[suspenseful music playing]
[intense music playing]
[theme music playing]
[music fades]
- Hello, Sharks. - Hello.
I am Mayank Pratap Sisodia.
I hail from a small city in U.P. called Dhampur.
I don't hold a degree from a premier institute,
but I know what customers want,
and that is honesty.
My business and I function on this principle.
I come from an agriculture-oriented family.
We believe
we should give back as much to the earth as it gives us.
The products we use in our homes nowadays,
such as dishwashing liquid, floor cleaners
and even toilet paper and wrapping papers,
come with free plastic bottles or plastic packaging!
Sharks, I don't need to tell you how harmful plastic is to us.
We bring you a solution to this problem
and we are The Honest Home Company.
We make plastic-free cleaning
We don't cheat people in the name of sustainability
and eco-friendly products.
All our products are available in the market at competitive prices.
Not only are our products sustainable
but our company is too.
That is how we went from an initial investment of Rs. 2.25 crores
to an annual revenue of Rs. 14 crores.
- Oh! - Well done.
my ask is Rs. 1 crore for 2% equity.
Yes, I studied there till the twelfth grade.
What after that?
I did my graduation from Punjab University
followed by MBA in Lucknow from Jaipuria Institute of Management.
After my MBA, my first job was with Parle Products Private Limited
as a territory sales officer.
Then I joined Hindustan Unilever where I worked for seven years.
- Very good. - I was promoted thrice in those seven years
after which I joined an ayurveda start-up
- called Kapiva Ayurveda. - Okay.
I helped expand their offline distribution in North India.
Within a year,
I took the monthly revenue from zero to Rs. 1 crore.
Okay, well done. Okay.
When I worked with Kapiva, I would get this a lot.
"You sell products with organic and natural ingredients,
but why market them in plastic bottles?"
Secondly,
the home and kitchen category is a fragmented market in India.
The aim was to unite them and provide customers with a brand
whose quality they could trust
and purchase our products from the shops.
So, at the end of 2019, I started The Honest Home Company.
Is The Honest Home Company...
- Was The Honest Company Jessica Alba's? - Yes, Jessica Alba.
Were you inspired by that or was it something else?
No, sir. I had no idea
The Honest Company was owned by Jessica Alba.
I found out after she sent me a notice.
[Sharks laugh]
- Did you win the case? - Yes.
- Do you own the trademark in India? - You can keep your name.
Yes.
Let's take your facial tissues for instance.
They are regular tissues in a box. What's special about them?
Let me give you all the details first, sir.
[Sharks laugh]
You indeed are honest!
Look, sir. We started with food wrapping paper,
aluminium foil, kitchen towels and facial tissues.
So, that generates our major revenue even today.
Other than that, the household cleaners,
such as toilet cleaners,
floor cleaners or dishwashing liquids,
- come in plastic bottles. - Yes.
When one bottle empties,
- you use the second after 15 days followed by the third. - True.
- We end up piling plastic bottles at home. - Yes.
This product is your solution.
This is a 25 gram pouch.
Take any old and empty 500 ml bottle of floor cleaner
and pour the contents of this sachet in it...
[water pours]
Add water and voilà! Your floor cleaner is ready.
[music playing]
The packaging is wonderful.
- Amazing. - Clean aesthetics and good vibes. It's great.
- Coming to your floor cleaner. - Yes.
- Is it organic and free of chemicals? - It contains chemicals.
So, only your packaging...
- I merely claim it is plastic-free. - Yes.
His claim is not toxic-free,
- it is plastic-free. - Tell us something.
- Any... - She has got a point.
You claim you're honest.
That gives one the impression
- everything is... - The ingredients are chemical-free.
Which is good for him.
He's making a profit. He's not making that claim.
It says there, 'Good for you.'
'Better for the planet.'
That claim is right.
But good for you? Maybe not.
Sir, the customer also looks at affordability.
Alright. You've gone with a grey area there.
Are you selling offline or online?
Your background seems to include offline.
