Building India’s Largest E-Commerce Enabler w/Shiprocket's Saahil Goel

Jivraj Singh Sachar

Welcome to the Indian Silicon Valley Podcast. I'm your host, Jivraj, and on this podcast, I speak with founders, investors, and domain experts from the Indian Valley, trying to understand the art of building a legendary company. In this episode, I speak with Sahil Goel, co-founder, and CEO of Shiprocket. Shiprocket is building India's largest e-commerce enabler with the wedge of being the leading player in logistics and now expanding into other ancillary categories that simplify the lives of independent e-commerce merchants. Shiprocket is a special company, and we decode much of their ten-plus-year journey. To get here, I asked Sahil questions about the Pivots, the behind the scenes of logistics, the culture, and many more aspects that will help us understand more about the core business model that shapes the success of Shiprocket. This was a special conversation as Sahil brings in a lot of clarity and structure to the company building. Tune in for a great one. But before we get started, here is a quick word about our sponsor.

And with that, let's dive into the 134th episode of the Indian Silicon Valley Podcast with Sahil of Shiprocket.

Thank you so much, Sahil, for joining me. Very excited to be hosting you.

Sahil Goel

Thanks, Jivraj, for having me. Very excited to be here as well.

Jivraj Singh Sachar

Thanks again, Sahil. And one of the most fascinating aspects of the Shiprocket journey is how it started and where it's gone. And I think what you continue doing in terms of the mission of empowering every digital transaction from an e-commerce lens, and when I was going through my research, I think the Audacious mission, the early Pivots, the early journey, the challenges stood out for me. I want to cover much of it through the next 60 minutes. 

But as we get started, what caught my eye was also your early experience of understanding the landscape of e-commerce in India and globally, right? If I'm right, you were at Walmart briefly. You saw the early days of Shopify. Then you try to bring that context back to India as well. If you can, maybe take us down memory lane, and talk to us about what that was like, what shaped your early influence of e-commerce, and how that would impact India. That'll be very interesting to hear.

Sahil Goel

No, happy to do it. The mission still stays alive, intact, the way it had started. Nothing has changed there, which is exciting because India has given promise in our future prediction, if you will, and allowed us to continue building on that mission. Very limited context was available back then. Professionally, at least to me, when I started my career back 10-11 years ago when I started Shiprocket 10-11 years ago, I had worked in insurance for a while. I was in tech on the insurance side, but I used to code websites, which was exciting. That's how I got exposed to Shopify. Walmart was only a three-month MBA internship, but believe me, they have such a great program where you get exposure, like a year's worth of exposure, in those three months. 

And it came together in my head in 2011, largely led by Shopify, because they were just doing an amazing job. They were building simplified tools that were a platform-like experience. Today we are very used to it, but everything else was software back then. And for software, you need a manual. And Shopify solved that by saying, no, we will build it like a platform or a very intuitive product. And that's why it got the entrepreneurs armed with the right set of tools. And that proposition was very exciting. I come from an SMB background family in India. We knew a lot about India and how people think and forget them. And I was the first two guys who started this. It was a bit of a jump in the deep end to say, there is no research because it's not happened yet, but let's take a punt. And it seems like a daunting enough mission there that there should be enough meat available to solve over the years. So that's how we came about here back in 2012.

Jivraj Singh Sachar

That personifies the right place, right time. But it's interesting how you started. If I'm not wrong, it was a Shopify-like version for India, and it was called Cartrocket back then. And there were multiple iterations before you came to the current version. If you can, maybe talk us through what that was like and what it means to be early in the market. Right, if that was the case. Because from the outside, it looks like India was not ready for independent merchants at the time like we are right now. So, talk us through those nuances and what it was like on the ground in reality, back in the day.

Sahil Goel

Initially, given that we were so heavily inspired by and in awe of Shopify, we decided to go ahead and build that for India. Whatever it means for India, we're called Cartrocket. We were India's first meaningfully scaled in a couple of years, we became India's first meaningfully scaled DIY web platform for building websites. 

We tried to do the App Store bit and got about 30, to 40 other developers to distribute their apps to our merchants. On day one, we understood that shipping and payments were essential because our ground infrastructure for both of them was just not there. So, we became like an enabler for those things. It was a very low touch, but we still had to do it because brands couldn't do it themselves. 

So that insight came quite early on, but we were still focused on building it as software and a SaaS platform. And we did get the first thousand merchants, we built it to like a couple of million dollars in ARR in two, three years of launching but then started hitting a wall because we got every merchant there was to get. It was very early. This was the time when people were asking us, why should I go online? And this is pre-Amazon, right? 

We launched before Amazon launched in India. Flipkart was growing rapidly. We obviously couldn't make the market. We just didn't have enough funds or capabilities at that point to try and create a market. But the belief in the mission continued to be that, look. Eventually, people will need some toolkit to sell directly. That's not going away, it's a matter of time, and we may not have a broad market fit, but it will happen. So, with that sort of focus on that mission, we kept trying different things. One of the things we were struggling with very hard was just in general: taxes were high; retention was low, and the pricing model was off. The subscription model was very new to India. We didn't have a direct debit and still don't to some extent. And people would invariably expect us to generate demand for them, which was not our business. But that was the expectation that I'm going to invest x thousand rupees into your platform.

Jivraj Singh Sachar

Why am I not getting orders?

