen him to be somebody who has been extremely focused, values-driven and sensitive, and some of the aspects we would've even discovered only more recently and many other aspects we would discover about the founder very early in the journey. So it has been a learning curve for us as well as we embarked on this journey. Welcome Manish, thank you for your time. It's great to be having this conversation. Later than what I would've imagined, but definitely, it's good to get started somewhere.
So I'll like to start with your personal journey and the formative years. What were the factors as you were growing up that you always cared for, what, all things that mattered to you as individuals, books, personalities that inspired you and, during those experiences, was it that you always wanted to be an entrepreneur? So all of those aspects eventually led you to make this plunge into entrepreneurship. Were the factors that mattered to you as a teenager? Were there, was something changed post that, but so would love to go back as far as you can, sharing some personal anecdotes and journeys about the whole thing.
Manish: Thanks, Ashish. Look, my childhood was like any other childhood in, I would say the early eighties and early nineties. I grew up in a city called Faridabad. My grandparents came from Pakistan, so they basically left everything they had in Pakistan and they had to restart their life in India. and so my parents had, I would say, a little bit of a tough upbringing. There wasn't too much money in the family. And so one of the most important things for them when we were growing up is, I think we saw them working really hard and my mom is truly inspirational in that sense. I think she can work extremely long hours without cribbing a bit. I was fairly good at studies luckily. And my childhood, I would say was like any other childhood of a boy in 1980s and 1990s. I loved cricket. I wanted to be a cricketer, but my parents thought it would be better to get educated and therefore didn't allow me to join a cricket academy and I can't complain today, but, my childhood was basically go to school, do your homework, and then play for three-four hours. Go to sleep, go to school the next day. So that's, it's very normal childhood. I would say till I was 16, I was like this in Hindi you have a phrase called “Kue ka maindak”, so I was like a frog in a small well, so I had no idea what the world held beyond this. So when I got into 11 standard, which is when I was 17, I heard about IITJE for the first time in my life and I thought I would prepare for it and probably get through it pretty easily because I was good at studies. Little did I know that a lot of people write that exam. And, I think, one thing that fundamentally changed my, I would say, outlook towards life and perhaps my trajectory was getting into IIT in 2002. For the first time, from a frog in a small well I went into probably swimming in an ocean and I had the best of talent from everywhere in India, be at the same institute and I think initially it was little bit unnerving. I had never seen so many incredibly brilliant students around me, like I saw at, at the college. Gradually you get a hang of it, and you start doing well. So I think IIT really opened our eyes to the world and I'm deeply grateful to the college, for doing this for us. One more thing happened at IIT, again, luckily during my time, and I think that inspired me to be an entrepreneur.
The Bharti family, which runs Airtel, they had sponsored a school at, IIT. It was called Bharti School of Telecommunication. I don't know what it's called today, perhaps it's called the same. And as part of the inauguration of that building, Mr. Sunil Bharti Mittal had come to the campus to give an inaugural speech. And I remember two or three lines from that speech even till today, which I think might be useful for people to hear. Airtel started somewhere in 1995-‘97, and in 2003, Reliance Infocom launched a new technology in India, which was called CDMA. And Airtel used to operate on GSM technology. And obviously everybody advised them that, now it's a big daddy's game and you should figure out what you want to do with Airtel. And Mr. Mittal said this in his speech, that if they had any other business at that point in time, they would've focused on that business and not focused on telecom. But given they had no other significant business, they decided to just remain focused on it because this is what they were doing. And so the entire team went for an offsite and came back, charged up and said look, let's compete head on. And, the rest is history. Airtel continues to be the market leader in India, both from a number of subscribers point of view, from a market share point of view, from a revenue share point of view, from profitability point of view, everything. It stayed with me. And I felt like, Mr. Mittal at that point in time was, I would say there was immense humility in what he shared with us. People don't like to share their vulnerable moments, but I think that did inspire me to say, Main bhi kuch aisa hi karunga life mein, so that was the thing.
One of your other questions, Ashish was on books and what do I love to read. So I wasn't a very avid reader when I was in school and perhaps even when I was in college. I have started reading, in what more recently, so like maybe last seven-eight years, 10 years. I love to read a lot of books, so I love to read practically anything and everything under the sun. I love to read on business. I love to read how you make good companies great. I love to read about, how do you improve your people culture in the organization. At the same time, I love to read about spirituality. I love to read about, I even love children's books, so I love pretty much reading everything. At any given point in time, I would be reading like five books, together. I would say one of my most favorite books, and I think it's something that I've learned a lot from and probably changed a lot with is, is a book by an Indian executive coach. It's called, Inside Out Leadership by Rajiv Vij. I think it's a very good book. I think you also have Indian authors writing, and that makes it like more, I would say relatable. But at the same time, I think the book is just absolutely outstanding and it's a must read for people who are trying to build large organizations and at the same time have an impact on society. Yeah, this is my background, my formative years, books I love to read, entrepreneurs that inspired me. But yeah, if there are more questions, I'll be happy to.