- I started with offline. - Okay.
My sales split last year
was 55% via offline channels and 45% via online channels.
This year, for the six months that have passed,
I've generated 40% revenue offline.
24% through marketplaces
- and 30% through quick commerce. - Quick commerce.
Very good.
Is the remaining 6% by yourself?
No, sir. The remaining 6%
comes from small sellers.
None on your own?
I have my own website but I don't sell there.
- Do you not try or... - I don't try.
- Smart. - Why not?
Sir, my average order value is Rs. 200.
The nationwide shipping cost from Sonipat per order is Rs. 150.
- Okay. - It leaves me with nothing.
You only sold goods offline.
Ma'am, we were all jobless for six months during the pandemic.
Before that, I had reached a monthly revenue of Rs. 25 lakhs.
I had a coverage of 1100 outlets in Delhi.
I knew which shops to sell my products to.
There were no sales for six months because of Covid.
I realised I was doing something wrong.
Offline sales alone will not sustain a business.
You have to adapt to new trends.
So, I started listing goods online gradually
but didn't get orders.
I asked my friends and colleagues about their approach.
They told me they had registered for GST with multiple states.
in the initial days.
For example, we sold food wrapping paper
below the cost price during the initial days.
People bought them.
The quality of the product is good.
One product sold
and along with it, my other products began selling too.
Mine is 16%.
- Last year's turnover was Rs. 13.8 crores. - Wow!
The first year's revenue was Rs. 1.82 crores,
the second year's was Rs. 2.89 crores,
the third year's was Rs. 4.9 crores
and fourth's was Rs. 13.8 crores.
And last month's?
Last month's sales were Rs. 1.42 crores.
- Lovely. - He is doing well.
- Tell us your margin structure. - Did you make a profit?
This is a highly commoditised market.
His margin is 8%. 8% is my logistics cost.
- We spend 15% on visibility. - Branding.
I am left with about 24%.
Coming to online sales of food wrapping paper.
The selling price to the consumer is Rs. 200.
My cost comes to around Rs. 56 to 60
making my gross margin anywhere between 70 to 72%.
Amazon's commission is 18%
- Yes, I did. - How much?
Sir, the net profit was around Rs. 60 lakhs.
Sir, marketing has to be done.
I'm a step behind
because I'm unable to meet the customers' demands.
- I'm out of stock. - Stock deficit.
- That's right. - Hang on.
How much working capital do you need?
I need a working capital of Rs. 1 to 1.5 crores currently.
That's a working capital equal to one month's sale.
- Yes. - Your sale is Rs. 1.4 crores and so is the working capital.
I don't get it.
You're being honest and claiming everything is great.
Sir, the products are so simple.
There's no scope for any catch.
I don't want a debt.
- My only concern is... - There is no debt. Let me finish.
I had a job before the pandemic.
I had two loans, a home loan and a car loan.
I couldn't pay my EMIs for a few months after Covid.
- Okay. - I have a high...
My current CIBIL score is above 700 now.
I had a high DPD back then.
So, if I try to avail a collateral-free loan,
I am refused a loan when lenders get to this point.
You said you raised Rs. 2 crores.
I invested a total of Rs. 2.25 crores in my business
and set up a factory
out of which Rs. 1.25 crores belongs to me
and the remaining Rs. 1 crore to three of my friends.
How much equity did you give them for that Rs. 1 crore?
I own 80% of the company
and 20% is divided among those three friends.
I don't think this will scale just based on the packaging moat,
I don't think it's for an investor
because an exit without scale seems difficult.
I'm out for today.
Wish you the best.
Thank you, ma'am.
- Tell me something, Mayank. - Yes.
Around 80.
- The first feedback was this is a highly commoditised market. - Yes.
The second is, "You're not good at online sales.
You're into sales. How will you build a brand?"
They said, "Get one... You're a single founder.
Bring a co-founder on board
who is from a premium institute
- and has knowledge of marketing." - Got it.
VCs want to fit you into a template
- and if you do not, they disapprove. - Yes.
