ScaleApp Podcasts with Prof Dan Isenberg
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ScaleApp Podcasts with Prof Dan Isenberg
Episode 8 - Amazon and Ikea love Wify - Post-purchase service for big-brand sales in India
Vikram Sharma and Deepanshu Goel founded Wify in 2020 to solve a big e-commerce and in-store pain point facing the Ikeas and Amazons of the 1 billion plus population - Not used to self-assembling and self-installing furniture and appliances at home, Indian consumers simply bought less. Building on their experience in larger companies, Vikram and Deepanshu built a tech platform to connect consumers, brands, and their army of Wify-trained professionals. Today Wify seamlessly connects all three, increasing brand sales, customer satisfaction, and creating skill-development and career paths (and income) for previously low-skilled people.
WIth just $6 million in angel and VC financing, Wify will be scaling 10x in the coming 3-5 years, growing from 3000 to 30000 professionals and from $6 million to - well you can do the math.
Notables:
- "Do it faster, sooner. Don't wait to get it so perfect."
- Most of the world is NOT a DIY world, and although the Indian market is huge, they anticipate expaning to Africa, Latin America and other markets.
- India, once conservative and venture-leary, is changing, and it is easier to recruit top talent, raise capital, and generate shareholder liquidity.
Hi, this is Dan Isenberg, and welcome to the latest episode of Scale-Up Podcasts. Remember, Scale-Up Podcasts brings you examples, hints, experts, people who have scaled up their companies beyond a few million dollars. And these are companies that come from all over the world. They may not be your so-called traditional ventures, whatever that means, but they're companies founded by people who are determined to grow their business as much as possible. And I am fortunate to have with me the two co-founders of a company in India called Wify. The two people with me are Vikram Sharma and Deepanshu Goel. And they'll tell you all about themselves and all about Wify, but I do have to disclose that I'm a shareholder in Wifi or will be soon a shareholder in Wify. And let's just get that out of the way. I'm obviously excited to be part of this journey. So let me start by just asking both of you, well, each of you, I should say, just in short, short, who is Vikram and who is Deepanshu? And let's start with you, Vikram. Who are you, short version?
Speaker 02:I'm an entrepreneur, have been building companies for the last 15 years. I met Dan when I was a student at Harvard Business School. And I remember asking him a question, whether it's better to be a venture capitalist first or an entrepreneur first. And Dan gave me a bunch of ideas, which took me about 10 years to get started with.
Speaker 00:Okay, we'll circle back on some of those. Deepanshu, how about yourself? Who are you?
Speaker 01:I keep it shorter. I'm an engineer , a problem solver and a business or a startup enthusiast. I love discussing business ideas and to Dan's point, trying to understand how can we grow them. That's what I'm trying to do here at Wify.
Speaker 00:And physically, where are you located right now?
Speaker 01:We are both based out of Bombay. And right now we are at a Wify office in different locations.
Speaker 00:Wifi is located in Bombay, Mumbai, India. Correct. And it's always been there. And it's focused on the Indian market. It's the first Indian venture, by the way, that we've hosted on ScaleApp Podcast. So that's one of the questions we're going to be talking about. I hope we'll get into what are some of the opportunities and challenges of building a scaled business in India. But now let me go through the same exercise with you about describing who is or what is Wify. And I'll get your version, Vikram. But then Deepanshu, it may be the same, but if it's at all different in any way, which it could be, your version as well. What is Wify, Vikram? So
Speaker 02:Wifi is a post-purchase services company. India is not a DIY country, unlike the West. So in India, consumers buy anything from furniture to appliances to whatever product they buy for the home. We provide everything. installation and after-sales services for those products. So for brands, we work all major brands like Ikea, Amazon, Panasonic, any brand selling consumer durables, we take care of the post-purchase services for them.
Speaker 00:Okay, well, we'll get into what the rationale for that is a little bit later. Deepanshu, what's your version of what is...
