1 00:00:10,000 --> 00:00:11,000 [music playing] 2 00:00:31,680 --> 00:00:33,040 [theme music playing] 3 00:00:56,080 --> 00:00:57,400 [theme music concludes] 4 00:00:57,800 --> 00:01:01,400 Sharks, engineers really love to solve problems. 5 00:01:01,960 --> 00:01:05,720 The real problem is, how does one become a real engineer? 6 00:01:13,280 --> 00:01:15,680 In order to receive good coaching, students need to go far from home 7 00:01:15,720 --> 00:01:18,400 to places like Kota, Patna or Lucknow 8 00:01:18,520 --> 00:01:20,840 where they spend around Rs. 3 lakhs annually 9 00:01:30,000 --> 00:01:32,160 Offline education has certain problems 10 00:01:32,240 --> 00:01:34,080 that they themselves can't solve. 11 00:01:34,520 --> 00:01:37,680 We teachers solve this problem of students 12 00:01:37,800 --> 00:01:39,800 through Competishun. 13 00:01:52,320 --> 00:01:54,040 Competishun is an ed-tech platform 14 00:02:00,760 --> 00:02:02,880 The reason is that the prime focus 15 00:02:03,080 --> 00:02:05,600 of ed-techs these days is money-mindedness. 16 00:02:05,720 --> 00:02:08,240 Also, they don't have an exact idea 17 00:02:08,320 --> 00:02:12,000 of what is needed to prepare the students. 18 00:02:12,200 --> 00:02:14,120 We've been doing this for the last 20 years. 19 00:02:14,200 --> 00:02:17,560 We know exactly what is required for a student to get selected 20 00:02:17,680 --> 00:02:21,200 and we've built that ecosystem in Competishun in the last 3 years. 21 00:02:36,960 --> 00:02:38,480 and get good results. 22 00:02:56,040 --> 00:02:59,040 - Welcome to Shark Tank India Season 3. - Thank you. 23 00:02:59,160 --> 00:03:01,960 In your pitch, you mentioned money-mindedness. 24 00:03:02,120 --> 00:03:03,640 Without money-mindedness, 25 00:03:03,800 --> 00:03:06,280 how do you propose returning our investment? 26 00:03:06,760 --> 00:03:08,280 The valuation is Rs. 200 crores. 27 00:03:09,600 --> 00:03:10,920 Our cause is such 28 00:03:11,000 --> 00:03:13,720 that we want to create a win-win situation for everyone. 29 00:03:13,880 --> 00:03:17,800 We were the first to start a YouTube channel in India in 2014. 30 00:03:18,160 --> 00:03:19,760 I used to teach in Kota for 10 years. 31 00:03:19,840 --> 00:03:21,120 Where in Kota exactly? 32 00:03:21,200 --> 00:03:23,920 I've taught at Bansal Classes and Resonance too. 33 00:03:24,040 --> 00:03:26,280 I used to teach the top batches. 34 00:03:26,360 --> 00:03:28,680 I was the first to upload my sessions on YouTube 35 00:03:28,800 --> 00:03:30,520 in India for free in 2014. 36 00:03:30,680 --> 00:03:33,040 Our social angle is very strong. 37 00:03:33,160 --> 00:03:34,360 How many followers do you have? 38 00:03:34,400 --> 00:03:36,080 About 1 million followers. 39 00:03:36,280 --> 00:03:37,280 That's low. 40 00:03:37,640 --> 00:03:38,720 [Sharks chuckle] 41 00:03:39,200 --> 00:03:40,840 Everybody has at least 20 million. 42 00:03:40,960 --> 00:03:44,480 Our channel only talks about serious studies 43 00:03:44,640 --> 00:03:46,640 so that the student can study and get selected. 44 00:03:46,840 --> 00:03:49,240 When the child is at such an impressionable age, 45 00:03:49,360 --> 00:03:51,960 effort is made to manipulate him in other ways 46 00:03:52,080 --> 00:03:53,880 by reciting couplets or other smooth talk. 47 00:03:54,080 --> 00:03:55,400 We don't do all of that. 48 00:03:55,520 --> 00:04:00,400 The couplet you're talking about is done as a means of engagement. 49 00:04:00,480 --> 00:04:02,240 Look at Shark Tank for instance. 50 00:04:02,440 --> 00:04:05,280 They made education entertaining. 51 00:04:05,360 --> 00:04:08,080 Now, lakhs of people know what equity and debt is. 52 00:04:08,200 --> 00:04:10,360 Had it been in books, they might not have known. 53 00:04:10,440 --> 00:04:12,760 Education and entertainment can go hand in hand. 54 00:04:12,880 --> 00:04:15,240 That's why Shark Tank is successful. 55 00:04:15,360 --> 00:04:17,120 I don't understand what's wrong with this. 56 00:04:17,240 --> 00:04:19,200 You're making it such a big USP. 57 00:04:20,880 --> 00:04:22,560 The success rate for IIT, 58 00:04:22,680 --> 00:04:23,840 if we talk only about IIT, 59 00:04:30,320 --> 00:04:32,920 you recite poems and couplets time and again, 60 00:04:33,000 --> 00:04:34,400 it breaks the students' flow. 61 00:04:34,480 --> 00:04:35,960 I completely disagree. 62 00:04:36,040 --> 00:04:37,880 - When I studied for the IIT... - Yes. 63 00:04:38,000 --> 00:04:39,160 I studied at FIITJEE 64 00:04:39,200 --> 00:04:42,240 and it was normal there, as in for a few hours. 65 00:04:42,440 --> 00:04:43,880 A few students in my class 66 00:04:44,000 --> 00:04:47,600 used to be coached from 4 am to 11 pm and even midnight. 67 00:04:47,760 --> 00:04:49,480 - You were supernormal, Vineeta. - No. 68 00:04:49,560 --> 00:04:52,800 I feel that over there, 69 00:04:52,880 --> 00:04:56,280 making them study for 18 hours a day 70 00:04:56,320 --> 00:04:58,640 had firstly, destroyed their personality. 71 00:04:58,720 --> 00:05:01,520 Secondly, I don't think it was better for them. 72 00:05:01,880 --> 00:05:04,040 - Okay. Hang on a second. - Yes. 73 00:05:04,200 --> 00:05:08,000 The teaching methods and approach might be different. 74 00:05:08,120 --> 00:05:11,160 We can't decide which one of them is the best today. 75 00:05:11,320 --> 00:05:12,360 Let's move on from that 76 00:05:12,440 --> 00:05:15,000 and decide if your business is investible or not. 77 00:05:15,240 --> 00:05:16,400 - Is that all right? - Sure. 78 00:05:16,480 --> 00:05:21,280 Lay out your differentiation and positioning very clearly. 79 00:05:21,400 --> 00:05:23,360 Could I give you a demo? 80 00:05:23,440 --> 00:05:24,640 - Sure, go ahead. - Please. 81 00:05:40,720 --> 00:05:43,440 The portal you see here is for a 'dropper' 82 00:05:43,560 --> 00:05:44,880 who has passed twelfth grade. 83 00:05:49,200 --> 00:05:50,840 A student who has passed the twelfth grade 84 00:05:50,920 --> 00:05:54,040 - has different receptivity at different stages. - Okay. 85 00:05:54,160 --> 00:05:56,040 Some have more time in hand while others do not. 86 00:06:04,680 --> 00:06:05,720 For example, 87 00:06:05,840 --> 00:06:10,120 we taught the same lecture in Praveen Classes, 88 00:06:10,480 --> 00:06:11,840 then at Prabal's. 89 00:06:12,200 --> 00:06:14,520 We even taught it at My Praveen Fast Lane. 90 00:06:14,600 --> 00:06:17,200 Fast Lane means we taught the same lecture faster 91 00:06:17,320 --> 00:06:19,600 - to a student with a higher receptivity... - Hmm. 92 00:06:19,680 --> 00:06:21,120 And in lesser time. 93 00:06:21,240 --> 00:06:24,640 We taught a crash course at C³. 94 00:06:24,720 --> 00:06:26,640 The same content but in an even shorter duration. 95 00:06:26,720 --> 00:06:29,840 It's for those who wish to clear JEE Main and not JEE Advanced. 96 00:06:30,040 --> 00:06:32,560 Then again, we introduced another course called Champ. 97 00:06:32,640 --> 00:06:34,040 It's a part of the same course. 98 00:06:34,160 --> 00:06:35,320 This is only for the students 99 00:06:35,360 --> 00:06:38,160 who wish to revise and have already studied earlier. 100 00:06:42,960 --> 00:06:44,560 No, they also customised it I'm assuming. 101 00:06:44,640 --> 00:06:45,440 Customisation. 102 00:06:45,560 --> 00:06:47,440 - No one else does this. - Nobody. 103 00:06:47,520 --> 00:06:48,920 You're getting traction then. 104 00:06:49,040 --> 00:06:50,720 - A lot of people are going for it. - Absolutely. 105 00:07:05,560 --> 00:07:06,720 They studied with us online. 