Sahil Goel

And that was hard to explain because people would compare it to offline retail, where I pay rent for a shop. And the thing is, rent in a high street area is payment for demand as well as for shelf space. It's both of them together, which is not true for online. The ecosystem also was not available where the way Facebook ads and Google ads are accessible today, the number of agencies and tools that are available today, wasn't there. A lot of people weren't aware. I think what we decided to do was, rather than try to change the user, we said, I think it's time that we change ourselves because this is not where the markets at our focus, and our objective continues to be to help these guys, our customer audience, win. 

So, we decided to go mobile in 2014, earlier called Cartrocket Studio. It was like a one-page website builder. We took the Cart Rocket experience on mobile. You could take a picture or import your Instagram feed. A lot of social commerce had started happening, in an unorganized, unstructured fashion. So, for some time, we might want to structure that on a platform by saying, look, don't sell on Instagram, sell here. I'll give you a PG, a payment gateway, a shipping layer, and a five-minute website builder on the mobile. And that was the first time we saw a lot of scale, at least on the merchant side, where we could now attract tens of thousands of leads. It was behaving more and more like an internet company. People could sign up; self-service was happening, so we did not have to do it for them. So that was a big win. But the problem was that there was still no monetization and no orders coming in. And from there, I think we expanded that vision to say, let's build a demand engine because everyone wants demand. We built a Facebook ad engine. We built a Google ad engine. We went around the block a bit, and it did scale. We scaled it to about a couple of hundred thousand orders a month, which at that scale was decent. 

But again, it still resembled a marketplace because merchants said, look, we just want to pay commission. We don't want to pay you for ads. And that's just; we don't want to invest money. We want to pay when we get paid. And I think that was a key learning for us, in terms of how Indian long tail merchants behave or how they operate their business because they're also operating on thin margins. They have a limited amount of capital available to invest in something. 

Digital was new at the time. And during that journey, we started finding that shipping was broken when we did the long tail platform. Like, it was impossible even for us to easily go to the carriers and say, well, every step from pickup to everything that comes after that wasn't working as smoothly as it should have been. And obviously, we built it for ourselves. We worked very hard with the carriers. We couldn't do it the way Amazon did it because Amazon had massive scale and massive capital available to their disposal. So, we should do it in an ecosystem first way. We were always very, philosophically keen on being able to do it.

Jivraj Singh Sachar

To integrate what's there rather than trying.

Sahil Goel

To carve out things and do it ourselves. So, we started doing that. Worked very hard with our three PL partners, got them to build new APIs, exposed things to us, and fix the process. And it was working well by the end of the two, three-year period that we ran it. It worked so well that merchants started writing to us saying we don't want to use the rest of the platform because I've got all these other WhatsApp orders or orders from Indiamart. Just dial that. I want to ship because I'm having a hard time doing it. And that's when we first started to really take it seriously.

We always knew shipping was a challenge, but in our heads, it was always a feature. It was not the product. The product has to be something else. And this is an enabler for the product. So, it always had a bit of a stepchild treatment in our heads until we were, anyway, finding it hard to scale with the existing model. A lot of people were writing to us. We had understood how long tail SMBs are, how to solve DIY in a country like India, how to monetize, how to collect money, and how to build a high retention, high revenue retention business. 

So, some of those learnings had come, which gave us the confidence to apply some of this to the shipping stack as a separate product. And that's what we did in 2016 end and in 17, that's how we launched Shiprocket because it's not apparent. Many people ask me, did you waste five years kind of getting to it? It's impossible to have this insight out of the box. Like, you have been doing this to see this problem so close to being able to say that it can be solved in a certain fashion.

Jivraj Singh Sachar

Got it. That's very interesting; a fascinating journey, especially the turn of events. What I'd love to know, and if you can double-click in theory, this sounds like a very linear or exponential pathway. But of course, the mindset that you need to keep to be agile and intellectually honest is that, okay, this is not working. Although we might be growing, this is not the eventual game. That requires a certain amount of acceptance. So as founders, how do you build that mindset? How do you iterate fast enough? What's the mental capacity that you need to make it happen? I'd love to know that piece of the pie.

Sahil Goel

You said it in your question itself. You said intellectual honesty. It's a very underrated kill if not value. Because, what happens is there's so much flux, right, in a rapidly evolving market. X person raised $50 million to do this. Maybe we should be doing that. There's a lot of uncertainty in a young founder's life. It's always like a flowing stream of insecurities and paranoia. 

So, when all that's happening, right, I think what you can fall back on, or at least what we learned to fall back on every time, was one of our convictions to say, okay, forget what's happening, right? Maybe we'll build a small company, but we'll build a real company. So, what is our conviction? What is our understanding of the problem statement? And are we solving a problem, being honest about that? And one way, like one of my early investors, Rajan from Nirvana, who's still very much a mentor and on the board, he would always ask me that, tell me if you died today, if your company died today, would anyone care? And it's okay to have only 1000 people care a lot more than 100,000 people who sort of care, right? That thought process helped us to say we are just sort of a push product that's just put up there, and people are using it till we incentivize it or keep pushing them? Or is this something people need? And what problem are we solving? And we continue to ask that question to us with every new product we innovate or every new feature we're trying to build. Is this really going to solve a problem? So, falling back on first principles just in terms of value creation, that is this going to create value eventually, and sometimes you'll still be wrong. But having that lens as a very clear objective lens is almost built back into the DNA of every minute you spend. 

