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Here’s your program.
Hey everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. This is a website where entrepreneurs come to tell the stories behind their businesses. Joining me today is a founder that Business Week called ‘One of India’s Most Powerful People.’ Anupam Mittal is the founder of People Group, whose collection of businesses includes shaadi.com, an online matrimonial services and matchmaking business, and Makaan, a housing site.
Anupam, it’s good to meet you.
Anupam: It’s great to be here, Andrew. I’m excited about what you guys are doing and I’m happy to be sharing my story.
Andrew: Thanks. So, I’m on your website right and I see just a small collection of the companies that you have, how many really do you have? How many different properties do you have?
Anupam: There’s a couple of things. One is businesses that People Group owns and operates. There’s really, primarily, three businesses, there could be sub-brands and so on, but those are sort of less meaningful. The three businesses that we really manage and operationally run, one is Shaadi.com, as you mentioned, that’s a matrimonial services business or matchmaking business. The other is makaan.com, which is an online real estate portal, where that business model is pretty clear to everyone. The third is a company called Mauj or the destination called Mobago, which is really a mobile application business. We are one of the largest independent app stores in the world. We do about one million downloads a day, and that number’s growing. So these are the three businesses that we titled operational manage.
Besides this, there are businesses where I’ve angel invested in and so on, but those are more investment activities rather than People Group businesses as such. I’m operationally involved in them.
Andrew: So Astrolife, which I’ve seen in a lot of articles about you, Fropper, which is also on your website people-group.com, those are angel investments?
Anupam: Well actually if you talk about Fropper and Astrolife, these are businesses that we had started pre-2008 and there were a bunch. We started with makaan.com, Fropper, and Astrolife to try and understand sort of the dynamics in the Indian ecosystem as the Internet evolved. Very soon we made a call we were only going to be involved sort of makaan.com. Fropper.com is still operational, but it’s a smaller business and it’s independently run. Astrolife is something that we own a small equity in, but we’re not really operationally involved, that’s run by somebody else.
So the website clearly needs to be updated. So thanks for pointing that out. There’s somebody working on it as we speak.
Andrew: What size revenues is the business doing right now?
Anupam: So we’re doing total, about $25-$30 million, is what we’ll end up doing this year. So it’s growing pretty rapidly. Makaan’s growing about 100% a year. Shaadi.com, we’re looking to clock about 35%-40% this year. So these are all growth oriented businesses.
Andrew: And you have some pretty impressive backers. Who’s invested in the business?
Anupam: So yeah, we’re very happy with our investors. Everybody’s heard of Sequoia, so those guys are there. I love working with them. I’m involved with them on a couple of board where I’m an angel investor and they’re the VC investor, so it’s a pretty broad relationship. Then we’ve got Silicon Valley Bank. Again, they’ve been fantastic in support and great investors. Then as far Mobango or Mauj is concerned, we’ve got Intel Capital as well. So really some very recognizable names and some blue chip investors.
Andrew: Is it a total of $18 million invested in the business? Did I read that right?
Anupam: Yeah, you’ve got that right. That’s about right, absolutely. You’ve done your homework, Andrew.
Andrew: At what point did you decide to take investment? How far along was the business before you went after investors?
Anupam: So let me think. So I think we got our investment somewhere in the middle of 2006. We started out though, shaadi.com technically started in 1996, but it was not really until 2000-2001 that we started focusing on it as a business and started to put energy behind it. Before that it was purely an experiment from our end. I think 2000-2001 until about 2005 we really kept our heads down and just focused on shaadi.com and built it out as a preferred place for people to find life partners for Indians all over the world. At that point we started to see a lot of interest from venture capitalist. There was a second wave of venture capital invests in India beginning by the end of 2005. I think we were one of the first companies that went off the block and raised capital. We thought it made because we had plans to get into a couple of related sectors and we knew we’d need sort of a cash file to make some of our vision a reality.
Andrew: Let’s go back then in time and find out how you got here. So in 1996 what was the original idea that created this business?