Ashish: No, just, a couple of interesting takeaways. You said you love cricket and Sachin Tendulkar of late has been making the statement a little more than he made even when he was in his playing days that never let anything doubt your ability and he narrates this whole famous incident around how they went to Pakistan and he was performing badly, not as well as he thought he wanted to. So I think, some of these things do tend to have an impact. Would some of those instances, when you would look back today and map it, the journeys that some of us had growing up through the eighties and nineties, we have seen multiple institutions come up at the same time, whether it was the way Indian economy started building up through the late eighties, big revolutionary movements in ‘91 and through the last 20 years. So all of these do tend to have an impact in our growing-up memories, and they do also tend to shape the way we make decisions or we allow reactions to come into us. So any of those building up things external that you can recall or you feel that okay, they did make a certain impact? I know you spoke about some of those, but anything around you beyond the instances of the speech that you heard from Mr Mittal and your learning?
Manish: I think cricket is very close to my heart. I think I describe the relationship between the three founders, and like this, I think Rahul and I are like probably Dhoni and Raina. I think we can look into each other's eyes and know what the other person wants to do. And that really helped us when we were raising capital on Zoom because, in a meeting room when you are like face to face, when one person starts, the other one sort of pauses and let's the other person take lead. But it was hard to do this over Zoom. But I think given our relationship, we could just look at that small tiny box on the screen and we knew that this person probably knew this answer better than I did. And then I would just pause immediately and Rahul would take care of that. I think Suyash in our lives is more like Sachin Tendulkar, I think he's been the backbone for a decade now. We want that backbone to remain healthy. But I think the relationship between the three founders is quite deeply connected to cricket. and I think that relationship in many ways has been about lot of mutual respect. It's been about, fairly unanimous decision-making on prioritizing the long term over short term. It's been that relationship where I think we trust each other blindly. We let each other take decisions in the areas they lead. It doesn't mean that we don't debate things out. We do, because at any given point in time, different people would be feeling differently about opportunities like we do. But at the same time, I think it's been a very rewarding relationship. We all came together through serendipity. We didn't know each other before starting Purplle. I knew Rahul because we used to stay at the same place, but again, we met serendipitously and then we met Suyash also serendipitously. But I think this has been one of our best relationships of our lifetime.
Ashish: Okay. Last point on the format of years, before we jump into the Purplle journey, you spoke, about the whole dynamics about trusting blind, having a conversation and yet then finally going with the person who knows it the best and I can relate to it from some aspects of the journey when we have had at Blume between Sanjay, Karthik and me, and then onboarding other senior leaders in the team as well so fully relate to it and at times there's lot of decisions where you're going to constantly focus on postponing gratification. I'll come to that aspect a little more on the Purplle context on how we balance out growth and blind growth at the cost of heavy capital burn, et cetera. But for now, the last part on the personal side of the journey, any one, two, or three decisions that you took during the early stages, which were make or break in life where you look back and say, okay, I chose an alternative path, it would have been very different from where I am at today or something that impacted you very positively and it was just the right decision you ended up taking anything that you can look back and say that yeah, this was the big moment, or these two are the big moments.
Manish: I think the first one would definitely be when we decided to just start up. Like I think, were in very good jobs, to be honest. I was having a time of my lifetime at Fidelity. I don't think there could have been a better employer and I relate a lot to Fidelity's value systems, so I was really happy to be there. We had a great team and we were doing investments together, but I think decision to start up again was absolutely one of the most, I would say, critical ones. And luckily I had Rahul, who was also my flatmate at that point in time where he also said, yeah, let's go for it and we decided to put in our papers and do it. I think the second one that I remember a lot is, during our journey in early years, which I would say would be like first five-six years because we've had a very different, journey from many other VC Funded companies I've had. We had angels and Blume invest in us in 2013. I think we've been very close to running out of capital two or three times in our journey and also many people who were investing in US were also first time funds. So, whether you look at Blume, I think we were from the fund one.
Ashish: That's right.
Manish: When you look at Ivy Cap, we were from the fund one and when you look at JSW Ventures, we were from the fund one. Yeah, so we had these first-time fund managers investing in us and in some ways we were scripting this together. But at the same time they also had restrictions on how much capital they could deploy in us. We’'ve had this, time where we've been very close to running out of capital three times or so, but I think we chose to just continue, and not give up. I think in early years it was about, a little bit of ego, I would say, where we said, we can't quit so quickly, this is not what we are made for so we just kept going on. I think at the same time, I think we've had some amazing investors slash friends who've helped us out in those moments with small amounts of capital, but that capital was good enough to keep us going. To give you an example, I've had, Blume wire some money to us from their GP fees. I'm not sure if we are supposed to mention these things, but it's okay. I've had two of my angel investors, give me money when I need it, like in the blink of a phone call. I may mention them, given that they've also done very well. I think one of them is Mr Raghavan and the other one has always been Vinay Menon. So I think there are these people who've backed us I thought they were quite fools backing us at those point in time, but I think every time they just helped us get over the things, hopefully this has been very rewarding journey for them. And I think they were also deriving these vicarious pleasures of running a startup while they were not running it, but they were funding it. But I thought they were just enjoying the ride as much as we were doing. So I think just the decision to never give up while we were up against tide, or I would say up against a huge wave almost, was I think the second important one. I think the third one, which turned around our journey quite dramatically was, in 2017, when we had, again, very little capital in the bank, we decided to use whatever capital we had and whatever data we had to build our own brands. And ever since then, I would say we've never looked back. So I think these are broadly three decisions that I can think about in the last 12-13 years that have influenced our journey in a really big way.