Speaker 01:Vikram spoke more about the demand side, so I'll speak more about the supply side. I think one thing that has been very important and is very important for both Vikram and me is to be able to create jobs. So at Wifi, we have been able to help the technicians that are working for us upskill, improve their productivity and consequently the income that they will be able to generate for their families and have a better living.
Speaker 00:So it's interesting. It's like you have different stakeholders in this Wify community. It's not just the shareholders. It's not just the executives. It's not just the customers, but it's also the employees. And so why don't you describe the pain point or opportunity that Wify, that you see in Wify and that led you to create the company? Go ahead, Vikram. Sure.
Speaker 02:Yeah, so the As you rightly said, Dan, there are multiple stakeholders. Let's talk about three most important stakeholders. The first one is the brands. The second is the end consumers. And the third is the technicians, the employees or the workers who are working on our platform or in the company. All three have different pain points. The brand's pain point is they cannot sell a product if they cannot provide after-sales service or installation services. in the country because India, unlike the West, is not a DIY country. Somebody will not buy a cabinet and come home and fix it themselves. They want somebody to do the installation.
Speaker 00:We're also talking
Speaker 02:about well-known brands. Can you give us just an example? It could be a brand or a retailer like IKEA could be an example of a brand and Amazon would be an example of a retailer who could be selling any consumer durable product which requires some installation at home. So those are the common issues for the brand and the consumer, which is providing service. And then the third set of stakeholders, which is the employees or the technicians or the workers working on the platform, their pain point is they often do not have the skills to provide this service. They are traditional carpenters, for example, who do not understand an IKEA product. So we solve that problem by upskilling them, as Deepanshu mentioned.
Speaker 00:So why don't you give us... Some of the numbers, we'll come back to this later, but how many people are we talking about in terms of the employees and the numbers of brands that you're dealing with? And if you can tell us anything about the numbers of revenues that you've achieved, tell us that as well.
Speaker 02:Sure. So as of today, we have more than 200 brands that we serve. We are serving 40,000 consumer homes every month. which is 40,000 unique services, which could be installation or service or maintenance requests. We have 3,000 people working with us on our platform. And our monthly revenue at this moment is about $550,000 per month. So a little over half a million dollars of monthly revenue.
Speaker 00:And so... Let's come back to the pain point. So there is a pain point at the brand side, right? That has to do with fulfillment. Now let's go to the other stakeholders. The pain point, obviously, or somehow you're providing benefit also for these 3,000 and someday 30,000, let's say, workers. What's the pain point for them? What need do you address?
Speaker 01:Yeah. Yeah. So, I think for them, India, if you look at the population, is a very youth-driven country. So, as a country, lack the infrastructure to be able to train and upskill these blue-collar workers. If you compare this to, let's say, US or the Western world, you will have proper training college courses for these technicians let's say an electrician a plumber or a carpenter who can get skilled and certified and then they are able to earn much more but in India that is not the case and because of the job scenario all of these technicians earning is meager so they are hungry for jobs and for jobs that can help them improve their skill set and continue growing in life so In our company, we have a motto for our supply, which I will quote you as is and then give you the English translation, is helper se malik takka suffer. What that translates to in English is the journey from an apprentice to an owner, to a business owner. So we help them climb that ladder and consequently improve their skills and income. and quality of life.
Speaker 00:So it sounds, at least at some level, that there's a big, heavy operational logistics side of Wify, and there's a big, heavy human resources side of Wify. What have been some of the challenges, both on the operational side and on the human resources side? And let me just add to that, I think a The perception of India, rightly or wrongly, is that it's a confusing country. It has a lot of complexity in terms of getting things from point A to point B. Of course, it's over a billion people of many different kinds of people, many different levels. So it sounds like you're dealing with just immense complexity, both on the human resource side, that's called the supply side, and also on the logistics side. Can you both talk about that a little bit? Is that an accurate perception?
