Why Ivy League and Wall Street alum Chinmay Shah gave up his plush job abroad to make watches in India
Chinmay Shah earned his master’s in Economics from Duke University, and began working in equity research focused on the oil and gas sector in the US. But the fact that his heart lay in entrepreneurship became apparent to him when he began to experience recurring ‘Breakfast At Tiffany’s’ moments, though these moments took place at night instead of morning and at Bergdorf Goodman’s in lieu of Tiffany’s. “Bergdorf Goodman is a storied fashion cum accessories store in NYC near my old office. Most nights, I would work late and end up there to treat my sore eyes to some of the most creative, elaborate, high-quality, and painstakingly put together window displays in the world. These displays were all planned one year in advance,” he says.
Path to entrepreneurship
These displays called out to the creative spirit within him. “It made me realise my engineering/finance background was accounting for only half of me,” he says. The path to entrepreneurship from there was gradual, but when he did take the plunge, he wrote his mission statement in two minutes. ‘To combine creativity with commerce that results in a lucrative and sustainable enterprise which deals in beautiful and safe products, thereby forwarding India’s legacy,’ became his personal manifesto.
Chimnay focused on watches because they allowed translating creativity to a ‘3D platform’ and had less competition in the organised space targeting creativity in that manner: high-brow cool or elegantly Indian, and in 2014, Aiqon Watches was born. “We could take inspiration from, well, the planet; history (the Mumbai and Poseidon watches), monuments (Pantheon and Hampi-inspired watches), industries (movies and technology themed watches) et al. From this point on, as a business, I must admit we did as many things wrong as right, but we have been appreciated for product quality and taking risks on design, albeit on a small collection,” he says.
Fighting monopoly
The Indian watch market is not designed to make space for newcomers, carved up as it is between long established giant brands. On the other side of the spectrum lies the large number of cheap, but attractive, pop culture-inspired pieces that have flooded e-commerce sites and low end stores alike. But Chinmay is counting on this polarisation to help him gain a foothold. He says, “The oligopoly and ubiquity of certain giants is probably hurting them right now, as evidenced by the slow growth experienced by them. For one thing, they tend to be fairly conservative on design. Moreover, at the Rs 1,000 – 4,000 final selling price range, there are actually only a few brands.
“Interestingly, from the very beginning, I have wanted to pursue at least a mid-sized offline COCO (Company Owned Company Operated) retail footprint in tier-I, II, and III cities of India, allowing pricing-design flexibility on multiple product categories, in addition to third-party online and offline retail. Finally, the sub-Rs 1,000 watches on e-commerce platforms will actually continue to grow. This is an issue the giants will likely have to solve more than me, to justify prices that are higher than mine, for quality that is likely no better, and sometimes even lower.”
Journey and struggles
Chinmay is incredibly candid in sharing the ups and downs of Aiqon. “We started planning our inventory in early
2014, and finally received them all by mid-2015. In that timeframe, the morale of the offline Management by Objectives (MBOs) took a dive, driven by a softer economy overall, online retail eating offline watch sales and the lowering wallet share for watches. This has made businessmen-owned MBOs quite conservative; more than what is likely good for themselves and the industry. This has resulted in offline MBOs carrying 95 percent of the same brands, and more than 80 percent of the same SKUs within those brands.”
On the space that he occupies in this scenario, Chinmay says, “We started off in a ‘most experimental product’
manner, and this shows up in our P&L. But I would put it to you another way: How many people would invest in a wristwatch venture by a first-time entrepreneur experimenting with differentiated design, but not technology? Initial conversations with those professional investors interested at this stage are being pursued.”
For Aiqon, the positive has been its returning customers. “To those who know - admittedly a small number - our designs and quality have elicited significant praise. About 10 percent of our sales are due to people who bought once, experienced the product and bought again,” he shares.
The negative has been getting his brand noticed amidst the online clutter. “Our sales are almost exclusively via Amazon, as the prominent fashion and ethnic portals didn’t list us due to SKU count. You must realise we have spent a total of Rs16 lakh on marketing of all sorts, 10 of which was spent in two months last year, yielding essentially no sales. In the last five months, we spent Rs one lakh in bits and got reasonable results for our marketing channel. As such, there is a limited amount we can do with an SKU count of 11,” says Chinmay. But at this point, increasing that number is not sustainable for Aiqon.
While listing risks that didn’t pay off, Chinmay is determined to remain optimistic. He says, “Moreover, while crafting the initial collection, we took risks with designs, tried out suppliers and procured higher priced inventory as we were bootstrapped and could test what works. Ignominiously, we made no dedicated ladies’ watches in the initial set. We started up in Mumbai- one of the worst decisions, alongside trying to crack businessmen-owned MBOs in Western India. But all those mistakes helped us craft a long term-oriented business model.”
Still, he admits, it’s hard not to feel the sting of everyday failures. “I heard some statements from Indian retailers about Aiqon’s products like ‘Should have made t-shirts,’ and ‘The staff can’t even understand your designs, forget selling them in the marketplace.’ One peer told me, ‘I am a part of India’s prominent watchmaker label, and even I wasn’t able to build a successful brand for them. So what makes you think you can?’”
While he accepts all these as the inevitabilities of an entrepreneur’s journey, Chinmay shares the one thing that has been the most painful part of starting up: “Not having any mentor for literally anything has been very disappointing.”
Future
While commenting on the future of his startup, Chimnay objectively assesses his strengths and weaknesses, “My strengths are design, story-telling and strategy. Weaknesses would include operations, and the pace at which things move. I need to think beyond watches, though those are strong foundations, and target the price-sensitive, vernacular-speaking, offline-oriented Indian consumer and present her/him with emotionally-connectible products that justify the little money they can afford to spend on it.” But when asked to predict that future, Chinmay frankly says, “I have no clue.” After all, the harder the struggle, the more glorious the triumph.