- I got it. - The opposite is advised to D2C companies.
- I've understood your industry. - Okay.
What will your scale and profit be in the next three years
and how will you achieve it?
- Sir, I could tell you about the next two years. - Sure.
- No problem. - My projected monthly sales
As for the rest,
Blinkit has a strong presence in North India,
not in the West or South as far as I know.
Okay. What is your burn right now?
Your overhead costs will increase.
- You'll need a leadership team. - Yes.
How much will you raise and what will your burn per month be?
Sir, I need to raise Rs. 8 crores if I want to get to Rs. 100 crores.
That will be working capital.
- I need it for working capital. - Your margin is about 4%
without these costs.
- So, the margin... - Sir, the net profit... Yes.
You agree you need a leadership team and branding.
- That margin will pay for the cost. - Hmm.
That will only happen with margin expansion.
- I... - Margin expansion isn't possible.
- It is, sir. - Okay.
- I agree you could go from 4% to 6%. - Okay.
Right, but you're still at a very low level.
How will you afford the branding and a leadership team?
Or you haven't thought about that?
Okay, your business is doing well.
I don't know if it will be bigger,
but your execution so far is amazing.
We'll take a bet and make you an offer.
Rs. 1 crore for 4% equity
and 1% royalty on sales
- Okay. - I'll match Vineeta's offer.
I was rejected by over 100 VCs.
- Amazing! - I love people
who are willing to face rejection 80 times over.
Amazing.
What do you want, my friend?
Do you not wish to give royalty
or wish to give less equity?
I want to give less equity.
Don't forget you raised Rs. 1 crore for 20% equity.
Sir, the company hadn't even started then.
They've been with me since day one.
- They are invaluable. - Amazing.
Okay. I'll offer you Rs. 1 crore for 3%
I'll match Anupam's offer.
[chuckles]
All the reasons Vineeta gave to invest in you, and plus one.
All the reasons Amit gave has a plus one too,
for the same reasons.
I will make you an offer.
Anupam's offer plus one.
[pensive music playing]
- There is one offer, we could try. - Okay.
- Rs. 2 crore which addresses your problem of working capital. - Yes.
No other VC will reject you.
We won't let them in, right?
Rs. 50 lakhs each. Rs. 2 crores for 8%.
[gripping music playing]
We'll keep the royalty as agreed.
When our investment reaches 2x, the royalty goes away.
That's our offer if they all agree.
I still wish to go solo.
[gripping music playing]
Okay, let him go solo.
- The rest of us will make the offer. - Yes?
It's simple. There are three of them.
One investor is more likely to give you more attention.
In the last season, I devoted hours to the companies I invested in.
Do you want more time or growth?
- Look at whose companies grew. - All my companies grew.
- At one point, they were... - Ours grew too.
Does your offer include royalty?
They asked for royalty until Rs. 2 crores is recouped,
- "Could everyone come on board?" - So sweet!
So, Mayank, what have you decided?
[dramatic music playing]
Amit, it's a deal.
I can talk until he reaches there.
Congratulations!
- Well done, Amit! - It was fun. You are such a good founder.
[photo clicking]
A good one.
A pathetic one.
- Awesome! - Woo-hoo!
[Amit laughing]
- Well done! - Good. Your last attempt was nice.
- Yes. - Punch.
He will earn a profit for you.
I know.
Do you know what is royalty?
Let's ask the Sharks.
A royalty deal can be explained like this.
When we approach an investor,
He demands to take 10% equity
and also, a 5% royalty on sales. Right?
The investor could put a condition that they'll take a royalty
Royalty helps keep an investor's money safe.
The money is safe
because they recover their money.
A bottom line royalty is good for the Shark
because it helps recover our money
in a quicker time.
It's beneficial for the founder
Many businesses which come here
have 10% to 15% profit.
The royalty deals are generally in the range of 1% to 2%.
If an investor is coming on board
who can help a business grow 2x to 3x
and the profit in the range of 10% to 15%
falls to 13%, it won't make much of a difference to the cash flow.
