231: Changing the Dairy Industry with Data | Ranjith Mukundan (Founder & CEO, Stellapps)

[00:00:00] Yeah, so they would say that if anyone walking on the street near the Stanford they'd you know,

[00:00:04] Purchase give you $10 million and say do a start-up right?

[00:00:07] It's been discussing ever doing a start-up from 2000 onwards.

[00:00:09] It's almost 10 years of you know all talk and no action.

[00:00:13] We all said look we are on the mid 35 now.

[00:00:17] We better take a plunge

[00:00:19] And that's about the time even the middle-eyed Christ who said so what does a farmer do from the morning he wakes up what exactly is

[00:00:27] milking all about you know what's a cow and what's a bull right?

[00:00:32] Let's solve the problem and then convert this problem into an excellent sheet and can here

[00:00:37] You can make a hundred million dollars. So me and my nine co-founders at that time

[00:00:42] Hello, and welcome to another episode of the Startup Operator podcast. I'm Roshan Kariepa

[00:00:47] On this episode we speak with Ranjit Mukundan who is one of the founders of Stellaps

[00:00:52] Stellaps is a one-stop dairy supply chain

[00:00:56] digitization platform and they offer cattle monitoring milk procurement and coal chain management services

[00:01:03] Ranjit is an experienced entrepreneur. He's been at this for over 10 years

[00:01:07] And I talked to him about various facets of the business

[00:01:11] From the product side on what it takes to put sensors on cows and what you can do with their data to the distribution

[00:01:19] aspect of things on working with some of these milk farmers and helping them improve their yield and productivity

[00:01:25] All of this and more on this wonderful episode. I hope you like it

[00:01:38] Hey Ranjit welcome to the Startup Operator podcast. Thank you so much for making the time

[00:01:43] Thank you so much, boss Timmy. Thank you so much. Awesome. Yeah, I know I mean

[00:01:47] Rohit of Bloom mentioned you in our conversation and since then you know, I've really wanted to have you on

[00:01:53] I'm really glad that we could make it and

[00:01:57] You know Stellaps is such a fascinating business and you personally have such an interesting journey

[00:02:02] So I'm looking forward to learning all of the nuances

[00:02:06] Of this right so let's start with you actually. I mean you have an interesting background

[00:02:11] You know, you had a corporate career with Vipro for about 15 years

[00:02:15] And then you know one would say it's not the most conventional transition

[00:02:19] To what you're doing with Stellaps right now, right?

[00:02:23] So how did that shift happen? What prompted that and you know, what were some of those new things you experienced that kind of

[00:02:30] Did you when you moved into this new role as founder of Stellaps?

[00:02:35] Thanks for sharing the thanks for having me here

[00:02:38] Watch some of your other shows. It's a great show

[00:02:41] I'll make it a point to watch all the 200 or

[00:02:46] Podcasts I'll make it a point to watch them and make it part of my library

[00:02:50] So thanks for having me here. So yes, so we by start my career in 96 start off as an embedded

[00:02:57] Software engineer in our developing software for folks like Ericsson not tell

[00:03:03] Nokia Cisco and all of that and then

[00:03:07] somewhere in

[00:03:09] 98 99 in that area when I was

[00:03:12] Living in the UK and then in the US subsequently

[00:03:15] That's a time the valley was a bus with a lot of these startup things happening right the first you know pre-Y2K

[00:03:24] You know spike and the first dot com bus that happened in 2000

[00:03:30] Happened you know right when we were at the you know peak of several things

[00:03:34] So this was the pets dot com yeah pets dot com and they would say that yeah

[00:03:39] So they would say that if anyone walking on the street near the Stanford

[00:03:42] They'd you know fortune give you a 10 million dollars and say do a startup right? So that was a joke

[00:03:48] You know going around so we're like bitten by

[00:03:51] You know that startup thing in 2000. So we've been

[00:03:55] And me and my you know other friends who are all from a similar background working on communication stack

[00:04:00] We've been we would meet quite often and say hey look the valleys are bus with so many startups. Why don't we do something

[00:04:07] And all that so we

[00:04:09] So that was a Genesis it so we started in 2011

[00:04:12] So you can imagine we've been discussing ever doing a startup from 2000 onwards almost 10 years of you know all all talk and no action

[00:04:19] Right, so we'd be in continuous touch. We'd be in a keep track of you know how Skype is a big thing suddenly how

[00:04:26] All you know

[00:04:28] We used to use you know search engines like infos eek and hot bot and all that the pre-Google days

[00:04:33] Alta vista yeah, all the vista and a surfers and all that and suddenly there's something called Google and we start using

[00:04:39] You go hey look. There's something called a page rank algorithm

[00:04:42] It was something that in we could do right we could take on Google right

[00:04:47] Your sort of young engineer so you want to sort of take on Google you know as well

[00:04:52] So we'd keep discussing we'd keep talking and we could only think of you know software and technology those days because that's about all the exposure

[00:05:00] You know we had

[00:05:02] Because we were working on projects like developing a Microsoft live meeting server for Microsoft

[00:05:08] Helping AT&T launch an App Store because

[00:05:11] They had got beaten quite badly by Apple's App Store because Apple made all the money and the AT&T network could go down

[00:05:17] So it all all our thoughts were around you know

[00:05:20] How do I develop something similar to what a Microsoft did or a Google did on AT&T?

[00:05:26] You know did nothing to do the agriculture nothing to do with calls nothing to do with you know milk right so

[00:05:33] We somewhere in 2011

[00:05:36] We all said look we are on a mid 35s now

[00:05:40] We better take a plunge and

[00:05:43] That's about the time even middle-life crisis it's you so until then you only seen

[00:05:48] The developed markets and

[00:05:51] And you sort of made some money so it's not no more about being financially secure

[00:05:56] Which is important because all of us come from a mid-class background. You said yeah, we can now take a take a plunge

[00:06:02] Right what we thought about several years ago what happened in the valley?

[00:06:06] Why don't we do something and

[00:06:08] Since we're all not just out of college doing a starter but having had 15 years of experience we said let's pick a compelling problem

[00:06:17] And

[00:06:19] What does compelling problem mean we said it has to be India because there's always this

[00:06:24] sort of a yearning to do something in the Indian context right it can't be that we always solve first world problems

[00:06:32] solve problems of a Microsoft or an Apple or a Google or a telecom

[00:06:37] Telecom telekate and T there's enough problems in Indian context

[00:06:40] So me and my nine co-founders at that time

[00:06:44] Right, we decided you test be a compelling problem in the context of something on healthcare or agriculture or

[00:06:53] Telematics to help

[00:06:55] To solve the pollution problems and all of that right so we said

[00:06:59] Let's build an IoT App Store

[00:07:01] Because I keep saying when all you have is a hammer everything looks like a nail

[00:07:05] So we said we know Apple App Store. We know how Android came through

[00:07:09] Because the entire Android elephant happened right under our nose

[00:07:11] Right, we were like the thick of things. We said let's

[00:07:14] Develop an IoT App Store it is you call M2M those days machine to machine App Store right

[00:07:20] And that's where the company's name is tell apps stellar applications

[00:07:24] We looked at apps are a application nursery so app sorry, we said that sounds too kudai

[00:07:30] Literally so we said we'll do you know still apps in the domain was available and we said let's do a broad

[00:07:36] You know IoT you know App Store and

[00:07:39] It should help solve we want to be the Google of IoT which means any non-human traffic should come to our platform

[00:07:46] Human traffic all goes to Google Facebook those days my space or couldn't lot of other things all the non human traffic should come to our platform

[00:07:55] And so we we looked at various sectors at that time. We looked at healthcare

[00:07:59] We spoke a lot of surgeons to do things like

[00:08:03] remote patient monitoring

[00:08:05] post surgery

[00:08:06] You know care and all of that

[00:08:08] But then at the same time one of her friends uncle was starting a

[00:08:14] Organic dairy so he said look I spent all of time in Bangalore when I'm here

[00:08:18] I don't know what happens to my cows and farmers which is in the village

[00:08:22] Which is about in a place called tip tour, which is about you know towards drive from Bangalore

[00:08:27] You guys are all take keys. Can you help me solve this problem? We said interesting this exactly what

[00:08:33] M2M is supposed to solve try to access

[00:08:36] Data where humans can't access it right in some cases in urban scenarios

[00:08:41] You're at condition area car and all that but in urban rural scenario. It's about cows animals in agriculture

[00:08:47] So into this happened in 2010 11 so me and some of my co-founders spent a lot of time on the farm understanding what happens on these forms

[00:08:56] What does a farmer do from the morning he wakes up? What exactly is

[00:09:01] milking all about you know what's a cow and what's a bull right it'd be sorry at that level

[00:09:07] But from a problem solving point of it is very interesting, right anything you look at it was like there's a lot of thing that

[00:09:13] Could help right everything was so manual. Everything was so old fashioned and being

[00:09:19] Technology guys everything will be like hey, this can be automated

[00:09:22] Hey, this can be done this way. Hey, this can be recorded in the software

[00:09:26] Hey, this can be sent over a cloud and analyzed. Why do I need a veterinary person to come on because it's a very simple diagnosis

[00:09:32] I can do image processing here. I could do text to voice text to speech here, right? So everything looked like

[00:09:39] Something that the tech that we had picked up over the last 15 years can be you know applied

[00:09:44] The problem solving part of a brain would actually get better offers

[00:09:47] Almost

[00:09:51] Zero business ends right to we didn't the last thing that occurred to us was that oh, we need to also make this you know try to see how to make money

[00:09:59] There is the concept of an investor and there is a concept of a business plan and unit economics and all of that

[00:10:04] That didn't occur to it was about

[00:10:06] Let's solve the problem and then convert this problem into an excel sheet and we can yeah

[00:10:11] We can make a hundred million dollars if I could sort of do that

[00:10:15] So that's how the entire journey started right from my personal background on the embedded engineering side

[00:10:21] Looking at various other

[00:10:22] You know platforms and

[00:10:25] Around the same time we were incubated at itimadras. So my co-founder so right there from I take out a variety of medras

[00:10:30] So professor Ashok Junjunwal at that time he's

[00:10:34] He's heading the itimadras incubation cell

[00:10:37] He was prime minister as advisory part of high prime minister's advisory council for agriculture

[00:10:42] So he said hey guys

[00:10:44] You can't be looking at multiple sectors

[00:10:46] You know cows in the morning you know buses in the evening and then health care

[00:10:50] Because the way we modeled our platform was for us a cow and a bus is the same thing from an IoT perspective

[00:10:55] Mission to mission right, but then he said look to monetize it

[00:10:59] You need to get more vertically integrated you need to get them domain focused

[00:11:03] Unlike in the value on the US where people would pay you for the you know software only component as a broad platform here

[00:11:10] You need to sort of as far as so that's where we said

[00:11:13] Let me drop health care. Let me we're actually doing projects with wallward that time in we started in 2012

[00:11:19] Trying to ensure that the drivers are driving properly

[00:11:22] We would tap into the OBD to interface collect all the data and then same time the data from an animal would come to say

[00:11:28] Okay, when is this animals peak ovulation so that you can inseminate this animal at the right time

[00:11:32] Then we figured that yeah, we need to start making a business sense out of it and then we said let's drop all the

[00:11:40] Health care education. Let's focus only on agri and

[00:11:44] Dairy seems you know large enough

[00:11:46] It's a large area. I don't know if you know a roach and it's a

[00:11:50] 7.6 percent of a GDP is milk

[00:11:53] It's a $250 billion industry if you consider the pre and post-harvest

[00:11:57] So we didn't have to look too further for seeing okay, what's my total addressable market?

[00:12:01] If I'm just able to solve it for milk

[00:12:03] 7.5 percent of our GDP is that it's a big enough problem and and that's when we sort of sorry getting more

[00:12:09] You know deeper into dairy and that's how the whole journey started so a long-awaited answer

[00:12:14] A lot of how to cover

[00:12:16] It gives a lot of context for sure

[00:12:19] Right, and I think you know it's

[00:12:22] So there are two categories right either the market picks you all you pick the market

[00:12:27] In the first category. I mean, it's it's a typical, you know

[00:12:29] You experience a problem you build a solution. You learn to build a business around that

[00:12:33] But in your case, right? I mean you actually studied the potential for

[00:12:37] You know how tech can disrupt a market

[00:12:40] Right and and pick something now. I wanted to take a step back and like talk about

[00:12:45] You know what were some of the principles you had in mind in terms of picking that market

[00:12:49] Right because you looked at healthcare you looked at I mean you're working with buses

[00:12:54] Right then you looked at dairy why do you pick dairy over all of these

[00:12:58] What were some principles guidelines guardrails etc. Yeah, absolutely

[00:13:02] So I said yeah, we were looking at buses in the morning, you know, you know

[00:13:05] Caused in the evening type of a scenario when we started but

[00:13:08] Something that appeared to us quite intriguing was that from a tech perspective since if you're all bitten by M2M and IOT and all of that right

[00:13:16] We felt that the best application for an M2M is the sheer remoteness of the problem

[00:13:22] Right what I mean by that is the cows are in the remote villages

[00:13:25] And your data centers and cloud is you know hosted some arrows

[00:13:29] and there's it's not possibly

[00:13:33] Practical for you to chase and run behind every common capture data right so M2M is all about

[00:13:39] The remoteness right in accessibility and how do you solve for the remoteness number one number two

[00:13:45] The analytics so things like chat GPT or not not even nowhere close those days, but the analytics right on the crowd on the cloud

[00:13:54] Could be a reasonable substitute for lack of expertise on the ground

[00:13:57] What I mean by that is most of the veterinary doctors would leave these villages and start pet clinics in the cities

[00:14:04] And then there's no one no expertise available in the

[00:14:08] villages right so

[00:14:10] We knew that

[00:14:11] The analytics and experts systems and algorithms that you can build on the ground

[00:14:15] Can be reasonable substitute for lack of expertise in premise

[00:14:19] Right and and IoT suppose to solve this you know problem like if you want to turn on your AC in the car

[00:14:24] If you had a driver would call him and say that look I would I'm coming you turn on the ACN keep it but

[00:14:29] IoT you'd sort of just message your

[00:14:32] Car yeah, and the AC would start so that when you said it's the right you know temperature right

[00:14:37] So it from a problem perspective from an IoT and M2M perspective more than anything else

[00:14:42] This seem to be the right you know fit that's sort of number one right

[00:14:46] Number two, we also figured that in agriculture people are willing to put money on the table and talk right from a customer point of view

[00:14:54] I remember doing in the IT Madras campus professor Ashok had organized

[00:14:58] A session where all the prominent surgeons

[00:15:01] From Chennai turned up and we were pitching to them saying that this how

[00:15:06] Telly this like 2012 right this or telemedicine would work well before Covid right maybe post Covid that picture

[00:15:12] I mean would have meant

[00:15:14] We'd have been much more easier

[00:15:16] so we were making the pitch to all the doctors and surgeons and

[00:15:19] Almost invariably all of them said what you're saying will not work

[00:15:23] Right I'd like to see the patient in person

[00:15:26] I'd like to even the young ones in forties and all that surgeons. I don't say

[00:15:31] This remote patient care and all that I don't think will work on the other hand on the agri site one would I imagine that

[00:15:38] They wouldn't take technology

[00:15:39] Hironies spoke to the say I like that if that if you can make it work. I'm willing to pay for it

[00:15:45] So we figured that a more evolved area like health care

[00:15:48] um

[00:15:49] Is not where you have people like surgeons and doctors they wouldn't want to experiment with tech because they felt

[00:15:56] um

[00:15:57] That human

[00:15:58] Component is very important whereas on the agriculture towards our surprise if you get that people are saying hey look

[00:16:04] I'll give you a purchase order tomorrow

[00:16:06] If you can automate my farm

[00:16:09] Right, I know you guys are techies. You can do it. I have a labor problem at the farm. Can you sort of automate the farm

[00:16:14] So then that was a second check right first

[00:16:17] From a problem solving and

[00:16:19] the application of IoT and M2M it seems you're really good problem the remoteness lack of expertise

[00:16:24] And all that because we felt that in urban scenario

[00:16:27] You still have access to people there's someone at home to turn on the the AC there's a driver

[00:16:33] It's not as compelling whereas in the villages you had no the go

[00:16:36] Right you know the go to manage your animals. You know the go to

[00:16:39] um

[00:16:40] You know put more veterinary doctors in the villages because they all migrated way you know to the towns