Eventually, it makes it a very easy conversation then, right, to kill things or shrink them or grow them or invest behind. Otherwise, it's a very qualitative, subjective, winding discussion with your founding team, management team, and so on. And we learned it the hard way because as we went through these pivots, they were not at all linear. They were very roller coaster-like, emotionally, financially, and in every way. That is when you learn this, to be honest. And people would tell us, but it's just like you have to make your mistakes, right? You can't learn because somebody else said it. I've never come across a founder so far who says, oh yeah, this person told me, and I changed the next day. It doesn't happen.

Jivraj Singh Sachar 

Yeah, no, that's awesome to hear. I think it's important to have that iterated as many times because otherwise, it's easy to just forget all of that, look at the present success, and be like, okay, this was intuitive all along the way. But then, how you got there is more important than where you got, especially considering the audience. But this is awesome. This is flowing well. Coming to, of course, the current tabata. Right now, it's a shipping aggregator with a bunch of other horizontal features where you're building an ecosystem that powers e-commerce transactions for merchants. If you want to, give us the behind-the-scenes, right? Because as a customer and even as a merchant, I'm guessing the interface and functionality are really simple.

You do a couple of clicks, and the eventual objective gets fulfilled. But you as a company are doing multiple things in the background that we don't get to see and which can be a huge eye-opener for anybody who's unaware. If you can tell us what happens, and more importantly, how it happens, that'll be super interesting.

Sahil Goel

We have to look at the stack as part of the transaction, so if you think about today, when consumers shop on Amazon, you fire up the app, or you go to Google Search, you look for a product, or you see an ad, and you click the product. You land on Amazon's product pages. You look for pricing, you look for reviews, and then you decide to buy. And when you decide to buy, you head to the Buy button. Then you look for shipping speed. When is it coming? Is it coming in five days or not, but I want it tomorrow. Let me change my mind. Buy something else. 

You have shopped on Amazon before, so you know I'll get my money back if there's something wrong with this. I can return it. If you can pay digitally, you'll pay seamlessly because it's easier, and you trust Amazon, and Amazon will deliver when they say they'll deliver. You'll see the price tag. If you don't like it, you can return it. You can leave a review. That's the buying process in the current ecosystem. And at least a few years ago, the ecosystem was well built or started to get well built with Shopify's India entry. Facebook and Instagram have become great mediums for online shopping without even a shopping cart.

Jivraj Singh Sachar

And demand generation has evolved manyfold.

Sahil Goel 

On Google and Facebook, organically, influencers have grown over the last ten years. So, it seemed like or seemed like e-commerce was done. You can generate demand off Amazon if you're a unique, quirky brand. Tell your story, and keep your customers: Amazon's one channel, Facebook's another channel. I mean, that's it. It's pretty simple. Then what is the need for all of this stuff that we do? The reality is that that would have been great maybe ten years ago. Still, now, in an environment where Amazon is really pushing the boundary on the distribution experience right and the trust between the seller and the buyer, it's not okay to just have a great looking website and bring consumers to the buy button. Still, it's extremely important to be able to deliver the post-purchase experience in a meaningful fashion where you begin to trust the experience.

That's where CACs can go down, conversion can go up, and you get better NPS loyalty, repeat rates, etc. So, we started with shipping because there was a problem of access. That was our first sort of understanding. And then, as we kept scaling and kept going through the motions, we started understanding that. Look, the problem is about more than just shipping. It's a larger problem, which is an intertwined problem between having a predictable supply chain, having the right workflow so that data can flow between all the stakeholders in the process, and having intelligence. Because if we can't tell Jivraj from Sahil or the system can't tell between two people, it won't be able to be intelligent about it, and there'll be fraud or losses, right? If we can't tell one carrier lane from the other, we're not optimizing anything. So, this started to dawn on us; Amazon does this exceptionally well. They have been doing it for years. And we felt that for direct commerce, we should pick up the sort of the flag to say that we should solve this because without this, direct commerce merchants don't really have a level playing field, and they don't have the requisite set of tools. So, the first thing we did was actually, go into fulfillment.

So, we started with a 120 thousand square feet fulfillment center in Bangalore. This was during COVID. Today, we are about 50 fulfillment centers strong, nearly a 2 million sq. ft footprint and nearly 20% of our shipments happen from there, right? So, we can do one-day, two-day deliveries from there. Returns are lower; the customer experience is better because we can tell that the person's checkout is coming tomorrow. So automatically, people want to buy. So, we're moving closer towards mimicking that experience you have on Amazon. 

And from a tooling perspective, we started building a bunch of software, building, acquiring. So, we started building software for helping onsite conversion, we started helping with fraud detection, and started helping with post-order communication. How do we use WhatsApp as a great channel, especially for COD orders, right? Because there's a big issue with RTO, which is a return before delivery on COD orders. How do you keep the intent in the buyer's mind alive? How do you reduce customer service costs for the merchant? How do you power a self-service return center? 

So again, the trust goes up. So, I think it's a mixture of working with fulfillment and shipping partners to make sure that the supply chain and the information highway of the supply chain continue to work well, along with that, utilizing a bunch of technology that can plug into a Shopify or a Facebook to be able to make kind of that experience more and more easy, intuitive and what we are used to as consumers. And finally, using the data we continue to grow and acquire to tie all this up to create that wall experience.

Now, as consumers, you guys see nothing, right? You see that I ordered on such and such website. I got it in three days. When it got laid, Shiprocket texted me. I'm used to reading in Hindi, so Shiprocket wrote to me in Hindi. We do all of that stuff with the intelligence that we have. Or I got a call because I was not responding on WhatsApp. 