[theme music playing]
[theme music intensifies]
"Those whose dreams are well-founded accomplish them."
- "Wings don't help, our willpower helps us soar." - Well said.
- Nice. - It isn't just a couplet, it's the truth of my life.
I had asthma since childhood
due to which I dropped out of school after the fifth grade.
There's a saying, "life teaches us every moment."
"We must have the desire to learn."
So I became life's student.
The knowledge of business,
identifying scent and facing difficulties head-on.
- Wonderful. - Well said.
I'm introducing my brand Adilqadri to all of you today.
Sharks, people have forgotten about attars
in the age of perfumes and deodorants.
The attars we make are long-lasting,
We have processed more than 10 lakh orders till now.
Our retail outlets are present in Mumbai, Gujarat and even Dubai.
Our vision is to make the Indian attar, Adilqadri
a part of the world's biggest international perfume brands.
It isn't just an endeavour but our resolve.
To fulfil this resolve, I ask for Rs. 1 crore for 0.5% equity.
"Every industry has a ruler."
And, I, Adil Qadri am the ruler of this industry.
[chuckling]
- Adil, welcome to Shark Tank India Season 3. - Thank you!
You said you dropped out in the fifth grade.
Please give us the context. How did you enter this business?
And how difficult it is to start a business in a small city.
I dropped out of the school around 2005.
From 2005 to 2012,
I did multiple courses and learned some skills.
One gentleman told me about SEO in 2014.
That's good.
We launched many D2C websites
between 2014 and 2018.
I did drop shipping, affiliate marketing
and many other things but nothing worked for me.
Then I remembered
that my father has been working in an attar shop for 20-25 years.
I came to know about some drawbacks.
The bottles that were sold couldn't be gifted.
Also, when there was a repeat customer,
they couldn't get the same fragrance and there were inconsistencies.
These problems paved the way for the launch of Adilqadri Perfumes.
- Can we try your perfumes? - Yes.
[ethereal music playing]
Oh, man! Very strong!
Is it known as attar or ittar?
Sir, I'm an SEO expert.
"Attar" has the highest search, so I call them attar.
- Good answer! - Good answer!
Do you have modern and lighter versions too?
Or do you want to focus on these fragrances?
None of these perfumes are traditional.
These are modern fragrances.
We are popular in India due to our attars.
We also launched our perfume range.
- What is the percentage? - 95%.
It's around 3.8.
Are you the number one seller with a 3.8 rating?
Our brand Adilqadri kickstarted the attar category.
This category didn't have much sales on Amazon.
Can you tell us the size of the market currently?
And also, whether it is growing or declining?
It's around Rs. 2,000 crores.
Rs. 2,000 crores for just attars?
It's the size of the whole fragrance market.
- No. - The market for just deodorants is Rs. 5,000 crores vast.
I'm telling you about the online perfume market.
The perfume market is also around Rs. 4,000-Rs. 5,000 crores.
The total market is around Rs. 10,000 crores.
- The online market plus the offline market. - Totally.
You said Rs. 2,000 crores.
What is the market share of attar?
- Sir, I couldn't find it. - So you don't have an idea.
- No. - It could be around 10% to 20%. Around Rs. 300 crores?
Yes.
Can you show us your website, Facebook or Instagram?
I have two Instagram profiles.
I run ads on both profiles.
On one profile, I make videos in which I star.
- Very nice. - Good.
For example, adilqadri_perfumes.
- You have 62,000 followers. - Yes.
We have maintained the aesthetics
Good job.
Please show us your personal profile.
This is my personal profile.
It has more followers.
Most of the ad videos are mine.
Do you boost these ads? I mean paid marketing.
- Yes. I do paid marketing. - So you are the influencer of your brand.
Yes. I'm the brand's face.
Let me tell you the current situation.
We hired celebrities
and influencers for our ads
- Amazing! - It shows authenticity.
People find me relatable.
It gives your product a kind of authenticity.