106 00:07:06,880 --> 00:07:08,520 - Give us an estimate. - Yes? 107 00:07:08,600 --> 00:07:11,560 How many of those students must have opted for other coaching as well? 108 00:07:11,680 --> 00:07:14,000 - Yes, it's possible. - How many? 90%? 109 00:07:14,120 --> 00:07:18,320 I believe that roughly 500 students solely depended on us. 110 00:07:20,880 --> 00:07:23,000 - if that's the case. - Come here if the demo's done. 111 00:07:23,800 --> 00:07:25,480 What are your business stats? 112 00:07:25,560 --> 00:07:26,480 If you look at the stats, 113 00:07:42,280 --> 00:07:43,080 2020. 114 00:07:48,120 --> 00:07:51,840 You could say the cost is roughly about Rs. 10,000 to 11,000... 115 00:07:51,960 --> 00:07:55,480 - Is that your average revenue per order or user? - Yes, average. 116 00:08:20,680 --> 00:08:22,800 Could you give us the cost break-up for Rs. 10 crores? 117 00:08:22,880 --> 00:08:23,800 It goes towards rent. 118 00:08:23,880 --> 00:08:26,160 The major chunk goes towards the salaries of the faculty. 119 00:08:26,240 --> 00:08:27,440 How many faculties are there in total? 120 00:08:27,480 --> 00:08:29,680 18 faculties including us. 121 00:08:29,800 --> 00:08:31,320 Is there a star faculty? 122 00:08:31,400 --> 00:08:33,640 - It must be you three. - No, we're the normal faculty. 123 00:08:33,720 --> 00:08:35,040 How much were you making earlier? 124 00:08:35,840 --> 00:08:36,920 Tell us. 125 00:08:37,000 --> 00:08:41,040 I had a commitment of 90 hours for which I'd get Rs. 1.5 crores. 126 00:08:41,120 --> 00:08:43,080 - Unbelievable. - Rs. 1.5 crores for a year? 127 00:08:43,200 --> 00:08:46,440 I was told it'd be doubled if I put Competishun out of business. 128 00:08:46,560 --> 00:08:48,200 Wow! That's good money. 129 00:08:48,760 --> 00:08:49,800 Tell me something. 130 00:08:49,920 --> 00:08:51,680 In this season of Shark Tank, 131 00:08:51,800 --> 00:08:53,360 given the scenario outside, 132 00:08:53,440 --> 00:08:55,960 no company with a revenue of Rs. 10 crores 133 00:08:56,040 --> 00:08:57,640 asked for a valuation of Rs. 200 crores. 134 00:08:57,760 --> 00:09:00,040 So, what you do not wish to be, 135 00:09:00,120 --> 00:09:02,840 those bad ed-tech companies, 136 00:09:02,920 --> 00:09:04,720 is what you're turning into! 137 00:09:05,000 --> 00:09:05,880 Not at all. 138 00:09:06,000 --> 00:09:09,800 What other ed-tech companies did was to lure students through ads 139 00:09:09,880 --> 00:09:12,640 without generating a system and without generating trust... 140 00:09:12,720 --> 00:09:15,920 How could you ask for Rs. 200 crores with a Rs. 10-crore revenue? 141 00:09:17,360 --> 00:09:19,320 Let me explain it in two parts. 142 00:09:19,360 --> 00:09:20,440 The first one is, 143 00:09:20,720 --> 00:09:24,000 investments have been made even at a multiple of 30. 144 00:09:24,200 --> 00:09:25,240 For those companies! 145 00:09:25,360 --> 00:09:27,280 You're not them, but you want that multiple! Wow! 146 00:09:27,360 --> 00:09:30,720 No. The ones who're on the verge of closing down. 147 00:09:30,800 --> 00:09:31,880 You're having a round. 148 00:09:31,960 --> 00:09:32,880 No, we're not. 149 00:09:33,000 --> 00:09:34,040 We're still standing 150 00:09:34,120 --> 00:09:36,160 which is a testament that if you teach well, 151 00:09:36,240 --> 00:09:38,480 - you will grow organically. - Correct. 152 00:09:38,600 --> 00:09:40,600 The opportunity is still there. 153 00:09:40,720 --> 00:09:44,200 Second, the online companies that came right before Covid 154 00:09:44,280 --> 00:09:46,120 pointed out flaws in offline tutoring 155 00:09:46,320 --> 00:09:47,640 which exists even today. 156 00:09:47,800 --> 00:09:51,320 Mohit, to justify a 20x valuation, 157 00:09:51,440 --> 00:09:53,360 you also will need to grow at that fast pace. 158 00:09:53,480 --> 00:09:55,160 You'll also start doing what they're doing. 159 00:09:55,200 --> 00:09:56,200 They could not grow. 160 00:09:56,280 --> 00:09:59,280 They could not, but you'll have to do that too and run ads. 161 00:09:59,360 --> 00:10:01,360 Why would we do something that didn't help them grow? 162 00:10:01,400 --> 00:10:03,960 If you won't do that, how will you return the investment? 163 00:10:05,520 --> 00:10:08,600 We feel that other online coaching classes have conceded defeat, 164 00:10:08,880 --> 00:10:11,080 the proof of which is visible. 165 00:10:11,360 --> 00:10:13,360 We feel we're at the point... 166 00:10:13,480 --> 00:10:16,920 Do you ever feel that the others are not doing anything worthwhile 167 00:10:17,040 --> 00:10:18,480 and only you are? 168 00:10:18,600 --> 00:10:19,960 I wish to know if anyone else 169 00:10:20,040 --> 00:10:21,880 in this industry is doing a good job. 170 00:10:22,000 --> 00:10:22,880 Yes, a few are. 171 00:10:22,960 --> 00:10:24,480 For instance, PW did good work. 172 00:10:24,600 --> 00:10:26,480 - PW. Physics Wallah. - Yes, they're doing good. 173 00:10:26,480 --> 00:10:27,320 Why so? 174 00:10:27,400 --> 00:10:30,880 JEE is attempted by 10 lakh people and NEET by 20 lakh. 175 00:10:31,040 --> 00:10:33,240 The students who prepare seriously will be around 10 lakhs. 176 00:10:33,280 --> 00:10:35,680 Physics Wallah started coaching 5 lakh students 177 00:10:35,760 --> 00:10:37,280 - over and above those 10 lakh. - Yes. 178 00:10:37,400 --> 00:10:40,320 And because their ticket size is just Rs. 3,000, 179 00:10:40,560 --> 00:10:42,640 the student doesn't need to think too much. 180 00:10:42,720 --> 00:10:44,240 He doesn't need to ask his parents. 181 00:10:44,320 --> 00:10:46,840 You could not explain your business with the same clarity 182 00:10:46,920 --> 00:10:48,480 as you explained that of Physics Wallah. 183 00:10:49,760 --> 00:10:51,960 Ed-tech no longer has linear growth. 184 00:10:52,080 --> 00:10:53,280 For instance ALLEN, 185 00:10:53,400 --> 00:10:55,440 that is currently the biggest offline player 186 00:10:55,600 --> 00:10:58,360 that might have taken 10 to 15 years to build earlier. 187 00:10:58,520 --> 00:10:59,760 What is their valuation? 188 00:10:59,880 --> 00:11:02,600 The last equity was raised at 1.1 billion dollars. 189 00:11:02,680 --> 00:11:03,720 Okay, keep going. 190 00:11:11,840 --> 00:11:13,600 Post which, you see hyper-growth. 191 00:11:13,760 --> 00:11:17,240 The biggest problem with Physics Wallah, I would say... 192 00:11:17,320 --> 00:11:19,680 - Forget them... - Let him finish, Peyush. Yes. 193 00:11:19,760 --> 00:11:21,840 - What was it? - The biggest problem is 194 00:11:21,920 --> 00:11:24,120 they cannot produce results in the top bracket. 195 00:11:24,400 --> 00:11:25,800 What is it you want to do? 196 00:11:25,880 --> 00:11:27,600 I'm not asking what Physics Wallah is doing, 197 00:11:27,680 --> 00:11:28,880 what their problems are 198 00:11:28,960 --> 00:11:30,360 or who is smart and who is not. 199 00:11:30,480 --> 00:11:32,760 I am asking, what do you wish to do? 200 00:11:32,840 --> 00:11:34,640 We wish to be the Bansal of online tutoring. 201 00:11:34,760 --> 00:11:37,280 What's Bansal? That's my surname. 202 00:11:37,800 --> 00:11:40,360 Bansal was known for its results. 203 00:11:40,440 --> 00:11:42,920 They used to reject admissions back in the day. 204 00:11:43,080 --> 00:11:44,320 Tell me something, Mohit. 205 00:11:44,440 --> 00:11:45,640 When you were tutoring, 206 00:11:45,720 --> 00:11:47,400 as far as I've understood, 207 00:11:47,480 --> 00:11:49,920 - you used to be the star tutor at these places. - Yes. 208 00:11:50,160 --> 00:11:52,440 - Absolutely. - So, what I've gathered is 209 00:11:52,560 --> 00:11:56,640 that you will cater to the best students 210 00:11:56,720 --> 00:11:58,920 and Physics Wallah is catering to the masses. 