Ashish: Awesome. I'm gonna skip a section and come back again on the early days of purpose, but since you mentioned about some of these aspects during the grow journey, I'll focus on that and continue to build up. So, there was a David versus Goliath moment. In the formative years we were up against,mega-large businesses, the horizontal __ and multiple tides within the waves where people would say that, okay, how are you compete. going to compete with the likes of FlipKart, Snapdeal, Amazon. And some of them even, were having very deep domains on the beauty side and were going very big, investing heavily on those aspects as well. So in, when we look back some of those conversations, and those battles specifically vis-a-vis with the investors who we were pitching to during the early days, who would say that, okay, why would a vertical commerce win and what is the right to win for a Purplle within that? So that would be very useful for people who hear this to get a little deeper sense on that early conversation pre-2015 ,’16, and that's the moment when vertical commerce really took off in a meaningful way. But pre that there were these severe questions which we had to combat with and that did impact the cash flow issues, et cetera, because that kind of affected the investor's conviction in some of these aspects. So what were the conversations within the team on combating those big sale by Flipkart or Amazon and it has a recurvation on what would happen on Purplle as well. So how would the team reflect on it? What are the conversations between the three of you along with the leadership?
Manish: I think somewhere we were very convinced that, beauty should be sold in a very different manner than probably a cookie cutter manner in which you can sell perhaps books or mobile phones and I think India has generally been very suboptimal on service experience in retail unlike many other countries except if you take hospitality as a sector. So I think, if you look at Taj or Oberoi in India, I think their gold standard in global hospitality, I think they're better than the best in the world. But I think our retailing standards have generally been fairly poor. And we definitely thought there was a way to up the game in beauty as a space, because it's a space where women want to feel liberated. It's a space where, women want to feel themselves and be themselves and not be pushed into buying something and just want a little bit more love and care, than what a horizontal or a, any other offline retailer was perhaps providing at that point in time. What we also knew at that point in time was that beauty wasn't such a large focus area for them, so we thought if we become big by then you know, maybe we would have a fair chance of winning the race. That's generally not a good idea to assume your future on, but at least we were hoping that would happen.
So in early years of Purplle it was extremely hard to convince VCs to invest in us for two or three reasons. I think one, most VCs didn't believe that, vertical commerce would scale in India. The second thing that many VCs had a problem with us was, we were three men starting a beauty business and perhaps they thought that we wouldn't understand this business and the nuances of this. Little did they know that I could apply a lipstick or a mascara, as well as any woman, would apply. And third, I think generally, as I said, the ecosystem of VC investors was also very new to India, and so a lot of people were just doing first time funds and, they really didn't want to bet on something which they hadn't seen scale globally in any other geographies. So people used to typically like and fund copy paste businesses from US which we weren't the case. And I think it was hard to convince people. Maybe that's the reason why probably new age Indian investors invested in us. When I say Indian investors, people who are not the Indian arm of a US venture capital firm. Maybe these people could take more independent bets than others. And so we had Blume invest in us, we had IVCap, which is a homegrown series A, series B VC fund. And then we had JSW, which is a homegrown series A corporate VC. Yeah, so these people invested in us and once we scaled up to a certain level, which I would say was in 2019 is when we had, Goldman and Verlinvest invest in us. By that time it was proven that vertical commerce would survive and do well. By that time it was also proven that we had a differentiated business model vis-a-vis everybody else because of the strength of our own brands. And by that time, maybe we had enough credibility as founders where people thought that when these people say something, they will more or less do it. And one of the things that probably we didn't do very well at, it's not very core to us, it doesn't come easily to us, is as founders, we don't like to sell large vision. We like to sell stuff, which is based on very practical assumptions. And sometimes it's, not as exciting for a VC, which is looking at like a 20-30x return from a company. Yeah, we have more grounds up and so it's hard to sell a story in the air, but look, that's what we are. I wouldn't want to change that about us because it just works perfectly for us. It's worked out quite well over the last 12 years, 11 years, and we would like to set fairly moderate expectations about our business and hopefully over deliver. But we won't never, we would never like to sell you like that we can be on the moon one day and then probably not being able to deliver it.