Please tell us the secret of Rs. 300 crores valuation.
What are your sales figures?
The valuation isn't Rs. 300 crores.
- Namita, have you become weak in maths? - Sorry! Hold on!
What percentage did you ask?
Rs. 1 crore for 0.5% equity.
- Oh, Rs. 1 crore. I wrote Rs. 1.5 crores. - [smirking]
Rs. 200 crore valuation isn't small for perfumes.
Please tell us the secret. What are your sales figures?
- Last month, we earned Rs. 6 crores. - Whoa!
- Lovely! - Very nice.
And 95% of your customers are men!
I'll be your customer.
Ma'am, I did the valuation
according to the ARR.
We will earn Rs. 80 crores to Rs. 90 crores this year.
Primarily, is it online? Or both online and offline?
- Primarily, it's online. - All right.
What percentage of this is online revenue?
95%.
What is your average selling price?
- Our AOV is Rs. 800. - Rs. 800.
Please tell us your revenue and profit for the last three years.
- During FY20-21, our revenue was Rs. 5.3 crores. - Okay.
With 3.5% EBITDA.
We are also burning cash.
What is the cash burn rate?
The burn rate is around 5%.
What is the cause of the burn?
Earlier, we had a limited stock.
Now, we have launched perfumes too.
- So the market is larger now. - Did you raise money?
No. We took debt.
Ooh! I thought so.
Can you tell us the economics?
The gross margin is 70%.
- Our ad cost is 40% and the shipping cost is 14%. - Hmm.
The operational cost is 20%.
Though you are smart,
- It's too high. - Ma'am, it happens during scaling.
Your goal is to make it a brand so that people buy organically.
Otherwise, what's the use of burning cash on performance marketing?
- Right. - Adil, what is your debt amount?
We took a debt of around Rs. 2 crores from a company
and Rs. 4 crores from another company.
[tense music plays]
- What kind of companies are these? NBFC companies? - Yes.
If you don't get funding here,
how will you repay after six months?
Your yearly loss is Rs. 6 crores.
- You'd need money for the working capital also. - Yes.
We have a plan.
We'll take a debt again as we have to pay the suppliers.
We are also planning
to approach a government bank for capital.
You should have approached them when you were profiting.
A government bank won't give you money if you are in debt.
Correct.
We haven't tried it yet. It's a plan.
We'll know when we approach them.
Basically, you mean that you'd pay off a debt with the other debt.
- Yes. - You are talking about profit. Right?
Is it the profit after paying off the interest?
- It's PAT, Profit After Tax. Right? - It's PBT.
No, EBITDA is 1.5%.
- Oh! - So it's EBITDA.
Then you are in the soup.
If your loss is 5% before paying interest,
it means you lost Rs. 4.5 crores.
You have a loan of Rs. 6 crores.
Suppose, the interest rate is 12%.
The total interest per year will be Rs. 72 lakhs.
You must earn, approximately, Rs. 5.5 crores.
How will you earn that sum?
Our sellers are working on credit.
Though you are slogging, your company is at stake.
Adil, let me tell you a rule of thumb.
A business with a gross margin of 70%
should be operated in loss
only if one has a runway of at least 24 months.
We must have money in the bank.
Otherwise, you must run the business at a 20% margin.
With your current margin structure
and due to your hefty loan, I won't be able to collaborate with you.
Earlier, you said you are the goon of this industry.
A goon gets jailed.
Okay?
You want to be the emperor.
So you must do a long-term planning.
Then you will get an independent business.
Only then you can be an emperor. Good luck to you.
Thank you!
I can be your customer
but I can't be your investor at present.
I have two issues with your business. One is the margin issue.
Secondly, when the mass market brands
observe the market increase,
it will bring about an OUD effect.
The market will become more competitive for you. So I'm out.
I'm fond of perfumes
but it's too strong for me.
Personally, I don't like Attar as a category.
For that reason, I'm out.
I'm out.
The simple reason is if I saw an increase in organic sales
or an increase in profit, I would have been interested.
