The ifs and buts while building business models and scaling up

Scaling up is generally understood as a destination and is measured in limited terms such as revenue, customers, and repeats. But it is much more than that. The journey towards scaling up is a daunting one. 

Conversations about scaling up and business models go hand-in-hand. The strengths and weaknesses of the business model determines the growth it sees. 

But what is the right business model?

YourStory’s Brands of New India presents a new series called ‘Whose Brand is it Anyway?’, in collaboration with Fireside Ventures, with the aim of creating a platform where budding entrepreneurs can learn the 101 of building businesses from those who have been able to create successful brands.

Bengaluru-based Fireside Ventures is a focussed early-stage investment platform for consumer brands. Anchored by a slew of marquee investors, including Premji Invest, Westbridge Capital, Mariwala Family Office, Unilever Ventures, Emami, RP-Sanjiv Goenka Family Office, Sunil Munjal’s Hero Enterprise Investment Office, and ITC, Fireside invests in exciting consumer brand startups across multiple rounds, from Seed to Series A funding. 

Founded in 2017, Fireside is also building a first-of-its-kind ecosystem for entrepreneurs in the early-stage space, with a strategic support network of in-house and partner resources.

In the second episode of ‘Whose Brand is it Anyway’, host Ankur Khaitan, Principal, Fireside Ventures, is joined by guests Ayushi Gudwani, Founder of FS Life, and Vishal Gupta, Co-founder of Gynoveda, to talk about the basics of building sustainable business models and scaling up.

“The way we look at business models is that they are ways and means of creating value for the business over the long term. While you deliver meaningful value for your consumers, how do you traverse back that value through monetisation strategies into business or creating long-term sustainability?  And that is the engine which runs your growth for the business,” says Ankur Khaitan, Principal, Fireside Ventures. 

Before you set out to start your business, there is a set of questions you must answer for yourself, the founders say. These questions are: what is the market, what is the ticket to win in the segment, what are you going to build, and what is going to be the USP of what you are building. 

The key is that the answers to all these questions have to be scalable. 

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“You can’t build a business in the near term on hustle and then expect that you will fully pivot and change it five years down the line,” says Ayushi Gudwani, Founder of FS Life.

“You can't say, ‘Let me try this, make the MVP (minimum viable product), and then figure out how it will scale.’ And specifically, in the D2C space, investors are looking at what’s the profitable view on the model. What’s the scalable answer? You do not invest assuming that they will figure out the journey to scale,” she says. 

The episode then talks about the importance of recognising a problem that the business will be solving before deciding on a business model. Once the problem and solution are identified, a founder can begin building a business model.

“Don’t build a business model to raise money, actually build a business model to solve problems, and the money will follow,” says Gynoveda’s Vishal Gupta.

He then talks about the four questions that must be answered: what is the kind of engagement that is taking place (is it one-to-many or many-to-many), what is the price model (is it freemium, free, or paid), how frequently are customers purchasing your product, and how long will it take to really become a market leader. 

The episode then traverses through the important questions about if and when a startup pivots. As a business goes through the mundane everyday issues, it develops its strength areas and building blocks. 

“When you are in the process of running the business, you don’t know what you are building. When you are forced to step back and reflect, you can actually articulate those building blocks more cleanly and then use them to transition,” says Ayushi. 

The episode concludes on the learning that “just do it” is the best way of learning and testing out your business models. 

Tune into this session to hear about the journey of FS Life and Gynoveda and the founders’ adventures into making these companies the Brands of New India.

In December 2019, FS Life (formerly Fablestreet) raised Rs 21 crore in a Series A round led by Fireside Ventures.

In November 2019, Gynoveda raised $1 million in a Seed round led by Fireside Ventures.