211 00:11:59,080 --> 00:12:00,880 Did I get that right or not? 212 00:12:01,000 --> 00:12:03,120 For now, Physics Wallah is catering to the masses. 213 00:12:03,200 --> 00:12:04,960 In the near future, 214 00:12:05,120 --> 00:12:06,640 when the results from an online platform... 215 00:12:06,680 --> 00:12:08,920 You know about what everyone else will do! 216 00:12:09,720 --> 00:12:10,720 How... [laughter] 217 00:12:11,040 --> 00:12:14,760 Okay. As far as we've understood, 218 00:12:15,240 --> 00:12:17,680 your USP really is 219 00:12:17,760 --> 00:12:20,720 - to build a result-driven ed-tech company... - Yes. 220 00:12:20,840 --> 00:12:22,600 - For JEE and NEET. Correct? - No shortcuts. 221 00:12:22,720 --> 00:12:23,800 I have two views. 222 00:12:23,880 --> 00:12:26,960 There are two types of gaming in results. 223 00:12:27,200 --> 00:12:31,640 The first is an admission test to get into the coaching class 224 00:12:31,760 --> 00:12:36,640 where the best students are accepted and are given discounts. 225 00:12:36,880 --> 00:12:40,880 And we do not take the rest because that impacts results. 226 00:12:40,960 --> 00:12:41,760 - Okay? - Yes. 227 00:12:41,880 --> 00:12:43,040 The second gaming is 228 00:12:43,200 --> 00:12:46,120 where they have loads of ads in the newspapers and on the buses. 229 00:12:46,200 --> 00:12:50,720 When it comes to results, I am still of the opinion 230 00:12:50,800 --> 00:12:53,880 that its biggest determinant is how strict the selection is. 231 00:12:54,120 --> 00:12:55,920 Secondly, this is gameable. 232 00:12:56,000 --> 00:12:58,800 So, building a reliable 233 00:12:58,880 --> 00:13:00,920 and trustworthy business on this is difficult. 234 00:13:01,160 --> 00:13:03,760 This has been changing for years. 235 00:13:03,840 --> 00:13:06,680 Vidyamandir used to be number one during my time, it is Bansal now. 236 00:13:06,800 --> 00:13:07,960 This will keep changing. 237 00:13:08,080 --> 00:13:10,400 You won't be able to build a brand on the basis of results. 238 00:13:10,440 --> 00:13:12,560 Secondly, I still believe 239 00:13:12,680 --> 00:13:16,840 that to achieve results, offline is an important component 240 00:13:16,960 --> 00:13:19,720 because keeping 15 to 17-year-olds 241 00:13:19,840 --> 00:13:22,680 engaged online for hours at a stretch is difficult. 242 00:13:22,800 --> 00:13:26,640 So, I cannot invest in you today, but best of luck. 243 00:13:28,120 --> 00:13:30,200 I don't see clarity in your vision. 244 00:13:30,640 --> 00:13:32,440 You said you wanted to be the Bansal of online, 245 00:13:32,480 --> 00:13:33,720 or you could not tell us... 246 00:13:33,800 --> 00:13:38,080 You didn't once say that you wanted to send x number of students to IIT. 247 00:13:38,160 --> 00:13:41,480 You've been harping on about something unauthentic. 248 00:13:42,600 --> 00:13:45,160 Second, I feel you're too competition-obsessed. 249 00:13:45,560 --> 00:13:47,600 I don't think by being competition-obsessed, 250 00:13:47,680 --> 00:13:49,240 you'll be able to build a big business. 251 00:13:49,560 --> 00:13:52,240 I am out for these reasons but best of luck. 252 00:13:52,400 --> 00:13:53,280 Thank you. 253 00:13:53,360 --> 00:13:54,840 My answer is no too. 254 00:13:54,920 --> 00:13:57,880 I agree with Peyush's views. 255 00:13:57,960 --> 00:13:59,360 Will you be able to make 256 00:13:59,480 --> 00:14:01,480 a successful business from being a star teacher 257 00:14:01,560 --> 00:14:02,960 remains a question for me. 258 00:14:03,080 --> 00:14:05,200 Being a star teacher, 259 00:14:05,280 --> 00:14:08,520 you might be able to attract a niche audience. 260 00:14:08,560 --> 00:14:11,560 However, how big will you become remains a question for me. 261 00:14:11,680 --> 00:14:12,920 For that reason, I'm out. 262 00:14:13,080 --> 00:14:14,080 - Okay. - All right. 263 00:14:14,120 --> 00:14:15,960 I can't join you as of today. 264 00:14:20,640 --> 00:14:23,040 With the intent, all the teachers are making money nowadays, 265 00:14:23,240 --> 00:14:25,360 we will too. 266 00:14:25,480 --> 00:14:26,680 From the business point of view, 267 00:14:26,720 --> 00:14:30,080 I don't believe you can do something different. 268 00:14:30,200 --> 00:14:32,400 I don't quite get what fuels your obsession. 269 00:14:32,520 --> 00:14:33,520 So, I'm out. 270 00:14:34,360 --> 00:14:36,280 I couldn't understand your differentiation. 271 00:14:36,800 --> 00:14:39,560 You said a lot of businesses came, 272 00:14:39,640 --> 00:14:41,600 and we've witnessed how dirty things got. 273 00:14:41,680 --> 00:14:44,360 That word was used in ed-tech in a way, right? 274 00:14:44,440 --> 00:14:48,440 For a moment there, I thought you were a breath of fresh air, 275 00:14:48,880 --> 00:14:51,520 but as the conversation unfolded, you were playing the same game. 276 00:15:25,440 --> 00:15:28,880 Or I was excited about tech, and ed-tech in particular. 277 00:15:29,240 --> 00:15:31,000 These are the reasons I'm out. Good luck. 278 00:15:31,160 --> 00:15:33,360 Find your footing, guys. You're all over the place. 279 00:15:33,440 --> 00:15:34,960 - Thank you. - Good luck, sir. 280 00:15:35,120 --> 00:15:36,560 - Thank you. - Very nice to meet you. 281 00:15:36,840 --> 00:15:38,120 [sombre music playing] 282 00:16:47,360 --> 00:16:48,400 [birds chirping] 283 00:16:48,840 --> 00:16:50,320 'Let me give you a statistic.' 284 00:16:50,440 --> 00:16:55,840 'The Indian government spends 7% of the GDP on welfare schemes.' 285 00:16:55,920 --> 00:16:57,560 'It is the people's right.' 286 00:16:57,640 --> 00:17:01,480 If you look at the gap between what the government spends 287 00:17:01,760 --> 00:17:05,640 and the people who actually benefit from it, 288 00:17:05,880 --> 00:17:08,000 there exists a huge gap. 289 00:17:19,120 --> 00:17:21,080 'provides them with application' 290 00:17:21,160 --> 00:17:22,880 'and documentation support to the last mile.' 291 00:17:22,880 --> 00:17:24,240 'I'll give you Rs. 1 crore.' 292 00:17:24,400 --> 00:17:26,400 'Aman and I would like to make an offer.' 293 00:17:27,640 --> 00:17:29,840 - 'I'll take your offer, Sharks. - All right. Good one!' 294 00:17:30,760 --> 00:17:32,880 'We were getting requests from everybody' 295 00:17:32,960 --> 00:17:36,120 'seeking support of welfare schemes either for the people' 296 00:17:36,200 --> 00:17:40,160 'whom they know or employ.' 297 00:18:11,760 --> 00:18:13,440 The other thing that happened is 298 00:18:13,560 --> 00:18:17,200 a lot of people wrote to us saying that they want to work with us. 299 00:18:19,240 --> 00:18:21,640 My female Haqdarshak partner had accompanied me. 300 00:18:21,840 --> 00:18:23,120 Looking at her work, 301 00:18:23,200 --> 00:18:24,960 a lot of people placed their trust in us 302 00:18:25,040 --> 00:18:27,520 and wanted to associate with us. 303 00:18:29,080 --> 00:18:32,000 Our Yojana Card is also associated with our Yojana Chatbot. 304 00:18:32,120 --> 00:18:35,160 None of the workers or farmers will need to write. 305 00:18:35,320 --> 00:18:38,040 They can merely tell us in their local language 306 00:18:38,160 --> 00:18:41,320 which welfare schemes they want information about 307 00:18:41,400 --> 00:18:42,880 or application support with. 308 00:18:43,120 --> 00:18:45,520 Our agents will then go there and help them apply for it. 309 00:18:50,160 --> 00:18:53,120 I'm a farmer and I'm busy tending to the crops. 