YourStory UNCUT: Vinay Singhal on losing a Rs 300 Cr startup and building STAGE
Started in 2014 by Vinay Singhal, Shashank Vaishnav, and Praveen Singhal, viral content website WittyFeed was India’s answer to American company BuzzFeed.
In an interaction with YourStory, Vinay revealed that by the end of 2016, the website had recorded 120 million unique month-on-month users. Additionally, it generated 420 million page views and 2.5 billion impressions.
But on November 26, 2018, the team woke up to a nightmare. The WittyFeed Facebook page was wiped off.
“We got killed overnight without any particular reason by Facebook. As founders, we were in denial…we thought it was a glitch. Later, we were ready to fight Facebook. But as time passed, we realised that wasn’t going to happen,” says Vinay.
By February 2019, the team ran out of money and was about to shut shop. “But we somehow believed that this cannot be the climax of our story…We had to rebuild and rethink what we do from here,” he adds.
Later that year, Vinay, Shashank, and Praveen set out to build a Netflix for Bharat— , an artist and dialect-based OTT platform for Indians. Today, the hyperlocal video entertainment platform has recorded more than two million downloads and has over one lakh paying customers.
It is backed by the likes of Vijay Shekhar Sharma, Ritesh Malik, Blume Ventures, Venture Catalysts, and Inflection Point Ventures.
“Our team kept saying that they won’t give up, no matter what. And that became the origin story of STAGE,” says Vinay.
For this episode on YourStory UNCUT, Vinay takes us through his journey of losing his first company, almost shutting shop, and building STAGE.
It takes a team
Before the deletion of WittyFeed’s official page, the personal Facebook profiles of the founders were deleted from the social media platform. The 150 employees working at the company also had their work experience removed from the platform as well.
“We may have violated some policies but we were never informed about it…at these companies, you do not get to talk to humans. You only talk to an email address at best,” says Vinay.
WittyFeed was profitable. But soon after its death, the team ran out of money.
The founding team called for a town hall with 90 employees remaining and laid out two options. They could either shut down that very day or the team could trust the founder and stick with them for another six months.
To their surprise, 54 people decided to stay back, taking home only 25 percent of their salary. Double of the remaining 75 percent was given as equity.
Vinay says, “These 54 employees became our angel investors, came to the cap table, and rescued us while we figured out the journey onward.”
“How do you kill a company that refuses to die?” he laughs.
OTT platforms in India– both global and large Indian players—focus on languages in the name of vernacular content. That is, they make video content in languages like Gujarati, Bengali, Tamil, Telugu, and Marathi.
However, “The moment you go beyond urban settlements in India, everybody speaks a dialect…Language is an urban concept,” explains Vinay.
Growing up speaking in Haryanvi led him and his co-founders to think about why there wasn't any content available in the dialect. “A true hyperlocal company built for Bharat would be a dialect-based platform. That is what STAGE is,” he adds.
Currently, only building content in Haryanvi, STAGE aims to target the underserved markets of India.
The founders at STAGE
Road to STAGE
While building STAGE, the team essentially faced three major challenges.
“We are more of a category creator. There are no TV channels or OTT platforms in this industry from which we could learn from,” says Vinay.
First, the team had to prove that there was actually an audience willing to consume content in local dialects. Vinay says that the first 18-months post the inception of the company went into solving this demand problem.
Once it was established that people were willing to consume content in local languages, the startup had to tackle the supply problem. To solve this, STAGE started a production house from scratch, making the very first web series in Haryanvi.
Finally, the last roadblock was monetising the content. “There is more money in rural India than we give credit for. All we had to do was create value for that,” Vinay says. Last April, STAGE went from being a fully-free platform to a fully-paid platform, and since then, it has added more than one lakh paying customers.
Overcoming 500 rejections
While the team had credibility in the market due to the success of WittyFeed, production is no cakewalk. “To build an OTT platform, you need to heavily invest to produce movies and web series. You need to pump crores to build just one good web series,” Vinay says.
Thus, STAGE needed to raise more external funding and it did not come easy.
The most prevalent model was building a user-generated content application, similar to TikTok or Instagram or YouTube.
“We were trying to build something new…There was no parallel to our story in the US or China. So, it became very difficult for investors to understand the model,” Vinay explains. “Anybody who wants to invest in our business has to spend an incredible amount of time understanding our business.”
“The funny thing about investors is that they want you to build something unique and once you do so, it becomes difficult for them to invest in you because you are ‘out of thesis’ and a category creator,” he says.
Convincing VCs to invest in STAGE became another battle. The founding team reached out to the top 25 investors and made more than 100 pitches—and got rejected. In fact, STAGE had to go through 500 rejections before five investors believed in the story.
The startup’s first angel investor was Jana Balasubramaniam, who came through Venture Catalysts. While Jana did not attend the pitch, he reached out to the team after watching the recorded video and decided to lead the round for his firm. He continues to remain the single largest angel investor on STAGE’s cap table.
“Blume (Ventures) rejected the first pitch as well,” Vinay says. The conversation with Blume continued for over a year before the early-stage VC came on board, and Vinay attributes this to the immense patience Karthik Reddy possesses.
Another of the first investors in STAGE is Better Capital. The startup has raised Rs 30.75 crore in funding so far.
Advising aspiring and early-stage entrepreneurs, Vinay says, “Keep at it. Do not give up. Persist and negotiate your way out of the struggles. Anyone who has built a successful business had to struggle at one point. They have reached the top because they persisted.”
The entrepreneur says it does get lonely at the top, adding that he had a breakdown the previous night “because it got too much.”
“We are currently raising funds and still facing rejections. We are doing so much and it still takes much convincing and education to make them (investors) believe in us,” Vinay says.
However, looking back, he adds that he would not change a thing.
“Jo hua acha hua (Whatever happened, happened for the best). It only made us better entrepreneurs in the process…If you don’t give up, life does give you a way out,” Vinay quips.
(This story has been updated to correct a typo in the headline.)