So, we use our intelligence to be able to do that. But as a consumer, you have a good experience because you were kept in the loop. Even if there was a delay, you were proactively told. So, you're not wondering what's happening to this. If you wanted to pay digitally because you were not going to be home for your COD order, we let you do that. And the merchant for this is slightly more involved. But at the merchant's end, a lot of this is also put under the hood. You press a button; we tell you various carriers available for multiple speeds, quality, and price; you can pick what you want. We'll even tell you this is a repeat customer. You may want to have a better experience here. So, if you can spend Rs10 extra but get it there a day faster, do it, because this guy has ordered from you before. You are trying to help the merchant to be able to navigate some of this and really build it in a very templatized fashion. Because while we do serve enterprises, the bulk of our focus energy goes towards making the mid-market merchant successful or the long tail successful because that's what we learned. And a lot of that comes from not giving a lot of controls or customization because that's when it starts going into this sort of unscalable territory.

Jivraj Singh Sachar

Again, that's super fascinating Sahil. That clarifies a bunch of things around the process and goes to show that, eventually, we'll get to a point where the Amazon-like experience can be replicated by the other merchants as well. I think it's already happening. It's amazing how Shiprocket’s playing the role of making it happen; zooming out a bit is also maybe the state of e-commerce in India, right? I was going through one of your past interviews, and you mentioned you have 85 million unique OD touchpoints with customers that you have already established as a company. And if one company is already doing that, then we, of course, have so much more available depth that still needs to be represented by numbers. And there are, if I'm right again, 150,000 merchants or more on the platform. If you can talk to us about what you see from an on-ground reality perspective regarding the e-commerce revolution in the country, I think that'll be very insightful to hear.

Sahil Goel

Happy to hear. It's fascinating how this has evolved in the last three, or four years; we see a big change. And earlier, e-commerce just meant marketplaces. Like five years ago when we were talking to the market saying, oh, we want to power direct commerce businesses. What's that? I've never shopped from a direct commerce merchant. You haven't? But there's an audience who does. It was small, but it was happening.

Today, no one is asking that question. They get it that, oh, yeah, I know someone who bought an Instagram. I may not have done it, but I know it's happening. And three or two in five people have done it where they've had the experience of doing it. Either from a website, you see an ad on Facebook; you click it, you like it, order it, and so on. And brands have also gotten very creative because India also needed help with a supply problem earlier, where all we had was big box brands or a lot of China import. There weren't a lot of great products that were being built or imported into India. 

That's massively changed and solved one part of the funnel, thanks to the merchant community that's done that. So, if you look at all these trends together, direct commerce is a big penetration as a channel. By direct commerce, we mean every offline retailer, big or small, that has their.com in addition to, let's say, an offline store footprint, as well as selling on Amazon, and I use Amazon as a placeholder; there are Digital first merchants, who we call D2C. More colloquially, those who are digital-first, who says, no, I'm not offline yet. 

I'm going to begin with the Digital-first business. Who can be, again, SMBs? They can be large in size and so on. And then you've got this very interesting micro brand concept which could be resellers influencers, or they could be the future digital-first brands, but they are just super young. Like they're two companies, right, who are just selling on install for now, scaling 200, 300, 500 orders a month and thinking about the next step. All of this put together is already 15% to 20% of India's e-commerce. It doesn't show up many times because of the unstructured part because it's just hard to report that, right? Platforms like us have that visibility, but many other times, it doesn't show up because the payment gateways won't see it, and the carriers may not see it.

We see it. So, we know nearly 35% of the volume that gets generated on our platform is unstructured, which means that people are using our mobile app too. They enter the data by hand, which tells us that they're just super small. And that is where the 100 and 200 thousand merchants working on the platform number start showing up. So, there's a very different kind of merchant base, a very different kind of volume that's being generated, which is not apparent. And that's been growing every year. Direct commerce overall has been growing every year. COVID was sort of a big kick in the pants for people who were just saying, oh, it's just a fad, or it's just marketing, but eventually it's all going to be Amazon. I think people realize that you can't depend on that. You have to have your channel. It's a multi-channel strategy; all channels must work together to make this possible.

So, over the years, that's been a big, sort of big change in trends where direct commerce continues to grow. Long tail merchants, given that the tools that are available given the ecosystem around them, have developed quite nicely, all of those things have come together and are pushing this forward. And direct commerce in the US today is about 40, 45% of all e-commerce. So.com is huge. Look at Shopify and the Facebook ad ecosystem. All of that stuff together has made for pretty impressive growth.

Jivraj Singh Sachar

Absolutely. That's very refreshing to hear and reinstate belief in the India growth story, especially from a brand perspective. I know this might be repetitive for you, but I also understand that the tire two-three numbers are very encouraging as opposed to what we may think from the outside. Right. So, if I had to ask you about Bharat commerce, especially because from ground reality, there's just way more happening than we know or understand, that'll be very helpful before we move on further.

Sahil Goel

No, absolutely. It's very exciting. And we have seen a great trend in that direction as well. When we started Shiprocket in 17-18, 60, 65% of our demand and supply were both tier one, and the rest were tier two, and three. That trend has completely reversed. 