310 00:18:58,320 --> 00:19:00,840 I didn't have an Aadhaar card or any ID card. 311 00:19:00,920 --> 00:19:04,160 By the time I got one made, the scheme would be discontinued. 312 00:19:05,400 --> 00:19:07,040 After my ID came through, 313 00:19:07,160 --> 00:19:09,680 Vinay got my Yojana Card made. 314 00:19:10,600 --> 00:19:13,960 Once that card was made, I got a benefit of Rs. 2,000. 315 00:19:15,920 --> 00:19:18,560 'We came on Shark Tank in January 2023.' 316 00:19:18,680 --> 00:19:21,440 From then until now, our growth has been exponential. 317 00:20:03,200 --> 00:20:06,640 As far as the problem we were trying to solve went, 318 00:20:06,920 --> 00:20:10,280 Shark Tank had a big hand in widening its reach. 319 00:20:10,400 --> 00:20:12,720 Today, when people think of government welfare schemes, 320 00:20:12,840 --> 00:20:14,560 Haqdarshak comes to their mind. 321 00:20:14,680 --> 00:20:17,200 'Your effort, our progress.' 322 00:20:17,960 --> 00:20:19,200 [theme music playing] 323 00:20:37,360 --> 00:20:38,720 [theme music concludes] 324 00:20:39,640 --> 00:20:41,680 Who doesn't love new clothes? 325 00:20:41,760 --> 00:20:44,000 New style! New fashion... 326 00:20:44,080 --> 00:20:46,120 - New self... - Excuse me, pitch! 327 00:20:47,200 --> 00:20:50,960 Today's cheapest and lasting option is fast fashion. 328 00:20:51,040 --> 00:20:52,040 Fast fashion. 329 00:20:52,240 --> 00:20:53,400 Such good clothes! 330 00:20:53,480 --> 00:20:55,200 - Super fast! Super cheap... - But... 331 00:20:55,320 --> 00:20:57,160 Trends change daily. 332 00:20:57,280 --> 00:21:00,320 Your new set of clothes starts looking boring in a few days. 333 00:21:00,400 --> 00:21:03,320 Let's buy more. There's a sale going on. 334 00:21:03,440 --> 00:21:04,920 What about our old clothes? 335 00:21:05,000 --> 00:21:06,480 I'll donate those. 336 00:21:06,800 --> 00:21:07,920 Oh, no. 337 00:21:08,040 --> 00:21:09,840 NGOs don't require your bikinis 338 00:21:09,920 --> 00:21:12,040 and your miniskirts. 339 00:21:13,120 --> 00:21:15,160 They'll throw your clothes in the trash can. 340 00:21:15,400 --> 00:21:17,680 Yes, Sharks. Our landfills are also 341 00:21:17,800 --> 00:21:20,680 full of old clothes like our closets. 342 00:21:22,280 --> 00:21:25,840 Globally, more than 10,000 crore new clothes 343 00:21:25,920 --> 00:21:27,280 are manufactured every year. 344 00:21:42,480 --> 00:21:45,600 but our crop tops and underwear will stay on this planet. 345 00:21:46,400 --> 00:21:47,800 What's the solution? 346 00:21:47,880 --> 00:21:49,440 Building treasure out of trash. 347 00:21:56,600 --> 00:21:57,960 [thrilling music playing] 348 00:21:58,120 --> 00:22:00,080 It's India's first thrift platform 349 00:22:12,680 --> 00:22:14,240 We are experts in borrowing. 350 00:22:14,360 --> 00:22:17,440 For instance, Mom makes me wear Sana's clothes. 351 00:22:17,520 --> 00:22:21,200 And Alfiya used to steal my clothes when she was in college. 352 00:22:21,280 --> 00:22:22,440 Where is my red top? 353 00:22:22,560 --> 00:22:23,960 [joyful music playing] 354 00:22:24,120 --> 00:22:27,800 The Indian mindset is about saving and reusing. 355 00:22:27,880 --> 00:22:29,160 And this is our concept. 356 00:22:29,520 --> 00:22:32,400 Bombay Closet Cleanse helps you shop, swap, 357 00:22:41,920 --> 00:22:45,720 We started this business with Sana's closet cleanse. 358 00:22:46,080 --> 00:22:50,120 To date, we cleansed more than 5,000 closets. 359 00:22:50,360 --> 00:22:53,280 Our focus is offline experiences, 360 00:22:53,360 --> 00:22:57,160 so we have two established offline stores in Mumbai. 361 00:23:07,320 --> 00:23:08,840 increase their lifecycle, 362 00:23:08,960 --> 00:23:11,440 and stop them from going into the landfill somehow. 363 00:23:11,800 --> 00:23:16,240 For this, our ask is Rs. 1 crore for 2.5% equity. 364 00:23:21,960 --> 00:23:23,640 [inspirational music playing] 365 00:23:25,080 --> 00:23:26,800 - Sana and Alfiya... - Yes! 366 00:23:26,960 --> 00:23:28,760 It was an entertaining pitch, I must say. 367 00:23:28,840 --> 00:23:29,640 - Thank you! - Super! 368 00:23:29,760 --> 00:23:32,160 Why don't we start with knowing about you first? 369 00:23:32,240 --> 00:23:33,280 Are you two sisters? 370 00:23:33,280 --> 00:23:34,120 - Yes. - Right. 371 00:23:34,240 --> 00:23:35,520 Please tell us your background. 372 00:23:35,520 --> 00:23:37,920 What did you study? And how did you start this? 373 00:23:38,000 --> 00:23:40,840 Sharks, I'm Alfiya and I'm 26 years old. 374 00:23:41,160 --> 00:23:43,520 I studied mass media 375 00:23:43,600 --> 00:23:46,080 and my specialisation was advertising. 376 00:23:46,160 --> 00:23:49,320 I used to work as a graphic designer before starting BCC 377 00:23:49,400 --> 00:23:51,680 and I had freelance clients too. 378 00:23:52,520 --> 00:23:55,360 I like branding 379 00:23:55,480 --> 00:23:58,240 so this company is my baby. 380 00:23:58,320 --> 00:24:00,360 - Do you live in South Mumbai? - No. 381 00:24:00,520 --> 00:24:02,120 - Bandra! - You have an accent. 382 00:24:02,200 --> 00:24:06,240 Your Hindi accent is unique. 383 00:24:06,360 --> 00:24:08,440 I practised to speak like this. 384 00:24:08,560 --> 00:24:10,160 To have an accent or to speak Hindi? 385 00:24:10,240 --> 00:24:11,400 - To speak in Hindi. - Hindi. 386 00:24:11,400 --> 00:24:12,440 [intriguing music plays] 387 00:24:12,560 --> 00:24:15,120 Did you get the accent through thrift or because of the expenses? 388 00:24:15,120 --> 00:24:16,800 - Expenses! - Expenses. 389 00:24:16,880 --> 00:24:19,400 We had to pay rent in Bandra. 390 00:24:19,480 --> 00:24:20,640 [laughing] 391 00:24:20,920 --> 00:24:22,200 [exhilarating music playing] 392 00:24:23,760 --> 00:24:26,960 Actually, I'm a qualified dentist. 393 00:24:27,120 --> 00:24:28,200 - Wow! - Oh my God! 394 00:24:28,280 --> 00:24:29,640 - Wow! - Who is the elder one? 395 00:24:29,720 --> 00:24:30,920 - I'm older. - So it's you. 396 00:24:31,120 --> 00:24:34,320 - My skin doesn't reveal my age! - [guffawing] 397 00:24:34,400 --> 00:24:35,720 [laughing] 398 00:24:35,960 --> 00:24:37,760 [exhilarating music playing] 399 00:24:38,720 --> 00:24:40,720 However, I'm 34 years old! 400 00:24:40,920 --> 00:24:42,800 - You're 34! - 34! No way! 401 00:24:42,880 --> 00:24:45,920 Oh my God! I love your boots and your clothes. 402 00:24:46,000 --> 00:24:48,080 - You should model for Quench. - I think so. 403 00:24:48,200 --> 00:24:49,480 Please! 404 00:24:51,080 --> 00:24:54,680 Actually, I was a shopaholic. 405 00:24:54,760 --> 00:24:56,560 I had 700-800 clothes 406 00:24:56,640 --> 00:24:58,480 which I wasn't wearing. 407 00:24:58,560 --> 00:24:59,760 Whoa! 408 00:24:59,920 --> 00:25:03,000 So we decided to try selling them. 409 00:25:03,160 --> 00:25:05,160 Many clothes had tags intact. 410 00:25:05,240 --> 00:25:06,760 "Maybe people would be interested in buying them." 411 00:25:06,760 --> 00:25:07,960 So I called Alfiya. 412 00:25:08,040 --> 00:25:10,080 "You are a graphic designer. Please help me." 413 00:25:18,200 --> 00:25:20,320 Around 80 people came to my house. 414 00:25:20,400 --> 00:25:22,880 Please do it again. "80 people..." 415 00:25:23,080 --> 00:25:24,760 80 people landed at my door. 416 00:25:24,840 --> 00:25:26,000 [laughing] 417 00:25:26,200 --> 00:25:27,200 They are amazing. 418 00:25:37,080 --> 00:25:39,240 - Yes, of course. - Yes, please! 419 00:25:39,320 --> 00:25:40,160 How many followers? 420 00:25:47,280 --> 00:25:49,640 The third boutique 421 00:25:49,760 --> 00:25:51,760 shows our Bandra store. 422 00:26:32,760 --> 00:26:33,600 It's lovely. 