How often do you see an entrepreneur’s last employer putting equity in their idea?   

Well, this is exactly what happened with the guest of our today’s episode, Shantanu Deshpande, Founder – Bombay Shaving Company.

  In 2015, when Shantanu decided to dominate the men’s grooming space and he was quitting his job at McKinsey, his peers and seniors didn’t just allow him to leave but decided to back him up with an initial Seed funding.  

Last year when the country went into lockdown, the company’s revenues increased by 3x. One of the interesting driving factors behind this was the women employees at the company.   

Their perspective was very straightforward:   

# Problem Statement: During the lockdown, there was a shortage of women’s hair removal products and razors.   

# Opportunity: They were working for a company, which made razors for a living.   

# Solution: These women employees then decided to coordinate with the product designers, test the product on themselves, put in their inputs, and get their own women’s razor out in the market.  

With this the Bombay Shaving Company, which earlier had 27% women customers buying their products for the men in their life (i.e. partners, father, brother) as a gifting option, now had 50% orders coming in from women with a major share of them buying women’s hair removal products.   

During the podcast, Shantanu shares with us what other tailwinds he leveraged during last year’s lockdown, how he believes in enabling his investors to partially exit from the brand from time to time, and how he derives the best value from his large institutional investors.   

Notes – 

01:38 – Growing up in Florida (US) and moving back to India

06:50 – Leaving McKinsey & starting Bombay Shaving Company

09:18 – “The richest source of information is a conversation with people who are in it all the time.”

17:13 – Tailwinds which enabled 3x revenue post-lockdown in Mar’20

19:50 – Channel-wise revenue break-up

21:47 – Raising initial seed-round from McKinsey

23:30 – “My belief was always, that we should never raise money to buy revenues, we should always raise money to build a brand.”

26:24 – Core-target metrics since launch

30:02 – 3 Crucial things to winning customers early-on

33:07 – Enabling exits for early Angel investors

39:57 – “Having good organic traffic is a proxy for brand strength.”

44:32 – Deriving best value from financial investors  

Read the full transcript here:

Siddhartha Ahluwalia 00:00

Hi Siddhartha Ahluwalia. Welcome to the 100x entrepreneur podcast. Today I have with me Shantanu Deshpande, founder of Bombay shaving company. Shantanu, welcome to the podcast.

Shantanu Deshpande 00:12

Thank you so much. My pleasure to be here

Siddhartha Ahluwalia 00:15

Shantanu before we delve dive into Bombay shaving company and what a cult that you have built right first. So, the Indian shaving both men and women now, right. I want to know about your journey, pre-Bombay shaving company, right about your parents where you grew up.

Shantanu Deshpande 00:35

Sure. So I actually, my, my parents come from the city of Indore. and moved around cities and as of my most recent memory of US, of course, is growing up in Florida, my primary school and came back to India, I think 96-97 when I was nine years old, my parents decided that it was time for us to come back. They didn’t want me and my younger brother to grow up in the US. Plus, both my grandfathers were no more and my grand moms were getting older. So, my parents made the counter intuitive decision at the time to come back to India, which is what a lot of their friends did not do. My brother and I were obviously quite against coming back because whenever we will come back for summer vacations or Diwali, we would be the cousins from the US with strange clothes and strange accent and all that. So, coming back to India permanently was not a very, was not a decision at the time. I was honestly fully concurrent with but you know, kids are adaptable, move to Pune. After a short few months’ stint in Bangalore and Trivandrum. My dad was then the CEO of Tech Mahindra, which at that time was a very small company within the Mahindra Group. So, he took over as the Managing Director and CEO and kind of grown over the next seven, eight years to any left to you before the before the IPO. And he in 2004 started his own company called airtight networks, which is the Wi Fi security space, he was 50 years old. So, I was at that time a young teenager and I saw my father and his co-founder who was a professor of computer science at IIT Kanpur kind of build a company out literally from our garage. And, you know, hire their first employee is nightbird. The initial plan, they have money out of Silicon Valley, they had their engineering team was in Pune. And their head office was in was in the valley. And an over of 15-16 years, they kind of built up to 1000 plus employees, I think 10 plus offices globally 800 Global clients, and they sold the business to Arista Network in 2019. I saw my father kind of do that. And it was a big part of the reason why I decided to become an entrepreneur. My mother, on the other hand, like a lot of mothers of that generation, she’s a yoga instructor, certified yoga instructor and one of the best practitioners of yoga. She’s a classical music singer, student, teacher, performer and does a lot of a lot of cool things of that nature.

Siddhartha Ahluwalia 03:43

Yeah. Going forward, right. Where did you do graduation from?

