Last week, my colleague Chandan and I visited Printo’s office in Bangalore.The flurry of activities, high-end machines in the big office set up, geared us for the interview at hand with none other than the founder of Printo, Manish Sharma.
In this candid conversation with YourStory.in, Manish (whom we found to be extremely self effacing and down-to-earth) shares the ups and downs of running a chain of organized retail print shops in India. We bring to you the excepts of the conversation –
Manish, tell us about your work experience prior to starting Printo?
I am what most common Indians are now-a-days, a software engineer by education. But, I have been an entrepreneur for most of my life. I started my first job with Rediff.com, I was their 4th or 5th employee. I was hired for a small team that launched the site, and it was a fantastic experience working at Rediff. After my stint with Rediff, I went ahead and started my own software company in Mumbai. We built it to a 150 member firm, I exited the company and my partner still runs it, the company is called IdeaLake. Then I moved to the US to start a product firm. I lost all the money I had made from IdeaLake in the product firm. Then I went to the UK, lived there for about three and a half years, did my masters in UK and then came back to India. Essentially, been a technology entrepreneur most of my life.
Who are your customers? Is it predominantly corporates or small businesses?
Our primary customers are younger companies, startups and companies with less than 1500 people.
It is not very intuitive that not many corporates come to Printo. Can you explain that?
It is a choice that we made, we saw an under-served market in the retail segment, I myself as an individual was looking for services and didn’t find any. On the other hand, the larger companies are over-served, they have a problem of too many people to choose from, while the younger firms have problems finding a professional vendor. So, we are not addressing a big gap in the corporate segment or the gap that we think we are addressing for them is something they don’t appreciate. Though we do have a few corporate customers like Microsoft and Wipro, corporate segment is still a very small part of our customers.
What percentage of Printo’s revenue comes from retail customers?
80% of our revenue.
What is the size of organized print market in India?
This is a crazy market! I didn’t know how big the market is until I started Printo. Printing is one of the biggest industries in the world. It is the second biggest industry in the US, after retail. It constitutes 2.1% of the US GDP. In India, it is about 1.4% to 1.5% of GDP and is growing rapidly. The fastest growing print market in the world is retail printing. If you want to put this in terms of size, then the market that we at Printo address is about 11 to 12 billion USD. The larger print market is 22 to 24 billion US dollar market, and this is a very fragmented market. If you segment the market to even further, lets say digital print market, it is around 4 to 5 billion USD market. We operate in a market where we say, you can walk into a store and get anything from digital prints to white formats to offset prints. The size of this market we feel is about 11 to 12 billion USD.
As Indians, we choose to go to neighbourhood printing machine over an organized player like Printo. Do you see a trend-shift happening?
I was very clear when I started Printo that the neighbourhood printing machine does provide value. One of the biggest values it provides is convenience. Lets say you want one quick color print-out, or one quick xerox copy, you choose to walk into your neighbourhood printing machine. We are channeling the existing demand in the market through professional delivery. A lot of our customers say that they go to Printo because, they get better quality and better customer service at our stores. If someone provides you a superior service, you shall automatically move to that. Perhaps, there is a mind-shift to the extent that people realize that expense is not just about the price tag. Actually it is much more expensive to go to the other shop in long run, simply because you might get the wrong number of print-outs, you might not have gotten the quality/kind of paper you wanted, etc. Also, most of our customers feel empowered, because they can go and publish whatever is on their mind at our stores. Lets say, you are a young business, and you want to spend on marketing, you can just walk into Printo, pick a template and get something quickly designed, have 2000 copies of the leaflets made at 99 paise per each copy, and you can start your marketing campaign. I think that is a mind-shift change, wherein most of our customers are looking for ways to empower themselves.
How many stores do you have?
We have 17 stores. One in Hyderabad and 16 in Bangalore.
Why Bangalore over other cities to begin with?
Why Bangalore as a start is because, it is a great test market for retail. Why test market is because, it has got a cross-section of diaspora which exists in other cities. It is also way cheaper compared to cities like Mumbai. In Mumbai, I could have done two shops with the amount of money that went into 6 shops in Bangalore.