423 00:26:33,680 --> 00:26:35,640 What does Rs. 7,500 mean? 424 00:26:35,720 --> 00:26:37,000 Is it the price I need to pay? 425 00:26:37,000 --> 00:26:37,800 - Yes. - Yes. 426 00:26:37,880 --> 00:26:39,200 What is its original price? 427 00:26:39,280 --> 00:26:41,040 It must cost Rs. 50,000 at least. 428 00:26:41,120 --> 00:26:43,040 - It's quite good for Rs. 7,500. - It's wonderful. 429 00:26:43,040 --> 00:26:45,680 Sana and Alfiya, suppose I come to your shop with my suitcase. 430 00:26:46,000 --> 00:26:47,520 The suitcase contains 50 clothes. 431 00:26:47,920 --> 00:26:50,920 I meet the shopkeeper and place my suitcase in front of him. 432 00:26:51,000 --> 00:26:51,800 What next? 433 00:26:51,920 --> 00:26:54,680 First, let me explain the process of procuring clothes. 434 00:26:55,000 --> 00:26:56,720 We don't allow walk-ins. 435 00:26:56,800 --> 00:27:00,200 Earlier, when we allowed it, as you said, many people just walked in 436 00:27:00,280 --> 00:27:03,560 and we didn't have enough space in the warehouse. 437 00:27:13,600 --> 00:27:16,120 to check stains and defects. 438 00:27:30,240 --> 00:27:31,920 - The clothes in style... - The trained shopkeeper... 439 00:27:31,920 --> 00:27:34,480 So your buying expert knows these things. 440 00:27:34,560 --> 00:27:36,040 - Yes. - Yes, they know about fashion. 441 00:27:36,120 --> 00:27:39,680 Do they refer to a guide book or they are trained? 442 00:27:39,960 --> 00:27:41,800 We have detailed guidelines. 443 00:27:41,800 --> 00:27:46,200 Some of the basic brands we mostly use have a pricing guide. 444 00:27:46,320 --> 00:27:47,600 The customers read it in advance 445 00:27:47,680 --> 00:27:49,200 so they have set expectations. 446 00:28:03,800 --> 00:28:08,560 Our store managers use the pricing guide to assess it. 447 00:28:08,560 --> 00:28:11,000 - The store managers are running the store and buying.- Yes! 448 00:28:11,080 --> 00:28:11,880 Yes, they also buy. 449 00:28:11,960 --> 00:28:14,760 We push them for store credit. 450 00:28:15,040 --> 00:28:16,960 Which is a better deal for people. 451 00:28:17,040 --> 00:28:18,880 When they swap, we give them double the value. 452 00:28:18,880 --> 00:28:20,400 If I buy it for Rs. 1,000, 453 00:28:20,800 --> 00:28:24,280 we give them 2,000 store credit in return. 454 00:28:31,640 --> 00:28:34,320 Because you give them 2X credit. Your margin goes down. 455 00:28:35,760 --> 00:28:39,120 - No, because... - So, it isn't a profitable deal for you. 456 00:28:39,200 --> 00:28:43,360 I am unable to understand this math. 457 00:28:43,440 --> 00:28:45,440 Listen, she sold you the product worth Rs. 1,000. 458 00:28:45,840 --> 00:28:48,720 The product that you were going to sell at the shop for Rs. 1,000 459 00:28:48,840 --> 00:28:51,720 - instead of that you gave a credit of Rs. 2,000. - Yes. 460 00:28:51,800 --> 00:28:54,720 So, next time, when that customer comes 461 00:28:55,600 --> 00:28:58,040 they will buy the product that's worth Rs. 2,000 instead of Rs. 1000. 462 00:28:58,040 --> 00:29:00,120 But we are also making money from their clothes. 463 00:29:00,200 --> 00:29:01,120 I get it. 464 00:29:01,200 --> 00:29:04,280 So, as per my understanding what is happening is 465 00:29:04,480 --> 00:29:07,200 that you think it's a more favourable option for you 466 00:29:07,280 --> 00:29:08,760 but it doesn't add up mathematically. 467 00:29:08,760 --> 00:29:11,480 You might not have high demand. 468 00:29:11,600 --> 00:29:13,120 When you offer store credit 469 00:29:13,200 --> 00:29:15,440 your demand is increasing. 470 00:29:15,520 --> 00:29:16,920 That customer isn't buying the product. 471 00:29:16,920 --> 00:29:19,080 And they wouldn't have purchased it in the first place. 472 00:29:19,280 --> 00:29:21,160 But mathematically, 473 00:29:21,280 --> 00:29:22,640 - this is a loss. - It isn't right. 474 00:29:22,840 --> 00:29:24,600 - Okay! - It's not a loss. The gross margin is less. 475 00:29:24,600 --> 00:29:26,120 Lesser margin. 476 00:29:27,040 --> 00:29:28,480 Explain the unit economics. 477 00:29:52,040 --> 00:29:53,200 How much salary do you take? 478 00:29:53,200 --> 00:29:55,600 - I take Rs. 80,000. She takes Rs. 1 lakh. - I take Rs. 1 lakh. 479 00:29:55,600 --> 00:29:57,920 The profit mentioned, is it after your salaries? 480 00:29:58,120 --> 00:30:02,240 Yes! Our salary is included in our fixed expenses. 481 00:30:03,200 --> 00:30:05,440 Tell me something! You mentioned 482 00:30:05,520 --> 00:30:07,720 that you make 15% profit. 483 00:30:07,800 --> 00:30:09,960 Is 15% profit each in both the shops? 484 00:30:10,040 --> 00:30:12,760 We opened our shop in Versova recently in June. 485 00:30:17,480 --> 00:30:18,400 There was one shop. 486 00:30:18,480 --> 00:30:21,200 - So, the monthly average sale is Rs. 16 lakhs. - Yes. 487 00:30:21,280 --> 00:30:24,200 This year your shop's average sale is Rs. 12 lakhs. 488 00:30:24,280 --> 00:30:25,720 - Yes! - Your sales have gone down. 489 00:30:34,720 --> 00:30:36,560 There aren't that many people. 490 00:30:37,760 --> 00:30:40,240 Hold on! I wanted to understand your net margin. 491 00:30:40,320 --> 00:30:42,800 Inventory will be a big problem in this business. 492 00:30:42,880 --> 00:30:44,880 - Yes. - Let's say you bought 100 clothes. 493 00:30:45,080 --> 00:30:47,320 How much percent of it gets sold 494 00:30:47,400 --> 00:30:49,400 - or is dead? - We rarely have dead stock. 495 00:30:49,480 --> 00:30:52,520 Because we clear it for Rs. 99 or Rs. 50. 496 00:30:52,600 --> 00:30:56,520 - I understand. - We sell around 3,500 products. 497 00:31:03,960 --> 00:31:07,360 I put 1,000-1,500 pieces in clearance sale. 498 00:31:07,560 --> 00:31:08,760 - How... - Monthly! 499 00:31:08,840 --> 00:31:11,120 So, the percentage is... 500 00:31:11,200 --> 00:31:13,960 - You buy 4,000 units, right? That is 25%. - Yes. 501 00:31:15,440 --> 00:31:18,480 Your profitability is 15%. 502 00:31:18,680 --> 00:31:22,200 Did you include dead inventory in that figure? 503 00:31:22,280 --> 00:31:23,640 It is our inventory. 504 00:31:23,720 --> 00:31:26,040 - Because honestly... - We can say that 505 00:31:26,120 --> 00:31:28,400 a decrease of 5% to 10% is expected when 506 00:31:28,480 --> 00:31:30,200 dead inventory is recorded in the books. 507 00:31:32,280 --> 00:31:34,360 No! The stock gets cleared. 508 00:31:34,440 --> 00:31:36,360 We rarely have... 509 00:31:36,440 --> 00:31:38,680 If you bought the product for Rs. 100 and sold it for Rs. 50, 510 00:31:38,680 --> 00:31:40,600 you'll have to record a loss of Rs. 50. 511 00:31:40,680 --> 00:31:43,280 - Correct. - So, there will be a net loss in those products. 512 00:31:43,360 --> 00:31:45,040 In those products, yes! 513 00:31:45,280 --> 00:31:47,000 Are you keeping that record in your book monthly? 514 00:31:47,000 --> 00:31:49,200 - Yes. - No, they are not doing that now. 515 00:31:49,280 --> 00:31:50,920 [tense music playing] 516 00:31:51,360 --> 00:31:52,680 - Alfiya and Sana! - Yes! 517 00:31:52,800 --> 00:31:54,400 - It was a pleasure meeting both of you. - Thank you! 518 00:31:54,400 --> 00:31:57,040 I am out for a couple of reasons. 519 00:31:57,760 --> 00:32:01,200 Running between 5 to 10 shops is fine. 520 00:32:01,440 --> 00:32:03,200 But there will be scale issues in the future. 521 00:32:03,360 --> 00:32:05,680 Because you won't be able to maintain 522 00:32:17,320 --> 00:32:19,960 Alfiya and Sana what I feel will be challenging is... 523 00:32:20,120 --> 00:32:22,520 You mentioned that once you opened the second store 524 00:32:22,720 --> 00:32:24,600 - the first store was cannibalized. - Correct! 