Anupam: So as I said earlier, it was an experiment and I’d love to say there was some dramatic vision or there was sort of this eureka moment, but there really wasn’t. It was just an accident and the reason I started it was because I was in India from the US for a few months. I was bored and looking at the Internet, which fascinated me as I was working on some Internet projects in the US with other companies. I started thinking about what we could do. I happened to meet a traditional matchmaker, I’m not sure you know how these guys operate, but essentially they operate within certain tight communities and they know everybody there is to know within that community or quite a few people within the community. Then they try to match make within that community.
Anupam: [phone rings] You know when you’re traveling you end up carrying three phones and you put the two on silent, but we forget that one. OK, there we go, I’ll take care of that.
Andrew: So you in the UK right now, by the way, right?
Anupam: I am. I am off to New York tomorrow.
Andrew: How many days are you on this trip?
Anupam: So, I’m in the UK for three days. I got in yesterday morning and I’m leaving tomorrow. Then New York, I’m going to be there for about a week. I’ll probably get two days off in New York.
Andrew: And in the middle of all of this you’ve got an interview with me that’s scheduled later in the day your time, I guess.
Anupam: Yeah.
Andrew: Well, thanks for doing it.
Anupam: Yeah, absolutely, man, it’s fun. You can’t stop, the show must go on.
Andrew: I’ve got to believe. So you’re just going to be working, working, working doing this. All right let’s go through this interview and let you get back into your phone calls and the rest of the day.
So, the original idea, you’re saying, you saw a matchmaker, you said, ‘This is an interesting idea, ‘ and you took it online.
Anupam: Well actually Shaadi Matchmaker acts through some family introduction and maybe they were trying to get me married or whatever they were trying to do. But what occurred to me was that it seemed awfully limiting that the choice of your life partner is determined by who many people this person knows. So, it made perfect sense, the Internet being sort of a global medium, you know, get like mined people on the Internet, we’re all looking to do the same thing, and connections will happen. I think it was as simple as that, really. So we put it on and for the next four or five years, as I said, it continued to be an experiment. I’d be involved on the weekends and so on, but by and large I was involved in my job.
In 2000-2001 when sort of the dot com world imploded and along with that, some of the business that we were working in the U.S., which by the way created some incredible wealth. Within a company called Micro Strategy that I used to work with, and I think the company at that point was worth about $50 billion pre-dot com bust, and that whole dream evaporated, and at that point, I sort of looked at Shariah [SP].com very closely, and saw some indications that wait a second. There’s some real connections happening here, there’s a lot of people actually starting to find their life partners here and so this might have some potential. And as we thought about it, what occurred to us was that there was a real big problem here that we could solve. I’m not sure how much you’re familiar with the Indian cultural context, but in India, marriage is almost an obsession. Right from the time, you know, kids are five and six years old there are family stories about how they’ll get married when they grow up.
So it’s sort of this thing that everybody must do. And the emphasis on that aspect is so much but the opportunities to meet potential life partners is very few. Workplace ratios are skewed, heavily in favor of males, dating is not culturally accepted, so how do you find a life partner when you’re stressed about it but your really don’t have avenues to do this thing. And so what we realized within that period 2000, 2001 is that wait, there’s a big problem here and you know potentially we can work towards solving in and that’s what gave birth to Shaadi.com conceptually speaking.
Andrew: In the time that you launched the business and in the early days of it there were lots of incredibly successful internet companies. Everyone was imagining that anything they touched online could become the next NASDAQ hit, and in the moment, why weren’t you thinking the same thing about Shaadi? Why weren’t you thinking boy, this could really be a hit, I could be the next Yahoo, I could control all of the whole Indian internet. Why weren’t you thinking lot the rest of us at that moment?
Anupam: You’re talking about pre 2000 before the dot com bust?
Andrew: Yes.
Anupam: It wasn’t if I didn’t have ambition, it’s just that I was part of this other story going on called Strategy.com, which was part of Micro Strategy which was a listed company. Our market cap had gone from 100 million as I said, to some 40, $45 billion in that ballpark. So we had sort of already made that happen as you were saying. So Shaadi.com to me was just something that started as an experiment and that was in India. We had a staff there and they were doing things but in the U.S. is where all the action was during that time. The Indian sub-continent had very little internet penetration, there was still going to be a long period of time before it became a credible business and somewhere along, implicitly maybe I recognized that and I kept focused on the U.S. It was only after it imploded that I began to think about whether it made sense to go back to India and start building this up.
Andrew: So you thought that might make sense, what’s the first thing you did after you made that decision?
Anupam: Once the decision was made, what we also understood was that there was a bigger need for the service like Shaadi.com in non resident Indian pockets, or sort of the ex-pat pockets like the UK, the U.S., Canada. Because these people were geographically dispersed and they were looking to get married within the communities but they had no way to reach out and find people. And so that’s where the need for the service really was. And so I spent my time setting up our U.S. office and really marketing and building out the service for the U.S. population for the first couple of years. After that we did the same for the UK and then finally once we were good and ready sort of went out and did a television campaign in India because awareness was the big issue, and there were big concerns early on about using the internet to find a life partner. So we had to educate people quite a bit, and we spent a lot of energy and time doing that. That’s how the first few years were sort of spent, establishing beachheads in the U.S., and UK and doing a lot of education and awareness.
Andrew: So the first thing that you did when it was time to focus on the business was take it internationally?
Anupam: It was already international in the sense that there was an organic usage of the site from these pockets. The first thing that we did was to recognize that and divert our energy in those pockets because that’s where the money, or that’s where the transactions were coming from, you know, because that’s where people had credit cards, that’s where the need was the biggest. In India we still had very little Internet penetration, no credit cards then, and so we just focused our energy where the business was, and I actually started more and more people coming in from India. We started to focus there as well. So today, although we have more people than we had coming from the US and UK in the early days, we’re pushing it. It’s smaller than it was in the early days compared to India. I mean, in India you’ve got one billion people, so you have it.
Andrew: So I’ve done interviews with multiple entrepreneurs who’ve had their companies fail, and one thing that keeps coming up is that they just lost focus and they were trying to go after too many different markets at once, and that seems to have led to their destruction. Why, for you, was that a good move? Why did it work out for you?
Anupam: Well, that’s a great point. I think lack of focus is a big issue when it comes to entrepreneurship, and something that everybody gets distracted with. But we’re talking about here really is the business that requires you to be in different markets. We’re talking about a network business. My product is only as good as the number of people on it, and the more people on it, the more variety of people on it, the better the product.
Andrew: Even internationally? So someone in the US would want a match in the UK?
Anupam: Absolutely, that’s because I’m not saying an American would want that, but Indians. So if you look at the Indians in the US, there’s several million of them in the US and Canada, in the UK there’s about three and a half million people. So these are people, as I said, who are geographically dispersed, and I have a bigger need than people in India who already have communities and networks where they can do these sort of things. So yeah, absolutely, and back in those days, a match outside, or finding a life partner in the US or the UK was something that everybody sort of aspired to do. So really it increases the value of the network, so to speak.
Andrew: I see, ok. And then how did you get new customers from all those different areas?
Anupam: So interestingly there were two [??] strategy. One, of course, was using ethnic media. So Indian television channels and publications exist in markets and they reached out to these ethnic Indians. They don’t cover the entire segment, they don’t cover the entire population, so you have to use more creative strategies such as [??]. And I think the media has been very friendly to us. People like yourselves, who’ve found Shaadi.com very interesting both from a cultural standpoint as well as an economic business model, have been very, very welcoming, have been very warm. And I’ve used that opportunity to generate awareness about [??].com and educate people about the medium[??]. So it was a good fair share amount of luck and cooperation from friends and good old media.
Andrew: So yes, I did see a lot of good articles about Shaadi, especially back in the early days. It was this, “Look at how the world is embracing the internet in a different way. Here’s a new culture that’s embracing the internet in a new way than the standard dating sites.” How did you do that? How did you get the message to them? How did you explain to them what was going on? How did you get them to write about you?
Anupam: My sales skills, obviously. No, Andrew, I think it was because I think what we were doing was very interesting, right? As a medium, if I were, I’m not, but if I were a media person, if I was looking for a subject to write, it’s pretty interesting to talk about tradition marrying technology at a time when the world was on the cusp of change.
Andrew: Did you hire a PR agency that did an especially good job? Did you have a strategy that you can share with us here?
Anupam: You know, frankly we didn’t have a PR agency, and actually to tell you the truth, when it comes to a PR agency, I’m very, very disappointed because we did hire some later on and none of them have actually ever worked out in our favor. [??] it’s probably going to send into trouble, but I’ll say it anyway. But what we did was we just put ourselves out there. I think I recognize the value of PR and we recognize that – I once said in an article about relevance of shout out [??] or the usefulness of it is twenty times more valuable then us placing any amount of advertising anywhere. And it was just that realization A. that written word is a lot more powerful and B. we didn’t have a choice, right? We hadn’t raised any capital. We didn’t have big piles of cash. The only thing we had was me, and so I just had to…
Andrew: So was it you making phone calls to the media, saying, “Hey, I’ve got this great new site.”
Anupam: Not really, actually. So we did have a PR person within the company whose job it simply was to call these people up and respond to all the calls that we got. I mean it was a marketing person with one year of experience or a couple of years and essentially all she did was work the phone.
And people were very, very receptive, I keep going back to how open and welcoming media was about what we were trying to do and had it not been for them I don’t think we would have been able to see this kind of success we did.
Andrew: All right so going back to India you said that there wasn’t as much money there and people weren’t on line like they were in the rest of the world. How did you deal with that, how did you get them on line and how did you make it profitable?
Anupam: Well some of it was just organic right, I mean, they were the earlier doctors and while it wasn’t sort of exploding the internet until say about 2007 or so in India there was some organic growth. There was 15%, 20% growth and we kind of let that carry us. Of course we sort of got very, very aggressive in the U.S. and UK and it kind of subsidized our India market if you will for a very long time.
We simply used our high profitable (inaudible) in the U.S. and UK where re-cost acquisition is very low and cost of realization for customers very high and we subsidized that for the Indian market until a point where the Indian market became big enough that those metrics started to make sense for it independently.
Andrew: I see, OK. At what point did you bring in Shaadi Point? What is Shaadi Point for people that don’t know it?
Anupam: Well it, Shaadi Point is Shaadi Center and that’s a, by that I mean they changed the name to Shaadi Center.
Andrew: I see, OK. So my research is out of date?
Anupam: Either that or our PR guys are not doing a great job.
Andrew: No this is me looking on line, so Shaadi Center? What is that?
Anupam: Well Shaadi Center is really a network of a 100 centers that we started to locate in India for organized match making and the idea here was to replace the age old marriage bureau and I’m not sure again if you’re familiar with these but these are dark, dingy sort of places that exist in India that offer match making services but really they don’t offer much value at all.
And we found that parent’s were going to take a long time to get used to the internet. They was sort of a huge technological barrier for them and although … and yet they made the biggest decisions when it came to match making, so we tried to think about matters that we could reach out to them without them having to learn about the internet.
And one of the parts was that we build a Shaadi Center which is all connected by the internet so we solved the problem of reach but connecting all these centers together into a central data base, and we have customer service representatives who have to find [matches], so it was that simple as that and then once we launched it we sort of got pretty aggressive about the rule out and we had a 100 centers in what 80 cities in three years I think
Andrew: Why change your name?
Anupam: Yes so your question about why change the name that’s pretty I see [inaudible] part of the plan. So when we launched Shaadi.com or when we launched Shaadi Point, as it was called then. I told you there was an issue earlier on there was a stigma attached Shaadi.com, or find a partner on line and not because of parents or anything it was because of young kids. It was uncool to find somebody on shaadi.com and so…
Andrew: But it was cool to have a match maker?
Anupam: Well no but it was just cooler to find somebody you feel in love with…
Andrew: I see, OK.
Anupam: You don’t want to admit that and it’s, we know the cool, cool [inaudible] always creates opinions and sort of helps in changing public opinion at large and so there was some reservations and people wanting to get on it and even people get on it they wouldn’t admit they found their partner on shaadi.com and there was a lot of negative publicity if you remember from 2000 to 2001, up to 2003 actually at [bow.com’s] and how an entrepreneurial business is in salons so we wanted to launch something that didn’t carry that baggage and so when we launched Shaadi Point we wanted to be seen as a non-internet business and that’s why it was called Shaadi Point.
Once we crossed that, the sort of problems associated with that, which would say 2007 or so, we realized that now associating the brand because shaadi.com had become a much, much more powerful brand at that point would actually help Shaadi Point, and we’ve kind of combined the databases of the back end as well. So we changed the name from Shaadi point to Shaadi.com center. So we got synergies and we got branding effect as well.
Andrew: But wasn’t Shaadi in the name… oh, I see. Before it was just Shaadi which means “wedding”, wedding points…
Anupam: Marriage, it was Shaadi point…
Andrew: Yeah, excuse me, marriage.
Anupam: …and then it became Shaadi.com center.
Andrew: I see. So by emphasizing that, by changing the name you’re able to emphasize the domain in there and let people know…
Anupam: Correct.
Andrew: …see this is associated with the website. OK, so how big did you get by 2006 when you were thinking of getting funding?
Anupam: Well, I think we were not that large. We were probably. I think, six or seven million dollars in revenue. It was growing pretty rapidly… it was profitable, yes.
Andrew: OK.
Anupam: Yes.
Andrew: And so why didn’t you say, ‘Hey, we’ve gotten this profitable on our own, we’ll build organically, it’ll take us a little bit more time, but at least I’ll have complete control of my business?’
Anupam: Well, yeah it’s a great point, it did cross our mind. But what we were seeing made us realize that there was going to be a lot of venture capital money coming into India, and that would mean that there was going to be a lot of startup activity, there were going to be a lot of companies funded, and we felt that the inflection point for the internet in 2006 was kind of nearing very close. Of course, it didn’t happen then, but we felt that we were very close to the infection point, and so it made a lot of sense for us to go out there and get a war chest ready for the battle that would emerge due to any inflection point.
Andrew: You mean [??] buy other opportunities, other companies?
Anupam: Sorry?
Andrew You mean, get a war chest so you can go out there and buy other companies, and…
Anupam: Well, that too, but I think more importantly we were thinking about how we expand this business, or how do we build a very, very large internet company, internet business in India, and we didn’t have specific plans on that front; we just knew that it made sense to have the capital with us when we figured out how to deploy this rather than not have it. What we also needed capital for, which we were very clear about, I said there were some challenges with education awareness about Shaadi.com then, and we were very clear that we needed to do some large television campaigns [??] to make Shaadi.com more mainstream than it was perceived to be. And when added that up, we thought we were raising the capital and not needing it, rather than needing it and not having it.
Andrew: I see. What’s the first that you did after you raised the money?
Anupam: Wow, I don’t remember. I think I had a party.
Andrew [laughs]
Anupam: We wanted to sort of launch a television campaign for Shaadi.com which educated people about how a lot of people are meeting their partners on Shaadi.com, and we spent the next couple of months executing that campaign, and I think it was one of the most memorable internet campaigns at that time in India.
Andrew: Ok. And then how’d you expand after that, what’s the first step?
Anupam: We, again, this is just very candidly, we did some missteps, and when I look back now, [??] all the time, who listen, that having less money is better than having more money, because having more money always gives you a false sense of confidence and you tend to make mistakes. So we opened certain businesses, and we started certain businesses that we shouldn’t have been in…
Andrew: Tell me about that, I love the candid talk about missteps, I think there’s a lot to learn from that.
Anupam: Yeah absolutely, I think couple of things, one is, think we spent, for example, Astrolife, and a couple of other related things that we did. I think we would have been better off using that time focusing on solving real problems. The challenge was that we didn’t see as much internet adoption that we had hoped for. After 2006, everybody thought that was the inflection point and it’s just going to go hockey stick. It didn’t happen. So after a year of having the capital with us, as not seeing that growth, we were starting to get concerned about where growth would come from. And so we started looking at other businesses. As opposed to looking inward, and looking at our existing base and saying, ‘Now there’s some real problems here that we’re not solving here that we could solve’. And we launched a couple of businesses which, you know, it’s hard to say. Right now we’ve got the wisdom of hindsight. But had, you know, out of those businesses, for example, came Makaan.com as well. And we’re very, very glad we launched Makaan.com, it’s going 100%, but a couple of them failed. So, you know, it’s kind of . . . .
Andrew: Can you take me through that thought process that led you to start a business, and then what happened as you realized that no, this is not the right business for us? I feel like sometimes walking in your shoes, even if it’s through a story, helps us identify and then helps us avoid issues and mistakes in the future.
Anupam: Yeah, absolutely. I think once we started these businesses what we started to realize; you know, once you’ve built a business and you becomes successful at it, you can get caught in your hubris and start to feel that any business you launch will become successful. And we’re guilty of that, and we felt that Astrolife [SP], or a couple of other businesses were much larger markets. And they are actually; the only thing we thought is we could organize them and get it all on the Internet a lot quicker than it’s actually going to take.
And so we overestimated the market size; we underestimated the effort. And we went in there and at the cost of, you know, sometimes compromising our core product, Shaadi.com, to a certain extent.
Once it was becoming clear that, wait a second, we’re not still seeing the growth that we expected to and we’re now actually focusing on these other businesses. We’ve increased our costs dramatically; revenue’s not following the way it should. We very quickly went into introspection mode. And we said wait, this is not where we wanted to be. And once that realization came, I actually moved very, very quickly.
Once it was clear what we needed to do I was very clear that we needed to go back to Shaadi.com, fix some core problems that we were not fixing. We were acquiring a large number of users but we weren’t delivering them the happiness that we thought we wanted to. And so we started fixing those product problems – and the Internet today is really all about the product. If you ask me what’s the three things that Internet entrepreneurs should do, it’s product, product, product.
So we went back with that obsession of product. We looked at everything else and we said, wait a second, there’s Makaan.com which is very interesting. That’s something that’s growing very well. And we re-estimated the size of the market and we realized that indeed could be a very large business and market. So we held on to Makaan.com, we didn’t touch that, but everything else which sort of wouldn’t really mean anything in the immediate future on the short to medium term, we let go of and we focused all our energies on Shaadi and Makaan.
Of course that mean some layoffs and so on and so forth as well, but we had the good fortune that in the second half of 2008, the world went through a recession. So we used that opportunity to clean up our act as well.
Andrew: I see.
Anupam: And we came out a much stronger company, a much more consumer-friendly company, and a company with a lot more clarity on who we want to be.
Andrew: Makaan is a real estate site that we’ve talked about, that I brought up in the introduction. Let’s talk about Astrolife just for a moment, since you brought it up a few times. What was the original idea behind Astrolife?
Anupam: The way it started was we were actually looking for a credible astrology service provider for Shaadi.com because astrology’s a big part of marriages in India. We couldn’t find one. And so we felt that if we started one – I mean, and we felt that there was a need for these services, and it’s a very unorganized business, there’s thousands of astrologers across India, but we completely misread it. You know, the reason people go to these astrologers is because they trust them. And there was no way we could, sort of, replace the astrologer with an automated astrology report or horoscope-generating engine.
Andrew: That’s the way I would think to do it. Why can’t you do that?
Anupam: Because it’s a trust issue. You don’t go to the astrologer for the report, you go there because you trust her.
Andrew: I see.
Anupam: It’s like saying, you know, would you give up your doctor and go to a website which offers medical advice, and print out a prescription and go buy the drugs? You wouldn’t do that, right? Because you trust your doctor, that’s why you go to them. You think of them as an expert who knows more beyond what technology can do.
Andrew: OK.
Anupam: So we completely misread it. And then we said, OK, so this is not something that makes sense for us, and then we got out. Similarly, Fropper.com – interesting business – we make money on Fropper.com, it’s profitable.
Andrew: The social networking site.
Anupam: Well, it’s actually dating.
Andrew: Oh, it is a dating site? OK.
Anupam: Yeah, with some social networking features. We sort of thought the market would be a lot bigger. And while we felt that there was the match-making site [TD] marriage, but then there’s this whole side where people want to date. And we completely, this time we completely overestimated the size of the market.
Andrew: How did you know the market wasn’t big enough, versus that you just weren’t reaching the market as fast as you needed to, or just didn’t know how to reach it.
Anupam: No, we figured out, we spent a lot of dime understanding this so we just knew that the market was not big enough.
Andrew: So after the site launched and it was up and running, you said, how big is this market?
Anupam: No, we estimated that earlier on. We went wrong, and once we launched and after a few [??] two years of experience, we realized that the market just wasn’t there. And maybe it will be there in the future but it’s not there today. We couldn’t give up what we had going for us for something that might be, we had to be more sure- especially when there was so many problems to solve within Shorty.com already.
And we had another growth engine, McKaan.com. We just wanted to narrow down our focus, break away all the clutter and just execute other things that mattered. They were easy decisions once that realization came in and we moved very very quickly. In fact, I would give the team and our entire company full marks in the second half of 2008, in executing a strategy that meant cutbacks, that meant layoff, that meant pulling down cost dramatically.
Andrew: And product reset [?]. What did you have to change in the product? You said that and I wrote it down to come back and ask you about it. How did you change the product, how did you improve it?
Anupam: I wish it was something in the past but it’s not, we’re still working on it. That’s the thing about internet businesses, it’s always a work in progress, you’re never quite finished when it comes to product. When it came to Shorty.com, the product is matchmaking, it’s about finding two people a life partner. That’s what we do, that’s not as simple as selling mobile prepaid coupons or anything.
This is real stuff we’re talking about, we underestimate what it would take. It wasn’t as simple as making three segments and saying these three segments, want these different things. What we realized was every individual is so different when it comes to finding a life partner, how do we build technology that understands each individual and that presents the world to them as they would like to see it?
Andrew: Yes, how do you do that? How did you do that?
Anupam: It’s a lot of things, right from the time you put up a profile. For example, most have a certain set of ideas in terms of the partner they want but they don’t want to spend the time filling out a detailed partner profile. The question you have to ask yourself is, can I derive from what you tell me about yourself what you want about your partner.
And we said, probably not perfectly but we can start attempting to. If we start attempting to, maybe some day we will be able to do it good enough that it won’t whether we do it perfectly or not. Once you start to do that then you sort of say, OK, photographs are very very important for matchmaking but most people are resilient [sic] about putting up their photographs on the internet. How do you solve that problem?
How do you create incentive schemes so that you can do that? You solve that problem. Then you start to think about, for example, there is a market segment like the US. There is generation one Indians, there is generation two Indians, there is Indians who’ve been living there forever. They all have very different things in mind when it comes to finding a life partner.
How do I determine which one you are and then use the right algorithms to present you the right results? I’m just naming three out of 500 challenges that we probably [??].
Andrew: What’s the incentive scheme, how did you get people to upload photos?
Anupam: Some of it is just changing the registration flow. The other one is, if you have a photograph you appear higher on search results, how simple is that? [?? you can set certain controls, that is if you have a photograph up you can put in controls that anybody who accepts you or you accept can see your photographs but others can’t.
You provide enough comfort by giving privacy controls but at the same time you provide enough incentives so that people have some attraction to conducting the behavior that you want them to.
Andrew: How do you talk to your customers to understand what their hesitations are around issue like photos so that you can find the right solution for them?
Anupam: There is ways we do that. One is, there is a lot of feedback that comes from customers, people who feel strongly about your product [??], people who will always write back. It’s prioritizing that and looking at that and listening to that. We had a project I call ‘the voice of customer’ two and a half years back and that essentially meant that we track the voice of the customer across a site, across everywhere, and started listening to it.
We do surveys about you regularly, we do focus groups very regularly. But beyond that I think when it comes to an Internet company the beauty is that the data tells you everything. You can run so many tests, you can run parallel tests, you can figure out what works and what doesn’t work out very, very quickly. So I think that’s ultimately the [??] to have a strong analytical systems and very scalable data systems and platforms that allow you to do A and B testing [??] doing and what he shouldn’t.
Andrew: Why did Makaan.com succeed, where so many others didn’t?
Anupam: Two reasons, one, large market, two, people. There’s one thing that most entrepreneurs have learned at some point is that it’s people who build businesses. And when it comes to Makaan we very, very deliberately built out a very solid team right from scratch. And we are fortunate that built it out for the winning business, for a business that has a very large market to address, and hence, it’s stacked up, those are the two reasons.
Andrew: Real estate is such a large market that it’s worth going after. One of my viewers who saw that you were going to be on here asked me to ask you a few questions. And this is from Devon Stolkes [SP], and it’s about Shaadi. He’s saying, ‘what’s a successful marriage according to the site, what’s the metrics that you use?’
Anupam: Well we don’t really have a metrics in that sense for a successful marriage. What we do have is a successful match and what that is to us is really when two people sort of identify each other as potential life partners and take their discussions off line and continue conversations further. We get a lot of reported success stories every day, and for everyone there are four or five that are not reported, those are just internal estimates. But if you have to really sort of [??] the question about a successful marriage, we have done some research in that subject and I think we came up with the six C concept which is: compatibility, chemistry, community, and there’s three more which I can’t remember right now. But all these sort of combine to a successful marriage or a successful partnership.
