Startup discussions are generously peppered with the word ‘scale’. So much so, that you’d think that, if you’re starting up, scale is the only thing you should be chasing (although it isn’t). But when you’re building a company with the vision of creating a large thriving business, scale becomes critical to you. At a recent Kalaari Capital event in the NCR region, some big names including Deep Kalra, the founder of MakeMyTrip and Kunal Bahl, the co-founder of Snapdeal came together to discuss the current state of eCommerce.
Deep has taken MMT through an IPO and Kunal has been through an eventful journey to bring Snapdeal to the scale it has attained. Vani Kola, the MD of Kalaari Capital, started off the chat by posing a question about the trade-offs of scale. “What are you willing to give up for scale?” Deep, who has had an experience of more than a decade running MMT, addressed the entrepreneurs in the hall, and said, “Scale is surely a crucial part of the business and if you’re talking of tradeoffs, profitability will surely come into the picture. Very early on, there is no way you can go after scale and forget profitability.”
One of the keys to attain scale is the unit economics and Deep emphasises on keeping on improving week on week. “You need to measure continuously and keep growing. It’s okay if the growth is marginal for one or two weeks but if you’re seeing no significant growth for a period of 3 weeks or more, you should investigate deeper because chances of something going wrong are higher now,” says Deep. Kunal and Deep both also stressed on how it has becomes extra necessary for companies to remain on their toes as the economy heads for a difficult time.
Another aspect to be kept in mind while building a business is that all steps should be taken based on what is already there in the bank. “You should plan for the future keeping in mind only the funds you have, not something that is going to come,” said Deep (here are three everlasting tips for success from Deep Kalra). In the initial days, it is also more about survival and less about scale. Once you’re comfortable in terms of cashflow, that’s when you start caring about scale a lot more.
Kunal shed some light on how they were able to pivot so many times and so quickly (7 lessons from Kunal). “While pivoting, it is very important to project the move as a part of evolution and not drastic change. People take in evolution more naturally and positively. It is a very simple thing to say but makes a lot of difference if it is actually placed that way. The founders and core team have to shield themselves and not allow the vibes of self-doubt emanate because if you really believe in something and stand by it, things fall in place,” said Kunal.
Apart from the duo, there was another session “Bringing Consumers: Bricks vs Clicks,” with Mukesh Bansal, founder, Myntra, and Rajiv Mehra, MD, Puma India, talking about both the online and offline versions of the India retail story. And, nicely placed between these two sessions, were the Good Idea sessions, where three interesting entrepreneurs presented their companies- Magzter, Zivame and The Closet Label.
Stay tuned for more insights and videos from the event.
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