Today almost 70% of the demand is now tier two and beyond. And even on the supply side, we are finding tier two cities where merchants are much more entrepreneurial, closer to supply hubs and so on, who are really taking charge. So, a half-and-half split between the supply, and then a good 70% of the demand is tier two and beyond. And that trend continues to grow. Right, that trend continues to grow in that direction because the next set of users, if there are today, I've heard numbers, I've heard 150,000,000, 200 million buyers, all kinds of numbers. And sometimes I wonder if a platform like ours has been able to touch 80, 90 million buyers, I don't think there's a possibility of having only 150. 

Like there's got to be much more, now, they could be low transaction users. They could be WhatsApp's first users. They could be regional vernacular users. I don't know, but they're very much there. If you look at Mesho and some of the other platforms that are going after that next 500 million user base, it's not going to look like what it looks like today; it is going to be different. And our belief is that look, no matter what it looks like. Eventually, people will need to ship, and they will need to connect this together. So, we want to stay in the enablement space, clearly, as this happens.

Jivraj Singh Sachar

Absolutely amazing to hear that again. No, this has been wonderful. As we go ahead, it will be interesting to touch upon some other aspects. One of the things that stands out about Shiprocket is the fundamentals with which it started. Right. And I'm talking about things like profitability focus on numbers, and it's not been a heavily funded company either, right? In the last couple of years, yes, there have been a couple of rounds, but traditionally, you had this mindset, and whenever in my research I've heard you, all speak also, there's a very strong fundamental focus on business metrics. Talk to us about what that means from a cultural standpoint and how you instil it as you grow. Because now the size has considerably gone up. So how do you maintain this level of discipline, and where does it flow from? I'd love to know that.

Sahil Goel

Yeah, I think multiple reasons, and I think, first of all, we just didn't know how to buy growth. It's not in our DNA, and I'm not saying it's right or wrong. As founders, that's not how we had envisioned starting the company. There was no VC when we launched, so we bootstrapped for a long time, got our early angels together, and almost made them like working partners with us, saying come and help us. We never thought that you could use capital to grow. That was not a philosophy. So, I think that DNA just stayed over time. Even when we did do growth experiments and investments, they were pretty small in nature. I'm talking about the early days, and then by 2019, we had become net profitable. We were generating cash as a company. In fact, the part of the business, which was a pure shipping vertical has stayed profitable since then.

Nothing's happened to it in terms of profitability, but of course, we've gotten much more aggressive in terms of building other components and using that capital efficiently. But at the end of the day, we again fall back on the first principle, saying, okay if I had four places to deploy this capital, where is my return on the capital going to be the highest?

And whatever project or investment we put it in, then we strongly measure that. It's not that we are investment averse, but eventually, it's got to start yielding a return. And if it doesn't yield a return, it needs to be shut down. Because at the end of the day, we, as founders, came from that background where access to capital was not easily available in the early formative years of our journey. And secondly, we also want to run this for the next 20-30 years. We are not too kind.

Jivraj Singh Sachar

Like you're not in it, too.

Sahil Goel

Make a quick buck or anything, right? We like what we do. We believe in the mission. So, for us, it'll always fall back on saying, well, is this a long-term initiative? And if not, then it makes no sense to do it. And when you say these input things, input variables together, automatically, it's going to lead to better unit economics, automatically, it's going to lead to better profitability. And that's what we've always built around or believed in. And it's different than when we have made mistakes; we've made tons of mistakes.

I often go back and think that maybe we should not have done this project, or we should not have invested so much money behind XYZ. But I'm saying as long as we are conscious of that, and as long as the team around you understands that, as long as the company understands that it's very much a value-focused company, both in terms of preserving as well as creating for every stakeholder, including our shareholders and us and our merchants and everyone else. So, some of that stuff runs early on in the DNA and has just stayed, to be honest. So, second nature to us now; it's not something we have to really do. It's just there.

Jivraj Singh Sachar

I think that helps. Having it naturally definitely helps. But it's great. I'm sure there's no right or wrong, but then this method has always worked for you, and it's great that it's just continuing well enough and important to reinforce this way, amongst others. So good to hear that as we proceed. The other bit and I don't want to sound stereotypical by understanding more about B2B marketing. Still, traditionally it's been very difficult to, let's say, establish trust, especially from a business-to-business perspective in India, right? Because we've seen the likes of, like, Infosys created globally, we've seen the likes of SaaS Zoho Freshworks do it globally as well. And then as consumers in India, we've done it well. But in B2B, creating trust seems like a low-hanging fruit, which has not been solved yet. Considering that, of course, so much of Shiprocket's business model depends upon the merchants and the suppliers, has this ever been a problem statement to crack? And if yes, how do you navigate it? What's the internal principle like?

Sahil Goel

Yeah, I think it changed with scale. Early days, it was bang on, like you said. Should I give an example? When we launched the shipping platform, we had burnt our hands so many times trying to collect money because trust is both ways, right? That itself was a reason to say, maybe we should not do this business, right? Because we still have to pay our suppliers, and I can't run after people trying to collect Rs.500. It's just not our business. So, we said we should build a wallet and let people prepay.

It was not the norm at the time, right? And we said, okay, it doesn't matter. Maybe I'll address only 5% of the market, but at least whatever I address, I'll be able to put in my bank and run my business. And people are very reluctant, saying, why should I give you, my money? Who are you? What if you run away with my money? And it takes time. It takes a sort of speaking their language, right? There are always the early adopters who will be daring enough to evangelize you and try. Then they'll tell their friends, oh, I tried this, and I had a good experience. 