Ashish: So. The other, so you mentioned about the difference journey and the ability of investors to localize and I think the localization factor is a very fundamental factor, and it was only in the late half of the last decade that kind of started becoming imperative that we will have a very unique set of journeys and I think Purplle also has a uniqueness in terms of the way the cap table was built out. It was not a typical journey where everything was happening smooth, a nice cool seed round 3, 4, 5, 6 million series A for less than 25% dilution. So templates were completely quashed. There were not a single template we followed until 2019 when things started falling into place. So when we look back, I think there are enough companies in the Blume portfolio, and even in the ecosystem in general, where they have been built in spite of markets and investors not believing in it enough. I would definitely not say that they didn't believe at all, because there were supports coming in from different quarters, time in again, but not with the same intensity and the same degree of conviction that company would need to break out very quickly. And in that whole thing, a commerce company, a very conventional thing was discounting. And there would be temptations to look at discounting to win the market or win the customer and we never had the luxury. So I, I would joke about this that we never had the luxury of, making a decision that, okay, we are not going to discount. It was combination of the fact that's how we were as a team between the three founders, all of you as individuals grounds up, like you said, and also the fact that we didn't have that kind of capital muscle to go about it. So where was the balancing factor and what were the things that you were trying to think about? Would the feeling be that, okay, we can't do it, so let's do it this way? Or like you said, it was only first principles driven?
Manish: I think it was largely first principles driven. We always wanted to run a good unit economics business. Yeah. it, I think it comes from our backgrounds. I worked at Fidelity, I think it's one of the best investors globally and very value seeking investor. Rahul used to work at Tata Sons, again, a very long term value seeking corporate in India, and Suyash had been an entrepreneur most of his life, but Suyash did not influence a lot of our commercial decisions as much as Rahul and I did. Just for everybody's note, he runs technology and product at Purplle.
I think between the two of us the feeling was always that let's prioritize long term over short term. I wish we could have done more and more of it. There were obviously some instances where we would've behaved a little bit more short term because maybe some venture capital told us that, if you hit this milestone you will have money from us and so forth. I think those are mistakes that I would ask every entrepreneur to avoid. I think you should run your business the way you like to run business with your own conviction and not because anybody external expects you to do something else. The earlier you can have that kind of faith in yourself, the better is the journey and the easier is the journey because this journey is not a hundred meter race, it's probably a
Ashish: Mega large marathon.
Manish: Much larger than even a marathon. So if you are trying to build your company over 20-30 years, then you've got to run the business like you feel is comfortable to run. You've got to take risks that you are comfortable with because your investors might be comfortable with very different risks because maybe they have 20 portfolio companies and even if one fails, it's okay. But for you, this is all you have. Your all eggs are in one basket. And it's not just financially, all eggs are in one basket. This is the only thing you know what to do. This is the only thing you do. So take risks that you know you are okay to take and so we've always run this company with good unit economics in mind. We wouldn't have run it any other way, even if we had more capital. Even today when we have a lot of capital in the bank, we choose to go after businesses that are higher gross margin and continuously reduce our exposure to lower gross margin businesses. And so once you've hit gold at one place, you know the idea is to keep finding more gold rather than to settle for silver or bronze, which is, in my view, like lower gross margin businesses versus higher gross margin businesses. So yeah, we wouldn't have done anything any differently.
Ashish: Just rewinding a bit all the way back till ‘11, the early days of Purplle. And when you all spoke about the backbone, you called Suyash the Sachin Tendulkar between the three of you. Many a times we do see that the first moments of struggle and there are enough founding teams that do tend to break. And there are enough signals that do come up before the eventual moment comes where somebody puts their hands up and says, I'm moving off. So when you were in that formative year, I would like to spit into two parts. First, would love to understand how you all thought about and arrived at the fact that this is what Purplle Journey is going to be and we are going to into the beauty bandwagon. There was no bandwagon actually.