Speaker 02:Sure, indeed, Dan, that is. I would like to add to that one more thing, which is part of the solution, is the tech. Without tech, we could not have been able to solve this problem at scale. So in order to solve this problem of human resource complexity and the operational complexity, we have to build this business on a tech platform from day zero. We thought about what kind of software system we need, what kind of tech do we need, and we built everything on that. So process was written down from the very beginning, put it on a tech platform, and hence we were able to solve this operations and logistics on scale. And I would say the second fundamental enabler is training. So every person who comes on the platform, we ensure training. that they are made aware of what is the expectation of the consumer, expectation of the brand that we are serving, and what is the expectation of us from ourselves that we want to deliver. So with that, we were able to solve this complex.
Speaker 00:I can imagine that you're talking about people with not necessarily high education, not necessarily a lot of formal training or formal experience. Is that accurate? So what are some of the challenges in, let's say, upskilling them to the point where they can actually represent Wify to both the end customer and also to the brand?
Speaker 02:Yeah, so that's a great question. So I think there are two major challenges. First is their willingness to get trained. And second is their ability to invest in their training. Now they are intertwined or connected with each other. Most of these blue-collar workers are daily wage earners. If they do not go to work today and do not make their $15, $20 daily income, they cannot run their family or their household. Give
Speaker 00:us a profile. What would this person be doing if they weren't working for Wify, for example?
Speaker 02:If they were not working for Wify they're likely to be working in an unorganized setting under a kind of a general contractor or a labor contractor or a carpentry contractor where they would be just a helper or an apprentice and they would be getting like, as I said, 1,000 to 1,500 rupees, which is $15 daily income they will be making. And any day that they do not work, they do not get that money in their pocket. So as a result, it limits their ability to invest their time in training because training wouldn't pay. Sometimes they also have the lack of willingness to, in addition to their ability, ability means they can't make the money so they wouldn't do it, but sometimes they're also not willing because nobody has really taken the time to educate them. Or they come from a background of exploitation. So there is a lack of trust sometimes in in businesses who are trying to employ them. So that was, you know, I think one of the biggest challenges to overcome that by trying to tell them that, look, we are here to help you get trained, get upskilled. And we had to actually pay them during that training period as well so that, you know, we can at least pay them the minimum wage, which will help them keep their livelihoods going. That, I would say, was the biggest challenge for us and continues
Speaker 00:to be the biggest challenge. The biggest challenge is getting them to leave what they were doing in order to join you and paying them in order to get that training. Is there much? So
Speaker 02:all the capital that we have raised so far in our company, I would say majority of that capital we have used for upskilling and training these people. It's like the supply build of costs for us.
Speaker 00:You feel that you've cracked that code?
Speaker 02:Yes, I think there's no silver bullet to it. It's something that we have to continuously keep on improving our solution. So far, what we have done has worked to get us from zero to 3,000, but I think we'll need a different solution or an improved solution to go from 3,000 to 30,000.
Speaker 00:And in terms of the overall opportunity, and we're just now talking about the numbers of employees, The overall opportunity is to employ how many people do you think in the, let's say, next four to five years?
Speaker 02:I would say in the next four to five years, the minimum opportunity is about 100,000 people. I would like to be at 100,000 people working with us in the next three years. And that is easily achievable. And you can do that with the current platform? Yes. Of course, we need to raise some funds. We need to raise some more capital. But with the current platform, we can easily achieve that.
Speaker 00:Well, let's talk about raising capital, but not specifically necessarily just raising capital, but let's talk about the environment or the ecosystem in India for building this kind of venture. As I sit back and listen to both of you, I say, yeah, this is a no-brainer. There must be 10 people, very talented people out there doing exactly the same thing because it just makes so much sense. This is beneficial for everybody, isn't it? So what am I missing?
Speaker 02:Yeah, so Dan, that's a great question. So I would say one factor is a lot of the investment community in India, the venture capital funds, They are in a big way influenced by the Western venture capitalists, which is that they believe if a business is only tech, that's where they would like to invest their dollars in. There's a little bit of, I would say, hesitation in the investment community to invest or participate in operations-heavy or people-heavy businesses. So that is some resistance that we have been facing, specifically fund raising in the ecosystem?