Yours seems to be a performance marketing company
rather than a product company or a brand company. Thanks!
A business with a 70% gross margin is fundamentally, a great business.
It's just that we have to be disciplined
about our performance marketing spend and I can help you with that.
[intriguing music plays]
I'll give you
a conditional offer.
[dramatic music playing]
The first condition is that you go back
to making a 10% margin which you can make.
You will just grow slowly.
You must stop burning money
so that you can reduce your debt from Rs. 6 crores to Rs. 2 crores.
My offer is Rs. 1 crore for 1% equity...
- Wow! - In your company and
a 1% royalty of your net revenue
until I get my Rs. 1 crore.
Please tell us.
- Deal done! - Oh, wow!
- Whoa! - [clapping]
'Adil is caught in a debt trap.'
I think I can help Adil to get out of the debt trap
and build a fundamentally strong business.
Secondly, I think his journey full of struggles inspired me.
Actually, I wanted to bet on this founder.
All our bets are based on the founder.
The founder precedes the business.
[sweeping music playing]
[theme music playing]
Sharks, we are completely surrounded by chemicals currently.
- We eat and drink chemicals and also use them daily. - Hmm.
So chemicals are good for us, right?
But a buzzword is quite famous nowadays.
- Can you guess that for us? - "Natural" or "organic"?
[Vineeta chuckling]
That's right.
People think natural products are safe
but the question is, "is natural effective too?"
Are all chemicals bad?
- Sharks, we believe... - Bang on!
Chemicals are good and life is all about chemistry.
Greetings, Sharks.
[ethereal music playing]
Our products are made under expert supervision
with high-quality and innovative ingredients.
They are beginner-friendly and immensely effective.
We have improved the skin health
of more than 3 lakh consumers till now.
Our products are available
on our website and other prominent marketplaces
Sharks, our ask is Rs. 60 lakhs for 2% equity in our company.
Thank you!
The first time I heard of Conscious Chemist was
when a very big influencer personally told me...
- They had two products in the beginning. - Three.
- Three products. - Yes.
She called me up and told me,
"Consider this brand from an acquisition perspective
"- at some point because it's very good quality." - Here they are!
[laughs]
So, I just want to say that the quality of the products is good,
but could you explain how you made such great products?
Vineeta, it typically takes about 40 to 50 iterations
to formulate a product.
We work from scratch or the ground up with manufacturers
- and independent R&D experts to develop formulations. - Okay.
We have 29 unique SKUs
which address different concerns
It took a lot of time
- Would you like to show them? Okay. - We'd love to, of course.
- You can choose any one. - Very nice.
This is an exfoliating cream.
- Huh? - It is an exfoliating cream.
- Can you talk in Hindi? - Hey!
You can try the sunscreen. The yellow one.
- I love your packaging. - Thank you.
Skincare brands have extremely boring packaging!
- To look trustable but still fun... - Sure, correct.
Is really tough. So, I think the logo and packaging are amazing.
[pleasant music playing]
Let me compliment this sunscreen.
- This is SPF 50. - Yes.
And SPF 50
- is not absorbed easily most of the time. - It leaves a white cast.
- This absorbed beautifully... - Thank you.
Wonderful! You've gotten positive feedback already! Crazy!
- The lovely ladies have validated your products. - Very good product.
- Thank you. - The way I opened it...
I just loved the feeling of ripping this off.
- So much love. - Thank you.
We know your product is good.
Tell me what you both do. You're talking but he isn't.
Sharks, I manage D2C, marketplaces and marketing.
I oversee the product and manage investor relations.
- Investor relations! That means you already have investors. - Yes.
- Okay. - So, our...
- He's the CEO. You are the CEO. - Yes.
Start with your sales.
- Our gross revenue last month was Rs. 85 lakhs... - Not bad.
- Everything. - Good.
- Our net sales were Rs. 4.5 crores last year. - Okay.
Our target is to clock Rs. 9 crores in sales this year.