Shantanu Deshpande 03:50

Yeah, so I was in Pune, we came to Pune in 97 did my schooling from there then my engineering from an NIT Nagpur, MBA from IIM Lucknow. So, for six years back-to-back I was in hostel which was again character building and beautiful. But for me personally, I tried to get into IIT ended up at NIT, I tried to get into IIM Ahmedabad ended up but IIM Lucknow so both great Institute’s but places which were not top you know what I’m saying? I always felt that I punch below my weight a little bit. But from IIM Lucknow I made it to McKinsey and Company which was the number one recruiter on all campuses. So for five years I was at McKinsey and it was the most incredible professional first step one can make. I found incredible bosses and mentors. 25 of them invested in Bombay shaving company when I left. there was a job that was made for me, it was consulting right rapid problem solving, you know, advising at the very top changing of problem statement every five, six months. I served insurance, cement, heavy engineering, zinc mine, you know, serve the whole spectrum across a variety of problems. So, for me, McKinsey was character building in so many ways. And I think a lot of who I am today, I attribute to my time at the firm, but 2016, I decided that it’s time to leave and start up on my own. A

Siddhartha Ahluwalia 05:15

and why did you leave like McKinsey at that point? you were Engagement Manager, I believe, right. On your way track to a partnership?

Shantanu Deshpande 05:23

Yes, yes. So, in fact, this was a time where partnership discussions that started happening when you become a senior manager, I was doing extremely well. I was one of the top consultants in my in my cohort. The two three triggers that happened. One was I think 2015-2016 was an incredible time for the startup ecosystem, right? There are a lot of things happening outside the firm. And when you’re an advisor for a long time you start missing action, you want to say you kind of miss being at the forefront. And that’s how it happened to me. Second thing is people who are respected tremendously at the firm started leaving for the startup ecosystem. So, Rahul and Sid, who were two three years my senior went on to found Treebo Hotels, Sai Krishna Murthy left for Flipkart, Anant left for Myntra. So those senior people at the firm, senior, slightly senior people who are my mentors, who had left and its kind of it made me feel that I will miss out if I don’t do this. I always tell anyone today I can go back to McKinsey whenever I want us to call the goodwill and just stay in touch when I recruit for them. I’m a faculty at the training I continue to kind of stay close to the partnership because our investors with us and the gives you will always be home. But I felt like I wanted to do something emotional one trigger people were leaving I do the second trigger was a conversation with a few of your friends. Like one of my close friends was a brand manager. Another close friend was an MBA at Wharton who intern at Dollar Shave Club. So, there were these three four, you know input people who are telling me the consumer products in India D2C e-commerce infrastructure, ability to market to digital is going to go through the roof. So great opportunity to build a brand. And I was always FMCG Guy. When I say sound campus, I wanted to do Unilever, Procter, Colgate, that is my dream job. And you know how it is that Indian engineers are the first company that comes you get a job and you’re not allowed to do what you really want to do. So, it was one of those latent needs. So those three, four things came together. And I said it was a very difficult I said that, to be very honest to leave McKinsey was, it was it was like really, it took a toll on me emotionally and personally. Because for the lock. When I when I was at McKinsey like that was, I felt like my parents were really proud. So, I have a younger brother, who’s a very high achiever. Okay, so he is an electrical engineer from IIT Bombay, Master’s and PhD from Stanford, teaching at MIT, he is a smarter amongst us. Finally, when I was at McKinsey, I felt my parents felt that I had kind of reached the ashes level. So, leaving was kind of leaving an elite job, great pay, but also leaving something which my parents were proud of the chat I’ve been trying to do for a long time. But I just felt I had to follow my dreams.

Siddhartha Ahluwalia 08:08

And then how did you do the market research? For what to start? Right? Can you share, you know, your process of discovering consumer insights, and how to bring them into action?

Shantanu Deshpande 08:19

So, I think the most the richest source of information is always conversations with people who are in it all the time, right? So, I had, like my friend was a brand manager at AXE when they were getting roger by FOGG. And it was absolutely phenomenal. Every Friday evening, or every other Friday evening, we will catch up in Chakala, go to a bar, and he will tell me all the things that are going wrong with his work and how a new company and there are 2015 or so right? How FOGG is kind of taking market share the deodorant market and I found that fascinating. I spoke to clients in retail, and they were telling me about how loyalty driven categories are suddenly seeing consumers become new things because they’re getting bored, or discoveries happening online. When I spoke to psyche who had gone to Flipkart, he was telling me about just the insane growth that is happening in across subcategories on Flipkart and also on Amazon. So, I think overall, there was a huge market, which is now which has now started becoming hungry for newer things. So, there was that. The second thing I think was that I think it was finally time one thing that I realized that it was finally time for a brand for men In financial independence, etc., but this will be the last 30-40 years as urban metros globally or even India we’re seeing women dating more we’re seeing women marrying later you’re seeing women being far more financially independent nowhere close to the war it should be but it’s you’re seeing it happen second thing is people are life casting a lot putting stuff on social media they want to be right swiped all the time. Right in a matrimonially competitive environment with life casting continuously men suddenly want to look good have no idea how, social conversation between women is very acceptable on personal care you see a woman tell her girlfriend I love your lip color Where did you get it? Which what brand is that? And now your hair very, very bad. Very normal, right? But we do sisters, but to guys like you and I I never I like said your shave is looking great. I would never do that that’s just socially not present. So, the onus on the brand is a lot more and the need is very high. So large market huge opportunity for doing things in a disruptive manner because of e-commerce infrastructure and marketing digitally and then the third thing I think the time had come for a brand for men to look good feel good and not this macho beard if you’re lucky but our kind of brand not that where you needed a personal care brand for men for them to liquefy and lower three four kind of triggers that made me feel that this was the right thing to do.