Speaker 00:Deepanshu, feel free to chime in anytime as well, but let me just expand that question a little bit more about the ecosystem in India in general to get not just financial, but also financial resources to grow your business. You need mentors, you need know-how, you need access to supplies, access to customers, and so on. Describe to us who don't know anything about that ecosystem, what is it like in particular? How do you think it's different from let's say the United States
Speaker 01:yeah it's a very different you know some points we kind of already covered but in US if I go to IKEA bring furniture to my home I assemble it myself right in India even if we can do that skill set we would not do it India is you know as Vikram and I coined it EIM do it for me country we were and we will always be a DIM country so that's one big change in terms of the country second is as Vikram mentioned about you know the VC world so in US there is a lot of funding on ideas right in India there is lack of funding just on ideas so I think that's one big change you can get a 10 million dollar cheque based on a drawing that you have on a paper napkin. But in India, that's not going to happen.
Speaker 00:So how did you get going? Was it your own capital, your own sort of sweat equity? How did you get this off the ground so that you could get to the point where you could talk to some investors to give you the resources to grow?
Speaker 02:Yeah. So we stopped. We have so far raised three, four small rounds and managed to reach where we are. The initial first check we got was from an angel investor who we had known for many, many years. So that helped. And subsequent rounds, we had to raise a combination of our own money plus friends and family and so on. Our last round, which we called a pre-series A round, is when we had some institutional investors and VC funds also come in.
Speaker 00:And total amount of capital raised approximately, give us ballpark.
Speaker 02:Is about 7 million. Actually less than, about 6 million is the total amount of capital we have raised so far. And on back of that, we have already built, you know, close to $7 million annualized revenue business. And we still have about 2 million in the bank. Do you think you're going to need much more capital going forward to grow? The amount of capital that we have is enough for us to kind of double from where we are. But I'm talking about 10x. We want to go 10x in the next three years. For that, we will need capital. And does that exist in India It does exist, but it is just harder to crack, especially for operations-heavy businesses like us.
Speaker 00:Okay, so it would be interesting. Do you think it's going to stand on its own merits, or is this something that kind of keeps you up at night? In other words, when I say standards or its own merits, you've got really great numbers. And you'd think that people would look at the numbers and say, yeah, these guys seem to know what they're doing. They built a business. They've done the hard work of getting 200 brands and 3,000 workers and a tech platform built out and presence in the marketplace. So a lot of it has been de-risked. You'd think that people would be lining up to... put money in, but it doesn't sound like that's the case. So what are you doing in order to make that case for the relatively scarce growth capital that's out there?
Speaker 02:Yes, I think we have reached that inflection point now. As you rightly said, we have kind of got to the numbers which tell the story in itself. We just need to improve or kind of come up with the right pitch to raise the next 10 or 15 million dollars to grow 10X. So that's where I think guidance from mentors like you would help in
Speaker 00:building that pitch. So let me ask you this, that you need to grow a business, let's say 10X, you need on the supply side, you need the people. Let's say in your case, it's people. You need, of course, the platform. that you have. You need the customers that you have, but you also needed the organization. And that means not just you and Deepanshu running the company. That means a management team of people who are really experienced at building a business can work together maybe know each other, at least share the same values, and there has to be a supply of those kinds of, let's call them executives now, for lack of a better word. How does that play out, and how will that play out in the future, your ability to tap into an executive labor pool? That sounds like a great word, but here's what we're
Speaker 02:talking about. I think we are in a great position from that perspective. We have a really good line management team, like category managers and business managers, We have a really good team already who is, I think, capable enough to take us to the next level, like 10x. How do you bring them in? So we have been hiring them over time, giving them an idea about the opportunity that we present. Some of them come from startups. Some of them even come from established companies. But we have been able to attract some good talent to line management. Some corporate functions is where we will need to get some new talent, you know, like HR, finance and so on. Because that's something which me and Dipanshu have been running so far ourselves.