So, focusing hard on solving every user's problem as much as you can fairly is very important, right? That is the fundamental trust-building required, especially when it comes to money cycles. We work in the COD industry along with working in shipping. How do you make sure people get charged fairly? How do you make sure your billing systems are great? So, then it takes time for people to develop that trust. And then over time, as there are more and more folks using you, there is a bit of that network effect where you start to build that trust, and there's even more responsibility than to uphold it. 

So, there isn't any shortcut. Marketing doesn't solve it alone because SMBs are very smart businesses. They look at the bottom line; they look at the impact. They're very sharp in their business and their overall work. So, I think it's just patience and staying the course, and eventually, it does happen. There may be another analogy for a shortcut. I was trying to think, but I haven't found one yet. If you look at any successful India-focused B2B company, whether it's India Mart or even platforms like Naukri, right? They've had to do the grunt over a longish period of time, and there's no quick win. Unlike consumers, the consumer has that virality aspect and all that as you mentioned, but I don't know if with B two B.

Jivraj Singh Sachar

There is nothing like that. Patience is the congress word for making it happen. But this is fascinating. The other aspect of what's very in my head as I was researching, I realized that there's a lot of focus that's been elaborated through the journey. But at the same time, there's also been a lot of experimentation. And one such thing that I feel super excited about is Shiprocket X. With this going global, and there's this entire belief of building consumer brands from India for the world, is another very interesting theme coming up in the country. And we, of course, need champions like Shiprocket to make it happen because there will not be a one-ecosystem and not a one-player ecosystem anyway. Talk to us about where that thought comes from, and I'm sure you've probably answered this multiple times, but in terms of depth versus breadth, right? Is there more depth to go to in India? And would that have made more logical sense as a company to focus on or when you decided to do such an experiment or such an expansion? Rather, what is the internal compass of the company? Like, how do you tactically make it happen?

Sahil Goel

See, I'll tell you what's constant and what's variable, right? What's constant is the merchant, the category, and the type of merchant. We work with that constant in our entire business, right? So, if we work with a direct commerce merchant, what's it like we don't work with anyone else? They could be of any size. And then, of course, we'll continue to expand in that fashion. But it's the same problem, the same use. Case number one and number two, what's also constant is a mission. What are we doing, why are we valuable, and why are we important to the ecosystem? And that continues to be to help the merchant succeed. It's straightforward.

How do we help our users succeed more than just helping them? Ship better fulfil, better save money, get more buyers. What else can we do for them and us? The merchants themselves honestly govern a lot of the roadmap. We do very active serving and meetings, and pelt out the strategy from there. I think global piece is not new. To be honest, we launched it four years ago as well and failed because of focus because we couldn't do it at that time. We could realize that it's not just putting a couple of carriers. It's not that you have to go deep. And as we started getting more requests from merchants, the supply side became more and more available, right? 

Now we work with over 20 30,000 connected websites that have beautiful products that are doing so well in India. And one of the things that merchants can really avail of is a four x three x bump in AOV because something that retails for $1,000 in India can very easily sell in the US for four or $5,000, right? So, it's a huge margin boost for the merchants. They are anyway manufacturing; they are anyway storing. Why not give them access to global borders? A lot of it came from the merchants. Some of our merchants had figured it out, but it was very cumbersome. The larger ones would go and take a warehouse space there, find an importer on record, take the goods there, then find a selling. It's very tough. The big ones could still do it, but somebody doing only 1000 transactions per month will never be able to do it, right? So, the same logic holds. 

Why can't Indian products show up on global shelves, and why can't we do that for them? And one of the key things that came back was, well, we can still figure out how to list on Amazon or Lazada or whatever, but how do we get it there? Like, we need a way to ship item by item in a cheap fashion, traceable fashion. And if we do, if something goes wrong, who do we call? How are we going to manage this? Or if we get to scale, how do we store the inventory in a foreign country? What are the customs requirements? And so on. So, there was enough complexity and enough resemblance to the kinds of problems we like to solve, where we picked it up again, and we said, okay, we need to solve this. And it's still the Indian merchant, right? We're simply telling them that we'll help you ship within your city, India, and the world. But it's the same set of merchants we provide multiple products to. So, think of it this way. So, it's more focused in direction than a focus in prioritization of product and so on. I think this is one thing that sort of growth solves because if you have multiple teams and leaders, you can do it as long as you don't bite off much more than you can chew. 

Jivraj Singh Sachar

I think that makes complete sense if you look at it as a natural extension instead of a divulgence; I think that just puts things into perspective. But the other aspect of growth, which Shiprocket’s also shows, is inorganic growth by virtue of M&As, right? And traditionally, India has not been a very strong M&A ecosystem. And hopefully, that's only going to get strengthened further. I've also had the pleasure of hosting Gaurav of Picker on the show, where he mentioned a bit about the acquisition and how values align. What I'd love to understand is from a culture standpoint, from an inorganic growth standpoint, in terms of team and human capital, how do you manage that when you're making a decision such as this? What does that mean for the company? How do you navigate it? I would love to know any nuances on that aspect.

Sahil Goel

Yeah, look, you're absolutely right. MNA is exciting and hard at the same time because of everything that can go wrong, to be honest, and because of everything that can go right. And when we raised our last round of capital, one of the clear roadmaps for us was to try and accelerate our vision and execution of the vision. And we love building as a company, so it's not like we're builders by design, so we love that. But if we can do it in one-fourth the time for certain components, then why not? So that thought process came into our heads, and then we did not do a very big net. We had very specific components that we wanted to buy and join back into the stack. And it was a very active role that the leaders in our company had to play, and still dedicate a bunch of time towards making sure that things integrate and it works like a machine. Otherwise, it's a sham.