[00:16:44] So from a compelling nature point of view it was much more compelling

[00:16:47] application of IoT and two

[00:16:50] Um as I said people have a customer right as a problem solver

[00:16:54] It's good to know that people are willing to pay some money for the problems you're willing to solve

[00:16:59] So the real vindication of okay, there is it's a valid problem. So these are two things that tilted more in favor of

[00:17:05] uh

[00:17:06] Agriculture dairy

[00:17:08] Visavir telematics or visavir health care

[00:17:11] The other insight that I found interesting and that I've seen personally

[00:17:15] As well is that you know you can't build software for software's sake right Indians hate paying for software

[00:17:20] I mean that is absolutely. I can't agree more with you

[00:17:23] Yeah, yeah, I mean

[00:17:25] I have some battles cars as well

[00:17:27] So you know

[00:17:30] Indians hate paying for paying for software and that could be changing but yeah

[00:17:34] You really have to build out the use case

[00:17:37] Um, right and that obviously influenced your

[00:17:40] decision to like dig deep

[00:17:42] um

[00:17:43] And go into a domain learn up about everything and then really focus on the end results. Yeah

[00:17:49] Right and not just say that hey here's here's some tech

[00:17:52] You can go and manage whatever you want with this

[00:17:54] Yeah

[00:17:56] And I think that's also like

[00:17:58] um

[00:17:59] That's also a stumbling block. I think a lot of young entrepreneurs kind of make yeah

[00:18:04] Yeah, they build this cool new technology which uh you know does something and then they sell the technology instead of the

[00:18:10] Outcome or the use case exactly exactly

[00:18:13] So I mean right right right right we said even we started with a software early approach right because

[00:18:18] Really wish as you said the people who pay for the software or the SaaS and value-based model and we soon realized

[00:18:24] Uh, that's not going to happen

[00:18:26] That was the first insight. Hey look our course hard course of analytics and people would ask

[00:18:31] You know how many Java engineers you have and hence out pay

[00:18:35] I'll pay according to how many engineers you have right it's not like for the in a value

[00:18:39] So one of the things that we just we were not trying to touch the hardware right so one of my co-founders Praveen

[00:18:44] He comes from a VLSI design background as well. So we said

[00:18:48] Look if

[00:18:50] When you're trying to solve the problem end-to-end in a use case driven approach

[00:18:55] And you can't just solve it in the software in data realm. I need a hardware as well

[00:18:58] There's that saying right. I mean if you want to build really good software

[00:19:01] You have to yeah, you have to you have to have your own hardware exactly

[00:19:05] Right, so we said look for example

[00:19:07] We wanted to monitor animals. We wanted to have a Fitbit for the animals. That's one of the components

[00:19:12] We have it goes around the animals leg right we said look all of the Fitbits that

[00:19:17] Europe and US has is about $1,500

[00:19:20] It's not going to work for the unit economics of an Indian farmer

[00:19:23] Who's only earning about you know $20 30 a month right or even lesser

[00:19:28] So we said let's design one ourselves. It doesn't look too complicated

[00:19:32] You know VLSI design and let's build this hardware otherwise

[00:19:35] I need a hardware monitoring confluent as well

[00:19:39] So we also said let's not be shy to touch you know hardware

[00:19:43] And when we realize that

[00:19:45] Hardware could be a taboo when we started raising funds whether be investors would say

[00:19:49] Oh, you have an hardware that's too complicated. I thought you guys are only software it

[00:19:53] You said no, I mean you need a combination

[00:19:56] You know to solve and and so we decided to also

[00:20:00] You know or not dabble around with infrastructure

[00:20:04] You're dabble around with electronics and all of that so our intervention solution would have

[00:20:09] Would need a civil engineering expertise because when you go mount things in a farm

[00:20:15] It needs to fit into the

[00:20:17] The farm civil aspects that things like a simple

[00:20:20] Scientifically managed cow shed how do you do it like a Lego block

[00:20:23] electronics some mechanical stuff

[00:20:25] Cold-chain milk is the most perishable crops. You need to know how to sort of cool chain it

[00:20:29] So we said maybe in retrospect, I think we took on too many things right

[00:20:35] We didn't care about its software mechanical civil we just said let's solve the problem

[00:20:40] Maybe had had we been wiser would have been little more

[00:20:43] We'd have drawn the boundary more quickly, but at that time it was

[00:20:46] Share-enthusiast as we said no the problem as we crack. Let's go all out and you know sort of you know solve it

[00:20:52] so for us

[00:20:53] Though we started off

[00:20:55] With a definition of tech as if it's a software. We then

[00:20:59] We realized soon. It can't be just you know software and data

[00:21:02] It's it can't be an app on a smartphone alone

[00:21:05] It has to be a whole slew of you know electronics data mechanical because at every step

[00:21:11] There's a hurdle that we need to cross and for that I just can't cross the hurdle with software

[00:21:16] I needed some mechanical engineering component. I need some electronics real estate design

[00:21:21] So we said let's take a solutioning approach

[00:21:23] Let's take a use case driven approach and see whatever it takes to solve that problem

[00:21:28] And hence we went well beyond software

[00:21:31] Though we start off as technology now our definition of technology is not just you know software

[00:21:35] That's one component of it. It has a liberal dose of hardware and all of it because the solution warrants it

[00:21:40] Right because such a old

[00:21:42] Supply chain Russian it's like

[00:21:45] Several centuries old and no one has ever tried to modernize it

[00:21:48] Like how our banking is modernized. It's all online. Yeah our agriculture

[00:21:52] Known as even attempted modernizing it

[00:21:55] So had it had all of that supply chain been online

[00:21:58] I would have probably tried to solve the problem only in software

[00:22:01] We realized that it's such an offline system

[00:22:03] The first step is to bring it online and for that I need hardware

[00:22:06] And then I'll start solving it in the software realm

[00:22:08] Yeah, I think you know it's inevitable that you have to take a full stack approach when you're talking about some of these things

[00:22:13] IoT for instance right yeah there are no standards that have evolved. I mean of course now maybe

[00:22:19] Yeah

[00:22:20] Right but around that time

[00:22:23] When when you're building applications you take a few things for granted right yeah exactly

[00:22:28] Exactly and so on and so forth

[00:22:29] Nobody is doing all of those things exactly building and the application

[00:22:32] Correct correct but uh

[00:22:34] Yeah, I mean I can imagine I can quite imagine and good analogy right in the telecom sector where I started my career

[00:22:40] All the basic introwers in place right the the basic switching systems

[00:22:44] Communication broadband yeah, you're trying to solve the problem for apps at a software layer

[00:22:49] So you sort of try to retrofit that into an agri system

[00:22:53] Right, it was like nothing there right. It's like

[00:22:57] Ground and all analog systems

[00:22:59] And then you sort of need to bring it to a level where the data comes online

[00:23:02] Then you start solving the problem at the data layer so exactly the experience we went through

[00:23:07] Now when you look at an unorganized sector like agriculture right and there are lethora of problems that you can solve

[00:23:14] Right agriculture, you know famously 40% of our population is employed

[00:23:19] Right contributes way less

[00:23:21] In terms of proportion to GDP and so on yeah

[00:23:25] Right and you know, you could make the case for technology right

[00:23:28] Uh, you know, you can improve yield and productivity correct

[00:23:32] You can increase market access

[00:23:34] You can streamline supply chain absolutely really. I mean there is yeah like maybe just that's it

[00:23:38] There's a problem that needs to be solved

[00:23:40] Yeah, there are thousand problems to solve right yeah, but at the same time

[00:23:43] You know, I feel like over the last three years what we've seen is like a hype in terms of oh agri tech is the next big thing

[00:23:50] To sort of a tapering down and a more like a rationalization of things

[00:23:54] Yeah, it is not as you know as

[00:23:58] Well certainly the problems are hard and complex and worth solving but it's not easy to solve those

[00:24:03] Yeah, right yeah

[00:24:05] So what do you think people get wrong about it? You know, what are the we all understand the

[00:24:11] The opportunities

[00:24:13] But what are some of the hard challenges that you know people founders kind of encounter when they look at this

[00:24:19] Yeah, yeah, so as you rightly said it follows that the famous gothner curve right it goes to the hype and then falls and then

[00:24:26] There's a good nomenclature to explain that

[00:24:29] So I think the act tech is probably going through that it sort of peaked

[00:24:33] Because uh when we started

[00:24:36] Uh the term actectin exist this like 2010-11 right and then you had very few

[00:24:43] Uh

[00:24:44] He did a probably omnivore was uh the

[00:24:47] Only actect fund at that time and they're one of our investors and one of our most

[00:24:52] staunch supporters

[00:24:54] Um, and then you had incubators like

[00:24:56] IT Madras where some like a professor Ashok

[00:25:00] The jnjnvala would take a bet on yes, it's a problem that needs to be solved right um

[00:25:05] So uh and it as you said um

[00:25:08] I think the trigger for the type cycle was

[00:25:12] When uh soft bank invested in a company called plenty

[00:25:16] The u.s. It's a $200 million investment because

[00:25:19] Anything that a short bank or tiger dusits in that caliber right

[00:25:23] It's a hundred two hundred million dollar so and plenty was out about about vertical you know gardening

[00:25:29] And suddenly someone in agriculture got a $200 million check right and then uh

[00:25:33] It started getting slowly mainstream then you had all the mainstream

[00:25:36] Investors also sit back and say hey look if uh, you know

[00:25:39] Short bank is bearing on something there is this is a interesting problem

[00:25:44] Um

[00:25:45] Human beings do need to consume food so there must be something in it

[00:25:49] Because agriculture is eventually feeding into the food uh, you know ecosystem

[00:25:53] But it's a long haul okay, so when there are easier you know use cases right

[00:25:58] If I take a very invest investment friendly view

[00:26:02] I would sort of pick an urban use case

[00:26:04] Because the purchasing power is you know higher

[00:26:07] The unit economics is easier uh, you know to build relatively

[00:26:10] Competition can be high but you can build a business band a little more

[00:26:15] effectively

[00:26:17] From an ROCE perspective or from a unit economics perspective in a uh, the news case in the context of a you know

[00:26:24] Five-year fund life right majority of the investors have a five to six-year fund life

[00:26:27] But agriculture you know spans across multiple fund lives. You just can't

[00:26:33] Crack it within a uh in a big way within a five-year

[00:26:36] You know time span

[00:26:38] Because it's it's such a big mammoth old-fashioned component. It needs a little bit of uh, you know

[00:26:46] Regret to sort of solve that's why like bloom funds concept of the the effect of compounding right

[00:26:52] You need to chip away at it

[00:26:54] Over a period of a decade and then it starts you know starts humming into a well-ordinary so one thing is

[00:27:01] It needs to be it needs enough time

[00:27:04] It can't be solved within a at scale

[00:27:07] Others you have to be too niche right. I just take one small component and solve it, but then

[00:27:13] If you want to solve something at scale in the agrarian rural space give it 10 years right 10 years

[00:27:19] To sort of this from the time when we started maybe now with a lot more know-how

[00:27:23] It probably takes a shorter duration, but one is give enough time number one

[00:27:28] Number two as we discussed in the previous part, right

[00:27:31] Uh, don't try to solve it only in the software layer. You just need to take a solutioning approach

[00:27:37] Because it's not like a mature industry as you said where all the base layers are taken care of and you can step back and say okay

[00:27:43] I can just solve it in the software and data like you might have to touch

[00:27:47] You know other uh, you know parts

[00:27:49] And the third part is uh

[00:27:51] The miss the business modeling is you know quite complex right vis-a-vis

[00:27:56] Uh, is straightforward, you know, sass-based model

[00:27:59] Which you could sort of define it using ltv cag and all of that right. I mean those

[00:28:05] um basic hygiene apart in ag

[00:28:08] Uh, there are so many other things how do you manage the commodity risks? How do you manage the inventory risks? How do you manage

[00:28:14] um the various uh because it's still under uh the effect of the weather right you've seen what's happening in Chennai and surrounding areas

[00:28:22] Um, agrarian gets impacted right

[00:28:25] So apart from all the other problems that are typical sass company needs to keep and tab on

[00:28:30] There are you know, bunch of other things that feed into your business model

[00:28:34] So now probably there are uh, you know enough companies out there investors have you know bird the finger as you said

[00:28:41] Hypened out

[00:28:42] Maybe there are some playbooks that you can learn from

[00:28:45] But when we started there was no playbook right uh, we didn't know what how do I fit it into the

[00:28:51] Uh, you know scheme of a sass-based

[00:28:52] Uniteconomics how do I fit into the scheme of an IoT based unit economics it didn't fit right so we had to um

[00:28:59] You know step back and learn a little bit on okay. How do you make it fit into a scalable?

[00:29:03] You know business model. How do I factor in

[00:29:07] For the inventory risks because when there's supply glut when heavy rains happen otherwise there is

[00:29:13] But death or supply so we had to sort of

[00:29:16] Make a blend of the tool it has to have all the

[00:29:19] Uh tech as an enabler competent built-in plus all the other business models

[00:29:23] So these are three things that I think I would let people be very very very off right

[00:29:27] traditional typical business modeling approach may not work

[00:29:30] You just step back and look at what fits into that too

[00:29:32] Don't just look at a software early approach

[00:29:35] All right, and three give it at least 10 years to solve it at scale

[00:29:38] These are things that jumped my mind when you ask a question right yeah

[00:29:42] And I think in such contrast to typical software businesses right where you fail fast

[00:29:48] hydratively

[00:29:50] Whatever it is takes to go from like MVP to a legit product in you know matter of a few

[00:29:57] If not, you know if not months. I mean a few couple of years or whatever it is right to get to a PMF as such

[00:30:03] Yeah, and here I think the concept of a PMF is such an evolving sort of

[00:30:08] Thing right especially had there been a playbook

[00:30:11] one would have you know

[00:30:14] Use that for example the software world I look at you know zoho or a fresh works or one of that

[00:30:18] So on the enterprise or MSME software space there is a playbook now

[00:30:23] So I would sort of stand on the you know shoulders of those giants and build forward from there whereas in

[00:30:30] In agree they didn't we didn't have any playbooks

[00:30:32] Right right and hence what you said

[00:30:35] Step back and figure out what's the PMF? How do you make that work in our context when the business modeling

[00:30:41] Because coming from the we pro telecom background of first excel sheet are very very sass software

[00:30:47] You know kind of a model X units. This is the unit economics that hey, they should work

[00:30:52] And then we figured that though this is

[00:30:54] This is a far too simple simple things like you know

[00:30:57] Once you do the modeling I mean once you do the like end to end you realize how much your margins are hit by

[00:31:02] Yeah, you know all the way greys that you mentioned exactly. How to factor all of those things exactly

[00:31:07] The most tragic thing would be to like build a compelling solution

[00:31:11] But we left with very little at the end to go around yeah, we get that feeling all the time

[00:31:15] Yeah, yeah

[00:31:18] Um so we've spoken about the market

[00:31:20] Let's talk about the the the founding itself right how do you go from idea to product to company? You mentioned you have nine co-founders

[00:31:28] Yeah, right that's very unusual. That's some kind of a record. I mean yeah, if you had nine by the way

[00:31:34] We always draw

[00:31:36] Some you know consolation from the fact that hey that's a humble. We say hey look in feed to add a line

[00:31:41] Go founders so

[00:31:43] We've had I think seven co-founders before on the podcast. Yeah, it's the highest right so this is just beats

[00:31:49] Yeah, so you need to give me a trophy as I walk out yeah

[00:31:52] So uh how did that happen and how do you manage to get you know some kind of consensus and how do you manage to

[00:31:58] You know make decision making uh, you know fast and quick with nine people

[00:32:04] Yeah, so how do you how do you go from this? Okay now here's a market. We want to operate

[00:32:09] We want to build and hey here is a business and we have all these people

[00:32:13] So yeah, we do that journey so we are we are one third of the founding size now

[00:32:17] We are about three co-founders from the time in the you know started but the idea was

[00:32:23] I mean I was running a practice called value added services practice

[00:32:28] Um at V pro and all the other eight folks were part of uh, you know my team

[00:32:33] um, so the idea was uh

[00:32:36] When I decided to step out

[00:32:39] The team who would uh, who was very close with right so they said

[00:32:43] You know, we'd like to be part of this kind of a you know journey as well because we also kicked about

[00:32:48] Technology trying to solve a compelling problem. So he said yeah, why why not let's uh more heads the better

[00:32:54] So the nine of us you know got started in on that uh, you know journey

[00:32:58] We're still in in touch uh, you know very amicable. We not had any in accrimonious fallout or anything

[00:33:05] Right, but over time some of the individual you know financial constraints

[00:33:09] Also kicking right not everyone have the same appetite for us

[00:33:14] Do not have the same family backing

[00:33:17] Right so at it's so sorry. That's a someone would say look it's been two years now

[00:33:22] uh, my you know dad is saying look I need to you know increase because we're all working for the first

[00:33:27] Couple of years are working almost on zero salary, right?