Speaker 01:Yeah, just to add to it, I think I give you a different perspective of it. So for me, when we are looking at line managers, something I realized fairly early is to understand something I called as employee happiness quotient. If that question is high, that value is high, the employee will stay no matter what. If that value is low, they will, you know, there will be attrition. So, we, I and Vikram both work very heavily to understand what is that they need. A lot of people need autonomy. So, we have created something as we call as a CEO culture. So, the category manager is CEO of that business. We have defined guidelines for them and And then they are able to run the business as they want within those guidelines. So a lot of freedom. So as Vikram said, we have now trained and groomed all of them to take on more responsibility and continue growing.
Speaker 00:So I like that word autonomy and a system to allow their autonomy to function. Is that typical in an Indian venture of the kind that you're building? Is that part of the business culture to build that kind of company where there really is autonomy?
Speaker 01:I think it's rare. I will not say that it doesn't exist, but I'll say it's rare. It's normally a single or a couple of people driving everything down and others following instructions. However, I think we want to scale differently. And it's a people business. So we need good people to be able to run it. So we are trying to build that to help us kill.
Speaker 00:Vikram, I see you nodding your head.
Speaker 02:Yes, indeed. What the puncher is saying is absolutely right. We see the rarity of that happening elsewhere. So that's why we are able to attract these people to come work with us because we provide that autonomy and that atmosphere for them to grow.
Speaker 00:So I haven't been to India for a long time, but I did a few study tours in India maybe 15 years ago. And one of the comments that people made then was that, let's say the middle class was oriented to the professions. And so your dream job was to go into some profession or other and have a stable job. And it was considered to be a little strange. Your parents would discourage you. Your wife or husband would discourage you from going into a job in a risky startup. Do you think that's changed somewhat?
Speaker 02:Yes, it is changing. I would say 15 years ago, it was more challenging or there was more resistance from families to let children go to or their kids or young ones, young graduates go to startups. But today that has changed. And I think a lot of it has happened because there are many success stories of companies which have grown up to become unicorns and people who have become, you know, generated also wealth by working in startups. So it's changing slowly.
Speaker 00:So India is huge, right? It's a a world in and of itself, let's say. It's a huge economy. It's vibrant and has incredible amounts of diversity within the country in language and culture and food and almost everything else that you can imagine. Do you think that the Wify business is an India business that will build the value in the Indian market? And by the way, I'm sure that it's, for all intents and purposes, huge if not unlimited for what you're doing. Or do you see the possibility, or a possibility, of applying this model to other markets? Because it does address a specific pain point in the Indian, let's say, business logistics.
Speaker 02:Right. Absolutely, Dan. I would say that it has a global possibility. Because our solution, our businesses... It consists of one is the operational solution, other is a tech solution. The operational solution is applicable to every other India-like country, which is not a DIY. In fact, only the Western world is DIY. Rest of the world, all of Asia, Middle East, Africa is not DIY. So our solution operation, like the entire solution of ours is applicable to the rest of the non-Western world or the global South. Whereas the tech is applicable globally, the software that we have can easily be utilized in the Western markets or the North American regions also.
Speaker 00:Okay, so let's go back to the beginning in a way. I'm sorry, Deepanshu, did you want to...
Speaker 01:Yeah, I was just trying to make a point. So let's take an example of US only, right? So let's say we can have the software side of it can have people... skilled and certified for certain kind of roles. Correct? And the demand side is obviously, you know, consumers coming for product that they have procured from the brand. Now, they will be able to source which kind of technician do they want and that technician has been certified for one particular job. So, let's say someone who is skilled enough for, let's say, installing in IKEA kitchen, but someone might only be skilled enough to install an IKEA side table. So the cost of hiring someone who is skilled enough to install a side table will be lesser than the cost of hiring someone who is skilled enough to install a kitchen. So that parity, that tech, has a global use case. Where people who are also sunny skills can come and join the platform.