Manish: So how did we decide on beauty as a business, to be honest with you, I think, I've said this earlier, there is this guy next door effect and, I had two people from my hostel, and basically one batches, two batches apart, who had become entrepreneurs both in the internet space. One of them, had started Flipkart. His name is Binny Bansal. He was one year senior to me, and the other one had started Zomato, Pankaj Chadda. He was one year junior to me. So when I would meet these people, I would feel like, if he can do it, perhaps so can I. So there was no envy, I would say. It gave me little bit more conviction that, let's go for it, it's possible to do it. I think the second thing that happened was that whenever I would meet more and more internet entrepreneurs in 2010, because of being in the private equity world, I could see that some tide was lifting everybody up. And there was basically more number of people joining the internet bandwagon, so to say. And I didn't want to miss out on that party, to be honest. And so Rahul and I were fairly clear that we will join, we will do something really within the internet space. I think the only model that made sense to us or is something we understood was buying and selling. We didn't understand any other business model, perhaps like classifieds or many media and so forth, because we had no background. I think buying and selling basically is like the simplest business to understand if you buy at 80 rupees and if you sell at 120 rupees, you basically make profit of 40 rupees and SaaS didn't exist at that point in time and also we had no background in technology. So I think one thing was very clear. We wanted to start something in the e-commerce space. Within that we were looking for gaps and open spaces that we could occupy. Given that there was always, there was Flipkart, which was doing amazing stuff on books and mobile phones and so and so forth. And then there was Myntra, which was doing, in those days, customized apparel. But I always thought they had an edge over us. And so we had two spaces shortlisted for us in 2011. One was furniture. There was no Pan India furniture brand in India. Truth be told, I had never been to Europe or US before 2011, so I had no clue something like Ikea ever existed in the world. But it was just fundamental first principle saying there's no Pan India furniture brand that can deliver good quality furniture to you to make your homes look better and we thought e-commerce is a good way to do it because then we can stock our inventory at a few places and we don't have rental costs and we can just deliver it to your homes and then we'll probably send a carpenter to your home to fix it. The second one was beauty, because we felt that beauty retailing in India actually used to be pretty poor quality. And I think continues to be not so good quality even today, although it's improved by quite a mile. We chose beauty for a simple reason. I think it was a theory of elimination, furniture I think needed a lot more capital to start with. And we didn't have that. We had our own savings of not more than 50 lakh rupees, in US dollars, it’s like,
Ashish: Back then it was a hundred thousand dollars, a little less.
Manish: Yeah, it was a hundred thousand dollars. So given that we had only a hundred thousand dollars, we thought let's get into a business which is less capital-intensive to start with. Beauty, for some strange reason, is a very high gross margin business. It's probably the highest gross margin business that exists in the world. It is also a fairly good repeat business. People come and repeat with you, fairly often, and it's not like a one-time business unlike furniture and I think India was at an inflection point of it, where, I think very few people were doing beauty retailing really well, and we thought we were entering a nascent market. And if we survived in this country for next 20-30 years, we would probably be able to build a good business. So that was the thing. Beauty is a large business. It's a high gross margin business. It's a high repeat business, needs less capital to start with. And so we thought, why not try our luck with beauty as a category, and the agreement with Rahul was, and Suyash came in couple of months later, the agreement with Rahul was that once we do well in beauty we will get into furniture at some point in time. That point has not come yet, but, that's how we zeroed in on beauty as a category.
Ashish: Interesting. And, the other, big question that I wanted to have in this part is also the founder dynamics we discussed briefly and you spoke about in the parlance of cricket. I would like to just double click on that in terms of the whole role that somebody at the backend ends up playing the dynamics between two founders, three founders, et cetera. And how do you make sure that you keep the flock together, because eventually the team expands as a wider leadership. So early conversations, basically discussions, debates, and decisions. Would just love to have some interesting thoughts that you try to put out as a framework, which will work between the three of you. Or it could even mean that, no, there was no such framework, it was a lot of, like you said earlier, blind trust and implicit faith in the best guy on the table to take it forward. So how did you really get the balance right? How do you all make sure that there were enough discussions, and then a considered call. So all of those aspects interspersed into the overall broad question on founder dynamics.
Manish: I think it's true for any relationship in life and not just true for founder relationship. I think you must respect the other person and never take them for granted, Suyash came from a very different background. Rahul and I used to work at a corporate. Suyash was an entrepreneur, and I think his previous startup wasn't doing so well. So he had probably some personal debt and all. And so ever since, we started, across the last 10 years, any equity distribution that has been to the founders, from the investor side has always been divided, one-third, one-third, one-third. We've never thought that one founder is more important than the other. In fact, if at all, I think Rahul and Suyash have paid a significantly larger role in success of Purplle than I have. And, I think second thing that probably has bound us together is we all came from very similar backgrounds, we all grew up in, I would say, lower middle class households. We knew what value of money was. We always thought saving capital money is very important for the growth of the firm. And so I think there were just very few conflicts in my view. I think we've also evolved quite dramatically as people over the last 11 years, and therefore the relationship has continued to blossom quite well. And as I said earlier, I think there are some areas where one person is better at decision making because that person knows that part of our business really well. And there are other areas where the other person is very good at decision making. So we let the right person take their decision. Only one principle we keep in mind when we take decisions is, is this better for the long term versus the short term. If it's better for the long term and we are okay to pay, take some pain in the short term, we will go ahead and take it. It has manifested in many ways at Purplle. It has manifested in how we've taken our capital allocation decisions. One of the things at Purplle that I wanna work on, and it's something that's work in progress at Purplle, is I want women employees at Purplle to do very well. The reason is, we are a company where I would say 95% of our customers are women. And if they don't do very well here, how do we expect ourselves to do well as a company, and so one of the decisions I think Rahul took, which I think is mind blowing, is when one of our senior employees went on a mat leave, on a maternity leave, he chose to not fill her position with anybody else. He said I would do this role myself for 6-8 months, keep the position for her to come back. And so those six, eight months were hard on him because those six, eight months we went through diligences, we went through business scaling too fast, and our warehouses were probably not scaling up as fast and so there was lot on his plate. But he just said that, look, we don't want to replace her with anybody else. Typically what happens in most companies is that if a woman goes on a mat leave, her position is filled by somebody else. And then when she plans to come back, she's given a role that the organization has to give her. In our case, we kept the position vacant for as long as we could till she came back. And I think, again we prioritized long term over short term because this woman is clearly a senior leader at the firm. And likewise, I think Suyash, Rahul and I have been glued together towards saying, let's do the right thing for the long term. We are okay to take pain in the short term. I think today we are also very over-communicative with our investors and board. We tell them things that we think are painful to hear in short term, but we tell them that we are doing this for the long term and if you were to continue as shareholders in the firm for 10, 5 to 10 years, I think this would be a very rewarding journey. So I think that that one, I would say common tenant has been that, can you prioritize long term over short term as much as you can? I don't think we can do it in a 100% of the cases, but I think if you can do it in 85-90% of the cases you do fairly and you stay together because like you're not changing your values and principles quite often.