You had a store in Malad, Mumbai. How was the market there?
We had a bunch of learnings from that store. Firstly, it was a store inside another store. We had a store inside Offix’s store. We occupied about 300 sq feet in a 4000 sq feet store. And, Offix shut down unfortunately. Then, we decided not to continue in Mumbai because our model is hub and spoke, and we can’t do just one store in a city. We go to a city when we can do 6 to 7 stores in one go. Incidentally, all our stores, including the ones that shut down make money. One discipline we have maintained in our business right from the beginning is that, we might not make lots of money, but we start making money at a gross level very very fast at all our stores. If a store doesn’t make enough ROI, we shut that store.
What is the average ROI of a Printo store?
Each store has its own ROI. But, the ROI of any store is typically in excess of 30% to 40%. If a store doesn’t reach this ROI in an year, we shut that store.
Last two of your ventures were IT and software, how did the shift to print happen?
I was a product guy right from the beginning. I was very passionate about products. After IdeaLake, I went ahead to do my own product, and that was the most passionate time of my life. I was dealing with a subject that was very close to my heart, Artificial Intelligence, and was closely working with a gentleman called Rajeev Motwani(He was one of the advisors at Google). And, Silicon Valley is a wonderful place to start a company. The startup failed, but I learnt a lot during that phase. So, I always had the passion to productize something. After coming back to India, the strong urge to keep away from IT and do anything but IT is another thing that drove me to Printo. Also, as co-founders(my wife & I), we believe that the social agenda behind Printo drives us, which very few people might be able to buy into. The social agenda that we are able to generate employment for a lot of people below Rs 10,000/month salary bracket is what truly drives us. I think IT has done a lot for this country, but the trickle-down effect was just not visible, it is too big a country for it to be visible. We need to start working at the base for the impact to be visible, and retail is manned by intensive resources. It is a great place to work at the base.
How did having a startup in the Silicon Valley help you start your venture here in India?
In no way at all. Firstly, my experience at the Valley was very short, just about an year and a half. I think the startup experience there is completely different. They have a brilliant ecosystem in the Valley, we don’t have any here in India. I set up my company in the Valley in 48 hours, but here it is a very long process. Though, it is much faster now. Challenges of young companies that are looking to set up basic bank accounts in India are huge. Challenges for young companies in terms of infrastructure, both soft and hard, are very huge. Especially, if you are doing something non IT, the challenges are very huge. So, I think nothing could have prepared me for this challenge.
Which service of Printo generates maximum share of revenue?
We are a long tail business, which means that a bunch of products add to the whole revenue curve. If somebody asked me what sells more than 10% at Printo, I would say paper. Our largest selling products though are our business cards. And yet, they constitute only 5 to 7% of our revenue.
Being a husband and wife venture, what are the challenges you face? Any strict dos and don’ts?
Don’t do this! (smiles). However, my wife(Lalana) is of the opposite view. She is the operations person. She works 12 to 14 hours a day, and she completely loves it. It has been good fun so far.
I think both of us were lucky in assembling a very good team. Printo is very non-personality-ish, and that is very good for us. That is exactly what we wanted for Printo. We have been absolutely dull and boring when it comes to associating Printo with a person. We have been lucky in getting talented people who have mostly moved up from the ground level. Bangalore today is run by a person who has joined one of our stores. Recently, we have been very lucky to add a new member to our team, and he has over 25 years of experience with Unilever. He is someone that we think would take this company to the next level. Having said that, I am not a great fan of husband-wife teams at all.
We were recently talking to a venture called PrintBindaas based out of Mumbai, they have an ecommerce store for printing. Do you see a lot of such startups coming up and they becoming competition for Printo?
We launched our ecommerce store a couple of weeks back, and the response has been tremendous. I think because of my technology background, this is something we always wanted to do. Infact, we put up our applications to “make your own cards” and etc, in the first six months of launching Printo. The ecommerce store was a part of our scalability story. But back then, we were selling almost nothing online. It was just taking away resources, money, more than money it was taking away our time, and we had a very little time. Then I decided to pull down the online arm until the market is created. And, we think that the market is now there for the online business.