- Okay. - There won't be any profit this year.
Yes.
How will you generate the margin?
- We made some changes to the packaging. - Okay.
We improved our gross margins.
We optimised our marketing cost.
Secondly, we've just gone offline.
- So, we're building offline partnerships. - Got it.
Investors and valuation?
We raised the first round in September 2021
- at a pre-money valuation of Rs. 9 crores. - Okay.
- We raised Rs. 3 crores. - Wow. Okay.
We held a small bridge round
at the pre-money valuation of Rs. 25 crores
in which we raised Rs. 76 lakhs.
- That's it! - Yes.
Tell us the company's name.
Lotus Herbals and Inflection Point Ventures.
- Lotus Herbals! Ah! - Delhi-based.
So, it's bridge financing in terms of convertible notes.
Yes.
'Convertible notes are debt instruments taken by companies'
'in the initial days when it's hard to determine the valuation.'
'Once the valuation is determined later on, '
'this debt gets converted into equity.'
'This is known as a convertible note.'
You raised Rs. 76 lakhs in equity.
Was it because the company would shut down if you didn't?
- We had a financial situation. - Hmm.
That's why we had to raise this capital.
How much do you have in the bank?
Around Rs. 65 to 70 lakhs.
Given your burn rate,
- you'll have to raise more funds soon. - Correct.
- If you don't, it's game over. - The runway is short.
We have a runway of seven to eight months.
In the next five months, you can go bust.
- I don't think so. - Why not?
Aman, as I mentioned, we've entered into offline partnerships...
- Development... - Offline is a next-level game.
It's even hard to get your investment back.
Let me tell you how it works.
If your goods don't sell, they are returned to you
in such a bad condition that you cannot imagine.
You have two goals to achieve.
To become profitable
and have positive working capital. By when will you do it?
We're also exploring some more categories
- and B2B partnerships... - Oh, man!
Which will bring us cash.
- You are trying new categories. - Yes.
Every new category you explore requires capital.
I'll give you my example.
We made a profitable brand in the headphones category.
We were doing well.
We expanded into wearables and now, we're spending.
Correct.
Entering a new category at this time is the worst decision.
Won't Lotus help you with the distribution?
We don't want them to right now.
Why not?
Do they not want to or are you refusing their capital?
They're giving us money and we don't want to take it.
- We couldn't reach a consensus on a few of the terms. - There you go.
You entered multiple categories and tried everything,
but you couldn't crack it.
Give me just one instance.
I think we wanted to be product champions first.
Along with it, we were building a team as well.
Infatuated by your product.
- You perfect the product and ignore everything else. - No.
- No. - The four Ps.
- This is just one P. - We are infatuated by scale.
Scale excites us and we're working towards it.
That scale will definitely be achieved in the...
- All you perfected was the product then! - Coming months.
Um... I don't know.
That's for you to decide.
Okay. For whatever reason,
you're not able to scale beyond Rs. 9 crores
and you've run out of money.
What can be done, Aman?
Do you think you can help them or do you have questions?
- Did you decide? - I have questions.
Don't pressure me to make a decision right away.
- I'm not. - I was talking to them and you just jumped right in!
- I said that because the questions had stopped. - Whose?
Yours.
I asked so many. Who asked the most questions?
I did.
[laughs]
He doesn't have an answer to your questions. They're rhetorical.
Rhetorical? Can you speak Hindi?
- Why? - [laughs]
I don't know what rhetorical means.
They are questions that you have answers to already.
Am I mad?
Can we talk to them now?
- We need to move forward. - Please do.
First and foremost, after looking at your sunscreen,
I got excited that we had a really great product.
In spite of such a short runway...
Your last year's sale was Rs. 4.5 crores.
It is predicted to be Rs. 9 crores this year.
At such a small scale, you dream of product expansion
and going offline.
Offline is suicidal at your level.
You seem to be really confused. There's such a lot you want to do.
I think you need to go minimalist in your thinking first, okay?
I think I'm nervous as an investor
because you're really confused about your strategy.