[00:33:30] Uh, whatever savings we had and then once we got seed funding we said we'll take some

[00:33:35] You know 15,000 home right and and first one was okay

[00:33:38] But for some of us it was like no I my my dad my family wants

[00:33:42] I mean to get back to more regular stuff

[00:33:44] So slowly depending on the personal appetite people said look

[00:33:47] I would like to sign off you guys continue. I'll continue to support you guys in whatever

[00:33:51] You know, man or some of them went back to the US they settled there

[00:33:54] some of them went back

[00:33:56] To the corporate world

[00:33:57] start working on other technology companies and you know that

[00:34:01] um, so uh, that's how it became we started off saying that we need enough

[00:34:07] More brains a lot of tech and all of it. So today as we speak

[00:34:11] um

[00:34:12] We are you know three you know co-founders but along the way

[00:34:15] uh

[00:34:16] Edition make me was always tough

[00:34:17] So if the first thing that we did when we got started was we put together a governance model

[00:34:21] Right and uh, if we said look this out the edition making structures go to be and since

[00:34:26] uh, you know, I was

[00:34:28] Always in addition making place vis-a-vis the other eight

[00:34:30] You know co-founders even in my earlier job. So that made things a little easier

[00:34:34] So I could take a final call on you know some of those uh in you know things

[00:34:38] but uh all the

[00:34:42] Eight of them are highly intellectually driven highly opinionated so it's never easy right

[00:34:46] So when you have a problem saying should we start solving

[00:34:49] For animal uh, you know peak easterest management versus real-time milk measurement

[00:34:55] We would debate for like you know, you know, you know 10 hours and then come out with all the solutions. So it was never

[00:35:01] uh, the slickest and you know fastest way of decision making

[00:35:05] But the upside is when the edition is made it's probably the best in that context because you're right

[00:35:10] It might have taken a day more and all of us would you know

[00:35:13] Invariably always knight out and pollolators to come out of the solution. So we met us are at

[00:35:19] 4 p.m. On a topic and we're like sitting and

[00:35:21] Cranking away at it at at at 4 a.m. Right so that way it might have taken a little longer

[00:35:27] but what eventually came out from some of the skulls were probably

[00:35:31] better

[00:35:32] You know it comes

[00:35:33] But I wouldn't it's very context life would always recommend it one way or the other it just really fits

[00:35:39] You know circumstantially what works in a context quick decision making is always you know, really important

[00:35:46] More than half the time you might be wrong

[00:35:48] But you just need to hope that at least half of the time you're right right so that way I think

[00:35:53] Edition making is probably very critical have gone models in place

[00:35:58] Decide fast

[00:35:59] In and it's not like you decide fashion all scenarios in some cases taking an extra couple of days is okay

[00:36:05] But in some other case when you're sitting and negotiating with a customer

[00:36:08] And you need to drop prices

[00:36:10] To win that you can't say look i'll come back within an hour and tell you right yeah in that case

[00:36:15] You need to take a call it you take a call in that call in other case where you're sitting and

[00:36:19] Working out the architecture

[00:36:21] To don't have to do it in a few hours you take your time come back with an architecture

[00:36:26] but broadly that fail fast

[00:36:29] That you you said the way I would read that

[00:36:32] book and that philosophy is take dishes in in a faster and

[00:36:38] And and fast is very relative in in the context of agri and arcase

[00:36:42] It's different in the context of a consumer facing

[00:36:45] Business and fmcg or any other consumer acquisition a business. It's a little like in different

[00:36:50] So contextualize those but I think that the tumble is be able to take additions fast enough depending on the context and

[00:36:58] And

[00:36:59] And having founder's helps three co-founders work of funders help because you need that support system around you

[00:37:05] Right, it can't be like a one or one is two less right nine might be too many

[00:37:10] But I think three to four you know co-founders is a good size for us to you can't go through everything

[00:37:16] Exactly exactly. The people are watching it absolutely so

[00:37:20] It really helps to have people looking at it from different different angles

[00:37:24] Yeah, one of the things that you know

[00:37:27] So I was just listening to the blue interview with Manit Savawal

[00:37:30] And he says you have to have people around you who kind of slow you down

[00:37:33] Yeah, yeah, you know and had to listen to the two or three times to understand really what he's trying to say

[00:37:38] Yeah, yeah, oftentimes I think you feel like every idea you have is the next best thing. Yeah

[00:37:44] But then you need to have people around you who kind of slow you know very good point

[00:37:47] There's an excellent point because

[00:37:49] Depending on the personality type that we are right. We will have blind spots

[00:37:53] Yeah, and you might be very operationally

[00:37:57] Detail oriented person

[00:37:59] I might be someone who's looking at

[00:38:01] Only the innovative component but for the business or succeed you need both

[00:38:05] So that's an absolutely good way to put it you need people who can slow you down

[00:38:09] Otherwise, you keep taking more and more interesting steps in the wrong direction right which is not the right thing

[00:38:15] So that's a I saw that in a podcast is really well done and well articulated podcast. Yeah

[00:38:21] So you know we have touched upon some aspects of it

[00:38:25] But you know just quick facts right what does still apps do

[00:38:29] Who are your customers? What are some of the common use cases yourself?

[00:38:32] Yeah, so at a very broad level. It's a very simple narrative. Okay. What we're trying to do is

[00:38:38] I've built out a digital you know food value chain platform

[00:38:43] Um, that's all we do digital food value chain platform

[00:38:46] But when you break it down it looks like the lot of cows animals and milk to it

[00:38:52] So on one end of the platform there are farmers because at the end of the day when you say food

[00:38:57] The food is invariably produced by the farmers

[00:39:00] Of course today there are a lot of lap grown meat lap grown milk and all that's um

[00:39:04] still in fancy

[00:39:05] And and catching on in place like the US right so

[00:39:09] On one end of the food value chain platform you have the farmer

[00:39:13] And on the other end, uh, you have the consumer like you and I right

[00:39:17] Consumers need good quality traceable antibiotic free fresh food

[00:39:22] So that it serves the right purpose right

[00:39:25] Um, and you better be sure what you're having or what you're allowed loved ones are having is is safe from various angles

[00:39:33] Um today traditional food if you actually put one of the microscope

[00:39:38] It's not a very, uh, you know happy story there's in in terms of the bacterial load in terms of

[00:39:43] A lot of things that sort of going

[00:39:45] And for the farmer who said the crux of you know this entire

[00:39:49] How do you sort of also he's the most important stakeholder right

[00:39:52] If all of the farmers live the villages and come to bangle then we can't grow

[00:39:58] vertically the food that we need

[00:40:01] So how do you ensure that these two

[00:40:04] Key stakeholders the farmer and the consumer

[00:40:07] Their

[00:40:08] Services and their requirements are met

[00:40:10] Well through this food value chain platform

[00:40:12] That's broadly what we're doing

[00:40:14] In the food value chain platform

[00:40:16] We applied it to milk as a first use case

[00:40:19] Um

[00:40:20] Because milk happens to be a daily velocity

[00:40:23] Agri produce

[00:40:24] If you look at milk as a crop it's probably the largest crop on the planet

[00:40:29] It's probably the most perishable crop on the planet

[00:40:32] It's not your face. It's not meat. It's not your tomatoes

[00:40:35] Milk that would perish right so from that point of view the idea is if I solve this problem in a compelling fashion for milk

[00:40:42] Which itself is large as he said a $250 billion market in India

[00:40:46] If you take the pre harvest and post harvest then you could potentially extend it to other

[00:40:51] You know, Agri you know produce in as well right

[00:40:53] So our endeavor has been to build out this food value chain platform

[00:40:58] With productivity quality and traceability as three key pillars to solve for you also mentioned it

[00:41:03] That everyone is trying to increase yield and all that right food value chain platform solve for PQT

[00:41:08] Productivity quality and traceability

[00:41:10] Keeping these two stakeholders in mind farmer and consumers their requirements in mind right

[00:41:15] So that's broadly what we're building out

[00:41:16] Where are customers our customers are

[00:41:19] FMCG companies who'd like to launch daily as a category

[00:41:24] Who customers like Amazon fresh ITCE Unilever

[00:41:29] For example, we supply the milk that Unilever uses in its hallix and boost

[00:41:34] I think some of us have grown up have had that

[00:41:36] It's significant portion of that is milk right but then can you give carbon-efficient milk can you give milk to Unilever that is

[00:41:44] um

[00:41:45] Precured in a fat-rate manner because the farmers get manipulated quite a bit

[00:41:49] So you can't sitting in Bangalore we'd have a cup of cappuccino

[00:41:52] But you know the milk that was produced was produced in a non exploitative manner

[00:41:56] Because you don't have visibility you don't have IoT to tell you this was done in a very proper fat-rate manner

[00:42:02] So our customers are FMCG companies who'd like to launch their own private label products right

[00:42:08] Tomorrow if you pick up an Amazon fresh paneer from Amazon

[00:42:11] We'd like to be the one who's actually

[00:42:14] Manufacturing and selling it in order them

[00:42:16] So that's our primary you know customer

[00:42:19] But along the line since farmers are on a platform

[00:42:22] They also sell a lot of inputs and advisories and services to the farmers

[00:42:25] We sell insurance financial services

[00:42:27] But those I would say are the

[00:42:30] Ancillary components because to make

[00:42:33] Farmers loyal and sticky onto your platform. I just can't have a trading relationship with the platform. I buy something and say hey

[00:42:40] I'm done a trading should be an incidental output

[00:42:44] When you're dealing with the farmer it can't be the primary thing. I can't just buy tomatoes and just eat it

[00:42:50] I need to ensure that farmers are getting financial services farmers are getting insurance services

[00:42:55] How do I shift the farmers orbit from being a small holder backyard hobby style farmer to more entrepreneurial farmer

[00:43:01] Otherwise, it's going to be a loose loose supply chain. It's going to be a loose loose value chain

[00:43:05] The farmers are always going to turn out

[00:43:07] They're also look at you very tactically right

[00:43:09] Who are is the Chi paying the highest that they'll you know sell it them

[00:43:13] But if they know that you're an institution there to solve help them also handle them to the journey from being a backyard hobby style farmer to more entrepreneurial farmer

[00:43:21] Then they would have a more long term stickiness with you. They will actually follow your protocols better

[00:43:25] Which makes us apply chain run in a more efficiently

[00:43:30] So these are the two sets of customers FMCG companies

[00:43:33] Who'd actually want to launch their own private label products

[00:43:37] Farmers who need these services so that they can graduate from a small holder farmer to more entrepreneurial farmer

[00:43:42] By solving for productivity quality and traceability in the supply chain through this food value chain platform

[00:43:47] That's roughly what we do when we serve right and just to clarify right here when you work with these FMCG companies

[00:43:53] You actually help them with procurement procurement and manufacturing right so for example if you'd like to launch

[00:44:00] Start up operate a cheese tomorrow, right and give it all right

[00:44:04] Exactly right you don't worry about in how do you manufacture it right?

[00:44:08] How do if you are a good connoisseur and if you taste a good cheese, you know, this is how cheese needs to taste

[00:44:13] Tomorrow I can give that to you in your label

[00:44:16] At your office tomorrow, right and then you can start marketing it and people like FMCG companies love that

[00:44:21] So it's not only the procurement piece which is the farmer teaching

[00:44:25] How do you also convert the procured milk into manufactured products right right to the end of the day

[00:44:30] We are consume milk in various forms paneer dahi chas kova

[00:44:34] I don't know if you know even sweets like

[00:44:36] Gulab Jamun 40% or I think 40 50% of it is milk base right when you walk into anyan

[00:44:45] Adyar on the bovan a to b or annan sweets or can't he sweets? Yeah, majority of the sweets are 80% is sweet base

[00:44:51] Right so so if you cancel milk and give from Indian sweets. I think there's probably like three left exactly right

[00:44:58] That's a good

[00:45:00] General honest question which other sweets that will not touch

[00:45:03] In a milk so the idea is to help these FMCG companies the unique words and for them. It's a really good thing right for them

[00:45:10] It's like if I built a brand like asherwath brand like ITC has

[00:45:14] Which is pan India brand

[00:45:16] Maybe all of us are familiar with asherwath atta and all that right why is it that we don't get asherwath milk paneer cheese

[00:45:22] And it's a well

[00:45:23] It's a billion dollar brand

[00:45:25] Right and I'm sure that if someone is buying an asherwath atta they'll also buy an asherwath paneer because you go by the brand of the trust

[00:45:30] That you have on the brand right so

[00:45:32] The idea is to enable

[00:45:34] these brands

[00:45:36] Who either to could not launch these because they don't know how to connect with the farmer

[00:45:40] How do I monitor? How do I what tech is needed?

[00:45:43] We're saying that we are we are that platform

[00:45:46] You focus on consumer acquisition

[00:45:48] And I must admit for us the inspiration behind this kind of business modeling

[00:45:52] Was also what we saw on the telecom network right the telecom network what we saw as perian India

[00:45:57] It's a low Rpoo market low average revenue per user right

[00:46:00] We figured that people like you know atta and motorphone

[00:46:04] They also sort of a consumer facing B2C CPG company

[00:46:08] And the network an IT is run by ericson and IBM respectively

[00:46:12] For both waterphone and you know atta

[00:46:16] So the entire network so whenever you and I make a call or download some data

[00:46:19] Some portion of that revenue goes back to ericson

[00:46:22] Some portion of the revenue goes back to IBM right

[00:46:25] So which means that

[00:46:27] Atlas a front end company they know how to play good looking

[00:46:30] Eroman music acquire consumers which is which is one skill

[00:46:35] So and for us we felt that from a ROCE perspective

[00:46:39] A consumer facing company which there are really big guys there today relancer retail

[00:46:44] Tata acquired you know big basket Amazon fresh

[00:46:47] Unilever and you know proctrine gamble

[00:46:50] So we felt that these guys with big pockets are so good at acquiring consumers so good at building scalable brands

[00:46:56] Uh right let me be there technology provider running operations for them at scale. So for them for us

[00:47:03] Technology and operations go hand in hand to be able to run operations at scale you need a lot of tech

[00:47:08] You couldn't possibly manage a 1 million fleet of Uber without tech right would only be a Ganesh travels otherwise

[00:47:15] 50 drivers calling and managing right so same way for us for us to manage this

[00:47:20] Food platform as a pan India basis

[00:47:23] So that when an ITC or an Unilever says look i'd like to turn on my new

[00:47:28] Milk paneer or new horlicks equivalent or new breakfast in a bottle in the top 10 cities

[00:47:35] They could do it overnight because we have sorted out how to become the backward backward integrated demand fulfillment partner

[00:47:41] Right in this whole component right the supply chain element is very crucial

[00:47:46] Right and i don't know i mean i saw this crazy start sometime back that nearly 40 or 50% of the food we produce is wasted

[00:47:54] Right

[00:47:55] And as you said either there's a glut or there's a scarcity right exactly never like

[00:48:00] Correct to me. It's never given backwards. Yeah, never never a case where demand matches supply ever exactly

[00:48:05] Um and in your case it's the cold supply chain as well right so it means that you had to preserve

[00:48:11] uh

[00:48:12] The most precarious

[00:48:14] Supply chain because of the perishable nature. Yeah, so that's an opportunity and a challenge that

[00:48:18] Yeah presents for you right yeah um

[00:48:21] So when you looked at it i mean what a few of the innovations that you did on that front

[00:48:25] Yeah, so we had to do several as you said the challenges were aplenty one as I said if i'm supposed to give you

[00:48:33] uh

[00:48:34] A brand of cheese right the input quality of milk matters a lot

[00:48:39] In the final order if if the paneer has to melt in your mouth the input quality matters

[00:48:43] That's when balut never get very good paneer. It's almost feels like rubber and the gravy never gets the heart of the paneer because

[00:48:49] Because other issues right because the milk that went into it is not that great

[00:48:53] Um same thing with your yogurt and your probiotics and all of that right if if your milk is high in residue

[00:49:01] A probiotic culture will not grow very actively

[00:49:03] Right so in a matter you know it could be a Greek yogurt or whatever so the input quality you know matters a lot