Ashish: I remember some of the extremes. If I may just put out one such discussion that two of us had more than I think two years ago. It was pre covid, if I remember it right, where we had this possibility of a infusion of capital and you went to the extreme of saying that I'm happy to give my shares a discount and make sure that we get the right attribution of value to the company. So that, that's the kind of extreme that you all have been thinking about. And that reflects in the overall value systems because at that point in time, you didn't say it with even the addition of the sentence that, okay, we'll then compensate in ESOPs later. You left that completely to hoping that, okay, we will figure that out on the way.
So it's been phenomenal. I think you've been able to create that trust with the investor group and the board as well. And I remember the last meeting also where we were discussing a few things and one of the two of you went on the extent of saying that, no, we won't pursue this kind of a growth rate because that's not the best thing, that the ecosystem probably needs at this junction we can do without it.
So, all, all good on that front. The next phase that I want to reflect on was the phase of Covid. That was the first time I think things started to fall in, right, from a timing perspective. We just finished the fundraise and while we were planning for going in that go big territory in a big way, we were now saddled with lockdowns, et cetera. So from that point of time, we were still a business which was sub, 200 million dollars of value. And it was also the point where I think there was a massive differentiation and separation from the men and the boys came up over the last two, two and a half years. So how was that phase in terms of, vis-a-vis any other typical startup and the early reflections that you put out on the value systems of the business and you're trying to keep the machine on, work from home, integrating the people and keeping the flock together. Love some reflections and journeys on that.
Manish: I think we've been very lucky over the last 10-11 years. and probably that's how the journey has played out to be. We raised our first serious amount of capital in December of 2019. This is when Verlinvest and Goldman invested 250 crores of primary capital into the the firm. And little did we know that three months later there would be lockdowns in the country and, people would be staring at something that they had never imagined or seen, never in their lives. For us, given our frugality, it's actually one of the key principles that you see within the office. given that we were always very frugal, actually our cost base in Covid was only 2 crores a month, and we had 250 crores of cash in the bank. So we were actually very comfortable saying if the business becomes zero, if the revenue stays zero for as long as it wants to be, we are okay. Yeah, we can survive for 125 months. Now, while we were very comfortable, I would say, different stakeholders in the system are not as comfortable because, not everybody knows your situation really well on the ground and therefore is a little bit more paranoid or worried. So one of the things we did at the time when covid hit us was we started over communicating with two key stakeholders. One was our investors. We actually started doing board meetings every two weeks and we were updating our investors on what's the situation on the ground and potentially when can we get started again, and so forth. I think the second thing we did was we actually started doing weekly town halls because our employees I thought would be a little bit more worried than probably even our investors because employees don't have access to what your cash situation is and they were hearing of layoffs everywhere else and we had announced to our employees that there would be no layoffs and no salary cuts. And it was hard to believe for a few people, so we had to just hammer this, many times by saying, look, this is how we are going to operate. I think it comes from our frugality principle, like I think we just didn't have high cost base and that's how we've always run this company. And at the same time, I also think, we like to treat people as partners and don't like to let go of people or fire people because business is not doing so well.