Siddhartha Ahluwalia 11:20

And how did you arrive other categories that you need to create your own blades your own razor, set like your own shaving cream,

Shantanu Deshpande 11:29

the three four options I was very interesting I prefer options were available at the time and we narrowed down give us we want to build a personal care brand for men. One option was so the if I want to place in the category, then right there was shaving and there’s non shaving equally divided right will shaving your hardware, which is razor blades remote, your soft services creams, balms, gels, forms, aftershave, all of that type of equally split between these two, in non-shaving 75% of the market is the deodrance. And then 25% we have a long tail of face washes and creams and body lotions and so on. So that’s how the market was well, there are three options here. Option number one was picking a category which is comparatively cluttered, but large, and do something innovative in it and try to take some 5-7% of the market, which is what lets you take the otter face washes and build out a brand that will always be like brand number 30 or brand number 100 or whatever, right? option number two is create a subcategory of your own. So, Fogg did what I was just talking about FOGG went into deodorant these 200 brands, and did this whole don’t waste any gas, only pure perfumes campaign. The ad was brilliant, I didn’t do it. The second option was to build our own category, like what Beardo did with beard category, nonexistent category, caught onto a trend and built out an assortment and portfolio of products and a brand that for the category is small, but they have a large share of that category. And they built it and guess

Siddhartha Ahluwalia 12:56

Beardo were started when you were building

Shantanu Deshpande 12:59

 Yeah, same time, same time. Man company, Beardo and Bombay Shaving Company started broadly around same time, and Beardo did very well, they grew very quickly. But in that market, we can do dollar Shave Club date, right, which is in the US a Gillette razor cartridge sells for three and a half dollars. So, Dollar Shave Club could come in at one and a half $2 with 80% quality and build out a scalable business. India, a marquee cartridge you get for 80 bucks is like 1.1 dollars, you can’t beat them on price. Right? So, ideas, okay, if you can’t play the razor and blade cartridge game, can we still enter in a large market like shaving, make really interesting well-designed product but very different. And the way we thought about this is Gillette as Reynolds Ball Pen. We want to create Watermen? More expensive, very exclusive, hard to get but creates super premium equity. And for two weeks, we built out this 100-gram razor it’s metal, it looks like a sword and its single blade and for Japanese blades in 2000 rupees 4000 rupees for the whole kicks are very different. And as a founder I always felt at the time making something beautiful. I don’t care what it costs, customers will buy it. So obviously naive at the time. But it worked out for us because Bombay shaving company for two years only sold this one kit and it created a huge equity in the system because women were gifting it. Men were finding it everyone’s name was written on the razor so people really felt that the brand was very premium. And the interesting thing was that that premium equity has continued to carry the brand forward even though we are now launched very affordable and competitively priced products across categories. Right. So I don’t know whether it was the strategy was not that obvious, but today we are a premium yet affordable and competitively priced company in the in the shaving for men and women space but that was how the initial container

Siddhartha Ahluwalia 14:59

In a recent interview in Jan? I think it was Financial Express. You said that you were just about to cross 100 Cr annual revenue. So, I believe you would have closed it, right?

Shantanu Deshpande 15:10

Yes, yes. Yes.

Siddhartha Ahluwalia 15:12

For roughly I assume, right. Today, you would be between nine to 10 Cr in monthly revenue. And this year, and you also shared an interesting fact that before pandemic, you were doing three CRM monthly revenue before like March 2020. Like how did this like 3x growth happened in a period when everybody was, you know, scared, panicky?

Shantanu Deshpande 15:36

Yeah, I did amazing. So, the pandemic was tragic for India, I we’ve lost so many people close to me also. But from a business standpoint, it is actually created tailwinds for us to that. So, two things happened, right. One is I think people just came online and for when people are coming on our discoverability online is because of our skills in D2C, our ability to experiment market. Well. It’s easier for me to compete with Gillette and maybe on Amazon or on Google, as opposed to in 2 million stores. Right. That is one thing that happened. Second thing is demand did not come down for our category. Right. You and I are on a call right now. So right now, what I’m wearing what shoes I’m wearing, what belt? I have what perfumes doesn’t matter. But my face needs to look good. Yes. Right. So, the consumption of our category continued to grow online. The third thing that happened was we launched women, which was a masterstroke not, it was not done by me or the senior people in the company was actually done by the women in our company. We have a large number of women who were extremely frustrated that they could not go to salons to get waxed, and all because of the pandemic, that they were working in a company that actually makes razors for a living and didn’t have a razor for them. So 30 women got together create a petition and said we are going to design our own razor, we going to launch of Bombay shaving company razor for women. So, it was a project by the women by Okay, they definitely done themselves. They work with the product development team, they worked with our procurement team they worked with our industrial designers caught that razor out and over the last one year said that that that category has just ballooned forever now 25% of our business, and I think over the next one year will be 40 to 50%. Our business will be women very different right is much larger markets very service oriented, even vaccine but younger women love shaving. They just love it. They like carrying a razor in their purse, they don’t want the inconvenience of figuring out appointment Lena hai urban company ka ya salon aunty ka, I want to go to a party, I want to go to a date tonight. I want to buy something short, carry a razor in the purse. And there is unlike men that Gillette is so strong in women, there is nobody so there’s a huge opportunity for us. Plus, given that women like Bombay shaving, we are brand, we’re a brand at soft, caring, easy to gift, right? So, there is equity in a woman’s mind, 27% of our buyers even before our women launch was women, they would buy for gifting during Valentine’s Day, Father’s Day, Rakhi, etc., right? So, there was a comfort to the brand. So, when we say okay, fine, we stand for shaving. And we are something for women. They were lapping it up when we launched a product within six days order number one on Flipkart it was taking share on NYKAA. So that was a was nine months it has now become 25% of our business going super-fast. So, there are two things that kind of led to led to this pre-export.

