This post has been sponsored by Haywards 5000 Hausla Buland Academy.
“Investors, funders, partners, or your consumers are likely to give you a chance if you are persistent. But, as entrepreneurs, you need more than just persistence,”
says Kunal Shah, Indian entrepreneur, investor, and founder of FreeCharge.
Founded in 2010, FreeCharge is a leading Digital Payments platform in India. Customers across the country today use FreeCharge to make prepaid, postpaid, DTH, metro recharge and utility bill payments for numerous service providers. The idea of Freecharge stemmed from the thought that talk time could be made “free” by giving away coupons and vouchers along with recharges. This was achieved by returning the amount paid by the user for recharge in the form of shopping coupons. Unlike many startups, which made it big in India, by taking inspiration from solutions that worked elsewhere globally, FreeCharge cut through the clutter with its pioneering idea.
Like any startup with a disruptive idea, it had to overcome numerous challenges. During the early days, a key hurdle was that not many mobile phone operators were open to the idea, some even blocked FreeCharge.Kunal says,
“The nine months prior to the launch of FreeCharge and immediately thereafter were not easy. Some retailers dismissed the idea as stupid. Some thought it was too good to be true. A few even thought the idea was too innovative for the Indian market.”
Talking about how he was able to tide over this challenging phase, he says, “If you are persistent, almost everybody is willing to experiment with your idea. But persistence will take you only this far. However, if you want to progress, you need to show results. And we did just that. The consumer traction we got helped us overcome the initial inhibitions and resistance.” The free coupons that consumers got with every recharge, translated into footfalls for the retailers and this gave FreeCharge the momentum to keep going.
After raising a round of seed funding from the Tandon Group and Sequoia Capital in 2010, FreeCharge went on to secure Series A funding of Rs 200 million from Sequoia Capital a year later. In 2014, FreeCharge received $33 million Series B Funding from Sequoia Capital, Sofina, and Ru-Net, and raised another $80 million from Hong Kong-based fund Tybourne Capital Management and SF-based fund Valiant Capital Management, and existing investors.Delving into the challenges he faced from investors, Kunal says,
“While there were many who were ready to invest, they would often bracket us as just another online marketplace player. They never realised that we were bringing an original idea to the Indian market or the uniqueness of it. It was difficult to confide in people who did not understand what you were trying to do. But, we were focused on finding the investor who understood the value that our business model brought. We wanted an investor who believed as passionately as we did in our idea and that it could work. We wanted an investor who understood that every successful idea need not be a copy-paste model borrowed from the West or East.”
Conversations with a number of entrepreneurs reveal that in addition to challenges such as gaining stakeholder confidence and funding, the lack of a good team is often a hurdle to growth. Kunal’s story too was no exception; in fact, he terms it as ’extremely painful’. In the early days of FreeCharge, in the absence of a robust tech team, the website was constantly down and faced technical glitches. This naturally caused frustration among end-users. “Coming from a non-tech background, getting a good tech team in place was a herculean task. If you look around, many entrepreneurs find a good team because they are able to tap talent – classmates, juniors, seniors – from their alma mater (most often IITs, IIMs or other prestigious institutions). I didn’t have that advantage, “explains Kunal. However, FreeCharge’s decision to shift base to Bangalore from Mumbai in 2013 worked and soon FreeCharge had a robust tech team in place.
Kunal Shah, on self-doubt and why doing homework is important for entrepreneurs
We ask him if he faced moments of self-doubt in his journey as an entrepreneur, and he confirms, “All the time and every single day.” Explaining why self-doubt is important for entrepreneurs, Kunal says, “As decision makers of our respective organisations, it’s only when in self-doubt, we are able to question ourselves before reaching a decision. Simple questions like ‘Am I doing the right thing… making the right move?’ help in reaching a decision that is beneficial for the business.” He adds,
“Asking if entrepreneurs face self-doubt is just part of the question. Ask them if they have self-belief. If they are optimistic or pessimistic. The answer to all of these is – yes. But the important link is how entrepreneurs are able to strike a balance and keep propelling the business.”
Sharing his take on the developments in the Indian startup space, he observes that a number of startups are working on ideas that are not unique and just bring a tad bit incremental value. He says, “By doing so, you are creating competition, which sometimes can prove to be detrimental for businesses. As entrepreneurs, we must remember that we are building businesses and not war.” He adds,
“What young entrepreneurs must understand is every business idea needs to be unique and should bring value for everyone involved. There are enough problems in India that need solutions. What is the point if everyone is trying to address the same problem with almost the same solution? More than staying rooted to your idea, entrepreneurs should stay rooted to an idea that works.”
Kunal Shah believes that entrepreneurs should also see themselves as players in a game of chess, otherwise they will end up as pawns fighting against one another. He says, “Only when you distance yourself from the game, are you able to figure your place in the larger scheme of things and take timely, objective decisions.” He advices young entrepreneurs to be able to let go of their business if needed. He says, “Entrepreneurs often make the mistake of considering businesses akin to spouses. But business doesn’t work that way. Sometimes, acquisitions, mergers, exits, are all a necessity in the interest of a better outcome.” Kunal Shah has lived every bit of this quote. In fact, he exited his first entrepreneurial venture – PaisaBack, a B2B venture that provided cash-back promotions for organised retailers, so that he could focus on FreeCharge. Kunal says, “While PaisaBack made profits with which we were able to start FreeCharge, we realised that the scalability aspect of FreeCharge was much larger than what PaisaBack offered. So the shutter came rolling on PaisaBack. And, five years after he started FreeCharge, he sold it to Snapdeal and it was hailed as one of the largest deal in the Indian consumer internet space.
The move was aimed at creating a platform that offers a seamless transaction experience and makes every day online payments safe, easy, frictionless, and rewarding. Today, Kunal dons the hat of a CEO at FreeCharge and is looking at rapid expansion and bulking up the digital payments platform. Kunal has also invested in startups like TableHero, Razorpay, LifCare, and Zilingo.
Of the many success factors that helped him in his #NaaSeeHaanTak entrepreneurial journey, Kunal quotes the importance of doing homework. He strongly believes that youngsters need to understand and analyse the subject matter before taking the entrepreneurial plunge. He says, “I stood in malls and surveyed more than 2,000 people to understand if the consumer was ready to buy into the idea. Put together, I have done about 500 hours of cumulative research before starting FreeCharge.” He says,“It is this homework that helps you demonstrate a workable solution and helps to make Naa Se Haan possible.”
Kunal’s startup mantra for success ~ “Ambition alone doesn’t work. Missions do.” And Kunal lives up to this mantra on every step of his journey.
Hauslay Ki Udaan