Technology is what has kept an 18-year-old People Group going in an industry where businesses run the risk of becoming obsolete, sometimes too soon. We spoke to Anupam Mittal, Chairman and MD, People Group, a company that owns internet businesses such as Shaadi.com, Makaan and Mauj Mobile, who shared a few secrets from the success of his many entrepreneurial ventures, and his new job as an angel investor.
CIO: You have come a long way since 1996. How have you managed to survive the dotcom bust and stay relevant even today?
We have been around for a really long time. Technically, Shaadi.com was founded in 1996 but didn't really focus on the business till early 2002. For the first five years, it was more of an experiment. Finally in 2002 we started evolving Shaadi.com seriously, and that was really the time we started putting any energy into it. Fortunately for us, the dotcom had bust, so everything, from hiring engineers and designers, had become cheap.
At the time, most people had written off internet businesses. But we saw a huge potential in building something long term. In the short term, people always overestimate the impact of technology, but in the long term, they underestimate it. But I believed that long term could change a lot of things and we started investing in an internet business at a time when most people weren't. So there was no competition and that worked really well for us. It was not a hyper competitive market, so it gave us a lot of time to make mistakes and rectify them.
The next phase came post 2009, when social media, and especially Facebook, took over, and competition in our space increased with new players emerging, and then we knew that the old style of marketing wasn't going to work anymore. We decided that we were going to create a compelling user experience for our users. We realized that when it comes to matchmaking, we had to be better than anybody else. While Facebook is a medium used to discover friends and replicate real life in the virtual world, it's not optimized to find a life partner. So we thought we must spend our energy in optimizing Shaadi.com in such a way that not only direct competition, but even social networks couldn't offer such a service.
Therefore, from 2009 till 2013, our journey has been about making Shaadi.com a user-centric organization where several 100 people are trying to find the right match for our customers, and that's our unique differentiator.
CIO: Do you ever think you were a decade and a half too early?
I would agree with the assessment that we were seven or eight years too early. I wouldn't say in 1996, but in 2001, yes, we were a decade too early. Today, businesses and especially the internet, is all about catching the right cycle. However, when you are too early from the demand curve, what ends up happening is you don't have hyper competitiveness, and you tend to get complacent, and then you take things slowly and start thinking that you're the biggest fish in the pond.
So I think had we started in 2008, we would have probably achieved the same success as what we did in the period from 2001 till 2012. Maybe we wouldn't have learned so much, but overall when there's hyper competitiveness and the entire ecosystem is buzzing with activity, the energy that you get and the speed with which you operate, becomes very different from operating in an industry which appears dead and lacks competitiveness. From that point, we were a few years early, but I personally feel that no other way would have worked for Shaadi.com.
CIO: What have been some of the lessons that you learned along the way for Shaadi.com?
There were many. First lesson was: Momentum is very critical, never compromise on it. When you have momentum, it's the best time to build. Giving away the lead is the worst thing that you can do in an Internet business because it takes a lot of time to recover from it, and sometimes you never even get a chance. So if you're number one, make sure that your next player is positioned at number ten.
As an entrepreneur, we are wired to be distracted because we are opportunists. Distraction is good to start a business but focus is critical if you're going to scale a business--that's was another important lesson that I learnt.
Never compromise on talent. Find good, pedigreed, entrepreneurial, and professional talent if you're going to make the journey and build something valuable. So that was lesson number three.
CIO: How did you manage to fend off competition from other matrimony sites such as Bharat Matrimony? What do you think is your unique differentiator as compared to your competitors?
To be honest, I think we lost a bit of the lead after 2009. We took our eye off the road and got distracted by too many things, and we didn't leverage the momentum like we should have. But I think we bounced back really well. Today, no one can say that capital or technology is a differentiator. Capital will be available to every good product and business, and technology is available to everyone. What differentiates Shaadi.com is our work culture. We are extremely paranoid about user experience and that comes alive in the interactions and feedbacks our users give us. And that's what creates the ultimate differentiator and stays in the long term.
CIO: Do you think having a combination of offline and online channel helped grow Shaadi.com's revenues?
It's helped us in a couple of ways. Initially we had a tremendous brand challenge. People believed that we were doing something culturally irreverent.
We were trying to go against the grain--a thousand year old tradition in India and trying to automate something people consider very holy. It was almost considered blasphemous.
So I think for us to build an offline channel comprising Shaadi centers was a way to gain credibility and telling people we are for real. It was a strategy to provide more comfort to people. In the last few years, we have found that our revenues from these centers has climbed, and that's because the centers were able to reach certain pockets the website couldn't. So we do a lot of local marketing in order to invite people to these centers and walk them through our products. Each of our centers today run a lucrative business, and it has worked really well for us. In the next year, we are going to think really hard about our strategy for offline and might even double the number of Shaadi centers from the current total.
CIO: So are you thinking of monetizing from the offline channel more than online?
Well, online has its benefits. But I don't think our offline channel is ever going to become a major part of our business. The offline channel is only a misnomer because everything is really online since all our businesses are all driven by technology. