Niche business, creative solutions11 min read . Updated: 18 May 2014, 05:23 PM IST
Four companies that are developing their own market, and attacking conventional businesses problems with creativity
Four companies that are developing their own market, and attacking conventional businesses problems with creativity
Spandan Banerjee is betting on catching the surfing wave when it does come to India. The Mumbai-based trained pilot-cum-surfing enthusiast was a key member of the India Surf Festival, which launched in Odisha in 2012. Last year, he co-founded a company to make sporting boards of every description, from surfboards and hand-planes to kiteboards.
Banerjee’s Tattva Boards has already made a small start selling longboards—essentially, longer skateboards that mimic the surfing motion on land—that go for ₹ 8,000-10,000 a piece. But the 25-year-old knows it may be years before his “boarding company" can be profitable.
“Surfing and skating aren’t mainstream sports in India and it will take time (for them) to get there. So regardless of what I do, the industry in India itself will be negligible in terms of a ‘business’ for a few years," says Banerjee. “There are no statistics, no modules or guidelines to follow. Everything we are doing is from scratch.... We are creating the industry and market as we speak," he adds.
Banerjee is among a small group of young entrepreneurs who are developing business ideas that may not even have a ready domestic market yet or that may seem too niche to present many opportunities for growth in the near future. These entrepreneurs are, however, continually pushing the boundaries of what is saleable in India.
We spoke to the founders of four such businesses about the problems they face in the current stage of their business, got a peek into how some of them are overcoming these hurdles creatively, and also spoke with some experts to get advice on how they should handle their next big challenge.
Amrit Kumar and Mriga Kapadiya, founders of the Mumbai-headquartered “luxury streetwear" label NorBlack NorWhite (NBNW), sport their brand of quirky on their sleeve. At the recent Coalition conference in Greater Noida, Uttar Pradesh, Kumar was sporting mid-calf-high neon green boots and Kapadiya’s maroon, velvet slacks had a large ‘zari’ motif on each side.
The Coalition is an initiative of Mumbai-headquartered Only Much Louder, which organizes the NH7 Weekender music festival, and New Delhi-based consultancy Do One Thing, to help businesses in creative sectors like art, music, film and fashion connect with mentors, investors and other entrepreneurs like themselves. The first edition of The Coalition launched in March with a conference at the Buddh International Circuit.
Kumar and Kapadiya, both 32, moved to Mumbai from Toronto, Canada, in 2009 with a business idea but “no real business plan". The idea was to launch a fashion label that would marry their love of Indian textile techniques with the 1980s and 1990s street-style aesthetic they had been exposed to while growing up in Canada.
In the three years since their first collection came out in 2011, Kumar and Kapadiya have used Kutchi embroidery, Bandhini, Ikat handlooms from Andhra Pradesh and North-Eastern weaves to make Westernwear. As they put it in an email interview, they see their job as “contextualizing traditional Indian textiles to speak to the international generation of modern, fashion-aware customers".
Starting at around 6,000, their creations are sold from the NBNW online store and pop-up shops—both formats that save on the high rentals of brick-and-mortar stores in cities like Mumbai. Next, they want to focus more sharply on developing their online shop and access funding so they can scale production, grow the team and expand to markets like New Delhi (they set up a pop-up shop at Shahpur Jat from 7-9 March) and Bangalore.
Suveer Bajaj of the Mumbai-headquartered FoxyMoron digital marketing agency says it’s a fundamental principle that you have to “spend money to make money on the Internet". Don’t shy away from bearing the cost of acquiring a customer. Even if this one-time cost is, say, equal to the ticket size of the entire first purchase, he says, it could be worth it in terms of “lifetime value of a customer"—the amount the customer is likely to spend on products over the years.
Roshan Abbas, head of events management company Encompass, says NBNW must ensure it stamps its investor pitch with its own brand of creativity. “A creative business must get across its creativity! And the passion! If you’re a quirky business and your layouts are conventional, who will buy into you?" he asks.
Banerjee, who describes himself as a carpenter, DIY man and beach bum, partnered with German national Dally to launch his boarding company last year. He has made 17 longboards to date—six of them were sponsored for the third edition of the India Surf Festival in February. He sold two, for under 10,000, and gave away the rest—mostly to children who couldn’t afford to buy them and who showed an interest in learning to ride.
Ask him how longboarding fits into his dream of making a living by surfing, and he’s happy to explain at length how longboarding is the closest thing to surfing on land, how it makes sense as a business model because “any kid in your building can try out a longboard or a skateboard", unlike surfing, for which you need the right kind of wave.
For him, the challenges include developing interest in boarding sports to create demand for his products and getting investors on board a venture that could take years to pay off. He is also dealing with problems like non-availability of specialized equipment, difficulty in developing processes, and having to do his own extensive, sometimes expensive, market research. He finds giving boards away in different parts of the country goes some way to help him sift potential markets from duds.
Banerjee calculates he will need to sell at least 45 boards a month to help set up his woodwork space, buy tools, do the branding and packing. He has only sold a few so far.
One of his biggest hurdles right now is “designing my brand or logo—someone who will understand my vision, I guess".
Mohamed Rizwan of advertising agency W+K Delhi says, “It’s no coincidence that the music, film and fashion industry have some of the most inspired identities." He cites the examples of the mould-breaking strategies adopted by music channel MTV in the 1990s and fashion label Louis Vuitton as two sides of a creative coin.
“MTV’s anti-consistency was their consistency. Every time you saw an MTV logo, it was different. The colours were different, the style was different, you didn’t know what form of MTV you were going to see next but it was unmistakably MTV," says Rizwan. “For the exact opposite, you need only to look at the fashion industry. Whether it’s Louis Vuitton, Prada or Bottega Veneta, it’s just a simple logo with a clear typeface with no embellishment. The logo simply becomes a means to mark that season’s collection and mood. The product, not the logo, becomes the hero. Who can question that logic?" he asks.
Laura Quinn, founder of Do One Thing and a key organizer of The Coalition, says that while it’s best to get a professional designer to do the final work on a logo, creating a “mood board", thinking about all the potential places where the logo could be displayed or used in future (on the company website, mobile app, posters) and subjecting a potential logo to the T-shirt test could help.
“Start by creating a ‘mood board’ of all the things that inspire you about the world of surfing—images of the beach, the boards, the shorts, the sunset, the post-surf drinks! Add in some design elements that you like from that world too—perhaps a surfboard design, or some signage you saw on the beach. A designer can interpret this into some initial logos for you to look at," Quinn advises.
“The ultimate test for any logo is the ‘T-shirt test’—ask yourself whether your logo would look awesome printed on a T-shirt, and if the answer is yes, you know you’ve cracked it," she adds.
New Delhi-based Braddock first met members of the Perna community in 2011 on a field visit to Najafgarh in the Capital, while working with an organization that fights sex trafficking. The non-governmental organization (NGO) wanted to enrol women from the community, who were being forced into prostitution by their families, into self-help groups.
Time and again, Braddock says, the women told her they wanted to give up sex work and earn money another way. When she discovered most of them could sew, she encouraged the women to hand-make some items which she sold “back home to a friend’s store" as a side project. Braddock says she thought their sewing technique at the time left something to be desired, but with some training, design inputs and someone to package their story just right, they could make a go of the social-cum-fashion enterprise.
Braddock quit work at the NGO and launched Sewing New Futures last year from the $1,000 (around 60,000) grant from The Pollination Project and the 1.5 lakh she raised through partner non-profit Shanti Project in the US. The Pollination Project gives one $1,000 grant to an “individual changemaker" every day of the year.
Funds continue to be a constraint for Braddock, and she is now launching a campaign on the IndieGoGo crowdfunding site to raise money for raw material and machinery, and to pay her staff of three.
Sewing New Futures sells appliquéd, raw silk scarves starting at 1,250, on a wholesale basis. “To hit ‘social break even’—how much we need for the women to make enough to leave prostitution," Braddock says, they need to sell 250 pieces per month. Currently, they often fall short of this target.
Getting an e-commerce platform going is work in progress.
“It’s not enough to just launch a website," says Bajaj of FoxyMoron. According to him, most creative start-ups discount the fact that millions of websites are launched each week, and they need to actively market themselves online.
He says that “to some extent these entrepreneurs are content-driven and often make the mistake of thinking that ‘their work will simply speak for itself’. In reality, however, the work needs to be packaged online".
Zainab Kakal of Intellecap, a consultancy focused on social entrepreneurship, says that for a social venture seeking funding, it is essential to “establish a strong business case at the outset"—that means clearly answering questions like, “Is there a market need for what you are providing? If not, are you doing what it takes to create a consumer base?"
Kakal adds that “organizations which are social on the basis of their workforce (that is, they employ disadvantaged groups) often need grant and aid support initially to set up operations". She says Sewing New Futures should apply for funds to family foundations and grant-giving organizations.
The idea came to Mumbai-based co-founder Suraj Talreja, then a “gig-attending, lyrics-reading, doodle-making, daydreaming" college student preparing to become a chartered accountant (CA), during his mandatory articleship, in early 2011. “While working for NRI (non-resident Indian) clients, one of whom was into sports tourism, the idea of combining music with travel hit me," says Talreja, 23.
He took the idea back to his friends—coder Krish Chainani and fellow CA Nishit Shah (Shah came on board full-time in 2013)—and without much thought as to how he “was going to go about it", took the plunge.
The 10,000 seed money came from Talreja’s CA articleship stipend, and was just enough “to buy a domain name and host the website" for the business that was then called Chorush, a mash-up of chorus and rush. The model really was to make travel agent commissions and curate new experiences more users could get enthusiastic about. The first festival the trio covered was the NH7 Weekender in Pune in 2011. They formally launched the company in 2012.
The company has since added events like the India Bike Week and VH1 Supersonic to its roster, and developed payment modes like Go Dutch, which allows group bookings with the option for each member to pay for themselves.
Soundtrot’s big challenge now is to deal with a long gestation period and get the cash flow right to cover operational expenses, overheads and the like.
Ajay Nair, director and chief financial officer of Only Much Louder, says start-ups make some common mistakes with pricing and fee structures early on that can have a lasting impact on business. These can range from failing to account for all the costs that go into delivering a service—“typically, the fixed costs that a business has (overheads, etc.) are ignored"—to “not differentiating between strategic and tactical pricing (the importance of winning business early in the life cycle of a company versus short-term pricing based on immediate profitability considerations)".
He says that with Soundtrot, the problem may be a case of being “over-optimistic about payback" and underestimating “the need for cash to keep a business afloat". The fix: “It’s always useful to have enough cash raised, either via external funding through debt or equity or through accruals from early sales, and not under-capitalize the business. It’s critical to closely monitor credit cycles with customers, reward customers via discounts for early payments and be shameless about collecting—the single biggest issue with cash flow management is not being aggressive about collections and being liberal with payment terms," he says.