[00:49:09] So one of the things is to ensure that you have come up with really good

[00:49:13] Testing regimes

[00:49:15] Some tests you do at the farm some tests you do at the milk collection center

[00:49:18] It's a highly fragmented supply chain some tests you do at the culture and so that your tell and and and farmers don't add things

[00:49:25] Because they're very mischievous

[00:49:27] It sort of gets into it in or do it intently right because you're adding something to the fodder

[00:49:32] Like a urea and you feed urea to the animals and it sort of reflects

[00:49:36] Yeah

[00:49:37] The milk same thing with things like complicated things like alpha toxin and all that it's sort of fit to the plant

[00:49:43] It it but it reflects in the in the milk

[00:49:47] So we need a lot of farmer education to ensure that they don't

[00:49:50] They don't do those practices

[00:49:52] You follow scientific practice the innovations we did were things like

[00:49:56] IOT based testing across the supply chain

[00:50:00] IOT based grading and pricing to incentivize farmers so that they can convert milk into money

[00:50:07] In real time right we actually trade milk things like mucoin and things like that right so that little even farmer walks in with this

[00:50:15] Pale of milk

[00:50:16] Uh or IOT device which is a combination ultrasonic sensors cloud

[00:50:20] Um and wireless devices from Qualcomm Qualcomm happens to be one of our investors as well

[00:50:26] So that contraption will help you grade in price the milk in real time

[00:50:30] The when farmers are paid they know they're getting a given price because it's being graded in prices based on quality

[00:50:36] And what time they would asymptotically move towards better quality production because they know if I do one inch better

[00:50:43] I get paid better because my neighbor got you know paid

[00:50:46] Exactly right and then on the farm side today

[00:50:49] We we collect about 150 parameters of the animal the milk and the farm and the farmer

[00:50:55] That's that's a mind boggling amount of data per farm

[00:50:58] And to think there are 80 million such farms in India right

[00:51:02] Um and that data again helps us do things like

[00:51:05] Uh you know do a recommendation engine that will tell you which farmers which animal needs what kind of nutrition at what point in time

[00:51:13] Because our farmers can't afford to buy a lot of

[00:51:15] Uh nutrition how are you delivering some of these insights to the farmers. I mean is it on the smartphone or

[00:51:20] combination yeah, it's a combination because when we started uh into smartphone penetration is very low

[00:51:25] I mean this 2010 level so a lot of our interaction was through an SMS

[00:51:30] Or through a local entrepreneur in the village

[00:51:32] whom you'd uh nominate as

[00:51:35] milk collection center operator

[00:51:37] So he's not on our rules

[00:51:39] But he would follow our protocol and he's incentivized to follow our protocol

[00:51:44] Improve milk productivity and all of that right

[00:51:46] So the combine when we started as a combination of SMS plus that manual

[00:51:50] Operator now at least every family has a smartphone

[00:51:55] Uh in the villages thanks to lands geo thanks to the government push

[00:51:59] Thanks to other and all of that

[00:52:01] The every family

[00:52:03] In south it's much better almost

[00:52:06] Every adult has a smartphone today, but if you go up north in UP Bihar where we operate at least every family has a smartphone

[00:52:12] And and covid has accelerated some of these uh, you know things so today

[00:52:16] We pushed this data

[00:52:17] over the uh or whatsapp interfaces

[00:52:21] Over you know farmer facing videos snippets

[00:52:24] Still feature phones is still part of our channel

[00:52:28] Because good percentage. I'm still used like older farmers still use you know feature phones

[00:52:32] Were not used to that touch-based in interface and more importantly

[00:52:36] The other stakeholders in the in the uh in the uh in the uh you know value chain

[00:52:40] Uh, this includes people like the collections and operator who I mentioned the veterinary doctor paravet was slightly more progressive

[00:52:46] They become the physical interface as well right who sort of retrait and drive home that point

[00:52:51] So we an advisory that's meant for you might actually go to a guy whom he interact with and he would then tell you

[00:52:57] Hey look, you know Rosalini you need to be doing this right and he's actually reading off from a cheat sheet

[00:53:02] Right that has come as uh, you know whatsapp message sing that okay when this guy comes i need to tell

[00:53:07] This because you might not have the where we thought to interpret

[00:53:10] You know that message right

[00:53:11] Yeah, that's the that's the other key key thing right which is that pushing for adoption

[00:53:16] Is more complex than sending a few notifications exactly yeah

[00:53:20] You know you might have to have some kind of community structure

[00:53:23] Yeah, you might have to incentivize these evangelists exactly um and have these guys really like you know

[00:53:29] Talk about this in a non-scary way to some of these folks absolutely because anything new

[00:53:35] I mean especially agriculture farm exactly very on the sort of hundreds if not thousands of years correct

[00:53:42] Right, so you're sort of you know disrupting

[00:53:45] You know some some kind of tradition

[00:53:47] Yeah

[00:53:48] Adoption is in fact that's why internally even today we have a team called as

[00:53:53] Transformation and change management team right

[00:53:56] And you'll be surprised it's not only the farmers the veterinary doctors and the parabets

[00:54:00] Who take a little time to move from a very traditional paper-based

[00:54:04] Intuition based approach to more data driven approach

[00:54:07] Even the larger cooperatives who license our technology right to uh to sort of digitize their own, you know value chains

[00:54:15] Um even their very adverse

[00:54:18] Using it said of my this paper and pen is enough. I don't need any analytics and cloud and you know that right

[00:54:24] So our change management and transformation team that entire mandate was

[00:54:29] How do I improve the adoption?

[00:54:31] How do I identify that first more like in the in the farmer context the weight works is the minute you have a model farmer in a village

[00:54:37] We identify the model farm a model farmer was relatively more progressive

[00:54:43] We get him to set up a farm as per our protocols scientifically complete tech driven and that farm sort of becomes like a

[00:54:49] Prilgrimage farm where every other farmer from neighboring villages start visiting him and then they say hey

[00:54:55] Looks like if that he can do it. He was a small holder two to three animal farmer and suddenly

[00:55:00] He's making net one lakh rupees per month as income and he's hardly has 15 animals

[00:55:05] And he has a bunch of gizmos, you know in his farmer outer

[00:55:09] A fitbit and I see him, you know, feeling away at this

[00:55:13] Entering data. Maybe I can do it. He's no different

[00:55:15] So then it becomes a big movement in that you know particular

[00:55:19] You know farm so that's all we do progressive guys first more

[00:55:23] Transformation and that's why I said it's a 10-year minimum journey right?

[00:55:26] It's not like in urban context you people have passed the basic threshold of technology usage

[00:55:32] Right the little more

[00:55:34] And thanks to covid people are all on to and demonetization people are on to

[00:55:38] APIs on to UPIs and all that but the village context they feel

[00:55:43] What is this bangle company advising me on right? I for my grandfather days. I've been running

[00:55:48] cows and here's a smart kid telling me

[00:55:51] How to run my animals and all that right so from that kind of a skepticism to sort of moving to a more scientific way of managing

[00:56:00] It just takes that much time the business model to me

[00:56:04] I mean, whatever little I've understood is so complex right?

[00:56:07] I mean you have a B2B component then you have a B2B2C component then you have a B2C component right

[00:56:16] I mean how do you how does all of this come together

[00:56:18] You know if you could talk about like the pricing structure

[00:56:22] And so on right yeah

[00:56:24] So and and how do you simplify all of this? How do you for instance? I mean I have like how how is your team structured

[00:56:31] In such a way that everyone is like rowing the same direction

[00:56:34] You know order to enable you know greater revenues for the company. Yeah, yeah, and I'm so every of our

[00:56:40] You know revenue stream

[00:56:41] So you're

[00:56:42] What is it? I'll be right so from the when you open the bonnet there's so many moving parts right

[00:56:49] So every of our you know revenue stream

[00:56:52] I'm finally maps to these three pillars. It's productivity quality and inner traceability, right

[00:56:57] Everything is linked to these you know three things

[00:57:00] um if it's if it's not helping me in either of these three things then I think

[00:57:05] It's completely orthogonal right

[00:57:07] uh

[00:57:08] So uh for example when I sell to an FMCG company which is our primary objective everything else is ancillary right

[00:57:16] Um everything else is on the supply side so it's exactly right because finally my true margin realization

[00:57:23] Is happening on the on the consumer side

[00:57:26] uh

[00:57:27] The rest of back the three margin pools uh that we are trying to access right one margin pool is on the farmer side because as

[00:57:34] The farm productivity improves farm throughput improves

[00:57:37] You're able to collect more amount of good milk from fewer number of farmers. So that gives rise to the first margin pool

[00:57:43] The second margin pool is as consumer if you're willing to pay one buck more for an antibiotic free

[00:57:48] Paneer or milk or gulab jamun or a fresh cheese, right

[00:57:54] That becomes a second margin pool because you're able to i'm able to convince you

[00:57:58] Through an FMCG partner that this paneer is better than anything else that you have

[00:58:02] um, and that becomes the second you know margin pool third margin pool since i'm taking a platform approach

[00:58:07] I'm able to sort of multi tenant that platform and service multiple

[00:58:11] FMCG customers. I'm not sort of setting exclusive pipes

[00:58:16] For one for uniliver one for ITC one for amazon fresh one for paperboard. That's not it

[00:58:21] It's a multi tenant dead cold chain infrastructure. It's a multi tenant dead

[00:58:25] Processing plant. It's a multi tenant dead procurement network as a result of which that gives you it's a shard

[00:58:32] uh

[00:58:33] Uh, glad to sum red infrastructure and compliment that gives you the third margin pool

[00:58:37] So the idea is you go after these three margin pools and to access it

[00:58:40] You need to at every of these three margin pools you need to solve for productivity quality and visibility or efficiency

[00:58:45] Try more and more efficiency into network

[00:58:47] Multitenancy is all about driving more efficiency and improving utilization right

[00:58:51] So uh customer like um

[00:58:54] Unilivered payment on a per liter basis very broadly ready if i'm procuring milk at 36 rupees from the farmer

[00:59:01] For all the hard work that i'm doing for ensuring that it's antibiotic free for ensuring that it's traceable

[00:59:06] Ensuring that it's also sourced in a very carbon-efficient manner, right

[00:59:11] They would pay me let's say 44 rupees per liter

[00:59:13] So i make about eight rupee per liter as my gross margin i'm buying it at 36

[00:59:18] Selling it at 44 so i make eight rupees per liter, right

[00:59:22] Uh and or a million liters is a lot of money that we can make right because just to give you a sense in India consumes about

[00:59:28] 600 million liters of milk per day

[00:59:30] Right and that's uh, you know four point five percent of a GDP

[00:59:34] 600 million and the six hundred million liters of milk is produced by 300 million in a cattle

[00:59:40] And and you're about 80 million smallholder dairy farming families

[00:59:44] So in terms of sheer headcount 18 to four

[00:59:48] It's almost the size of US population feeding the 1.4 billion people first daily use of nutrition, right

[00:59:54] And more than half of the Indian population does not eat a fish or meat for them

[00:59:58] Milk is the most important source of protein

[01:00:01] But 750 million people only rely on

[01:00:03] predominantly learn milk for their you know proteins

[01:00:07] Unlike the europeus where majority of them eat fish and meat in India people majority of them don't eat

[01:00:12] You know fish on meat so

[01:00:14] So if an FMC's you want to go after the protein requirement of that 1.4 billion people

[01:00:19] And don't want to understand anything about these 80 million smallholder farm farmers

[01:00:23] They could use a platform pay a per liter fee

[01:00:25] Saying that look they'll be making much more because the brand would command that premium, right

[01:00:30] We would get about eight rupees a liter roughly, right? So that's sort of our fundamental approach

[01:00:36] In that entropy i pass on the lions share to

[01:00:39] The all the stakeholders in the platform it could be the veterinary doctors because they're the ones who are trying to make certain things happen

[01:00:45] I pass it on to the

[01:00:48] The animal husbandry technicians because without them

[01:00:51] The supplemention won't be successful, right? So the idea is to

[01:00:55] Water the the FMCG company pays make sure their good amount them goes to the other is take care and we keep in our piece, right?

[01:01:03] But that's a gross margin that we work with that's the first and fundamental

[01:01:07] Revenue seems the second revenue stream since I'm giving a lot of services to the farmers

[01:01:11] It's it's not like i'm force-fitting the farmer the services on to the farmer, right? It's almost like

[01:01:18] These farmers need multiple things and i don't want them to go somewhere else and

[01:01:23] Say that i don't have anything to do with still apps tomorrow

[01:01:26] So they need they have their asks right and one very interesting thing about milk is

[01:01:31] Milk is a daily velocity

[01:01:34] produce

[01:01:35] Every single day twice a day farmers come to the collection center which is not the case in other agri produce

[01:01:40] let pulses and grains fruits and vegetables cereals

[01:01:43] grains you get to see the farmer three or four times a year

[01:01:46] Right, that's number one number two. I get to see the farmer very hyper locally in the village

[01:01:51] Because milk is produced needs to be collected because of the perishable nature

[01:01:56] needs to be collected in the vicinity of the village

[01:01:59] whereas other force and vegetables pulses and grains cereals

[01:02:02] A farmer's driver per tractor to the local Monday at the talukal level, right and then offload it

[01:02:07] uh

[01:02:08] So you're like several kilometers away from the farmers

[01:02:11] You know house here since i'm very hyper local

[01:02:14] In the village and i see the farmer twice a day every single day throughout the year

[01:02:18] I could actually sell things in a very hyper local manner

[01:02:20] You almost sort of without having to invest like a sceptor you can actually become a zepto to the farmer

[01:02:25] Can actually sell input sell services and i in return i get the loyalty

[01:02:29] I get the they do they sort of see that buying milk is just one aspect of it

[01:02:34] i'm getting a lot of other in services so we sort of become a bangle or one

[01:02:38] For the farmer you had this bangle 1 concept on bangle rate where you could go for your inventory

[01:02:42] You anything you go my dad used to use it quite a bit

[01:02:45] Anything you go you could go there. It could be our uh water bills

[01:02:48] Electribles or recharges and anything same thing here since i see the farmer twice a day

[01:02:52] I want to give all the services and my entire commercial thought process if i have a fixed

[01:02:57] Cost in the village that is set up to procure milk and interface with the farmer

[01:03:02] Why don't i leverage the same fixed cost to deliver more services

[01:03:05] because in agriculture it's

[01:03:08] To make the unit economics work

[01:03:11] You need to leverage your fixed cost

[01:03:13] Beyond just the primary service

[01:03:15] Multiple other handsley services otherwise you're it's not a high it's not a high-r push segment right

[01:03:22] So if you say that i'll only make money in trading

[01:03:25] I'll only money make make money with my FMCG customers

[01:03:29] Then you're leaving a lot of money on the table right the best way to run an agress apply chain is to ensure that

[01:03:36] wherever this a fixed cost

[01:03:38] sunk

[01:03:39] You monetize a fixed cost across multiple services. It's not easy unity cross-skill you need to upskill

[01:03:45] People might argue you don't have focus and all that right but

[01:03:49] We're not trying to launch a spaceship to Mars. It's a relatively simple human

[01:03:55] You know comments and so if you have the right operational rigor

[01:03:58] You can actually you know use the same fixed cost in terms of personal in terms of infrastructure to do more services

[01:04:04] You might have one overarching service

[01:04:07] Right which gives you 80% of the revenue

[01:04:09] But the other small answering service would be margin contributors. Yeah, the margins have to come from that right exactly

[01:04:14] I mean if you're talking about roughly let's say 15 to 16 percent margins on the

[01:04:19] The procurement stuff exactly

[01:04:22] Right and that is gross margin and then you know you have all the other services

[01:04:26] Correct

[01:04:27] It service can contribute a percentage imagine if you have i6 services right then you're talking about 22 percent and

[01:04:33] From 16 to 22 is a big jump on a million liters. Yeah, or a million farmers and a million liters

[01:04:39] It's not 6% of 100 crore it's like 6% extra on a few

[01:04:43] You know 5,000 6,000 crore that's a lot of cash flow that you're generating

[01:04:47] Right so one of the thing that we learned when you since you're asking a it's a business model question right

[01:04:52] These very high-volume businesses you need to measure them in terms of cash flows rather than your EBITA percentages

[01:05:00] Yeah, right the the EBITA percentages or the EBIT percentages might look

[01:05:06] Be very deceptive you just need to look at how much cash

[01:05:09] Real hard cash are you generating on a daily and monthly basis

[01:05:13] So that

[01:05:14] Lands are being a very you know mind-boggling any other changes that you've seen in your business as a result of this kind of a business model

[01:05:23] Because again, you have to be I would imagine you have to be very very

[01:05:27] operationally optimized for something like this yeah

[01:05:30] Right you have to think of other value-added services be fairly full stack in your

[01:05:35] Solution to the farmer or to the other stakeholders. Yeah

[01:05:39] Any other thing that this kind of a business model imputes to your way of working

[01:05:44] Yeah, absolutely so

[01:05:47] It's a fundamentally the concept is one of vertical integration right. It's not new to agree it's just that

[01:05:54] Other industries have used this concept of vertical integration where once if I have one customer or a consumer

[01:06:01] How do I sell more in the path of that consumer? I don't have to

[01:06:07] Just sell one you know service

[01:06:09] both in the B2B space and

[01:06:11] You know in in B2C space right so

[01:06:14] In our case

[01:06:16] The idea was how do I make this vertical integration work?