Siddhartha Ahluwalia 18:20

And if you can share, right, what’s your percentage of revenues less from direct to consumer, your own website from ecommerce and offline.

Shantanu Deshpande 18:29

So direct to consumer is roughly 10 to 15%. We don’t use direct to consumer as a as a as a sales channel as much because we’ve realized one thing said that men shaving and men’s personal care is not a very engaging category. It’s not like men will think extra about it. Unlike women, and kind of go to a website and buy something specifically if someone happens. We get a lot of people who come and browse and then when they see it in a store or on the season Amazon, they will be going up that’s the nature of the category. Women is very different women d2c is much higher, so 10 to 15% a day to see roughly 50 to 55%. Yeah, 55% now is ecommerce which includes Amazon is obviously the highest one there. But we are growing very quickly on Flipkart, Nykaa because of women Myntra doing well. Social Commerce.  e-pharmacy, so anywhere and every channel will have its own assortment. For example, grocery will be more on shaving cream and forms. NYKAA will obviously be more of women’s hair removal. And that around 55% and roughly 30% is is from our offline, General trade modern trade b2b that kind of.

Siddhartha Ahluwalia 19:38

got it. And if we can go back in time, right when you started 2015 was the year when

Shantanu Deshpande 19:44

2016 was when we started the other side thinking about it. You know, I’m drawn to launch in July when we launched.

Siddhartha Ahluwalia 19:50

And when did you quit your job? Like put in

Shantanu Deshpande 19:53

2015. end

Siddhartha Ahluwalia 19:55

so, six months was roughly a period you take Yeah, product experimentation, e

Shantanu Deshpande 20:00

Hiring an initial team thinking about the market raising the money all of us,

Siddhartha Ahluwalia 20:04

when did you raise your first money?

Shantanu Deshpande 20:07

my exit from McKinsey was kind of complicated, right? Because the firm invest in you for like four or five years, let’s do kind of go around the world, you know, fly, live in great hotels, you know, do what you want there. So those discussions had just started happening for me a little bit at the firm, what my client’s platform is, what my knowledge platform is. And that’s when I started to decide to leave. So, my exit was kind of prolonged, I had an owed it to my mentors and the senior partnership with the firm to have conversations, I also felt that if there was merit in what they were saying, maybe I’m taking the wrong decision and mckinsey is not a place for me. So, I did like 6-7-8 months of kind of discussions. But at the end of it, I think everyone kind of realized that I wanted to do.

Siddhartha Ahluwalia 21:05

Yeah, I can hear you, Andrew. I lost. I lost a video. Yes. Good. Continue. Yeah.

Shantanu Deshpande 21:12

So those conversations took like, almost half a year, and I wanted to have them. And by the end of this conversation, i had 20-25 conversations because over a period of 5 years, you work with a lot of people. They also kind of reach the same conclusion as we find you go and live your dream. But by the way, because you have to be a close and because you know you, you seem to be doing something interesting. And 2015 2016 is when everyone decided to start becoming angel investors, they all wrote cheques in the company. So, my exit from McKinsey. And my fundraising of the seed round was the same set of conversations, which I cannot thank the firm enough and the partnership enough to date so we raised around for four and a half cr or someone comes up 15 lakh someone put in 50 lakhs or 20 lakhs stuff like that. So that’s how it’s done.

Siddhartha Ahluwalia 21:57

Got it? And when was the time, right, that you brought in the first institutional investor and Who was that?

Shantanu Deshpande 22:04

So, we have always, we’ve always raised capital very conservatively given here, you will know about brand building and personal care space is its high gross margin business. If you are brand premium can attract good prices, you have to have a big cushion to play with. So, you don’t need a lot of money to do this. You can do what brands in India, when they cross 100-150, they’re mostly profitable, many of them are profitable from day one. So, my belief was always that you should never raise money to buy revenues, you should always raise money to build your brand, but you will always raise small amounts of money and other large so we raised 4 cr from our angels then we did 2 million rounds with fireside ventures then we bought in Colgate Palmolive. A year later

Siddhartha Ahluwalia 22:49

when was with fireside Can you share the timeline of these?