525 00:32:24,680 --> 00:32:27,400 I am questioning its demand. 526 00:32:28,360 --> 00:32:31,640 You will have a small boutique business, and you will make money. 527 00:32:31,760 --> 00:32:34,440 But I doubt it is scalable. 528 00:32:35,520 --> 00:32:37,200 For that reason, I am out. 529 00:32:37,280 --> 00:32:39,840 But it is a good business for you 530 00:32:40,080 --> 00:32:41,840 where you are making good money for yourself. 531 00:32:42,000 --> 00:32:43,000 All the best! 532 00:32:44,760 --> 00:32:46,720 I will recommend two things to you. 533 00:32:46,920 --> 00:32:50,240 Please strengthen the operational aspects of your business. 534 00:33:00,640 --> 00:33:03,080 you are selling in the market. 535 00:33:04,280 --> 00:33:05,960 Even if you sell it for a cheap 536 00:33:06,120 --> 00:33:07,480 price, keep your aspirations high. 537 00:33:07,600 --> 00:33:10,080 I am out because it is still small. 538 00:33:11,280 --> 00:33:12,640 Okay? Best of luck. 539 00:33:12,800 --> 00:33:14,360 - Thank you so much! - Thank you! 540 00:33:14,880 --> 00:33:16,240 Hurry up and tell me 541 00:33:16,600 --> 00:33:17,640 what is your equity split. 542 00:33:23,520 --> 00:33:24,520 Oh! 543 00:33:24,960 --> 00:33:25,840 Negative? 544 00:33:25,920 --> 00:33:28,080 How is the bank balance negative? 545 00:33:28,680 --> 00:33:29,800 What do you mean? 546 00:33:29,920 --> 00:33:32,120 We've just obtained an unsecured OD. 547 00:33:32,200 --> 00:33:33,880 How much money is stuck in working capital? 548 00:33:33,960 --> 00:33:36,280 What do you mean by that? 549 00:33:36,360 --> 00:33:38,480 Do you know the definition of working capital? Inventory! 550 00:33:38,480 --> 00:33:40,280 - That is the issue! - And receivables. 551 00:33:40,560 --> 00:33:42,200 [tense music playing] 552 00:33:42,480 --> 00:33:44,000 How much money is tied up in inventory? 553 00:33:44,080 --> 00:33:45,640 Around Rs. 4-5 lakhs. 554 00:33:50,560 --> 00:33:52,480 - You had to obtain OD for that. - Yes! 555 00:33:52,920 --> 00:33:54,680 You are asking 556 00:33:55,000 --> 00:33:56,440 for a valuation of Rs. 40 crores. 557 00:33:56,520 --> 00:33:59,840 Your this year's profit might be Rs. 30 lakhs. 558 00:34:01,280 --> 00:34:02,960 Calculate how much that is. 559 00:34:03,120 --> 00:34:05,640 How many times do you have to multiply Rs. 30 lakhs 560 00:34:05,800 --> 00:34:07,400 to get to Rs. 40 crores? Tell me. 561 00:34:07,600 --> 00:34:09,360 You are on Season 3 of Shark Tank. 562 00:34:09,440 --> 00:34:12,720 Sir, my math is not good. I... 563 00:34:14,440 --> 00:34:15,760 130 times or so. 564 00:34:15,840 --> 00:34:17,240 - Yes! - Why... 565 00:34:17,360 --> 00:34:18,720 Why the big valuation? 566 00:34:18,800 --> 00:34:23,040 You're either selling your business to investors 567 00:34:23,200 --> 00:34:27,120 or you're selling your vision of where our business is headed. 568 00:34:27,240 --> 00:34:28,080 - Yes. - Okay. 569 00:34:28,200 --> 00:34:29,720 I have to believe either of the two. 570 00:34:31,120 --> 00:34:33,080 Explain your next three-year journey. 571 00:34:33,200 --> 00:34:35,240 There are a few things I want to do. 572 00:34:54,680 --> 00:34:56,880 where the clothes are collected 573 00:34:57,040 --> 00:34:58,440 - and sorted. - Got it! 574 00:34:59,520 --> 00:35:01,640 Alfiya and Sana, nowadays, fast fashion 575 00:35:01,720 --> 00:35:03,480 creates fabulous trendy clothing 576 00:35:04,000 --> 00:35:06,320 priced from Rs. 500 to Rs. 2000 and sells them in a flash, 577 00:35:06,320 --> 00:35:08,360 by producing them overnight. 578 00:35:09,200 --> 00:35:13,120 If a person can buy from Zudio, a brand owned by Tata Group, 579 00:35:13,200 --> 00:35:15,800 why will he or she be seen in your shop? 580 00:35:16,400 --> 00:35:18,560 Your second challenge you mentioned 581 00:35:18,680 --> 00:35:20,840 that you will grow your business with marketing. 582 00:35:21,000 --> 00:35:22,040 Suicide! 583 00:35:22,280 --> 00:35:24,960 Your economics doesn't support it. 584 00:35:25,840 --> 00:35:26,920 Lastly! 585 00:35:27,200 --> 00:35:29,320 According to me, you seem to have a solid business, 586 00:35:29,640 --> 00:35:30,760 but 587 00:35:31,000 --> 00:35:34,040 when it comes to business terms, investor speak and returns 588 00:35:34,120 --> 00:35:36,720 you appear to lack a natural instinct. You're very uncomfortable. 589 00:35:37,760 --> 00:35:38,840 Go with your instinct. 590 00:35:39,080 --> 00:35:40,840 Go with what comes to you naturally. 591 00:35:40,960 --> 00:35:43,040 Only then you might do somewhat better. 592 00:35:43,120 --> 00:35:45,000 - So, I am out! Good luck! - Okay, no, worries! 593 00:35:46,760 --> 00:35:49,000 I really wanted to, you know, 594 00:35:49,320 --> 00:35:54,280 support two very enterprising women. 595 00:35:55,040 --> 00:35:56,040 But there are 596 00:35:56,200 --> 00:35:58,320 many gaps. 597 00:35:58,400 --> 00:36:00,440 Right now, this is not investible. 598 00:36:00,520 --> 00:36:03,480 Please don't go into negative cash flow. 599 00:36:03,720 --> 00:36:05,760 You can run this on a profit. 600 00:36:05,880 --> 00:36:06,800 I am out for now. 601 00:36:06,800 --> 00:36:08,120 - Okay! No worries. - All right! 602 00:36:14,960 --> 00:36:16,520 [upbeat music playing] 603 00:37:32,040 --> 00:37:36,080 [theme music playing] 604 00:37:48,680 --> 00:37:51,880 [theme music playing] 605 00:37:53,800 --> 00:37:56,400 Sharks., all of us enjoy a premium coffee. 606 00:37:56,520 --> 00:37:58,920 But you have to spend a minimum of Rs. 250 607 00:37:59,160 --> 00:38:01,120 to have a cup of premium coffee. 608 00:38:01,320 --> 00:38:03,440 - Absolutely! - To stay awake at night 609 00:38:03,680 --> 00:38:07,080 if you want a bigger cup of coffee, you have to spend Rs. 500. 610 00:38:07,280 --> 00:38:09,760 So, to have a cup of premium coffee 611 00:38:09,840 --> 00:38:11,760 do I have to burn a hole in my pocket? 612 00:38:11,960 --> 00:38:13,080 Is there no other option? 613 00:38:13,520 --> 00:38:16,200 There is! There is a similar premium brand 614 00:38:16,360 --> 00:38:18,760 that sells coffee for a not-so-premium price. 615 00:38:19,160 --> 00:38:22,200 Are you saying expensive coffee's time is up? 616 00:38:22,360 --> 00:38:25,800 - Ta-ta? Goodbye? - Yes! 617 00:38:26,160 --> 00:38:29,320 Because we have introduced KIOSK KAFFEE. 618 00:38:36,200 --> 00:38:38,440 Sharks, you will get premium coffees 619 00:38:38,440 --> 00:38:40,720 at affordable rates at KIOSK. 620 00:38:45,000 --> 00:38:47,800 From white flat blend for your parents 621 00:38:47,880 --> 00:38:51,440 to western style secret recipe coffee for Gen Z. 622 00:38:51,640 --> 00:38:53,240 KIOSK has all your needs covered. 623 00:39:00,800 --> 00:39:03,000 when prominent businesses were on the verge of shutting down, 624 00:39:03,000 --> 00:39:06,920 we engineers, without FMCG background entered this industry. 625 00:39:07,000 --> 00:39:09,720 And gradually we opened 50 outlets. 626 00:39:09,880 --> 00:39:14,000 Our vision is to make affordable coffee accessible to everyone. 627 00:39:21,320 --> 00:39:23,680 Of course! There is no need to ask. 628 00:39:23,960 --> 00:39:27,400 - Of course! We would like to drink. - The menu is on your desk. 629 00:39:28,840 --> 00:39:30,600 Bro, I will have a black coffee. 630 00:39:30,800 --> 00:39:33,320 - Make that two. - I don't have coffee. 631 00:39:33,440 --> 00:39:35,120 Drink something, Azhar. 632 00:39:35,200 --> 00:39:38,520 Drink this. Have a roasted Hazelnut Frappe. 