Mr Anupam Mittal, founder-chief executive of Shaadi.com — a pioneer of matrimonial services in the country and recognised as the ‘most innovative company in India' in 2011 by Fast Company, a US business publication — spoke to Business Line about his 14-year journey as an entrepreneur.
Excerpts from the interview:
The entrepreneur journey wouldn't have been a walk on bed of roses. What was the most challenging part- incubation of the idea, raising funds or reaching it to the public?
I would like to state that challenges turned out to be opportunities as they helped me discover innovative prospects. Initially poor connectivity, low bandwidth and a lack of credit-card penetration were major challenges when we started our Internet-related businesses. However, when we started Shaadi.com, most of our revenue actually came from NRIs (non-resident Indians). The number of resident Indians who used the platform at that point was low compared to NRIs, thanks to India's e-commerce-related challenges. Over the years, this has changed. A significant portion of our revenues comes from within the country.
Traditional and arranged marriages over the Internet were a laughable idea when Shaadi.com started. At that time, the mindset of Indian parents was conservative and technology-shy. In India, the growth rate of Internet was an obstacle. But things slowly changed in favour of online matrimonials since Internet as a medium of matchmaking takes away geographical limitations and is thereby more efficient than the traditional avenues for searching your life partner.
It was also a huge challenge to get Indians to pay online but overtime we realised that Indians are value-conscious consumers. Online one cannot have a salesperson, thus, it was harder to convince them. Hence, the way we sensitise them is by providing them a lot of services free: the reason being only when you provide them with a lot of value will they be willing to pay. So for example, let's take Shaadi.com — one can come there, look at profiles, click on the best-suited profiles and send in your proposal but only when someone accepts your offer is the time when we ask our consumers to recompense. After one shells out the money, they can continue with the communication with the interested party.
How did you keep your consumers engaged?
Over the years, online matrimonials started emerging as a trend across the globe. Traditional ways of finding a life partner through offline channels limit the options available to the potential bride or groom. As loads of youngsters now prefer to select their life partners online, we at Shaadi.com help make the process a perfect match between tradition and technology.
While we do our best to keep our database the largest, we also continually strive to build technology that will bring matches to our members that are relevant to them. Our customisation, filtering and blocking systems are unparalleled in the industry. Shaadi.com-members can browse and express interest in other members from their home or office at any time of the day or night.
It is important for us to not only deliver what our customers need but also exceed their expectations wherever possible. We do this through a combination of hiring good customer-relationship officers, providing appropriate training and empowering them to support the customers. Our customer-relationship officers are available 24/7 through phone, email, chat and on Twitter (@ShaadiDotCom) to respond to customer queries in a timely fashion.
You were alone when you started Shaadi.com 14 years ago. How do you plan to withstand competition now that there are many more companies offering matrimonial services?
Whenever a business opportunity gets scale, several entrants emerge to exploit the opportunity. However, Internet businesses have significant network effects and typically in any segment, one finds that one or two players (or in some cases three) control 80 per cent of the market. We think this characteristic will prevail in online matrimonials as well.
The only way we can stay ahead of the competition is to continually strive to understand our customers better and translate that understanding into world-beating products.
Why are a lot of start-ups (like Foodiebay.com, Moneyvidya.com, Taxiguide.in, etc.) today going online? Is online the way forward?
Further, the fact that over the last decade [a] few individuals have proven that Internet businesses can scale in India, gives aspiring entrepreneurs a lot more confidence in their abilities to do the same.
What are the attractions of an e-portal for an entrepreneur?
There are many different types of businesses and many different industry segments when it comes to what you call e-portals. I am assuming you are using the term in a generic manner to mean Internet. If I had to generalise about the attraction of an Internet business, I think there are a few that are common across segments: low capital intensity (except in product e-commerce); higher gross margins, especially for services-related businesses; ability to compete with giants since talent and time are more important on the Internet than capital; ability to connect with and shape consumer opinion without having to depend on others.
What decides the fate of a start-up?
To me, a start-up is like raising a child and, therefore, this question is akin to the age-old conundrum of what constitutes good child-upbringing — difficult to answer in exact terms as there is no formula. Having said that though, if I had to pick one thing that pretty much determines the fate of every start-up is the fate of its main founder. A start-up and a founder are so inextricably bound that their fates are too.
Since you are part of some angel groups, too, could you tell us what is it that you look for in a business plan?
Besides being part of IAN and Mumbai Angels, I fund start-ups directly as well. Besides the quality of the founding team (most important), we also look for the potential to go after a large market and the competitive intensity in that market. We want to see that there is opportunity to keep the product differentiated for a long time and create intellectual capital as well. At the end of the day, start-up-investing is risky, and so most of us will back companies where we think we can make at least 20-30 times our investment.
What are the funding and mentoring options available for a start-up?
Fortunately, for start-ups this is probably the best time to raise money in India. There is no dearth of capital and/or investors. As a start-up one has the option to go to incubators, formal angel groups, informal angels or directly to VCs. However, while money is available, it is only available to [sic] the right opportunities. If as a start-up one is not sure about its potential to raise money, then the entrepreneur should probably try and get in touch with an entrepreneur who understands their industry and can mentor them. It is better off spending a couple of months understanding yourself and your opportunity than chasing investors with a non-fundable plan for a year.