I think as management team, we should take responsibility if we've overhired and as management team, we should take responsibility for our actions and don't let these people go just because a business is now seeing a slight slowdown and stuff. So it's something that I'm not very fond of in the startup ecosystem in India. We've been always a team that has said, hire carefully, wisely. Make sure that you can retain these people even if you have a slight downturn in revenues over in the near future or so. So this is how covid began. I think gradually a lot of our stuff was considered as essential services, so we started reopening our warehouses in May of 2020. And, then we saw this unprecedented surge because offline stores were shut and I don't know if it was revenge buying, I just think other avenues were shut. So there was this massive demand to buy online and we were running out of supplies because factories couldn't produce it at the scale at which we were selling. Again, because we had capital in the bank, there were two things we did vis-à-vis are other stakeholders, which is our suppliers, is one we told our suppliers that, we will buy more units of inventory than we have done in the past and stock it with us so that we don't go out of stock. Second is many of our suppliers were facing cash crunch. And so we decided to advance our payments to them because we had that capital and we thought this might be a good time to perhaps help the ecosystem a little bit. Yeah. Like they had probably helped us ever since we were growing up. And so this is what happened in 2020, from a time when business was shut to a month or two when there was huge demand, which is August and September of 2020 to us running out of supply during Diwali and then trying to sort small products and so forth. And then, as covid wave two hit, which was in April, we decided to raise a next round of capital, which is when we approached, a set of investors we thought believed in us, and I think Kedaara and Premji matched our value systems, perhaps like nobody else and so we are, I think, extremely glad to have them. I think they're probably top one or two or three private equity funds in India and especially because they have Indian capital, and I think they are there to the timelines really well and we are glad to have them on our cap table. And so as covid we have three was coming we were again, very well capitalized with about a hundred million of cash in the bank and so I think it's been a journey of lots of luck. I think luck has played a big role in us being able to raise capital at the right time just before a big covid wave was coming in front of us.
Ashish: So again, there was a stark difference. The first two factors that do differentiate the Purplle Journey vis-a-vis the rest of the startups in the ecosystem. And there will be a few in that category. I'm not saying we are the only ones. Yeah. is the fact that we grew with a very alternative and unique set of investors. We didn't go down the, fast path of trying to just buy customer love with discounts. So value systems driven. There'll be other value systems will come across the ecosystem, it's hard to otherwise really build companies. You might build a unicorn, but to stay and become a decacorn and be a listed company and scale is hard if there were no value systems, so that, I'm going to take it for granted that every business that does well has to follow those principles, but these two were very different vis-a-vis common startup journey. And the third one you just highlighted when you said what you said during the covid, the reaction to the supplier ecosystem. By and large, we were talking about layoffs and we were talking about renegotiations with suppliers. Basically everybody was in a genuine SP where cash was a key thing and everybody was trying to go around, figure out ways and means to, conserve their cash and pass on the burden onto some other member on the ecosystem. Firing an employee would mean that you have passing the onus onto that employee to survive surpassing on the onus to suppliers by saying, you fund me for a few more months. And here on both we had a different take. And the supplier part particularly is a big one.
Manish: I think, maybe I can just chime in. There were also couple more instances where I thought this, this happened and I think now we know it and so we probably use it to our advantage as well. But, we've done, two acquisitions in covid. The first one we did without meeting the team in person ever. That one was, we entered the feminine hygiene space with a brand called Carmesi. The founders were running out of capital there and, they had little cash left in the bank to procure supplies for themselves of sanitary pads. And so they did ask us, if we could help them out with that and so we placed an order with their supplier, paid them at once, got stock in our warehouse by the time acquisition was completed. So basically we had wired money to an entity and bought Carmesi pads when we didn't know what, like if that transaction hadn't gone through, I think we would've been left dry thinking, why did we buy like so many sanitary pads and what are these doing in our warehouses. The second time we did this was, when we did our second acquisition in covid, which was Faces Canada. Again going into the season, Faces Canada had less capital in the bank. This was in August-September last year, and we ended up wiring, I think seven and a half crores of loan to Faces, even though we hadn't bought the company yet and we didn't know how it would play out. But I think we did the right thing from a long-term point of view, from a reputation point of view. So far we have done, I think five acquisitions. All founders continue to stay with us. The entire management team, barring one at Faces, continues to operate with us in albeit much larger roles. And so I think, being true to your values has played out quite well for us.
Ashish: And again, I'm not trying to overemphasize, but not just trying to fit it in the theme, but I think significant variances when some of the startups do end up becoming mega large with large chunks of capital, acquisition pretty much becomes constant. And here over the last decade, I've seen this whole approach to acquisitions, which is very fundamental. The resonance to the team, the culture, the value systems, and then going all in is what has stood out. And I think even when we have not gone and carried out a few, which we have evaluated. I think it sticks out and there's a clear pattern, as well.
Manish: Being nice to other people is a superpower, I think we should stay this way because I think this is one way we can compete with a lot of large companies in India because perhaps they won't be able to behave this way. So I think it's a win-win for us. I'm not doing this for charity. While this is one of our core value principles, I just think it suits us. It fits us really well.
Ashish: It's part of the whole package.
Manish: I think it just benefits us, like it's win-win for us. This is how we win. So we would want to continue to be extremely nice to people and, hope that being nice to them, these people would feel better in our company than they would probably feel in any other large conglomerate, and it helps us win deals. So I think it just, it's a win-win for us.