And culture is the first filter. If you have three identified potential strategic partners and don't align on the value system, that's it. No matter how good the business is, if the value system is not intact or how we think about value creation or the sort of belief of the long term, et cetera, if we find that there isn't a meaningful match there, we would not proceed. It's just very intuitive to us to not be able to do it. Because someone asked me, how do you price the value? How do you price assets when you buy them? And, my view was that there is no price. Like because, you know, you can't over or underpay for any, any of this. Because once it happens, what value it will create here is where it really matters. So, I'm not sure what you paid for. It's like VCs. When VCs pay for an asset, it's for a forward-looking outcome, right? It's not for what's happening today.

And it's the same way. When you decide to join hands or join forces it's forward looking. For us, it's been the same way. And I'm very happy with the journey. We've now acquired five companies, and it's just been amazing.

Everything has grown, by the way. Everything has grown in the last year. We work like one team, and of course, some things are not fully integrated because they're not meant to be, but still, it's like one expanded team where we've been able to get all of this other sort of leaders from the ecosystem who are now helping us build this even faster. So that's been the overall thinking, and I am very excited about how it can accelerate and fuel a company.

Jivraj Singh Sachar

This sounds very exciting, and I can only imagine what the inner challenges look like, but great to see the outcomes really alive. This also begs the question, right, Sahil? I'm guessing with five new acquisitions through the journey, with four co-founders, your role as a CEO really would be very differentiated. And I'd love to know what that is, considering that so much is happening at any given time. This is to say that, from the outside, you look at Shiprocket, you think there are acquisitions happening there, day to day happening, forward-looking projects, expansion to the US and whatnot. This can seem like a wide array of things that need to be managed well; what do you have to do right to ensure this engine is running well enough, and where do you spend most of your time?

Sahil Goel

Yeah, it's been a very uphill journey for me as well, to be very honest, because it's like a pivot in my thinking and execution. Every six months, I have to try and rehire myself for this role, and I try to be very objective about all the areas where I struggle or I operate, let's say, under efficiently and so on. And it's all about the team, to be very honest with you. My growth as a leader has only been possible because of the folks around me. Every senior leader I've hired in the last five years has made me a better person. They bring their knowledge and tell us how it's done in X Company, Y Company. I may not adopt everything, but it's always great to know that, okay, I'm struggling with, let's say, prioritization of time; where do I put my time? And the better the people were, the better I became, to be honest with you. Because your team gives you leverage and without the team, CEO is meaningless.

So, I think honestly that's it. The team has been essential in allowing me to one, be able to delegate, be able to step up, and two, even how I should run my day or where I can add the most leverage because I try to do this sort of thing.

Does it matter right enough? Is it important enough, and can I affect it personally? The answer to any of those is no. I tend not to focus on it. If I realize that setting the vision for the next five years and setting goals or OKRs, let's say for this quarter or this year, is the most important thing because it'll bring people on the same page, people will start working well with each other, it'll remove confusion, remove the sort of like why are we doing this? And stuff like that. So, I realized over time that I had to be a much better communicator because if I'm not communicating articulately enough, then it's not about doing as much as being able to get people aligned on the same common objective. I'll put a lot of my time on that. Of course, we have a pretty large cap table now, so there's a bunch of alignment and feedback with investors that must be managed. I get involved in a bunch of the zero-to-one projects because I still love them. I'll put some of my execution time there to help drive some of that ideate with some of those things. And that said, to be very honest with you, the rest is largely having a great team aligned with you. I don't think it's not possible for somebody to drive another person. You can align someone on a common vision, right? You can give very objective feedback to make somebody better, mentor somebody, but that's it, like beyond that, it's their calling and their push.

Jivraj Singh Sachar

Super. I love that. Especially that framework, can I affect it, and does it really help? Does it make it better? So, I think that is super tactical and overall, also lovely to hear that a newer set of challenges, of course, brings in an interesting learning curve for you and gives us a more interesting vantage point to maybe observe and learn from. Since you mentioned the team a bunch of times, we've not had the chance to focus on that particularly. Again, I am trying not to be generic here, but considering that this has been a decade-plus journey now and it's going to be long if I'm not wrong, there are cumulatively 1500 and more people in the organization now. How do you ensure that in terms of leadership alignment or just like hiring the best people? What is the go-to strategy? Like, what do you look for things on a tactical level in terms of just having spent time, maybe? How do you solve for attrition in the company? How do you solve inner leadership, stuff like that? I'll keep this broad-ended, but if you can give your cues to how to build the best possible team and what you do at Shiprocket, that'll be super helpful.

Sahil Goel

It is similar to M&A, value alignment is key because a company's soul is the value system, and you can call it culture; you can call it values, or whatever. There the filter is extremely high both at the time of getting people in and at the time of performance appraisals and so on. I always say this will is much bigger than skill because that was my experience too. I knew nothing about this industry, but given that we were so hungry to make it happen, we learned whatever there was to learn and continue to do so every day. So, we look for folks like that. But at the same time, like a couple of years ago, we made sure that we are not just hiring in only our own image because that too is bad for the company because then there's less diversity. So, it's not okay to just because then we'll be very homogeneous and like mono as a company. So, we did values exercise a couple of years ago, got in our top 2030 leaders, and really tried to spell out what our values are. And it was refreshing because while I thought I should have had it 100%, I only had 60, 70% because there was a certain set of expectations or values from the team, which was great. I agreed with them 100%. But it was not apparent or clear to me. So, I think getting people to really strongly align on the values walking the talk, not just something that's stuck on the walls, it has to be part of your everyday being and your everyday behavior that tells the team that, look this is how it's done.