[01:06:19] How do I leverage the same picks cost you know to deliver more so in terms of

[01:06:25] and if I

[01:06:26] If I get it wrong one service wrongly delivered can eat away the margins

[01:06:31] Generate by all the other

[01:06:34] ideas to

[01:06:36] Have early warning systems, right? So it's such a I mean, it's like you live by the sword diverse sword kind of situation

[01:06:42] Which is like hey one way of looking at it is I can acquire a user and sell them eight products

[01:06:48] Another way of looking at it is that hey one of these services screw up then all the seven on gone

[01:06:54] Yeah, no you hit the nail on the head and this happened to us

[01:06:58] quite a bit so I'm quite glad you caught it

[01:07:01] So for us the overarching

[01:07:04] Services buying milk right in a very distal in a manner

[01:07:09] So when there's a supply glut and I don't pay the farm with the right price because on the demands

[01:07:13] I don't have the right demand

[01:07:15] And

[01:07:16] The the farmer would get pissed and all my other six services hanging the same farm would fall by the way side

[01:07:20] The exactly what happened and that's one of the problems you're trying to solve for now

[01:07:24] How do I tough one?

[01:07:26] Relatively speaking. How do I solve for the supply demand in a way Greece

[01:07:31] How do I move away from a

[01:07:34] Supply forward pricing so that people don't look at it as milk purchase to more product backward pricing

[01:07:40] where it's you know governed by

[01:07:43] You know three-year contracts and

[01:07:45] It's sort of a consumer minus pricing rather than a supply-forward commodity, you know pricing right because commodity

[01:07:51] Pricing cycles are really very vicious. You get caught in a supply glut and then

[01:07:57] Your entire vertical integration stack collapses right because farmers are pissed off. They churn

[01:08:02] I'm not able to pay because on the demand side, I don't have the right you know price coming from the product

[01:08:07] And that's one of the key things that we're doing

[01:08:09] Right now exactly as you said

[01:08:11] How do I make it more accretive and continue to work rather than it doesn't collapse

[01:08:16] You kind of lock in prices and so I'm sure that you must try to remember that's what we do right now

[01:08:21] Contracts and futures. Yeah, so yeah, so what's the way to lock in prices is to

[01:08:27] convert

[01:08:28] The raw chill milk that we procure

[01:08:31] And all the cool chaining and all the hard work, you know that we do

[01:08:34] You convert into value added products. The minute you convert milk into money. It's no more milk

[01:08:40] Right then you get you price for money or not milk

[01:08:43] When you convert into cheese you price for cheese and not then

[01:08:46] The price for a puny cheese the eco

[01:08:50] Traceable milk

[01:08:52] Right people also buy traceable milk which is milk but not milk because they're paying the buying it for the traceability

[01:08:58] And not because it's it's milk right so in those cases you get governed by the three-year product backward pricing contracts

[01:09:05] Or rather the supply-forward pricing where on a supply glut

[01:09:08] You have beaten down saying that you might be the best guy in India

[01:09:12] best quality and

[01:09:14] Institutional honest, but then I'll pay you buck more

[01:09:18] But that buck more is not good enough for me to absorb my cost that I've deployed

[01:09:23] That's the issue with supply-forward pricing

[01:09:25] So what are the things that we're doing the next you know six to eight months and we're building towards an IPO right now is to

[01:09:33] Do get at least ensure that at least 90% of what we do is product backward pricing 10% risk

[01:09:40] I can take it support for you in a sort of a play

[01:09:43] And this will make a ensure that my vertically integrated stack is always on a positive spiral

[01:09:49] And as you said, it's not collapse at the minute one of the service you know screws up

[01:09:53] It could be lending right we also lend to these farmers because farmers need capital

[01:09:57] Banks don't lend to these farmers because they don't have any prior borrowing history

[01:10:02] Right, so we have a fintech arm where we where we actually lend to these farmers

[01:10:07] And I keep saying and the reason I lent to those farmers only then I can make good quality paneer

[01:10:11] But because I can actually the if I lend to the farm and the farm throughput improves. I can actually do antibiotic tests at the farm

[01:10:17] So as you can see why a good quality paneer warrants a fintech division right it's

[01:10:22] In a step back it looks like unrelated, but there's so quality of paneer and the fintech need is so tightly

[01:10:28] You know integrated into the in a supply chain, but if you to solve

[01:10:33] That's the big problem that we're trying to solve for right now

[01:10:36] How do I get from a product from a supply-forward pricing

[01:10:39] To a more stable, you know product backward pricing

[01:10:43] So that as you said my entire vertical integration stack should not collapse

[01:10:46] That's exactly what we try to solve for as we speak

[01:10:49] No, it's a complex challenge for sure. Yeah. Yeah. Yeah

[01:10:54] So one thing

[01:10:56] Well, I have two questions actually

[01:10:58] so

[01:10:59] First is on the financing itself right for you to be able to manage your own cash flows must be like heck over challenge

[01:11:07] Right because I would assume with with these FMCG folks or whatever you have certain credit cycles

[01:11:11] Yeah, then you have to pay the all the intermediaries in between yeah

[01:11:14] Then you have to pay the farmer yeah and so on and so forth

[01:11:17] Yeah, yeah, so your own financing might be like you know super complex

[01:11:23] Yeah

[01:11:24] You might need like financing more regularly than you know typical again, you know like a software tech starter

[01:11:30] Where you raise a bunch of money plan your 18 month cash burn and you know

[01:11:34] You ramp up or ramp down based on demand right. It's not so simple as such

[01:11:40] Um how do you think about that? Yeah, so the good thing and the bad thing about it. Okay one is

[01:11:46] um

[01:11:47] Initially, it needs some capital but once you start getting into a positive cash flow generation engine then

[01:11:53] um

[01:11:54] There's enough cash flowing because I said milk is pot and sold every single day

[01:11:59] Right you can't imagine a more annuity business right

[01:12:02] Um, we build our customers every five days

[01:12:05] Right five days

[01:12:07] And a lot of these customers are like cash and carry at say like

[01:12:11] Of course the larger players would opt to you and say

[01:12:13] I need a 10-day credit cycle 15-day credit cycle and all that right

[01:12:16] But the max

[01:12:18] Payable

[01:12:19] Receivable gap that we have put in our business spend 30 days

[01:12:22] And that's because when you deal with the Horeka segment

[01:12:25] Hotel restaurants and cafes people like Starbucks or the thing right?

[01:12:28] This is not it. Yeah, then then

[01:12:31] Cash and carry does not work yet and we don't have that

[01:12:34] You know kind of a

[01:12:36] Stature where you can say you pay me first everyone pretty much everyone works on credits

[01:12:40] Yeah, yeah, so so

[01:12:42] So why are we is that?

[01:12:43] So we need to deploy cash in three areas right one is the capex part where

[01:12:49] There is an infra component to what we do there's a cold chain there's IoT hardware

[01:12:53] um, and there's uh

[01:12:55] You know bunch of incremental capex that we need to deploy on the processing plant side

[01:12:59] um

[01:13:00] We sort of

[01:13:01] Take processing plants on lease and we owe you five them so that it can meet the export criteria and all of that right

[01:13:07] But for the oeification there is an incremental capex that is needed so a good portion of the

[01:13:14] Cash allocation goes towards capex on the capex we typically do one is to one debt equity

[01:13:19] It's a very debt-friendly business that way

[01:13:21] You don't have to eat up all the money from uh in equity because

[01:13:25] You're all the assets are sweated twice a day every single day throughout the year

[01:13:30] So to that extent it's relatively it's not like your setup of warehouse for bananas and only during banners season

[01:13:35] It's occupied and then

[01:13:37] Resurrectime is not there right so it's sort of every day utilization and assets. So

[01:13:42] capex is one area capital allocation

[01:13:45] One is to one debt equity second is working capital as you said um

[01:13:49] We typically follow anywhere between 50 to 30 day working capital and if if our

[01:13:54] Customer portfolio is cured more in terms of oreka then that goes up

[01:13:58] We try not to do that we have a good mix of

[01:14:01] You know cash and carry customers

[01:14:03] Some would have a 20-day credit cycle some would have 30 days

[01:14:06] But roughly I think between 20 to 30 days is what are um working capital

[01:14:11] So we need working capital for that we would take 80% from debt and 20% from equity

[01:14:16] And then there's also cash loss cash loss happens because

[01:14:19] When you're expanding it's a massive business that you can build

[01:14:24] And if you want to very thorough cash generation engine right

[01:14:28] Then you need scale at scale you get a lot of operating leverages

[01:14:31] Then you can get more farmers I can do more lending I can do more insurance and I can serve more

[01:14:36] Multitannent at customers and I can be multi-region

[01:14:39] Because Delhi needs money as much as Bangalore does

[01:14:42] Right in fact the other way Delhi consumes more

[01:14:44] Similarly to tier two tier three cities even cities like Mysore

[01:14:47] You know Tirupati and all these places consume enough of tary

[01:14:51] So for us to get enough operating leverage you need reasonable

[01:14:55] You know scale and which scale comes some cash loss because when you start

[01:14:59] You

[01:15:00] The utilization is not very high

[01:15:02] Your procurement network your coal chain is subutilized

[01:15:06] When you subutilized you have personal on the ground and your infrastructure on the ground there's a cash loss

[01:15:10] So typically when we expand then you expanded village

[01:15:13] We'll have a cash loss for about six months. So that needs to be funded

[01:15:16] Right the cash loss in expansion stage when you stop expanding and stabilize you don't need that cash loss

[01:15:21] So this is a three cash loss component where we need to deploy

[01:15:24] majority of it can be

[01:15:25] Deployed

[01:15:27] Can be funded through capex through debt right so it's sort of that we're debt-friendly business

[01:15:33] So so from an ROE perspective

[01:15:36] We are we can deliver 60 to 50 to 60% ROE

[01:15:41] Because the capital that you get through debt that is sort of helping us grow

[01:15:45] So ROC would be anywhere between 30 to 35% and ROE would be anywhere between 55 to 60%

[01:15:51] That we're able to deliver and demonstrate in our unit economics

[01:15:53] And it's a very strong cash generation engine every day

[01:15:57] I'm billing every day I'm getting cash

[01:15:59] And hence our focus is in the next 36 months

[01:16:04] Can I go to a place where I'm actually generating about 120 crores to 140 crores of

[01:16:08] Analyzed EBITDA cash a year

[01:16:11] And that gives us confidence that at that scale we should be able to list

[01:16:14] Right our thumb rule analysis is that if you're between

[01:16:17] You know 1700 to 2000 crores of top line and able to generate

[01:16:21] You know 120 to 140 crores of EBITDA cash

[01:16:25] On a percentage basis it might not look very

[01:16:27] You know glamorous. It'll be still about 9 to 10% EBITDA

[01:16:31] But in a real-sure cash that you're generating an accruing

[01:16:34] It's about 121 40 crores

[01:16:36] And that's something that would you know make us and still we are scratching the surface here

[01:16:40] Yeah, right?

[01:16:41] At a million liters

[01:16:43] Rochem that we would process

[01:16:44] We'd be still one by 600th of the market in India

[01:16:47] And you're not talking about exports

[01:16:49] We looked at exports also in a big way. Indian diaspora is very big

[01:16:52] I don't know if you know

[01:16:52] If you take all of the Indians you'll leave also in India

[01:16:55] That's about 281 million people

[01:16:56] So it's the fourth largest country you have

[01:16:59] India

[01:16:59] You know China

[01:17:01] US and then again India

[01:17:02] It's also the share of diaspora right

[01:17:04] So just imagine you get on Dubai or Singapore

[01:17:06] If you're able to get

[01:17:07] They seek out the wouldn't you take it because you would because

[01:17:10] Something that you

[01:17:11] Your

[01:17:12] Your

[01:17:13] You know born

[01:17:14] grown up on right

[01:17:15] So the idea is get to about 1077 to 2000 crores of top line get to about