633 00:39:38,720 --> 00:39:41,040 - Peyush sir! - Sir... What is your name? 634 00:39:41,320 --> 00:39:42,920 - Pranay. - Pranay sir! 635 00:39:43,000 --> 00:39:44,880 - How many black coffees? - Three black coffee. 636 00:39:44,880 --> 00:39:46,720 One strong Latte. 637 00:39:46,800 --> 00:39:49,680 And one Hazelnut Frappe. 638 00:39:50,120 --> 00:39:51,760 What is your flagship product? 639 00:39:51,840 --> 00:39:55,160 Kafe Frappe is a standard drink where we serve a coffee shot. 640 00:39:55,240 --> 00:39:56,960 That is very famous. 641 00:40:00,040 --> 00:40:01,680 We have an elaborate menu in cafes. 642 00:40:01,760 --> 00:40:04,120 We have mentioned our best-selling items 643 00:40:04,200 --> 00:40:06,040 - on the menu. - Is this how you cut the menu? 644 00:40:06,040 --> 00:40:07,800 - Yes! - Haven't you paid attention to this? 645 00:40:07,880 --> 00:40:10,720 You have not left any margin. 646 00:40:10,880 --> 00:40:12,360 It is not well made. 647 00:40:12,480 --> 00:40:15,680 - This must have happened in a hurry. - Okay. 648 00:40:15,680 --> 00:40:18,080 Our menu is displayed on a TV. 649 00:40:18,160 --> 00:40:20,320 - Are you wearing an LED? - Yes. 650 00:40:20,440 --> 00:40:21,600 Are the three of you friends? 651 00:40:21,760 --> 00:40:23,480 - Yes! - We are college friends. 652 00:40:23,600 --> 00:40:24,880 Which college were you in? 653 00:40:31,640 --> 00:40:33,480 Which year did you start? 654 00:40:33,720 --> 00:40:35,480 24th December 2020. 655 00:40:41,600 --> 00:40:44,680 used to buy a coffee. Nilesh and I used to hesitate. 656 00:40:44,800 --> 00:40:47,920 The coffee is expensive. We can't afford it. 657 00:40:48,040 --> 00:40:49,680 Every time we went there 658 00:40:49,760 --> 00:40:52,240 we used to buy one coffee and share it among the three of us. 659 00:40:52,440 --> 00:40:55,440 The bill used to be around Rs. 500 660 00:40:55,600 --> 00:40:57,760 because Sangram would opt for add-ons. 661 00:40:58,440 --> 00:41:01,920 Nilesh and I used to pause before dividing the bill. 662 00:41:02,160 --> 00:41:04,120 This is how the journey began. 663 00:41:04,280 --> 00:41:05,800 We decided to start a business. 664 00:41:05,880 --> 00:41:08,120 You were sipping on coffee 665 00:41:08,200 --> 00:41:10,600 you decided to quit your job and venture into the coffee business. 666 00:41:17,480 --> 00:41:19,040 There is Nescafe Cafe in India. 667 00:41:19,120 --> 00:41:21,200 - The coffee is cheap. - Sir, it is brewed coffee. 668 00:41:21,280 --> 00:41:23,000 - This falls under freshly brewed coffee. - Okay. 669 00:41:31,920 --> 00:41:34,280 The coffee is good. It is really good. 670 00:41:34,440 --> 00:41:35,920 - Thank you so much. - Very nice. 671 00:41:36,080 --> 00:41:39,400 Do you have the label in your shop as well when you serve? 672 00:41:39,480 --> 00:41:41,320 - This is how we deliver it. - That is how we deliver it. 673 00:41:41,320 --> 00:41:43,640 What type of roast did you put in our black coffee? 674 00:41:52,000 --> 00:41:53,560 I loved your coffee. 675 00:41:53,640 --> 00:41:55,520 It is believed 676 00:41:55,600 --> 00:41:59,520 that arabica is premium and robusta is less premium. 677 00:41:59,600 --> 00:42:02,440 They only use arabica in cafes and not robusta. 678 00:42:02,560 --> 00:42:04,240 But there has to be a punch. 679 00:42:04,320 --> 00:42:07,320 Robusta gives you a punch. You can feel the punch of robusta. 680 00:42:07,640 --> 00:42:09,240 And you can feel that punch in our drink. 681 00:42:09,320 --> 00:42:12,760 I don't drink coffee so I cannot comment on taste. 682 00:42:12,960 --> 00:42:16,240 As a newbie, I liked the taste. 683 00:42:16,360 --> 00:42:18,080 Others sell it for Rs. 250 and you sell it for Rs. 70. 684 00:42:18,080 --> 00:42:20,520 There has to be something different. Why is their coffee expensive 685 00:42:20,520 --> 00:42:21,560 while yours is cheap? 686 00:42:21,640 --> 00:42:24,360 There is a brand difference. They have a brand. 687 00:42:24,560 --> 00:42:26,240 Operation cost... 688 00:42:26,400 --> 00:42:29,080 They have big lounges 689 00:42:29,160 --> 00:42:30,480 at premium locations. 690 00:42:30,600 --> 00:42:32,640 We drastically reduced the operation cost. 691 00:42:32,720 --> 00:42:34,320 At KIOSK 692 00:42:42,200 --> 00:42:43,800 We are focussed on the product. 693 00:42:43,880 --> 00:42:47,120 If you want to have coffee you can come here and have it. That's it. 694 00:42:47,200 --> 00:42:49,640 In India, people generally 695 00:42:49,720 --> 00:42:51,800 visit coffee shops for experience. 696 00:42:51,880 --> 00:42:55,600 10 years ago, only meetings used to take place in coffee shops. 697 00:42:55,760 --> 00:42:56,840 But it is not the same any more. 698 00:42:56,840 --> 00:42:59,120 People genuinely come to have coffee. 699 00:42:59,200 --> 00:43:02,040 The growth in India 700 00:43:23,960 --> 00:43:26,360 What is your exact model? Is it just a kiosk 701 00:43:40,280 --> 00:43:42,080 Right? And the price point is exactly the same. 702 00:43:42,080 --> 00:43:43,840 That is great. New models are good. 703 00:43:43,920 --> 00:43:46,280 We get fresh coffee 704 00:43:46,360 --> 00:43:48,880 at Starbucks, Cafe Coffee Day 705 00:43:48,960 --> 00:43:50,520 and there are many chains like yours. 706 00:43:50,680 --> 00:43:52,520 How big is the total of this business in India? 707 00:44:01,040 --> 00:44:03,160 - The total is Rs. 5,000 crores. - Yes. 708 00:44:03,240 --> 00:44:06,480 Let's exclude premium chains such as Starbucks 709 00:44:06,560 --> 00:44:08,120 and those who sell a lifestyle. 710 00:44:08,200 --> 00:44:09,640 They are not selling coffee. 711 00:44:09,800 --> 00:44:10,640 - Right! - You think so too. 712 00:44:10,760 --> 00:44:13,160 I believe it too. They are selling lifestyle and aspiration. 713 00:44:13,160 --> 00:44:16,200 Excluding them, what is the market size of those selling coffee? 714 00:44:16,320 --> 00:44:17,320 Do you have any idea? 715 00:44:17,680 --> 00:44:21,640 We are not sure. But big players are ruling that market. 716 00:44:21,720 --> 00:44:24,160 A huge sector is still unorganised. 717 00:44:24,240 --> 00:44:26,240 There used to be Nescafe counters. 718 00:44:26,320 --> 00:44:28,880 You are doing the same with brewed coffee in counter format. 719 00:44:29,000 --> 00:44:30,040 - Correct! - Good. 720 00:44:31,120 --> 00:44:33,400 Share the sales figures for your business. 721 00:44:33,480 --> 00:44:35,840 Our last year's sales were Rs. 8.4 crores. 722 00:44:41,800 --> 00:44:44,400 Are these sales yours or from your franchisee? 723 00:44:44,480 --> 00:44:45,840 It's the total sales of the company. 724 00:44:45,840 --> 00:44:47,040 What's the run rate this year? 725 00:45:21,360 --> 00:45:23,600 Share the revenue split of your revenue streams. 726 00:45:48,440 --> 00:45:51,360 Around 2.5. 727 00:45:51,480 --> 00:45:53,480 20% is the cost of materials. 728 00:45:53,560 --> 00:45:55,720 No! The cost of materials is 45%. 729 00:46:00,240 --> 00:46:01,640 2 times. Sorry! It will be 2 times. 730 00:46:11,480 --> 00:46:13,880 Average! How much revenue does a franchise generate in a month? 731 00:46:13,880 --> 00:46:16,480 - It will make a net profit of Rs. 60,000. - How? 732 00:46:17,080 --> 00:46:18,720 How much is his sales? 733 00:47:12,040 --> 00:47:14,520 - Yes! - Some might be loss-making. How many are making loss? 734 00:47:14,600 --> 00:47:16,200 Around 2-3... 735 00:47:26,920 --> 00:47:28,720 Let's assume they grow every year. 736 00:47:28,840 --> 00:47:30,760 The payback takes around 3-4 years. 