I think that's a glue that really keeps everyone together and then spelling out we adopted an OKR system three years ago because I started to find it very hard to be able to make sure that every person had the right message. Then I would hear offhand questions or saying, why are we doing this? And I can answer it, but it's not scalable to answer it one by one. But the cascading system of the OKR is not only good for the team but also for me, right? Because it keeps me disciplined, saying okay, in this quarter, if we need to do these five things, let's only do initiatives that help us get to those five things, right? And that brought in great discipline, great prioritization; it took away some of that. But the FOMO of saying per year karna, when will we do this? And we say, okay, but we'll do next quarter. We agreed, right? And I think that was great, to be very honest; it was a great tool to get kind of the actual productivity and actual alignment on the actual tasks going. And other than that, having leadership development. Our HR had joined about a year ago, and she's really come and taken to the next level in terms of growth paths or career ladder. A bunch of training, a bunch of sorts of even psychological assessments like Hogan to say, okay, well, who's a risk taker, who's not? And that perspective between the team can be immensely useful. Otherwise, you may agree or disagree and commit, but you may not know why. So having that perspective has also been very useful for our team.

Jivraj Singh Sachar

Awesome. I love that. A lot of crucial pointers there and a lot of great learnings. Thanks for sharing. That sale, I think, goes back to a lot of food for thought. For folks listening, this means super interesting. And as we close it down, I have like a set of last two questions, which I usually ask most founders on the show and close. One of them is that I continue saying that the purpose of the podcast is not to make, let's say, company building sound fancy or not to make the Founder's journey fancy, but it's to humanize it. So maybe since we've spoken about a bunch of theoretical, strategic, tactical aspects, perhaps if you can talk about not in the traditional sense of challenges, but things that don't get spoken off enough, maybe you speak to a closed mentor or are part of water cooler conversations. What about the Founder Journey has been challenging for you? Simply stated, I would love to know about it Sahil.

Sahil Goel

Self-belief is not what it seems like. Because founders, at least early days and even now, sometimes, you'll often doubt yourself, am I doing the right thing? And there will be so many opinions and so much free advice that is always right. So, it's important to compartmentalize it. See, I'm also not saying don't do it just blindly because then you'll make a mistake. Having the right set of people around you, I know I mentioned that you have to make your own mistakes, but I'm 20% there where I'm trying to learn from other people's mistakes. And that takes an open heart to say you don't have to do everything yourself and fail at everything. Let's go with it. It's okay. And that has been useful. It's helped me save time because I'm like, I trust Person A and Person A; they've had this experience. How can I learn from them?

As silly and trivial as it sounds, it's not easy to implement because founders fundamentally are over-optimists, right? And that's their problem, and that's why they end up doing some things differently. So, I think having enough self-doubt, but not self-doubting yourself is important. As long as you have the right set of people, a co-founder, or a set of people who can critique it, come to an answer, and be objective about what you're doing. And the second thing is also to try and outsource your learning, if you can, with folks who personally have had their experiences. And how can you leverage that? Those were two sorts of tactical things that come to mind as I think about your question.

Jivraj Singh Sachar

So, the optimal amount of self-doubt or self-belief that's an interesting one. I love how you've articulated that, but this has been great. I have honestly enjoyed so many aspects of this conversation as we close. This is something that I again asked most founders on this show. When we go back to the original motivation and consider the size, now there's a lot to lose, right? And I'm sure the vision is also consequential now, where you're almost on the verge of making it happen. It starts with an idea, a belief. Now there's proof that it's happening. Now you have to cross, I don't know, the race and you have to complete it. What still gets you out of bed? 

Keeping all these things in context, I'm sure all of these things are a driving force, but how do you continue staying motivated about that mission, about building Shiprocket every day? If you can crystallize that thought for us as we conclude, that'll be phenomenal.

Sahil Goel

It's very important to expand and zoom out the vision every year or every two years. You should pat yourself on the back for what you've done but don't stay there too long. Because being balanced about what you've been able to do is important. And because we continue pushing the envelope. And saying, okay, well, till three years ago, had we imagined we'd get here?

But now we're saying, okay, let's be even more audacious. So that is where you keep pushing yourself, number one. And number two is progress. It could be mini micro progress in one part of the business. It could be one new feature. Whatever it is, it's extremely important to continue making progress towards that vision. Otherwise, it starts getting like because there are quarters when everything is just maintenance, and it can get hard because you may not enjoy it as much. So, for me, and I know for a lot of our team, is essentially just that, just saying, okay, well, we expanded the vision this year. We're now going to do these two new things, what's happening?

And you may not spend a lot of time on it as a founder, but knowing it's happening is exciting. And then, even if you build and fail, it's okay. It's part of the journey. 

Jivraj Singh Sachar

That perfectly summarizes it. Thank you so much, Sahil, for being your candid self and for being on the show. This has been super productive, helpful, and valuable. I'm sure I have learned a ton, and I hope everybody listening also does.