[01:17:19] 121 40 crores per beta

[01:17:21] And then list

[01:17:22] So the idea is to get to that cash generation engine

[01:17:24] With the kind of capital allocation that I just mentioned

[01:17:27] You know a lot of these verticalized market places

[01:17:31] Right

[01:17:31] The typical

[01:17:33] You know where you have a platform matching supply and demand

[01:17:36] And you have a software component

[01:17:38] And you have financing and so on and so forth

[01:17:40] A lot of these folks have also

[01:17:42] Done their own labels

[01:17:44] Right I mean very crude example would be let's say Nika

[01:17:47] Right

[01:17:47] To be able to increase those margins and whatnot

[01:17:50] So can we expect like a

[01:17:53] Stellapse cheese or Stellapse

[01:17:55] Dairy product sometime in the future

[01:17:57] Yeah very tempting

[01:17:58] We think about it

[01:18:01] You know all the time

[01:18:03] I think earlier you asked a question

[01:18:05] What exactly integrated service so many things that you're doing

[01:18:07] One of the things that we need to get it right

[01:18:10] I'm not saying we got it perfect is the sequencing

[01:18:12] Right

[01:18:14] You're tempted to launch

[01:18:15] You know leverage the fixed cost

[01:18:17] All in one go

[01:18:19] And when you try to do that

[01:18:20] There's only so much limited management bandwidth

[01:18:23] That's only so much you can do

[01:18:24] So the idea is

[01:18:25] I think the sequencing and prioritization is very

[01:18:28] Very key

[01:18:29] I wish we had got it

[01:18:30] Better than what we have currently

[01:18:32] Where you need to go after

[01:18:36] DeCache cow literally

[01:18:37] The first service

[01:18:38] Right

[01:18:39] And then

[01:18:40] At the right time you unleash the other services

[01:18:43] In our case we might have unleashed far too many to early

[01:18:47] And which is what now we're trying to correct

[01:18:49] Right now we're saying

[01:18:51] Let me step on gas on the service

[01:18:53] Right which is the market linkage service

[01:18:54] When FMCG company

[01:18:56] And then get it hit the ball of the park there

[01:19:00] And then

[01:19:01] Where I'm muted I will amplify it

[01:19:04] So I think the sequencing is important

[01:19:05] So this part is pretty critical to respond

[01:19:07] Your question in terms of

[01:19:09] At some point

[01:19:10] If I'm sitting on enough cash flows

[01:19:13] Are there places where you can launch your own brand

[01:19:15] Possibly yes

[01:19:17] Mainly because we see that

[01:19:18] In tier one cities it's bloodbath for price

[01:19:21] You have the Britannia

[01:19:22] The ITC

[01:19:23] The Amazon fritters

[01:19:24] The Zammato

[01:19:24] The Swiggy

[01:19:25] All of them competing to launch your own private brand

[01:19:27] But then

[01:19:28] We were quite surprised to see that

[01:19:30] People do in tier two cities also to spend money

[01:19:33] To buy good product

[01:19:35] And I think

[01:19:37] As the discreasional income keeps going

[01:19:39] As the countries GDPs are growing

[01:19:42] You have enough money to

[01:19:43] Also buy experience

[01:19:44] You might actually walk out

[01:19:46] Even if you are in Mysore and buy

[01:19:48] Good ice cream from

[01:19:50] Connohous or one of those

[01:19:52] So we might

[01:19:52] Our thinking is currently

[01:19:54] If there is an unaddressed market

[01:19:55] Where the big brands are not

[01:19:58] Really looking at

[01:19:59] Maybe there is an opportunity

[01:20:00] Because we know best

[01:20:02] How to get the right

[01:20:03] In our recipes

[01:20:04] How to get the right

[01:20:05] Things going

[01:20:07] So you may not see

[01:20:08] So right now one of the things that we do

[01:20:10] As a step in that direction

[01:20:12] Is something called as house of brands

[01:20:13] Where in

[01:20:14] There are brands in Bangalore like

[01:20:16] Anambari brand

[01:20:17] Or

[01:20:18] Nil Giri

[01:20:19] Not that we would like to

[01:20:20] Love to talk to them

[01:20:21] Who are good brands

[01:20:22] In Bangalore

[01:20:23] But for them

[01:20:24] Dairy is still not a big

[01:20:25] Categories

[01:20:26] So we're telling them

[01:20:26] Hey look

[01:20:27] We've been in dairy for

[01:20:28] But we're half 13 years

[01:20:29] So we understand all about it

[01:20:31] I can actually help you propagate

[01:20:33] Your brand

[01:20:35] We don't want to

[01:20:36] Own the brand

[01:20:36] You own it

[01:20:37] But we'll take care of

[01:20:38] Launching your own way

[01:20:39] Yeah, because I know all the interesting products

[01:20:41] That I can do with milk

[01:20:43] Right from

[01:20:44] Putina Chas

[01:20:45] To and all of that

[01:20:46] And I'll help you do it

[01:20:47] Highly traceable

[01:20:48] And I know what will

[01:20:49] What will make

[01:20:50] Bangalore pay for it

[01:20:51] Because Bangalore likes good products

[01:20:53] They pay better for antibiotic

[01:20:55] You know, freestyle

[01:20:56] So I'll tell you what

[01:20:56] You need to pray

[01:20:57] So that's the closest we have gotten to

[01:20:59] That

[01:21:00] But never say never

[01:21:01] As I said it's a matter of sequencing

[01:21:03] At some point you might see

[01:21:05] In a mumarclable product

[01:21:07] In a teatocity like Kurg

[01:21:09] Come from or in in in Tirupati

[01:21:11] Or in a place where

[01:21:12] Because just because Britannia

[01:21:13] Is not focused on that mark

[01:21:15] And we know how to make the

[01:21:16] Unitechnomics work

[01:21:17] Because if can make

[01:21:18] The rural Unitechnomics

[01:21:20] Farmers facing Unitechnomics work

[01:21:21] Maybe I can make the Unitechnomics work

[01:21:23] In a teatocity

[01:21:24] Right so that's

[01:21:25] I would limited that

[01:21:26] But yeah, strongly on a radar

[01:21:28] Yeah

[01:21:29] No, when

[01:21:30] I think

[01:21:31] You know

[01:21:32] It's only natural

[01:21:33] You're sitting on a ton of data

[01:21:35] Yeah

[01:21:35] And expertise

[01:21:36] Yeah

[01:21:36] Right

[01:21:37] And uh

[01:21:38] Yeah

[01:21:38] And at this point

[01:21:39] You know you're

[01:21:40] You're not at the

[01:21:41] The highest margin

[01:21:43] Part of the value chain

[01:21:44] Exactly

[01:21:44] So

[01:21:45] So I think it seems like an eventuality

[01:21:47] That yeah

[01:21:47] Someday we will have like a

[01:21:49] Stellapse

[01:21:50] She's or a Chas

[01:21:51] Yeah

[01:21:52] Yeah

[01:21:53] Yeah

[01:21:53] And not to go off on a tangent or anything

[01:21:55] But you know people talk about

[01:21:57] Tear to tear three cities

[01:21:59] Post COVID

[01:22:00] The recovery in these places

[01:22:01] Were faster than

[01:22:02] You know

[01:22:03] Exactly one

[01:22:03] Yeah

[01:22:04] And if you look at

[01:22:05] Some of the monetization journeys

[01:22:07] Of a few of the startups and so on

[01:22:08] Focused at Tear to right

[01:22:10] Very promising

[01:22:11] Right people are paying for content

[01:22:13] Which is exactly

[01:22:14] You know you can't get people

[01:22:16] In Teo one to pay for content

[01:22:17] Yeah

[01:22:18] Yeah

[01:22:19] So I think there is definitely an appetite

[01:22:21] There is

[01:22:22] You know for anyone who's been to

[01:22:24] I mean I'm just

[01:22:25] Coming from a wedding in Puri

[01:22:27] Right

[01:22:28] Again Teo to tear three places

[01:22:30] You just look at the amount of

[01:22:33] Money they spend on weddings for instance

[01:22:34] Right

[01:22:35] Definitely

[01:22:36] A lot of money there

[01:22:37] Yeah

[01:22:38] And I think they're more value conscious

[01:22:40] Yeah I won't say they're more cost conscious

[01:22:41] They're more value-value conscious

[01:22:42] And another really anecdote

[01:22:44] Okay so we were

[01:22:45] One of our customers in Pune

[01:22:47] They wanted us to manufacture

[01:22:50] Gulab Jamun's for them

[01:22:51] A tin Gulab Jamun's

[01:22:53] Right

[01:22:53] They also had export license

[01:22:54] Potentially

[01:22:55] Exported

[01:22:56] At some point

[01:22:57] They got the demand estimate wrong

[01:22:58] They're sitting on

[01:22:59] You know tens of thousands of extra Gulab Jamun

[01:23:02] They said

[01:23:02] Can you guys figure out how to

[01:23:04] To market it

[01:23:05] And the good part is

[01:23:05] Tin Gulab Jamun's has a one-year shelf life

[01:23:07] Right

[01:23:08] So for us the immediate thought is

[01:23:09] Ideally with the

[01:23:10] You know a few million farmers

[01:23:12] Let me take it to my farmers

[01:23:13] A lot of skepticism even inside

[01:23:15] Even among my co-founder saying

[01:23:17] He'll look

[01:23:17] They're daily subsistence folks

[01:23:19] And you're trying to

[01:23:20] You know take Gulab Jamun

[01:23:22] And that became that just flew off the shelf

[01:23:24] Right

[01:23:24] We took it to the village

[01:23:26] Just sold it at a cost price plus level

[01:23:29] Because the idea was to recover the cost

[01:23:30] Not to make a ton of money

[01:23:31] Right

[01:23:31] And in fact when I visit some of the villages

[01:23:33] Even in really

[01:23:34] Remotery like Easton

[01:23:35] You peach and dolecha

[01:23:36] Any and all this

[01:23:37] One farmer called me said

[01:23:38] You call me since that said sir

[01:23:39] That day you sold it at a cost

[01:23:42] You're not getting it right now

[01:23:44] So you're right

[01:23:45] So we sort of write them off

[01:23:48] Very quickly

[01:23:48] But as you said

[01:23:49] Right is a bit

[01:23:50] You know poorie or bit

[01:23:52] Chania chantul chania

[01:23:54] If people get the right product

[01:23:56] The right price and the right value

[01:23:57] They do buy it

[01:23:58] And we sort of sit here

[01:23:59] And when we're understimate

[01:24:00] Thinking that only banglur can buy

[01:24:03] Whereas they can't

[01:24:03] Which is sort of not right

[01:24:05] So keys take hold

[01:24:06] And this entire ecosystem

[01:24:08] Is the cooperatives

[01:24:09] And the unions

[01:24:10] And what not

[01:24:11] Right

[01:24:11] And you know

[01:24:13] I would think that it's not a

[01:24:15] Very easy relationship

[01:24:17] Right

[01:24:18] Because obviously

[01:24:19] I mean there are some political considerations

[01:24:21] Exactly

[01:24:22] And so on

[01:24:22] So how do you operate with these folks

[01:24:24] Like

[01:24:25] I imagine you work with KMF also

[01:24:27] Right

[01:24:27] We do

[01:24:28] And then

[01:24:28] Yeah

[01:24:29] And perhaps an Amul co-op

[01:24:30] It's at Yavidu

[01:24:31] Yeah

[01:24:31] So how do you work with these folks

[01:24:33] Yeah

[01:24:33] So the two levels of

[01:24:35] It's sort of a low-height relationship

[01:24:36] A lot of times

[01:24:37] Right

[01:24:37] So

[01:24:38] A lot of times

[01:24:39] We

[01:24:40] On the tech side

[01:24:41] These cooperatives are our customers

[01:24:43] Because the kind of tech

[01:24:44] That we have developed

[01:24:45] Of the years

[01:24:46] We also license it

[01:24:47] To these cooperatives

[01:24:48] So they're the analogies

[01:24:51] AWS was developed

[01:24:52] By Amazon to power its commerce

[01:24:54] But people like you and I can license it today

[01:24:55] People like

[01:24:56] A competing platform

[01:24:57] Like a Mishok

[01:24:58] And also license it

[01:24:59] Similarly

[01:24:59] We have developed

[01:25:00] Our tech platform

[01:25:01] Of the last two and a half years

[01:25:03] 13 years

[01:25:04] To power our entire supply chain

[01:25:07] And I like to use

[01:25:08] Use a word

[01:25:09] Value chain more than supply chain

[01:25:10] Mainly because

[01:25:11] Supply chain connotes

[01:25:14] Trading relationship

[01:25:15] Whereas value chain

[01:25:15] You're also focused on

[01:25:17] Improving throughput

[01:25:18] And you know

[01:25:19] Other things

[01:25:19] So

[01:25:21] We developed this entire tech stack

[01:25:23] To power our own

[01:25:24] You know

[01:25:25] Value chain

[01:25:25] Slat supply chain

[01:25:26] But then we figured that

[01:25:27] I can immortalize the cost of our

[01:25:29] And you by licensing it to others

[01:25:30] So people like Amul, KMF

[01:25:33] Would be

[01:25:33] You know my surmilk union to

[01:25:35] Colour milk union

[01:25:36] There are customers on the tech

[01:25:37] You know site

[01:25:38] But when we run our own

[01:25:40] Captive supply chain

[01:25:41] To procure

[01:25:42] You know milk

[01:25:43] We land up also

[01:25:45] You know

[01:25:46] Looking at us

[01:25:47] In a not so friendly manner

[01:25:48] Because in the same village

[01:25:49] I'm

[01:25:50] You know buying

[01:25:51] You know milk

[01:25:51] But

[01:25:53] Colour milk union also buying milk

[01:25:55] There's a hey look

[01:25:56] I thought

[01:25:57] You're my supplier

[01:25:58] And buying tech

[01:25:59] And what are you doing

[01:26:00] You know

[01:26:00] Taking away my farmer

[01:26:01] Then we would say look

[01:26:03] Aren't you better of focusing on

[01:26:04] Improving a non-dene brand

[01:26:06] On the consumer side

[01:26:07] That's where money is

[01:26:08] And we'll power you

[01:26:10] But properties don't look at that

[01:26:11] For them

[01:26:12] The farm and the rural

[01:26:13] It's a base

[01:26:13] It's a base

[01:26:14] Right

[01:26:16] So

[01:26:17] One

[01:26:19] Right now

[01:26:19] Their skill is much massive

[01:26:21] So

[01:26:22] We haven't still

[01:26:23] You know got into the crosshairs

[01:26:24] But

[01:26:26] One of the things that we

[01:26:27] To keep the farmer

[01:26:28] On our side

[01:26:29] We try to give multiple services

[01:26:31] Right the Bangalore one concept

[01:26:33] Whereas

[01:26:34] These

[01:26:35] Large cooperatives are only

[01:26:36] Have a trading relationship

[01:26:38] And that relationship is not always very transparent

[01:26:40] These cooperatives are divided into

[01:26:42] Societies unions and federations

[01:26:45] And finally

[01:26:46] The unions who pay to the farmer

[01:26:48] Their visibility is limited to the

[01:26:49] Society level

[01:26:50] Which is

[01:26:51] The local operating entity at the village

[01:26:54] The society then

[01:26:55] Is an independent panel that manages the farmer

[01:26:57] Right so

[01:26:58] These union who disperses the money

[01:27:01] Does not have access and visibility

[01:27:02] Right up to the farmer level

[01:27:04] For us everything is direct

[01:27:05] You know with the farmer

[01:27:06] So things tend to be more transparent

[01:27:09] They know us

[01:27:10] We know them

[01:27:11] We

[01:27:11] You know send all our

[01:27:13] To a digital connection

[01:27:14] All the messages to them

[01:27:15] And to the Bangalore one concept

[01:27:17] Rendered multiple

[01:27:18] You know services to them

[01:27:19] So they

[01:27:19] So even which

[01:27:20] Even if we are not the biggest

[01:27:22] Paymaster

[01:27:23] The highest paymaster in the village

[01:27:25] Farmers will stick to us

[01:27:26] Because they get multiple other

[01:27:27] You know services

[01:27:29] And that's really very

[01:27:30] Important because

[01:27:31] A large play like an Amul Lauren Randri

[01:27:33] They are much

[01:27:34] You know bigger balance sheet

[01:27:35] And they can afford to

[01:27:37] You know go below the market rates

[01:27:39] And all of that

[01:27:40] Which we can't

[01:27:41] Right so

[01:27:42] We are always

[01:27:45] They're not the best paymaster in that village

[01:27:47] And farmers will stick to us

[01:27:48] Mainly because

[01:27:49] They know it's

[01:27:49] Buying milk is one aspect

[01:27:51] Of what we do

[01:27:52] There's so many other services

[01:27:53] That they get

[01:27:54] So they sort of

[01:27:55] You know stick to us

[01:27:56] That's one way in which

[01:27:57] We you know try to differentiate

[01:27:59] And two

[01:28:00] We try not

[01:28:01] Going into areas

[01:28:03] That has

[01:28:04] Huge amount of government subsidies

[01:28:05] For example

[01:28:06] Kanata Kazwan place

[01:28:07] Where Nandini gets a huge amount

[01:28:09] Of government subsidy

[01:28:10] Which is not true of

[01:28:11] Many other states

[01:28:12] About seven or eight states in India

[01:28:13] Where the state milk federation

[01:28:16] Received

[01:28:17] Subsidies from the state government

[01:28:19] Using taxpayers money to subsidize the farmer

[01:28:22] So we try to stay away

[01:28:23] From the clutches of

[01:28:25] Those districts and those villages

[01:28:27] Because they're set of headroom for growth even otherwise

[01:28:29] Just to give you a sense

[01:28:31] Thanks to the

[01:28:32] You know 70 years of

[01:28:33] Work that amulets done

[01:28:35] Through Dr.