So, which cities next for Printo?
It is an interesting question. I think, the answer is Bangalore. We think Bangalore has got a huge potential yet to be captured. If we go to other cities, it will most probably be a southern city.
What are the challenges of scale in organized print business?
Challenges of scale in print business are very similar to challenges of scale in a lot of physical businesses in India. The efficiency of human resources is so poor that unless you concentrate the business in one central location, you won’t be able to maintain the quality of service and consistency right across. And, that is when we started innovating on the hub and spoke model. Lets say you want one brochure or 100 – 500 business cards, you can get that done at our store. If you want 500 brochures or 2,000 business cards, then the order gets sent to the central hub. The design is sent digitally, and it gets printed at the hub. Beyond that, lets say you want 5,000 brochures or 10,000 business cards, we have a network of vendors whom we have developed relationships with over the past five years, and are a part of our ecosystem, we outsource the work to them. That is why we call ourselves a new age print business, there are enough good printers out there, but they don’t appreciate quality, timeline and project management. They don’t appreciate customer service. It is by the hub and spoke model, we feel we shall overcome the scale challenges of print business. As long as the job reaches the hub, we make sure it is shipped.
Same goes with our ecommerce store. The challenges with most ecommerce stores seem to be on the infrastructure side. And, that is where most of the money is being spent. We believe we already have the infrastructure in place, we know what our customers want, and we just have to be lean and nimble enough to know how to do this online. And, we accept that it is not just about putting up a website. There are folks out there who are much smarter than us. So, even if we do a decent job with the online store, our infrastructure will pull us through.
Whom do you work with for your home delivery services?
We do work with Bluedart for all our home deliveries. We infact receive orders from all over, Assam to Vishakapatnam. The value of our online orders is in excess of our retail orders. The average ticket size of a retail order is 600 Rs and online order is 1700 Rs.
How did your investors Sequoia Capital and Seedfund add value, apart from the monetary bit?
I think monetary support in itself is the biggest kind of support in India. Somebody trusted you with money, didn’t let you mortgage your dad’s house, and that is good enough value. It would have been very different, if it was in the Valley. In India, it is very difficult to raise money if you are a startup. We are a very young ecosystem when compared to the west. We all have to go through a few cycles of failure and figure this out. So, I would say money was good, and though we spent it not very wisely, it was a significant part of the learning process.
However, I completely believe that, VCs in India are incompetent when it comes to adding value. I do not say this in any derogatory manner. They cannot have developed the competency, as there was no vertical market to experiment with and develop competency. For example, in the Valley, in areas like software development or consumer ecommerce, there were around 50 VC funds for 10 years which were just making investments in these spaces. Some of them were stupid and foolish, but everyone learnt in the process. There was scope for VCs to understand the problems of young companies. In India, none of these sectors are deep enough. If you wanted to invest in ecommerce companies in India 10 years ago, there were no ecommerce companies to invest in. So, there was no way for the VCs to learn. There is no learning, and hence no competence. Naturally, they choose to spread their money beyond IT. They spend money on companies like Printo, Cafe Coffee Day(CCD) etc. And now, they would have limited competency in telling CCD how to go about running their business unless they have been in the sector for at least 20 years. So, they stay back but give you the money, and try and add value by figuring out how much money to give and when to give more. I think money in itself is a big enough value add in this country.
Finally, considering your busy schedule, how do you spend time to relax?
I love running. I am a long distance runner. I stopped doing that an year ago. I figured that, I was spending a lot of time running and then feeling tired. I love trekking. Infact, I am off to Himalayas for a 10 day break next week.
Manish has definitely taken a big step in bringing the unorganised printing sector in India on one organised platform. It is a big space with big opportunities, nevertheless has its own challenges, and we hope Manish in his inimitable style succeeds in building a national footprint for Printo.
On another note, we at YourStory.in vouch for the services that Printo offers, being their regular customer ourselves
We continue to track the Printo story and will bring to you latest updates from their end, meanwhile do go and check out Printo’s work.
– Varsha Adusumilli, Deputy Editor, YourStory.in
What are your thoughts on this story? Feel free to leave a comment.