Speaker 00:Sounds to me like you're your leaders in a market. I'm sure you'll see competitors if you don't see them already. I'm sure maybe there are some, but it sounds like your leaders. And if you move fast, stay paranoid a little bit about the competition and keep getting access to resources, I think it's going to be a major success. But we didn't talk about exit possibilities. I wonder if you could comment briefly, and I may use this segment. I wonder if you could comment briefly about exit possibilities. You see that in India, outside of India, acquisition, listing, and I'm not asking as a shareholder who's not patient. Just ask us what your overall vision would be.
Speaker 02:Sure. So today, Dan, what's happened is the listing possibility has become... easy, easier and more real in India, even for smaller companies. We are seeing companies with even, you know, $20 to $30 million revenues also getting listed. So the listing market in India for small and medium companies has become strong. So that is definitely a possibility. And we are actually not too far away from EBITDA positive. The moment we reach that, we can have listing. Second, there's a lot of opportunity of getting acquired also because a lot of business houses want to have a foot in the home. So home advisory or home improvement, home maintenance is a very big segment.
Speaker 00:Got it. Okay. I'm sure that's a question that investors ask you. Right. I'm certain the foreign ones ask you this. By the way, do you see foreign investors showing interest?
Unknown:No.
Speaker 02:when you asked about competition so right now there is we are the leaders in B2B space there is a very large competitor on the B2C space who are at least 10x or 20x larger than us there's a company called Urban Company you see it's popularly known as they have raised about 250 million dollars already and most of their large investors are foreign investors so we see there's a large possibility for us to attract both foreign and local investors.
Speaker 00:And what do you mean by B to C in this case? Do you mean that the consumer, they sell a service to the consumer? To the consumer directly.
Speaker 02:So let's say you have bought a product which is lying in your house. You don't want to reach out to the brand for service. Because brand either has limited ability to provide a service or you think brand will overcharge. So these consumers reach out directly to the urban company. So they're the largest on the B2C side. But they are very broad in their service stage. They provide everything from massage to shave to haircut to easy repair to home improvement to painting your walls. We are very specific. We are only focused on home improvement. And we
Speaker 00:are B2B first. And the B2B means that Amazon will integrate you into their offering and sell you to their customers. Already bundled price
Speaker 02:or an optional price, right? Mostly already bundled price and sometimes optional.
Speaker 01:Yeah, but that's increasing, and we continue to increase. Interestingly, Amazon's one of our top customers, and they are really also fascinated by our model. So our integration with them is going deeper.
Speaker 00:So let's go back to the beginning in a way, because I've promised to my listeners to keep these relatively short, but I have to ask you both this one question. You've been doing this for a few years, right? I would say probably 8 to 10 years, something like that. Is that fair? No,
Speaker 02:this Wify we started five years ago. We will complete six years this summer.
Speaker 00:Okay, and you guys look to be like you're in your early 40s, more or less, right? You're not 60 or 70 like me, and you're not 20. If you met yourself... who is five or 10 years younger, getting ready to start a Wify. What advice would you give your younger self now that you know what you know? Let's start with you, Deepanshu.
Speaker 01:Make mistakes faster. Don't try and over-optimize. And learn. So in startup, there will always be a thousand fires to put out. Prioritize which one to put out first.
Speaker 02:Interesting. And you, Vikram? Start sooner. Urgency. So similar to what Deepak just said, sense of urgency. No need to have the perfect solution in place. Just once you have an idea, just try it out.
Speaker 00:Okay, that's great. Well, thank you all very much. This is the end of our current session. podcast episode. I've had a half an hour of very interesting conversation here Deepanshu and Vikram Sharma, the two co-founders and the two leaders of this, what I see as a really fascinating venture, Wify, that one of the reasons that I brought it to you, my listeners, is that it's a little different from the kinds of ventures that I think we'd encounter in the United States and in Western Europe. Maybe, maybe not, but it does have a particular, at this stage anyway, a particular Indian flavor to it. And so with that, I'll sign off. Feel free to Download this podcast and take a look at other podcasts that you think might be relevant to you. We have some really, really fascinating companies already that we've talked to and have a lot more on the docket. So again, Deepanshu and Vikram, thank you very much. I wish you all the very, very best success.