[01:28:36] Vurgis Kuryan and all of them

[01:28:38] Even 25% of our milk is organized

[01:28:43] 75% is unorganized

[01:28:44] That means if you take a penalty average

[01:28:47] Right

[01:28:47] If you

[01:28:48] You know pick 100 villages

[01:28:50] 75 villages will not have organized milk procurement

[01:28:53] It's how the 25th is organized

[01:28:55] And to get to this 25% is taken

[01:28:57] 60-70 years

[01:28:58] Right

[01:28:59] Which is really

[01:28:59] Really a good work

[01:29:01] Visually food and vegetables and others

[01:29:03] In food and vegetables

[01:29:04] Less than 5% is organized

[01:29:06] Right here 25% is organized

[01:29:08] Thanks to the finally one

[01:29:09] When you say organized

[01:29:09] I mean you are talking about like

[01:29:11] Mundies and stuff like that

[01:29:12] Exactly

[01:29:12] Right here it's proper

[01:29:14] Village level society

[01:29:15] And all of that

[01:29:16] In other ways

[01:29:17] In food and vegetables

[01:29:17] It's just Monday based systems

[01:29:19] That are there

[01:29:19] So hence

[01:29:20] There's enough headroom

[01:29:22] For us to stay

[01:29:23] Away from

[01:29:25] These cooperatives

[01:29:26] Because there's enough unorganized

[01:29:28] Patches

[01:29:29] In a village or in a district that we enter

[01:29:31] And two

[01:29:32] Avoid

[01:29:33] States where which is heavily subsidized

[01:29:35] And out of the 20s

[01:29:36] In the 27-odd states

[01:29:38] Only 7 of them has that subsidy

[01:29:40] And three make sure that

[01:29:41] You don't have to compute only on price

[01:29:43] You ensure that it's a platform approach

[01:29:44] It's a Bangalore 1 type of an approach

[01:29:46] Where farmers get

[01:29:47] You know multiple services

[01:29:48] So that's what we sort of deal with this

[01:29:49] You know situation

[01:29:50] So you mentioned prepping for an IPO right

[01:29:53] Sometime in the next 36 months

[01:29:54] Yeah

[01:29:56] What are the various things that

[01:29:57] Goes into prepping for an IPO

[01:29:59] I mean I would imagine

[01:30:01] Improving margins

[01:30:03] Streamlining

[01:30:04] Streamlining your operations

[01:30:04] Getting the story right

[01:30:06] Right

[01:30:07] Because obviously pitching it to

[01:30:09] The biggest

[01:30:10] Of the ground on the street

[01:30:11] Needs to get right

[01:30:12] You need to get all of those things

[01:30:13] Right

[01:30:13] Could you talk about like two or three things

[01:30:15] That you're doing in preparation

[01:30:17] Yeah

[01:30:17] The first and foremost is

[01:30:19] As I said

[01:30:19] Get most table margins

[01:30:21] We should be on

[01:30:23] Sort of a trajectory where

[01:30:25] Margin stabilizes and every quarter and quarter

[01:30:29] We should be able to show

[01:30:30] At least a 50 hundred bips improvement

[01:30:32] In our net margins

[01:30:35] Yeah

[01:30:35] So that's one fundamental thing

[01:30:37] That you know

[01:30:37] We're working on

[01:30:38] You know right now

[01:30:39] Stable and expand those

[01:30:41] You know margins

[01:30:42] So that

[01:30:43] For us

[01:30:43] The journey doesn't end at listing

[01:30:45] Right

[01:30:45] The journey is

[01:30:47] Post listing

[01:30:47] How do you continue to show robust

[01:30:49] You know growth

[01:30:51] Right

[01:30:51] So the idea is that is one

[01:30:52] And two

[01:30:53] From a risk mitigation point

[01:30:55] If you have a sort of

[01:30:58] Portfolio approach

[01:30:59] So that as you said

[01:31:02] Because of some reason

[01:31:04] The Horacca segment

[01:31:05] Something happens

[01:31:07] Or the

[01:31:09] Export channel

[01:31:10] Something happens

[01:31:11] Government says tomorrow

[01:31:12] Bands

[01:31:13] Saying that all milk

[01:31:14] Band from India

[01:31:15] Because

[01:31:16] We need to get proteins

[01:31:17] Protein sufficient first

[01:31:19] So you need to have

[01:31:20] Multiple market off-take channels

[01:31:24] So it's very tempting to say

[01:31:25] Stay focused and focus on one channel

[01:31:27] Like the house of brands

[01:31:29] Or the Horacca

[01:31:29] Or the

[01:31:30] Contract manufacturing for Britannia

[01:31:33] Ready as market off-take

[01:31:34] We believe that risk mitigation

[01:31:36] Means you have multiple channels

[01:31:38] Even if at the cost of

[01:31:40] We having to really stretch

[01:31:41] And manage those channels

[01:31:42] That's in

[01:31:44] Risk

[01:31:44] Mitigation outweighs

[01:31:46] You know focus on one or two

[01:31:47] In a chance

[01:31:48] Should become supportful approach

[01:31:49] So that's the second thing

[01:31:50] You know that we are doing

[01:31:52] A third and most important

[01:31:53] As you mentioned

[01:31:55] That was very perceptive

[01:31:56] That you caught some of those

[01:31:59] You just can't have one service

[01:32:01] Suddenly you know bleed you to death

[01:32:02] Right it has to work

[01:32:04] And for that what we need to do is

[01:32:05] We need to have early warning systems

[01:32:07] That quarterly

[01:32:08] We're able to look at and say

[01:32:10] Among all the services

[01:32:11] And cash flows that we're doing

[01:32:13] Which one is

[01:32:15] Are we doing as planned

[01:32:17] If there's a stop loss

[01:32:19] When do you pull the trigger

[01:32:20] On those services

[01:32:23] When do you put your foot on the pedal

[01:32:25] So that we need to define

[01:32:27] Those early warning systems

[01:32:29] Typically focusing on

[01:32:31] The financial metrics

[01:32:32] In terms of cost

[01:32:33] In terms of people

[01:32:34] In terms of efficiency

[01:32:35] In terms of

[01:32:37] If I estimated x working capital

[01:32:39] Is it really x working capital

[01:32:41] If I estimated

[01:32:42] 25 days

[01:32:43] My payable receivable time

[01:32:44] Is it really 25 days

[01:32:46] Or is it 30 days

[01:32:47] That five day or a million

[01:32:47] It can be a lot of money

[01:32:50] Developing those early warning systems

[01:32:51] And dashboards

[01:32:53] Where you're entering multiple services

[01:32:55] To multiple stakeholders

[01:32:57] Because your day to day monitoring

[01:32:58] Should be a very simple set of four five levers

[01:33:01] When you wake up in the morning

[01:33:03] I just look at four metric

[01:33:05] And I should know between yesterday

[01:33:07] To today

[01:33:07] As is metric improved

[01:33:08] Or as it's sort of gone down

[01:33:10] Which is especially true in this

[01:33:12] Milk and dairy kind of a use case

[01:33:13] Because it's a daily velocity

[01:33:15] Daily moving

[01:33:15] Correct part

[01:33:16] I'm not just waiting for

[01:33:18] March April for harvest

[01:33:19] And then September for sewing

[01:33:21] Kind of stuff

[01:33:22] Daily sewing

[01:33:23] Daily harvesting

[01:33:24] Daily selling

[01:33:25] And daily billing

[01:33:25] And daily payment to the farmers

[01:33:27] So this kind of

[01:33:29] Early warning system

[01:33:30] And stop loss

[01:33:31] In a mechanism would help

[01:33:33] You don't realize retrospectively

[01:33:35] Oh my god

[01:33:35] This particular service

[01:33:36] I've already lost 10 million

[01:33:37] And my cash reserves are this

[01:33:39] And I can't recover those

[01:33:40] Cash losses

[01:33:42] And the fourth one

[01:33:43] Is the governance models

[01:33:45] And reporting systems

[01:33:47] That way I think

[01:33:48] We've been doing quite all right

[01:33:50] Relatively speaking

[01:33:51] When a half years into it

[01:33:53] Are internal IT systems

[01:33:54] And all that

[01:33:55] In reasonable shape

[01:33:56] I wouldn't say in the best of shape

[01:33:57] So we get good

[01:33:59] You know pat on the back

[01:34:00] When some of the investors

[01:34:01] Do are due diligence

[01:34:01] And say hey look

[01:34:02] Visavee

[01:34:03] A traditional startup

[01:34:05] Some of your

[01:34:07] System maturities are quite reasonable

[01:34:09] But we can't understand that

[01:34:11] I think as we build towards

[01:34:12] And I feel these

[01:34:13] Governance models, reporting systems

[01:34:15] And tools need to get

[01:34:17] A little more

[01:34:17] You know, well oil

[01:34:18] It could be an internal ERP

[01:34:19] It could be the

[01:34:20] MISs that we generate

[01:34:22] You know for our investors

[01:34:23] Those needs to get a little more well oil

[01:34:25] So these are the four things

[01:34:26] That you know

[01:34:27] We would focus on as we build towards

[01:34:29] The IPO

[01:34:30] And you know

[01:34:31] Again it could be

[01:34:34] You know more of an emotional thing

[01:34:35] But why an IPO

[01:34:37] You know

[01:34:38] Why not stay private for longer

[01:34:40] Yeah

[01:34:41] Right

[01:34:42] And perhaps a crewmo value

[01:34:44] And listed at a much bigger valuation

[01:34:46] I had a point

[01:34:47] Why go IPO

[01:34:49] Relatively early in your journey

[01:34:50] Because it seems like

[01:34:52] In more ways than one

[01:34:54] I mean you are just getting started on your business

[01:34:56] Right

[01:34:57] So yeah

[01:34:58] Why go IPO

[01:34:59] Yeah so

[01:35:00] Multiple ways to look at

[01:35:02] If you really look at

[01:35:03] Maybe about 4,000 funded companies

[01:35:05] listed on our

[01:35:06] You know stock exchange

[01:35:08] There are only about 25%

[01:35:10] Or about 900 of them

[01:35:11] What about 2000 crores

[01:35:14] So which means that

[01:35:15] In 36 months

[01:35:17] And do remember

[01:35:18] We are building on top of

[01:35:20] The work that you have done over the last

[01:35:21] You know 13 years

[01:35:22] So

[01:35:23] It's not like today

[01:35:24] I am able to talk

[01:35:26] To the head of foods

[01:35:27] At ITC

[01:35:29] Mainly because he doesn't

[01:35:30] He recognizes as a player

[01:35:32] To reckon with

[01:35:33] Over the last 13 years

[01:35:35] Have the gumption

[01:35:36] To talk to the head of nutrition

[01:35:37] At Unilever

[01:35:38] They talked was

[01:35:38] Because they know in India

[01:35:39] They have to make a mark

[01:35:40] In a daily velocity nutrition product

[01:35:42] They have to work with us

[01:35:44] So the idea is

[01:35:46] It's

[01:35:46] We've been in the space

[01:35:48] Operationally

[01:35:49] It's just that

[01:35:50] We're just changing the way we

[01:35:52] You know pricing things

[01:35:53] We're changing the way

[01:35:54] We

[01:35:55] You know look at milk

[01:35:55] Not milk as milk

[01:35:56] But milk as value added products

[01:35:58] So to that extent

[01:36:00] It's about

[01:36:01] You know getting

[01:36:03] Some of our acts right

[01:36:04] Rather than finding a new act

[01:36:06] To go to IPO

[01:36:07] Right

[01:36:08] And for us

[01:36:09] Given the volume

[01:36:10] That we're seeing

[01:36:11] Like FI23

[01:36:13] We ended the financial

[01:36:14] At about 300 crores

[01:36:15] Of revenue

[01:36:17] And we were a bit positive

[01:36:18] In Q3Q4 of FI23

[01:36:21] FI24

[01:36:22] Since the focus was more on margins

[01:36:24] We probably end the year at about 500 crores

[01:36:26] And the reason why we only grow one and a half

[01:36:27] X

[01:36:29] Is mainly because

[01:36:30] We focus more on margin expansion

[01:36:32] Otherwise you would have been

[01:36:33] At maybe 700 crores

[01:36:35] You know close to

[01:36:36] Because we could do it to X

[01:36:38] From 300 crore to 200.5 X easily

[01:36:40] So from a sort of a

[01:36:42] Find it crore

[01:36:43] Revenue not even revenue run rate

[01:36:45] Analyze revenue

[01:36:47] To grow to 4x

[01:36:48] A in 3 years to about 2000 crores

[01:36:51] And become

[01:36:52] From a top-line perspective

[01:36:53] A top 25% of the listed companies

[01:36:55] I think it's a doable

[01:36:57] You know part

[01:36:58] But

[01:36:58] Along the chain

[01:37:00] If someone like an Amazon fresh comes

[01:37:01] And say hey look

[01:37:03] I would like to acquire you

[01:37:04] We'd be open to those

[01:37:06] You know discussions

[01:37:07] But we think

[01:37:08] Given that we'll be at a reasonable scale

[01:37:10] In the top 25% of the listed companies

[01:37:13] And since we are already at about 500 crores

[01:37:15] And we've shown what it takes to go a beta positive

[01:37:18] You know the focus is on improve the

[01:37:19] Depita, improve cash flows and all of that

[01:37:21] We think

[01:37:22] We are in a good place

[01:37:25] To build from your

[01:37:26] Towards an IPO

[01:37:27] If I'm solving for the other

[01:37:29] You know for

[01:37:30] In a problem

[01:37:31] It's also function of the market

[01:37:32] Situation at that point in time

[01:37:35] The analyst narrative as you said

[01:37:37] How do I get the analyst narrative

[01:37:39] Can

[01:37:39] I think as I said

[01:37:40] A digital food value chain platform

[01:37:43] Or a digital diary

[01:37:44] There's something that people understand

[01:37:46] Like commerce versus e-commerce

[01:37:48] The e-mains digital

[01:37:49] Like a digital

[01:37:51] Dary or a digital food value chain platform

[01:37:53] So that's sort of our thinking

[01:37:55] You know right now

[01:37:56] Given the scale and given the margins

[01:37:57] That we are seeing in front of us

[01:37:59] Right

[01:38:00] Yeah

[01:38:00] And

[01:38:01] You know we've seen this

[01:38:02] With some of the stocks that have listed

[01:38:03] The tech startup stocks

[01:38:05] That have listed as well

[01:38:07] Right

[01:38:07] The IPO journey imputes a certain sense of discipline

[01:38:10] As well in terms of how our business is run

[01:38:13] Right so

[01:38:14] So yeah

[01:38:15] There's just a lot more to

[01:38:18] You know going IPO than just simply raising capital

[01:38:20] Of course

[01:38:21] Yeah

[01:38:21] Yeah

[01:38:21] I mean

[01:38:22] There's a

[01:38:23] Putting the governance model in place

[01:38:25] Putting the reporting

[01:38:26] Mechanisms in place

[01:38:28] You know making it

[01:38:29] Making things

[01:38:31] You know

[01:38:32] Less interesting

[01:38:33] Less innovative and more boring

[01:38:35] Right

[01:38:35] That's

[01:38:36] So that it sort of runs like a well-oiled

[01:38:38] Sort of machinery

[01:38:39] More predictable

[01:38:40] More predictable

[01:38:41] More stable

[01:38:43] Because we

[01:38:44] Guys who are

[01:38:46] You know

[01:38:46] Focused on as you said

[01:38:48] How do you

[01:38:49] I

[01:38:49] More innovative

[01:38:51] Technology and folks

[01:38:52] We keep trying to

[01:38:54] Tweak on the innovation front

[01:38:55] So you need to curb your

[01:38:57] Enthusiasm to

[01:38:58] Further innovate

[01:38:59] Right

[01:39:00] The ideas can I

[01:39:01] When you wake up in the morning

[01:39:03] The focus on what not to do

[01:39:04] Rather than what to do

[01:39:05] Right

[01:39:07] So that's what we are attempting to do

[01:39:09] Build and you hit the nail on the head

[01:39:11] It's about discipline

[01:39:12] Right how do you get to that

[01:39:13] Discipline to

[01:39:14] You know focus on reporting

[01:39:16] Focus on

[01:39:17] Making things more

[01:39:19] Stable

[01:39:20] Making things more

[01:39:21] Predictible

[01:39:23] Which would invariably mean making things more boring

[01:39:26] So that's what we're sort of

[01:39:27] You know working towards

[01:39:29] Our own mindset needs change

[01:39:30] I can't wake up and

[01:39:31] Cowboy style

[01:39:33] Do another one

[01:39:34] Another

[01:39:35] Interesting thing

[01:39:36] Very tempting because

[01:39:37] Every day you're exposed so many things

[01:39:39] You find something that can get you

[01:39:41] Three four percent more abit

[01:39:43] Then you say hey let's

[01:39:44] Sort of do it but then

[01:39:45] I know that the minute you touch that

[01:39:47] There's some other well-loyal thing

[01:39:48] That might you know suffer

[01:39:50] So that's sort of the balance

[01:39:51] I'm not really good at it

[01:39:52] So that's why

[01:39:53] I need people around me

[01:39:54] You know who would

[01:39:55] Slow me down on some of those answers

[01:39:57] The markets impute that

[01:39:58] I mean because no matter who you are