Shantanu Deshpande 22:52

2017 July

Siddhartha Ahluwalia 22:54

every year we have raised money. So, first year were angels. Next year were fireside ventures the year after that August 2018 was Colgate Palmolive

Shantanu Deshpande 23:04

December 2019, was sixth sense venture partners. And January 2021 was Reckitt Benckiser, again, global clear we are two global strategics who sit on Bombay Shaving company’s cap table. And I’m very proud of the fact that one small company in India can actually attract the strategic interests of $200 billion global behemoths and we are all like in global investments, we will not India team decided to merge the global HR and develop investment.

Siddhartha Ahluwalia 23:30

And I think unlike in case of Marico, when they invest invested in beardo, say the eventual goal was to absorb the brand right here. There are two brands, right? So, they kind absorb they can’t with Bombay shaving company to have an

Shantanu Deshpande 23:47

idea. I have always been very careful about strategic universal; I think for two reasons. Number one is the institution is huge, unlike venture capital, or private equity, where the number of partners is very small, right, so continuity is easy. In large businesses, the number of stakeholders is very high. And if the person who is sponsoring your investment leaves, then the next person who may or may not be important to that next person. So, you have to be here to be able to be able to insulate yourself from these kinds of risks. Second, are strategic investors being scary to financial investors, they seem they exactly what you’re saying. They seem like people who will gobble you up, right. So, we wanted to do two things. We wanted to bring in these folks with a very clear long term view number twos, and they’re very strategically important to us, like they’re both highly penetrated brands in India offline, they will do things for us that we will never be able to do on our own. So, their value to us is immense. But that value comes with a cost. We said we will never allow unless you are sure that you want to sell to this company long term. We will always keep them under 15 16%. So, most of them have minority holdings. The rights are very limited. So, our financial investors are higher, right. Our strategic investors have lower rights and they’re very mature, sophisticated and comfortable about that fact second, the third thing is they counterbalance each other. So, with RB coming in now there is a weight, which now it’s easier to distribute. And it’s the capital becomes more balanced for financial large company to come in if they want to participate.

Siddhartha Ahluwalia 25:13

And from 2016 Can you share your yearly milestones like what was the numbers that you used to measure yourself by?

Shantanu Deshpande 25:20

We obviously topline was a critical one. Market internet sales was another one our cohort and repeat rates were important. We moved around a lot said right so we kind of went from men’s shaving to men’s grooming, to like a men’s grooming we are like a 500 SKU when we had an oil, we had beard we had that you may made soaps, body washes, we had all that. Now we’re the last one and a half years, we realized that okay, this is our core focus is hair removal. We know how to do Hair Removal for men, we know hair removal for women, we now know also what channel product market fit is. So, men shaving is something that we will build offline more than we will build an e commerce, the category sits offline, that consumers buy the stuff in stores, women hair removal, the category sets online offline mode, if you will find it and health n glow, we will also find it on Nykaa Myntra. So, our strategy for these two different businesses is very different. And for us revenue, market, internet sales, NPS cohort management on online, they have obviously some metrics around conversions, number of sessions, brand strength and so on. Offline again, we have repeat chords for localized stores and so on. So, it’s very standard, we have kind of good partners, working with companies like Colgate and RB to become very disciplined about how you track things.

Siddhartha Ahluwalia 26:40

And if from 2016, if you can share, you know, yearly, let’s say top line, how much?

Shantanu Deshpande 26:46

Ah, yeah, it’s very hard. I’ll tell you; I’ll tell you what we were doing when we raised the money, right. So when fireside invested in us, you’re doing like 15 lakhs a month or 18 lakhs a month, then 2018 when Colgate invested. And if you’re doing like 40 lakhs a month, then 19 when six sense invested and we were doing my senses roughly to 2.25 crores a month, then when RB could invest it in January again. We were doing roughly four and a half cr a month and now we’re doing 9 cr a month

Siddhartha Ahluwalia 27:20

it’s been a phenomenal journey for you and where you think you want to take it right you have seen you know the market size

Shantanu Deshpande 27:29

I think I think nobody owns hair removal the way we can in India and you have you have Gillette for shaving you have nivea you have vlcc and kaya for women, veet for hair removal cream your Venus in women results. No one brand owns Hair Removal for men and women in India as a fmcg company, right? I think that’s the space we want to be having that space we can really compete and have equity we are we are at 100 crores plus 120 crores I feel that in the next two years, we can build a 300 to 350 core equal brand between men and women. Right. the options open up significantly in terms of scale in 1000. I think to build 1000 crore business will require us you know, combination of product and service business. So, it might involve salons, it might involve clinical treatments, it might involve hair treatments in the dermatologist so I don’t know what that journey is going to look like. But I think if I were to do and for founder then you have been one before I think, 2-year journey is sacrosanct. After that it becomes you know, a bit it’s kind of more ideation. So, my belief is long term, we want to own hair removal consumer business in the country. I think men’s shaving and hair removal plus women’s hair removal together online offline and online respectively, can take us to 300-350 cr equally divided between both. And then the 350 to 1,000 crore journeys might involve I think it might involve penetrating deeper in the Indian channel and, and expanding into services as well. So that’s broadly I look at.

Siddhartha Ahluwalia 29:06

And, you know, just stepping back right has been a phenomenal journey right as a D2C founder. So, what if you can lay some things right, there’s some first principles, right? When you acquired your first customers like what were those things which you

Shantanu Deshpande 29:22

few things I think, number one is I think the product experiences is crucial, right? And small and small things make a big difference. I think keeping it simple and focus on the small things is really important. For example, if you take a shaving cream, when you open the top of the shaving cream, the shaving cream should not spread on the cap. It’s a small thing but it’s very important. People in the ketchup industry understand as well. You see Heinz, they do a very good job of other cap, secondary close the cap, the sound the cap makes sense closed. is important. The tactile feedback on the thumb is important. The fact that you feel the shaving cream is not getting wasted is important. The fragrance on face after you wash off after shave, how long it lasts is important. So very important. One thing which I tell to anyone who’s building a brand, whether it’s b2c or otherwise, get the product experience, right, everyone can make a 95%, good product, you will then make a 99%. Good product. Very, very, very doable can make 100% cool product. And those people succeed a lot. So, founder energy, team energy should be in building out a really good, outstanding product experience. Secondly, I think, figure out where to play like Don’t, don’t, don’t play in super nice, super small, scattered areas were very boring. We did we did that right. And we learned the hard way. But don’t play in places or lunch, you have a much higher chance to succeed if the need is tight, right? We’ll build something small; it will not remain relevant for too long and you lose interest. So, there are two things at the product experience, spot on. And second is playing live markets. Third thing is I think, just learn the art of storytelling, super important as a band, you have to learn. And there are so many brands globally that are doing such cool things. There are so many media, like from podcasts to pay media to the internet opened up so many doors, I just learn the art of storytelling and your brand ecosystem. And that’s a very important thing that those founders and marketers need to do today, there are three things that I think are super important for people starting their own business.

Siddhartha Ahluwalia 31:23

And what was the story from the beginning for Bombay shaving company, one summarized in one sentence.

Shantanu Deshpande 31:30

We believe that men need to look good, when men look good, they feel good. And when they feel good, they’re the best version of themselves, to the people they love. And that’s our small role in the life of a man. That’s what Bombay shaving company always stood for.

Siddhartha Ahluwalia 31:45

And some of the other gestures, which you did it right over, I think important in the journey. The fact that you know, you gave your earlier angels a 20 cr exit in the last round. Yeah. So how did that happen? Right? Because they would have liked to have stayed as much longer in the company and emotional attachment is there.

Shantanu Deshpande 32:05

So actually, what we did was, and this is a question that is not done, thank you so much for asking, right? I think we don’t discuss exits. And we kind of think of them as taboo topics or, you know, look, when you have a large cap table with large number of people, and people who, who cares about the business, yes, they will stay for a long time, they feel like they’re a part of the business. But when an investor wants to come in and wants to hold higher percentage of the company and your return to shareholder value is satisfied for your angels, for example, you need to take a step back and say, if someone had put in x and is taking out 6x, do I need that six X in the company? Right? I’m getting money for myself. Can that investor who’s an angel investor, take that 6X and put it in six different entrepreneurs today who might need that money more? Absolutely. So, what we did was if someone had put in 20 lakh and is taking out a crore, the owner will not let them take out of cr, we let them keep 40 in the company and take out 60. And that’s 60 we forced not forced, but we encourage them that you know, I know the 60 is coming out. But please deploy it in founders, right, six checks of 10 lakhs each and six different founders. And you guys can do it together or we can like you can do it an employee the company will want to exist, and you can keep it back for them as Angel money, their value or valuation is too high. Now you can put this money back in the company. It won’t make sense from an angel return center, take out the profit or some part of it, and redeploy, that really set a chord with them. And I felt good because end of the day said right, we are people who are my mentors, my family, friend, etc. It felt like a loan, even though it was an equity investment that I didn’t have, I’d never owed the money as a liability. It felt like an emotional loan to give back I took from my father-in-law, my dad, you know, my neighbor, who said, oh, if you’re putting in your money when I want to put it plays on your shoulders, there’s a weight on your shoulders when you have that kind of capital. So, I said guys, if for nothing else, just do it because I will feel lighter and I’ll sleep better at night. Your investment in the company remains it’s not like I’m getting away completely. So, people took the money and they were very happy about it. We also give significant exits to senior employees who were on the company. People paid off Home Loans people have bought their parents’ house or wanted to nice car. It feels good man. Like we keep talking about wealth creation and entrepreneurs. It has to happen tangibly and on time. And the one thing I realized the most out of this whole situation was it was a small amount for the investor also for the company also. But when you have a shark that has tasted blood now the hunger is very different. And investors try to keep that key founder and only been in power for longer they feel that that person to them Jee Jaan, for the bad idea of burnout rates is a really high it gives the person some amount of liquidity rather than 5% or someone holding for employer. But that amount of money was so high that they felt if itne 2-3 saal me my 5% of the company this big, imagine what can happen in 10 years and it becomes very real. So, for us secondaries are a very important part of our capitalization journey. And I urge founders are listening to this already to do it, do it in small amounts stolen ways, when your investors are comfortable. Don’t dilute a lot while you’re in your skin in the game reduces that’s a big No, no. But do taste blood because you’re working hard for it.

