The man who discovered fire, didn’t let the rest of his hunting group stumble around in the dark. This is the principle that most industry veterans who double up as investors work on, when they take startups under their wing. But don’t be fooled that this is some brand of big-heartedness. Community living existed then, and it exists now – but remember, so does survival of the fittest! What does one do in these eternally ambiguous times? You go the Suman Singh way.
The Founder of American startup Austin Bazaar and now, CEO of Indian Bajaao.com, built and left his $30 million entity to spread the light of knowledge to a similar startup. Now that Brand Austin Bazaar is going strong, brand Suman also has all the scope to expand its horizons beyond the one company he has built.
Andheri to Austin
An engineer from Sardar Patel College of Engineering, Mumbai University, Suman left Mumbai to get a Master’s degree in Engineering from the University of Texas at El Paso. With a 4.0 GPA, Suman kickstarted his career with Nortel Networks in Dallas, and moved on to Dell in 2003 as the Lead Engineer at the Enterprise Computing division. “When I joined the industry, I realised I was more of a business problem solver than a technical one. That’s what made me tick. Corporate America was no longer my calling, and that’s when I decided to branch out on my own.”
Living in Austin, the live music capital of the world, it was hard, almost impossible, not to join the crazed fandom. “Even though I am not a musician, I have loved music all my life. Living in Austin, I had several friends who were musicians. By interacting with them, I realised that there was an underserved market. There were not enough choices in instruments for a musician, who was just starting out and gear available was at a very high price-point. And I decided to launch Austin Bazaar and fill that gap that I thought existed. I took the leap of faith and launched it out of my garage.”
First and foremost, they decided to go with an e-commerce model, and connect with customers digitally, rather than brick-and-mortar stores. “We initially developed a product line that was very much focused on the beginning musician – we had to make it simple for them to buy their first musical instruments, without feeling intimidated.”
Their strategy evolved, and they struck gold by becoming the first in the market to develop packages, rather than sell individual items. The packages included everything that the musician needed to get the most out of their instrument. So, an electric guitar package may include the guitar, a fitting case, matching strap, upgraded strings, electronic tuner, and suitable amplifier.
All the right notes
Off to a great start, he crossed $1 million in sales within the first year itself. The early years saw rapid year-over-year growth of almost 100 per cent per year but, unfortunately, their climb coincided with the slowdown in the US economy.
“But we learnt how to thrive in a slow economy. Being self-funded, we did not have much money to burn to get market share. We were founded on the mantra of profitable growth. To do this, we built a very lean and efficient organisation. We relied on systems and software to keep costs low. I used my background to build some systems and tools myself. Even our marketing spend was controlled and managed by home-built software tools. That enabled us to spend our marketing budget very wisely keeping in mind the return on investment.”
Another challenge that not many talk about was scaling up a fast-growing business, by rapidly upping the game in customer support and fulfilment infrastructure, and supply chain management, which was done by finding the right partners.
Within a few years, Austin Bazaar become a major online retailer of musical instruments within the US market. The current revenues of Austin Bazaar are upwards of $30 million per year.
Austin, it was serendipity, says Suman, when on a trip to Bombay, he met Ashutosh Pande, the founder and CTO of a similar Indian startup BAJAAO through a friend. What was supposed to be a half-hour meeting, ended up lasting four hours. They chatted about the music e-commerce landscape in India, as Suman realised that a lot of strategies in the US could be replicated in the Indian e-commerce space.
“I liked the BAJAAO story, how it started, and where they wanted to be. It reminded me why I launched Austin Bazaar. It helped musicians realise their dreams. BAJAAO’s strong brand awareness in the country amongst musicians convinced me that it could become the dominant player in the music industry. So I decided to invest and first came in as an investor. We were trying to find an ideal candidate for CEO for BAJAAO, and I thought ‘hey, why don’t I give it a shot? I am from Bombay, it’s my city and culture.’ So I took it up as a challenge.”
Austin Bazaar had transitioned from a startup to a more mature company. Suman was ready to entrust the management of Austin Bazaar with a COO, and take BAJAAO by its horns.
When Suman entered the picture as CEO, BAJAAO was facing similar challenges as Austin Bazaar – but he wanted to clock growth without falling into some of the pitfalls that other Indian e-commerce companies had.
Excessive spending on marketing and advertising without thoroughly understanding the economics behind that spend. Some companies created such cost and management overheads that profitability seemed to be an afterthought. At BAJAAO we decided to stay lean.
As CEO, Suman prioritised implementing new technological solutions, investing in people management, updating the marketing efforts, and operational strategies and building a corporate sector.
We did this by first upgrading our technology. We built a new website experience for our customers that they love. We also invested in new ERP and CRM systems that enable us to automate our processes and respond to customers in a more effective manner.
The second big strategic shift was to focus on all aspects of music through BAJAAO Entertainment, - not just gear – but also music creation, production, education, consumption, artist relations, curation and culture. “I am committed to the mission of making the BAJAAO brand synonymous with music in India.”
Under his tutelage, their monthly traffic is approaching 1 million visitors, and gross sales have grown by over 350 per cent in the last 12 months and over 400 per cent growth in revenue. Bajaao is well on its way to becoming the biggest e-commerce site in the music industry.