[01:40:00] Right it does that quarters a quarter

[01:40:02] That mentality

[01:40:03] Yeah

[01:40:04] Right and

[01:40:05] They're not very kind to too many of these

[01:40:07] Experiments and whatnot

[01:40:08] Exactly

[01:40:08] Typical startup

[01:40:10] Corpability is

[01:40:11] May not

[01:40:12] You know ogge your well with that

[01:40:13] Right

[01:40:13] I think that hey

[01:40:14] You know

[01:40:15] You have to take these risks

[01:40:16] And you have to do something

[01:40:18] Wild and crazy and innovative

[01:40:20] But at the same time

[01:40:20] It's a fine balance

[01:40:22] At the end of the day

[01:40:22] To say that hey this is a business

[01:40:24] And you have a responsibility towards

[01:40:25] Your exactly

[01:40:26] You need to you need to convert it

[01:40:28] Into a cash generation machine

[01:40:29] Correct

[01:40:29] To a part of it

[01:40:30] Yeah

[01:40:31] Other part

[01:40:32] You could still continue to innovate

[01:40:34] Right

[01:40:34] So like

[01:40:35] The way you know

[01:40:36] Amazon goes about it

[01:40:38] Keep saying it's a day one at Amazon

[01:40:40] Yeah

[01:40:41] It sort of in

[01:40:42] In us

[01:40:43] As you know startup founders

[01:40:45] You might have experienced

[01:40:46] It's that innovation

[01:40:47] And doing something new

[01:40:48] And tinkering away

[01:40:49] It's always there in our

[01:40:50] You know blood

[01:40:51] So the idea is

[01:40:53] As you said

[01:40:53] As you quoted

[01:40:54] You know

[01:40:55] Money is subravolved

[01:40:56] Have enough people around you

[01:40:57] Who can you know slow you down

[01:40:58] And say hey look

[01:41:00] Let's bore things down

[01:41:02] And and generate cash

[01:41:03] And then

[01:41:04] Under the under the hood

[01:41:05] You might still continue to innovate

[01:41:07] So maybe

[01:41:09] 5-10% of your bandwidth

[01:41:10] Would be continuing to innovate

[01:41:11] Which would secure your future

[01:41:13] Right

[01:41:13] But your present is all about making things more boring

[01:41:16] Wow

[01:41:16] This has been a fascinating conversation

[01:41:18] We have uncovered

[01:41:19] Like many many nuances

[01:41:21] And I certainly can

[01:41:23] You know

[01:41:24] Talk plenty more

[01:41:26] To you about this

[01:41:27] It's amazing

[01:41:29] But I'm sure that

[01:41:31] Obviously we're

[01:41:32] Like

[01:41:33] Twice over the time budgeted

[01:41:35] And yeah

[01:41:35] Obviously

[01:41:36] Obviously

[01:41:37] Yeah

[01:41:38] Exactly

[01:41:39] As you said

[01:41:39] That very finally

[01:41:40] Saying this guy talks too much

[01:41:41] So

[01:41:42] Absolutely not

[01:41:43] I mean

[01:41:43] So

[01:41:45] This is certainly not the first

[01:41:46] I mean

[01:41:47] This is not the last conversation

[01:41:48] We're going to have

[01:41:48] I'm sure that

[01:41:49] You don't do follow ups

[01:41:50] Right

[01:41:51] But I want one last

[01:41:53] Response from you

[01:41:54] And think of it as a clarion call for

[01:41:56] You know

[01:41:57] Entrepreneurs who want to look beyond

[01:41:59] Let's say the

[01:42:00] Cool and sexy

[01:42:01] Fintech idea

[01:42:02] Or the SaaS idea

[01:42:03] Not to say that

[01:42:04] You know

[01:42:04] I mean

[01:42:05] There aren't

[01:42:05] You know

[01:42:06] Challenging problems

[01:42:07] Or compelling problems to solve in that domain

[01:42:09] Yeah

[01:42:09] I am from the SaaS world

[01:42:11] Yeah

[01:42:11] Right

[01:42:11] So

[01:42:12] But

[01:42:14] If you were to talk to those folks

[01:42:15] We're looking beyond these

[01:42:17] Domains

[01:42:17] Yeah

[01:42:18] Fintech, SaaS, consumer, etc

[01:42:19] Yeah

[01:42:20] And looking at something

[01:42:21] Like what you are doing

[01:42:22] Like a verticalized marketplace

[01:42:24] In an unorganized sector

[01:42:25] Right

[01:42:26] What would your advice do

[01:42:28] This entrepreneur

[01:42:29] Or want to be entrepreneur

[01:42:30] Be

[01:42:31] Yeah

[01:42:31] So

[01:42:32] Something that I've realized

[01:42:33] Right

[01:42:33] I wish

[01:42:35] Someone

[01:42:35] I had this wisdom

[01:42:37] And I had much lesser

[01:42:38] Grey hairs

[01:42:39] So

[01:42:41] I think a lot of

[01:42:43] You know startup success

[01:42:45] That I've learned

[01:42:46] What time

[01:42:47] Is on

[01:42:47] How you sort of execute

[01:42:49] Right

[01:42:50] Not necessarily

[01:42:51] On the

[01:42:52] Innovativeness of the idea itself

[01:42:54] Right

[01:42:54] And today in this

[01:42:56] The internet world

[01:42:57] In this chat GPT era

[01:43:01] LLM

[01:43:01] And all of that

[01:43:03] Ideas are

[01:43:04] Important

[01:43:05] But I wouldn't call it

[01:43:07] Diamond doesn't

[01:43:07] But ideas are there

[01:43:08] Right

[01:43:09] If you got the idea

[01:43:10] To diamond get it 10 days from now

[01:43:12] So I think it's about execution

[01:43:14] Right

[01:43:15] If you can

[01:43:16] Focus on

[01:43:18] Not just

[01:43:19] How do I

[01:43:20] Get something done

[01:43:21] In a year's time

[01:43:23] It has a

[01:43:23] War impact

[01:43:24] But how do I execute

[01:43:26] Over a you know five year 10 year window

[01:43:28] Right

[01:43:29] That's I think very critical

[01:43:31] The importance of execution

[01:43:34] Head of

[01:43:35] Innovation

[01:43:37] Again, I'm not dismissive about innovation

[01:43:39] Or great ideas that are important

[01:43:40] But

[01:43:41] I think if you're only banking on innovation

[01:43:43] And great ideas

[01:43:45] And

[01:43:46] Execution is not even on your radar

[01:43:48] Then I think

[01:43:49] Within a year or two

[01:43:50] You might have your own bright spots

[01:43:52] But I may not be sustainable over a period of time

[01:43:54] Right so that's one thing that

[01:43:55] I think on that point

[01:43:57] I mean conventional advice

[01:43:59] Is that you have to build something

[01:44:02] Completely unique

[01:44:03] That is 10 x 100 x better than the status quo

[01:44:08] But what I've realized from talking a lot of folks

[01:44:11] Is that the 10 x and 100 x

[01:44:13] You don't have the perspective to build that on day one

[01:44:15] Yeah

[01:44:16] Yeah

[01:44:16] Absolutely

[01:44:16] So that's I think it's about

[01:44:18] Yeah

[01:44:18] Day one you have to just

[01:44:19] Like get in the weeds

[01:44:21] Like learn of your ecosystem

[01:44:23] Figure out the market

[01:44:24] Figure out the stakeholders

[01:44:25] Exactly

[01:44:26] And earn the right to build something

[01:44:28] Which is 10 x or 100 x

[01:44:29] Or 20 x or 30 x

[01:44:30] Absolutely

[01:44:31] Absolutely

[01:44:31] So the other way to look at it

[01:44:32] A Russian is that

[01:44:35] People say

[01:44:36] One in 10 or one in 21 and 30

[01:44:38] I don't know what's the number

[01:44:39] Startups

[01:44:40] Suction and remaining fail rate

[01:44:42] But I think it's

[01:44:43] The other way to look at it

[01:44:45] I think any idea can be made to

[01:44:47] Make to

[01:44:47] Suction

[01:44:48] If you focus on

[01:44:50] How to make it successful

[01:44:51] Rather than if it will be successful

[01:44:53] Right

[01:44:53] It's another way of execution

[01:44:55] So in frame

[01:44:55] It's not about all the ideas that I've failed

[01:44:58] Because the idea is so bad

[01:44:59] Of course in some cases it could be

[01:45:01] But majority of the cases

[01:45:02] I think

[01:45:05] And you're not going to be hung upon

[01:45:07] That idea

[01:45:07] You're going to come

[01:45:08] Want to duplicate

[01:45:09] Fine tune it

[01:45:10] Take a turn here

[01:45:12] Pivots and mini pivots

[01:45:14] What are pivots and mini pivots

[01:45:15] You're basically trying to say

[01:45:17] How to make it sort of work

[01:45:21] So if you have that

[01:45:22] That means it's execution

[01:45:23] Right

[01:45:25] You're not sort of

[01:45:26] Jumping from

[01:45:26] It's not about jumping

[01:45:27] From one innovative idea to the other

[01:45:29] It's about okay

[01:45:30] You had a flash in the pan

[01:45:31] You got an idea

[01:45:32] And then it's about

[01:45:33] How do I

[01:45:34] Turn it to this way

[01:45:35] We get to this way

[01:45:36] Might take a few years

[01:45:38] Where to do that

[01:45:38] So that's the other way to look at it

[01:45:40] Execution means

[01:45:42] Several

[01:45:42] You know pivots and mini pivots

[01:45:44] You may not get it

[01:45:44] You may not have your

[01:45:46] You know what's a moment

[01:45:47] All the time

[01:45:48] For every idea that's always a counter idea

[01:45:50] But then ideas you're looking at the predominant parts

[01:45:53] Right

[01:45:53] You're not looking at that one in 20 that succeeded

[01:45:56] Also looking why the other 19

[01:45:58] Didn't work

[01:45:59] Right so it's

[01:45:59] That's where the execution

[01:46:01] You know comes up

[01:46:01] That's where

[01:46:03] The ability to

[01:46:05] You know

[01:46:05] Do the road boring work

[01:46:08] And the notion of compounding

[01:46:10] And all that sort of

[01:46:12] So you're right

[01:46:13] So it's a matter of

[01:46:14] How do you

[01:46:15] Convert a problem into

[01:46:16] How do I make it successful

[01:46:18] Rather than

[01:46:19] Whether it will be successful or not

[01:46:20] Yeah

[01:46:21] Sorry I interrupted you

[01:46:22] I mean you were

[01:46:23] Talking about like what entrepreneurs should do

[01:46:25] Right

[01:46:26] Yeah so execution

[01:46:27] Obviously

[01:46:28] Is on

[01:46:29] You know really on top

[01:46:30] That's number one

[01:46:31] And to

[01:46:32] It might sound a little cliché

[01:46:34] But

[01:46:35] Given of time

[01:46:36] It you may

[01:46:36] You might have

[01:46:37] Startups around you hitting the ball out of the park

[01:46:40] Every two years, three years

[01:46:42] But there are certain problems that might fascinate you

[01:46:45] That might take

[01:46:46] Maybe a 10 years

[01:46:47] To solve

[01:46:48] Right or a seven, eight years to solve

[01:46:50] It could even be the space tech area

[01:46:52] It could be

[01:46:53] In

[01:46:54] Yeah I don't know how long

[01:46:55] You know Tesla took

[01:46:56] Before it hit the ball at the park

[01:46:57] When people like Amazon

[01:46:58] Right

[01:46:59] It's not like

[01:47:00] They hit the ball at the park in three years

[01:47:02] Right

[01:47:02] I think they turn

[01:47:03] A bit of a positive after 12 years of operations or something

[01:47:06] So that is given of time

[01:47:07] So when you jump into it

[01:47:10] Don't jump into it

[01:47:11] Thinking that

[01:47:12] There's a glamour at the other end of the third year

[01:47:15] Right

[01:47:15] It could be

[01:47:16] No glamour at all

[01:47:17] But you have to stick with it

[01:47:18] For 10 years to sort of

[01:47:20] You know make it work

[01:47:21] So give enough time

[01:47:23] Three or five year

[01:47:24] For someone right out of college at 22

[01:47:27] Three years looks like a long time

[01:47:28] But from a business buildout perspective

[01:47:32] Especially a problem that you fascinated with

[01:47:34] And may not be

[01:47:36] You might be lucky

[01:47:37] I wish I was

[01:47:38] If you come up with an angry bird's idea

[01:47:40] You're good

[01:47:40] Right within six months

[01:47:42] If you come up with the tick-tock idea

[01:47:44] It's good

[01:47:44] If you came up with

[01:47:46] Any of those ideas that

[01:47:47] Full of the ground in six months

[01:47:49] I didn't want to say crypto

[01:47:50] Which is

[01:47:51] Which would have been the case

[01:47:52] But

[01:47:54] There are such ideas as well

[01:47:55] But then

[01:47:55] You're banking on

[01:47:57] Those one-off cases where

[01:47:58] You get the timing and everything right

[01:48:00] Yeah

[01:48:01] You may not get everything right

[01:48:03] If you're lucky

[01:48:04] And I would want to be one of them as well

[01:48:06] But

[01:48:06] That's not the case

[01:48:07] If you're banking on

[01:48:09] You know a cause effect

[01:48:10] Kind of a scenario

[01:48:11] Where you're putting in a hard work

[01:48:12] And you have a reasonable idea

[01:48:14] Then it's about giving yourself

[01:48:15] That ten-year window

[01:48:18] To get to some

[01:48:19] Assemblance of

[01:48:21] Cash generation

[01:48:22] You know engine

[01:48:23] So execution

[01:48:24] Given of

[01:48:25] You know sort of time

[01:48:28] I think we touched upon it briefly

[01:48:31] Don't look at it only from a software point of

[01:48:33] You don't look at it from

[01:48:34] You know what is very glamorous point of view

[01:48:37] It might involve

[01:48:39] Some hardware

[01:48:39] It might involve

[01:48:40] Some mechanical engineering part

[01:48:42] It might involve

[01:48:43] Cow and

[01:48:44] Not so

[01:48:45] Fascinating things

[01:48:46] But

[01:48:47] If you're looking at solving the problem

[01:48:50] Don't just go with

[01:48:51] You know something that's

[01:48:53] Very glamorous

[01:48:54] You might have to

[01:48:55] Also touch a few things

[01:48:57] That may not be very

[01:48:58] You know glamorous

[01:48:59] So I think then you're all

[01:49:00] You know set your success

[01:49:01] Stay long enough that

[01:49:03] You become a right person at the right place

[01:49:05] With the right

[01:49:05] Exactly

[01:49:07] Exactly

[01:49:07] So

[01:49:08] Exactly

[01:49:09] Yeah

[01:49:09] Yeah

[01:49:10] All right

[01:49:11] This was

[01:49:12] Like a super enjoyable

[01:49:13] Conversation with

[01:49:14] Like one of the best we've had on the podcast

[01:49:17] Thank you so much

[01:49:18] You know for being on the podcast

[01:49:19] For sharing your wisdom

[01:49:20] And inspiring

[01:49:21] You know a lot of people

[01:49:23] With this

[01:49:23] Yeah

[01:49:24] So hopefully

[01:49:25] Hopefully we'll do

[01:49:26] A

[01:49:26] Conversation two and a conversation three

[01:49:28] Yeah absolutely

[01:49:29] I loved and enjoyed it

[01:49:30] I didn't

[01:49:30] I feel like

[01:49:32] A formal candidate was good

[01:49:33] Like

[01:49:34] The only thing missing was

[01:49:35] Probably a beard

[01:49:36] Yeah right

[01:49:37] And then

[01:49:38] In a shadow

[01:49:38] And equations are very insightful

[01:49:40] And I was

[01:49:42] At time surprised that you're asking

[01:49:44] You know questions

[01:49:45] That are so

[01:49:46] You know pertinent

[01:49:47] Right

[01:49:48] So either you're done a lot of homework or

[01:49:51] You're one of those

[01:49:51] You know geniuses who

[01:49:53] Because of your experience

[01:49:55] You know

[01:49:55] I'm having to ask those right

[01:49:56] Absolutely

[01:49:57] A lot of genius

[01:49:57] It's just a matter of experience

[01:49:59] I suppose

[01:49:59] And I mean

[01:50:01] I would love to take credit for all of this

[01:50:03] But then I mean

[01:50:04] It's all you

[01:50:04] Right

[01:50:05] I mean you have all of these

[01:50:07] nuances

[01:50:09] I was just so fascinating

[01:50:10] You know

[01:50:10] I mean I could really think of

[01:50:12] Another five

[01:50:12] Six things that I want to ask you about

[01:50:14] But

[01:50:15] Yeah

[01:50:15] You know

[01:50:15] Yeah

[01:50:16] Part two

[01:50:16] Part two

[01:50:17] Part two

[01:50:17] Part two

[01:50:18] Part two

[01:50:18] Yeah

[01:50:18] And all the very best for

[01:50:20] The IPO

[01:50:21] I guess

[01:50:21] So much

[01:50:22] Yeah

[01:50:22] I would

[01:50:23] Certainly

[01:50:23] I'll lead all the wishes

[01:50:24] To make it happen

[01:50:25] Yeah

[01:50:25] I would certainly

[01:50:26] Apply

[01:50:27] Whenever you choose to list

[01:50:28] And I hope to God

[01:50:29] I get an allotment

[01:50:30] I have terrible luck with

[01:50:31] The

[01:50:32] You know

[01:50:32] Ip

[01:50:32] As I said

[01:50:33] I've been rejected

[01:50:34] More times

[01:50:34] By the IPO market than

[01:50:35] By any good

[01:50:37] That's a good one

[01:50:39] Yeah

[01:50:39] So

[01:50:40] So yeah

[01:50:40] So thanks a ton

[01:50:41] Thanks for all the

[01:50:42] Thanks so much

[01:50:43] Thanks so much

[01:50:43] Thanks a lot