Siddhartha Ahluwalia 32:21

And you plan to keep on doing it right offering

Shantanu Deshpande 35:30

yeah 100% not only myself also, employees also early investor everyone, keep on keeping hungry. appetizers are important to stay hungry. So, I think that’s the way to think about it.

Siddhartha Ahluwalia 35:46

got it. And, you know, if you reflect back, you know, in terms of other decision-making principles, which your team has built, what would they be from which other D2C founders or any founders can learn from today’s podcast?

Shantanu Deshpande 36:01

I think one is stay close to the consumer, going, if you are an Indian fmcg go into the market a lot. Talk to retailers talk to category builders, talk to competition, just keep it’s a very fast evolving market, stay close to the market, you can’t do work on a laptop, in your office, you have to be in the market, talk to people, it’s tiring, in summers, it becomes very painful. You, you feel like you’re not getting a lot. But Darshan is a fantastic example, you built fog sitting in panwari and figuring out how deodorants are sold, right. That’s where the insight came. So, do that continuously Stay close with them? You know, I think second thing is trust your judgment. And gut don’t keep waiting for data to validate what you’re thinking or feeling. entrepreneurial teams are very fast. And they need to be they want to make big dents in categories without have the competence to come large size competitors, you can’t be too slow. And you can never be fast enough to keep launching products Exactly. Or keep you know, kind of manual now on our communication strategy to do whatever you can to create upheaval in the category as much as you can, not only will do it is to be a giant third thing is in any decision. Be prudent, right? One, one framework that I found helpful is whether you’re launching a product or doing a campaign or whatever it is to measure it across attractiveness, usability and time to impact. So, if you have two out of these three, it’s a goal it’s worth it or questionable on even to then kind of hold on. So that’s a that’s a framework that we try to use for all our decisions internally. And it’s something that’s become a part of the DNA of the company. So, one thing is we’re not being rocket science, right? not rocket science. But to do a few things that are doing very, very well. That’s what at least we try to focus on.

Siddhartha Ahluwalia 37:54

And how is your thinking on distribution evolved over a period of time paid versus organic? Right. When, to where and when to? And what are the channels you as a founder discover for organic?

Shantanu Deshpande 38:08

Yeah, I think I think it’s super critical to understand where the category sets, right so we have realized men shaving is a category that sits offline. So, our ability to create distribution offline is very important. so large, relationship management efforts are working with procurement managers are these large chains, making sure that our merchandising and in store activations are extremely high quality. We are competing Well, our brand lockers good. It’s a pure brick and mortar business. But when it comes to women, I think it’s super critical to understand engagement online. Okay, brand photos, storytelling and community building, which allows people to come onto our brand destinations, I think organic traffic is a is a proxy for brand stands, right, if you have more organic traffic, then that means a brand is creating all on its own. A lot of it is front loaded. So, it becomes scary sometimes because you want to index on brand rather than performance. performance is important because to continue to acquire consumers to continue to identify, I think, what pay channels have done very well is that they have created a habit of addiction of marketing spend if done well, your engine keeps churning, right. So, they’re important but I think long term vision should be on equity building for the brand and bringing people into retail environments where conversion is maximized. So, whether it’s a big basket or whether it’s a big bazaar store or whether it’s a health and blue outlet, or whether it’s a large format department store in Kerala, whatever it might be in that retail environment, your brand should be picked up or it really should be top three consideration then

Siddhartha Ahluwalia 39:47

how do you divide your teams for this distribution if you can like roughly share the current size of Bombay sharing company and the size of the distribution team?

Shantanu Deshpande 39:58

we have two functions, which is marketing and product building as a marketing team and was performance D2C, the design, production studio for all our product shoots everything, campaign management, campaign strategy, shoots, all that happens in productive areas, sometimes over insights to procurement to manufacturer management, to quality control to cash management all added up. There are two big channels function right. And we have e commerce within e commerce we obviously have different things for Amazon Flipkart Myntra Nykaa etc., we have a d2c team, which is which runs like a product team, and it runs our website. So, bringing in traffic and then converting traffic. We have a large offline team, we have 60-65 Member Offline team, which manages both my modern trade, large format and general trade, which includes pharmacies and we have a b2b institutional team as well. So, from a number of people about overall the company has roughly 150 people, marketing will probably be a 15-18 number team product will be 10-12 team. Ecommerce will probably be at 20–25-member team. d2c is a 10-member team, offline, here’s a 65-member team and then you have obviously a finance, HR, you know, those kinds of roles as well. Customer Service.