737 00:47:30,960 --> 00:47:33,080 I believe that if the payback takes so long 738 00:47:33,160 --> 00:47:34,840 - in a franchise business... - No one will opt for it. 739 00:47:34,840 --> 00:47:37,320 How is it benefiting it? 740 00:47:37,400 --> 00:47:39,200 He will rather put Rs. 12 lakhs in the bank. 741 00:47:39,440 --> 00:47:41,920 Basically, its economics 742 00:47:42,000 --> 00:47:44,880 isn't working for both of you. 743 00:47:44,960 --> 00:47:48,080 Because the problem is Rs. 2-Rs. 2.5 lakhs per outlet. 744 00:47:48,160 --> 00:47:49,720 The reason 745 00:47:49,800 --> 00:47:53,760 Starbucks sells coffee priced at Rs. 250-Rs. 300 because 746 00:47:53,840 --> 00:47:55,920 they have to cover the expenses of rent 747 00:47:56,080 --> 00:47:58,200 and manpower costs in major cities in India. 748 00:47:58,280 --> 00:48:00,080 If you want to make business 749 00:48:00,160 --> 00:48:04,040 one outlet should at least generate a minimum of Rs. 4-Rs.5 lakhs. 750 00:48:14,640 --> 00:48:16,120 Now, it has become a part of... 751 00:48:16,280 --> 00:48:19,280 I have noticed when I go to Starbucks or Costa Coffee 752 00:48:19,520 --> 00:48:21,160 people park their cars early morning 753 00:48:21,240 --> 00:48:23,760 take the coffee and leave. They don't even sit at the cafe. 754 00:48:23,960 --> 00:48:25,800 - But they still spend Rs. 250-Rs. 300. -Right! 755 00:48:25,800 --> 00:48:28,840 You can serve a takeaway model to that market. 756 00:48:28,920 --> 00:48:31,680 You have addressed the right problem. 757 00:48:32,040 --> 00:48:34,120 Three of you are engineers and are solving a problem 758 00:48:34,120 --> 00:48:35,400 I like the taste of your coffee. 759 00:48:35,400 --> 00:48:38,320 There is an issue with your business model. 760 00:48:39,440 --> 00:48:41,600 When you try to scale it 761 00:48:41,680 --> 00:48:43,200 the rental cost won't be the same. 762 00:48:43,400 --> 00:48:44,960 People cost won't be same. 763 00:48:45,080 --> 00:48:47,640 Compliance cost! You will have to increase revenue per outlet. 764 00:48:47,720 --> 00:48:49,200 Don't open more outlets. 765 00:48:49,280 --> 00:48:51,280 When the revenue is around Rs. 6-Rs.7 lakhs 766 00:48:51,600 --> 00:48:54,160 is when the unit economics model will be made. 767 00:49:01,680 --> 00:49:05,080 about sales numbers and how you are explaining things. 768 00:49:05,320 --> 00:49:07,040 You are either not explaining properly, 769 00:49:07,120 --> 00:49:09,680 or you haven't understood your business. 770 00:49:09,880 --> 00:49:12,880 Even a 'paan shop' can make revenue of Rs. 10 lakhs. 771 00:49:13,040 --> 00:49:15,840 Your sales per store is very low. 772 00:49:15,960 --> 00:49:19,840 You can't grow your business like that. So, I am out. 773 00:49:24,440 --> 00:49:25,880 You have received a feedback today. 774 00:49:25,880 --> 00:49:28,880 The profitability of every outlet and every franchise. 775 00:49:28,960 --> 00:49:31,040 Get into the depth of it and make a systematic business. 776 00:49:31,040 --> 00:49:31,960 I am out. 777 00:49:32,040 --> 00:49:32,880 Thank you. 778 00:49:33,040 --> 00:49:35,440 They are asking you to generate Rs. 5 lakhs instead of Rs 2.5 lakhs. 779 00:49:35,440 --> 00:49:36,280 That is impossible. 780 00:49:36,360 --> 00:49:38,240 Because it is impossible. 781 00:49:38,400 --> 00:49:41,040 Doubling the revenue is very challenging. 782 00:49:42,000 --> 00:49:45,200 Receiving a footfall of 100 people each day 783 00:49:45,520 --> 00:49:46,560 is too much. 784 00:49:46,840 --> 00:49:50,000 The main issue here is that investing so much 785 00:49:50,080 --> 00:49:52,680 in making a Rs. 70 coffee in a retail outlet format 786 00:49:52,800 --> 00:49:56,000 cannot yield ROI. 787 00:49:56,160 --> 00:49:58,560 There is only one way to get out of this. 788 00:49:58,720 --> 00:50:01,840 To make the same revenue as you do on the counter 789 00:50:01,920 --> 00:50:04,640 on Swiggy and Zomato. 790 00:50:04,720 --> 00:50:06,600 If you cannot crack that 791 00:50:06,680 --> 00:50:08,920 then your outlet will never break even. 792 00:50:09,000 --> 00:50:12,200 But to do that you need a different skillset. 793 00:50:12,440 --> 00:50:15,040 I am not sure that you possess 794 00:50:15,160 --> 00:50:17,720 the necessary skillset to successfully run an online business. 795 00:50:17,720 --> 00:50:20,800 So, this model is not investable. So, I am out. 796 00:50:22,520 --> 00:50:24,800 Do you know that coffee 797 00:50:25,680 --> 00:50:27,280 is cheap in every country 798 00:50:27,720 --> 00:50:29,080 but in India? 799 00:50:29,600 --> 00:50:31,040 Right? It is cheap in the US as well. 800 00:50:31,280 --> 00:50:33,400 Why do you think that chains 801 00:50:33,720 --> 00:50:35,520 in the US or Europe 802 00:50:35,640 --> 00:50:38,920 sell a cup of coffee for ¤3-¤5? 803 00:50:39,480 --> 00:50:42,640 Because coffee is a commoditized business. Right? 804 00:50:48,560 --> 00:50:51,360 If you have coffee at the same place around 20-30 times, 805 00:50:51,520 --> 00:50:54,640 that's when you get used to it and you want to go back to that place. 806 00:50:54,800 --> 00:50:57,440 That is why people have layered it with providing a lifestyle. 807 00:50:57,640 --> 00:50:59,920 So, coffee is sold as a lifestyle. 808 00:51:00,080 --> 00:51:02,920 Whether it's Costa Coffee or Starbucks. 809 00:51:03,120 --> 00:51:06,240 You want to sell it on cost-plus. 810 00:51:23,680 --> 00:51:26,480 If you sell on a cost-plus basis, no one will let you make money. 811 00:51:26,760 --> 00:51:29,040 Why? Because, you will do two things. 812 00:51:29,160 --> 00:51:30,960 Either you will go on delivery platforms. 813 00:51:31,240 --> 00:51:34,080 Delivery platforms will take their margin or commission. 814 00:51:34,600 --> 00:51:36,480 There will be several people selling coffee there. 815 00:51:36,480 --> 00:51:37,920 So, you will have to compete on price 816 00:51:50,080 --> 00:51:53,520 Due to competition, they'll keep raising rent and finish your margin. 817 00:51:53,640 --> 00:51:56,120 So, that's the problem with your model. I'm out, good luck. 818 00:51:56,280 --> 00:51:58,040 - Thank you, sir. - Thank you, Sharks. 819 00:51:58,120 --> 00:51:59,720 - Yes, thank, bye. - Thank you. 820 00:52:00,120 --> 00:52:02,800 [tense music playing] 821 00:53:17,640 --> 00:53:19,880 [theme music playing] 822 00:53:20,480 --> 00:53:22,280 Hello and welcome to Ask the Shark. 823 00:53:22,360 --> 00:53:24,280 You must already be knowing the format. 824 00:53:24,400 --> 00:53:26,840 Your business-related doubts and questions are answered 825 00:53:26,920 --> 00:53:28,200 by your favourite Sharks. 826 00:53:28,440 --> 00:53:30,360 We ask them a question on your behalf. 827 00:53:30,440 --> 00:53:32,120 So, today we have on Ask the Shark 828 00:53:32,200 --> 00:53:34,880 the CEO and co-founder of Sugar Cosmetics, Miss Vineeta Singh. 829 00:53:34,960 --> 00:53:36,480 Ma'am, welcome, and thank you so much 830 00:53:36,480 --> 00:53:37,840 for giving us your valuable time. 831 00:53:37,920 --> 00:53:41,240 Ma'am, today's question is by Mr. Yogesh Jain from Udaipur. 832 00:53:57,880 --> 00:54:01,120 And, I think, growing up, I focused 833 00:54:01,280 --> 00:54:03,840 a lot on numbers. I was good at Mathematics. 834 00:54:03,920 --> 00:54:05,920 And, I think, every founder team 835 00:54:06,040 --> 00:54:08,800 should have one person who is very good at numbers. 836 00:54:08,880 --> 00:54:11,840 Because, very often, we get pitchers here 837 00:54:12,080 --> 00:54:15,000 who are quite clueless about the numbers of their own business 838 00:54:15,080 --> 00:54:16,320 and about the market numbers.