Work on that, please.
- I'm out. - Thank you. Thanks.
Your product and brand are brilliant
but your distribution strategy is messed up.
You need to make this a large-scale business on marketplaces
and quick commerce.
This is your team's deficiency. You need to solve this.
Unless you resolve this,
you cannot turn this into a large-scale business
on the basis of product and brand.
For this reason, I am out. Best of luck.
- Thank you. - Thank you.
That's point one.
The second is, you didn't talk about the consumer.
Every founder has this passion
that my product is good and effective and so, it sells.
The person becomes a promoter and garners brand love.
I didn't see that here.
I'm out. All the best.
- Thank you. - Thank you.
I'm out.
Your business is solid, it's good.
Hire a business officer
who will find ways to help you boost sales.
If you have a superb product, you need a superb salesman.
- Hire one. - Sure, thank you.
Thank you.
Your entry was strong, right?
We all got very excited
- after seeing the product and packaging. - Sure.
You know? In business, the best product doesn't always win.
- Of course. - Yes.
You said nothing that is different in terms of strategy
that will help you break away.
You're here today. So, where will you be after that?
- Let me ask you a final question. - Sure.
What terms has Lotus set?
- The valuation they gave us was weak. - How much?
- That was around Rs. 18 crores. - Yes.
How much were they investing?
Around Rs. 2.5 crores.
What is your share?
I own 51% and Prakher owns 17%.
- So, you still have 70% of the company. - Yes.
I'll give you a piece of advice.
If possible, please go to them and accept their offer.
The anti-dilution clause will kick in.
no one is going to fund it
in the beauty space at this scale with a non-clear differentiation.
You are not going to get funding.
You're getting Rs. 2.5 crores.
Be smart. Be a businessman, not a product theatre only.
Take the funding.
You'll get a year to make this work. Otherwise, you're done.
- Good luck. I'm out. - Thank you.
- Good luck, Robin. - Thank you.
- Bye. - Thank you.
[sombre music playing]
Friends, welcome to Ask The Shark
where you get to ask business-related doubts
and questions to your favourite Shark.
I am merely a medium to pass on the Shark's answer to you.
Today on Ask The Shark, we are joined by
the CEO and Founder of Shaadi.com, Mr. Anupam Mittal.
- Welcome, sir. - Thank you very much.
Sir, Mr. Abhinav Thakkar from Pune wants to ask you a question.
I have often seen you ask pitchers about the market size.
of how risky the business is.
When the market size is big,
many mistakes are forgiven
- because market size has that kind of room. - Hmm.
When the market size is small,
no matter what you do...
You might be the best entrepreneur out there,
but your mistakes won't be forgiven because the market is very small.
- You don't have enough room to manoeuvre. - Okay.
- The risks increase. - Okay.
This is why investors give a lot of importance to the market size.
Got it.
How do you calculate this, sir?
There are many ways to calculate the market size.
One is pretty straightforward.
The market size is published in many industries.
Access the internet and do a little bit of research.
You will have a fair idea and get the approximate numbers.
It does happen at times and in many cases,
that you need to find out the market size, right?
- Let's take electric vehicles for instance. - Okay.
It is a product
- that everybody believes will have a huge market in the future. - Okay.
What will its size be?
There are many ways to find out.
One way to very simply put it is to say
that all the cars being sold today
will be replaced by EVs within 20 years.
The next step is
to consider the replacement cycle of an ICE engine.
- Let's say its replacement cycle is every five years. - Okay.
- That of an EV might be ten years as it has fewer parts. - Yes.
So, if you look at the numbers,
you will understand
that the size of the EV industry
might be half of that of the regular car industry
- if the replacement time is half. - Yes, half.
You can take a proxy and calculate the market size too.
At times, you have no idea absolutely
in cases where there is no substitute product.
How do you calculate the market size at that point?
It can be calculated using a top-down approach.
- Take digital watches for instance. - Okay.
- Your watch is priced at Rs. 5000. - Okay.