Siddhartha Ahluwalia 41:27

if you can share, right, as a founder, how you spend your time in various functions, what do you do for your own learning.

Shantanu Deshpande 41:35

So, I’m a I’m a founder who likes to build a leadership team that makes my presence in most settings redundant. So, we have a solid leadership team, these team is solid as the completely independent have taught me hands off. But two things I tried to do is number one is I I communicate, communicate and over-communicate our mandate and vision all the time. Second thing I do is I try to have higher value, always try to make sure that the DNA of the company is constantly evolving and not breaking. The third thing is I’m responsible for the financial prudence of the business, whether it’s raising capital, or reviewing how the company’s doing a budget standpoint. Fourth thing I do is I make sure that I make sure that we are honest to our consumer orientation. So, staying close to the consumer major products I’ve got, what the consumer is thinking about the brand. And anytime I go into stores a lot I you know, I read Amazon reviews a lot, a lot of my work is like dipstick and kind of out. I don’t, I’m not a hand on that. So, you will not see me in office, you know, doing problem solving sessions all the time with everyone, I will be very clear about what I expected to get done in a week, in a month in a quarter. And then I trust my team to do it. And I make sure that course correction is my job. Financially, of course, I participate in raising capital, making sure that you’re always in the green.

Siddhartha Ahluwalia 43:19

And if you can share, you know, we are reaching towards the conclusion of the podcast, how do you best derive value from your financial investor? So, what value you derive from the Fireside And six sense, right? And how do you keep them aligned to that?

Shantanu Deshpande 43:35

So, financial investors are our, in my view, they are cheerleaders, right? They don’t add and like Colgate and Reckitt can add tangible impact for Colgate for example, they’re there, they make their tubes in a company. We now work with the same company all our tubes are built in the same company that’s a huge cost advantage, distribution through Reckitt and Colgate will be used for so financial investors cannot do that. Right. What they do extremely well most of them is that they are very sharp problem solvers. They are very good at pattern recognition. They are very they know me very well Now personally, to know when I’m making mistakes, they help us a lot of recruitment. They I trust Nikhil Kaval Kanan Nimisha assessment on new people, especially senior folks, so they have a big role in bringing in some other people who have hired and in recent times, and they keep us honest, they are cheerleaders who keep us honest, and they are a big believer because I come from McKinsey. I’m a big believer in problem-solving. Problem Solving support continuously and a big believer in advice. I think it changes the way you think I will talk to someone with very smart questions. A lot of your assumptions or questions you had to think more that is invaluable. So, they play that and constantly. And the thing is they are, they want us to succeed, not only in return for their own investment, right. And these are both very founders first, they genuinely believe that the founder is successful, their job is done. I love that about them, which always makes me feel like they’re in my corner. I’ve seen a lot of founders with funds, their interests have become difficult to manage. And it becomes very, very different, very toxic. And you can’t help but sometimes things just kind of go down that path. But thankfully, for me, touchwood, I’ve always, I’ve never once felt that they were not in my corner. So that makes a huge difference. Plus, you know, Nikhil, for example, is a consumer guru, he or he makes bets that are totally unseen. Well, I am amazed by his ability to like source out deals, and find really crazy founders and corners of India and really kind of will take them and build them into you. And he’s also had a career and in public equity. So, when if and when Bombay Shaving Company decides to go public, Nikhil would be a fantastic guy to just have in our corner so that way they played, a lot of values, short term and long term.

Siddhartha Ahluwalia 46:12

And what do you do? You know, my last question is, what do you do for your own learning? podcasts or whatever else?

Shantanu Deshpande 46:22

a voracious consumer of content online, right. So, I follow every startup person on Twitter. I read a lot online of what people do. And listen to a lot of startup podcasts. I have a lot of mentors in my life. So, Rahul at Treebo, Revant Bhatia at mosaic. These are guys who I talk to like for hours, just kind of showing how the ecosystem is changing. What are the things that are happening in their businesses, how they think about, I think, Dhaval at pharmeasy has talked in terms of building and recruitment? So that ecosystem helps I think this concept, Id founders who are like frogs in the well become stagnant from a learning standpoint. If you put yourself out there, you spend a lot of time with these different meetings kind of agenda, like when I mean, you guys are never about scale. But here are the three things I need to learn more, here are five skills I need to pick up. It’s never that it’s always continuous. You discover more things about others along the way, and then becomes really cool.

Siddhartha Ahluwalia 47:23

Thank you, Shantanu. It was a wonderful, wonderful chat. You know, personally, I learned a lot, right. And I hope you enjoyed and listeners love it as much as I did

Shantanu Deshpande 47:34

no Siddhartha, you have a wonderful style, very unassuming, very open. And I’ve seen some of the work that you and Nansi do. And is actually like it’s very relaxing and pleasure to talk to you. And you know, just hear the intelligence in your questions. And when you when you make me things I’ve always been a very so thank you so much and completely my pleasure to be here. Thank you so much.

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