Andrew: While you’re away from home, while you’re traveling, I can’t imagine how exhausted you must be today and how much you’ve got to run around. Now you have to stop, take a breath, be on Skype with me and go through these questions, but like I said, I’m grateful for you doing it.
Anupam: Adrenaline is a wonderful thing.
Andrew: Right on adrenaline. Second question he wants to know, what have you done in the U.S., and outside of India to differentiate yourself from sites like Match.com which has a cool factor to it? Or more of a mainstream.
Anupam: Well, here’s the thing with Match.com, everybody at Match.com comes in everyday at to work and [??] how to get the next million customers on, and how to increase revenues from a 100 million to 150 million, and how do we sort of insure people keep coming back to us and so on. They’re not thinking about what does it take to effectively match make between Indians. That’s what we’re doing, everybody at Shaadi.com comes in to work thinking, what does it take, and what does it matter to Indians. So it doesn’t matter how hard Match.com or anybody else tries, the fact is that is the problem that we’re focused on, they’re not.
Andrew: So what do you do as a result of that, because you’re so focused on Indians, what do you give them that…
Anupam: Everything, everything that we do is around that, capturing consumer insights, our information flows, our discussions are product [??] planning. Everything is around whether or not we are building a better [??] match making platform for south Asians around the world. If the answer to that question is no, we probably won’t do it. And those are not the questions that Match is asking or somebody else is asking. So I think it’s just focus.
Andrew: Things like the drop down menu on the homepage that Match.com and no one else has, caste or sect that you’re from, mother tongue, they don’t have questions like that.
Anupam: Absolutely, they don’t and they cannot, if they had that that would alienate their main audience. It’s very tough for them to do what we’re doing and it’s hard for us to do what they’re doing.
Andrew: What’s entrepreneurship like and angel investment like in India? What’s the community like?
Anupam: Well, it’s very interesting now. It was very small even up to a couple of years back, but it’s thriving now, it’s much larger, a lot of people have gotten involved in the last couple of years. I think for any entrepreneurial ship eco system to really thrive and grow, you need a certain amount of exits and I think we threw out the first cycle of exits in India where some entrepreneurs have IPOed the company, and it was sold out. At BPO it was software, and these are the entrepreneurs now that are coming together to really create angel networks that are funding the startup company that I’m merging today. Some of these companies will go on to be [??] enterprises tomorrow.
It’s thriving. It’s still early days, but I think its well on its way.
Andrew: You said you’re making some angel investments. What are you looking for?
Anupam: I said that to you earlier. Implicit in all of my other answers were two things. One is people, and the other is product. And sometimes startups don’t have a product, but what we want to see is this the right theme because we know the startup gen stuff, and they’re going to falter and they’re going to fail and will they get up on their feet and do it all over again.
Do they have a product vision? If not, a product that is compelling and that is smart enough. If those two things check out, then, of course, one has to look at market size and other things. By and large, I’d say it’s people.
Andrew: All right. Finally, any advice for other entrepreneurs?
Anupam: You know, I’m still learning myself. So, I’m happy to take any advice for me.
Andrew: Here’s the advice that I got from you. Focus on large markets. Every time you talked about the hit products, you said that they had a large market behind them. Every time you talked about a small product, one that you had to close or one that’s just sitting around, you said it just wasn’t a big enough market.
Anupam: Well, I’m just taking that cue from you, right? Here’s the thing, if there’s one advice that I would give and I was put at gun point. Here’s the thing, it takes the same amount of effort to build a small company that is
company in my view.
If you’re going to fail, you might as well fail hitting it big. So, it goes back to what I said earlier, large markets. Figure out if this market is large enough, if the problem you’re trying to solve is large enough so that you can build a very, very large company in the bargain.
Andrew: Great advice. Thanks for doing the interview.
Anupam: Thanks, Andrew. It was great talking to you, man. We’ll have to stay in touch.
Andrew: You bet. Will do.
Anupam: OK.
Andrew: Thank you all for watching.
Anupam: Bye-bye.