Ashish: Awesome. So in terms of even the journey forward, I know we have discussed it, I'm just putting it out slightly broader and each time that you were remembering that round of infusion, I was just trying to check in my head we almost participate every time in our own way. It was not going to be a big needle moving infusion, but yeah, the thought process was that there was a very deep conviction in the way you guys were looking at the overall business and the scale up and the orientation to profitable growth is something that really, personally has been phenomenally resonating with me all through the conversations, and that has also been the factor why Purplle continues to be in that list of a few companies where we are managed, partly serendipity, partly with very deep intent, also largely with intent and partly serendipity we had the right capital, doses available at that discretion to be able to make up play thanks to the trust of our LPs into it.
So I think that's broadly, it'll come to the last segment where we'll go through the quick fire questions. And I'll start with the first of the five. What would you order for your last ever meal?
Manish: I think it would be Rajma Chawal.
Ashish: Okay. current book or maybe a favorite book of all time, if you can.
Manish: as I said, I read a lot, so lots of books are favorites, to be honest. I think the one that I'm reading right now is 365 days, 365 lessons from the Dalai Lama.
Ashish: Wow. Okay. best piece of advice you've gotten?
Manish: This was from, my two, ex bosses. There are two pieces of advice that I think I got and I'm immensely grateful to them. The first one came from, these are two founders of Avendus capital. The first one came from Kaushal Aggarwal, he said that India's going to grow at 7-8% for the next 20-30 years. So as long as you stay in the game, you'll do really well. So make sure that you don't fall out. basically make sure that you don't run out of cash. And the second advice from Gaurav Deepak was, always take care of your health. I think that's extremely important. Much more important than sometimes, spending that extra hour at the company. So yeah, these are two pieces of advice that I'm grateful for.
Ashish: Favorite failure, the one where you learned the most?
Manish: I think, this was in 2015. we were trying to do things that VCs would ask us to do. I think my biggest failure would be that we didn't do things because of our conviction in that year, but probably did this because somebody else showed us a carrot that, they would invest in us if we would do A or B thing and reach a certain milestone. I think those are ridiculous things to follow and I would never do this again.
Ashish: Most memorable customer moment or maybe feedback?
Manish: I think customer moment for sure. There was this customer in Bandra East that, we had gone to visit and, a couple of my colleagues, and they nararated this to me. This customer was using, we have a top selling product on our platform. It's called Good Vibes Rose serum, it's our own brand. it's our top selling product. It's a wonderful product. I think more than a million people have bought it now. This product basically gives you instant glow. And so this girl, almost started crying because she said, now because of Purplle I can afford products that otherwise I thought only rich kids could afford and she had tears in her eyes because she said this product has been magical for her and I couldn't be more grateful. So I think I and my team came back like really inspired, man, we have to make this big now. So yeah, I think that was one, I think it was way back in 2019 or so, or 2018. Yeah, something around that time.
Ashish: Cool. A best employee moment.
Manish: Best employee moment. Nice. I like employees when they give us, honest feedback. And so I think this was a feedback I got from one of our earliest employees, the one who went on mat leave as well at some point in time. She gifted me a book, which was, ‘Employees First, Customer Second’ because I think in my early years of being a founder, I used to be a extremely demanding founder. I expected everyone to behave the same way I behaved, and I think that was an incorrect thing to do. And at some time I could be brash as well. I've changed a lot. So you see a very different Manish today than what you would probably see 10 years ago. And so she gifted me this book, which with a message, which said, I know you would get most things right, but for the ones you would get wrong, here is one that you should read and I'm very grateful to her.
Ashish: Very cool. So thanks Manish. Really appreciate this time and it was a pleasure doing this with you.
Thank you everyone for checking out X-Unicorns. This podcast is a Blume Ventures offering, and we will be releasing a new episode every Tuesday. Our sound engineer is Shrey Tiwari, and our producer Vedant Nayank of Manic Port Studios. See you all next time. Really appreciate all the support from everyone. Thanks.
Part of Blume Podcast
Welcome to The Blume Podcast, where we explore “The Power of Compounding” through insightful conversations with industry leaders. In this season, we bring you four captivating episodes featuring Peyush Bansal, Raamdeo Agrawal, Nithin Kamath, and Dinesh Agarwal.
In the first episode, Peyush Bansal, founder and CEO of Lenskart, shares his journey of building a successful eyewear company and the importance of hiring the right people. Discover how his clarity of purpose and long-term thinking shaped Lenskart’s success.
Next, Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services, shares his investment philosophy and insights on India’s growth. Gain valuable advice on building a strong brand identity and the dangers of building a startup for the wrong reasons.
In the third episode, Nithin Kamath, founder and CEO of Zerodha, reveals the secrets behind building and scaling an online brokerage firm without external capital. Learn about the power of compounding and the importance of trust in the financial industry.
Lastly, Dinesh Agarwal takes us on a journey of starting a business in India during the internet boom. Discover his thoughts on business growth, profit margins, and the significance of small and medium-sized enterprises in creating employment.
Tune in to The Blume Podcast and unlock the power of compounding with these inspiring stories and valuable insights. Stay tuned for new episodes coming soon!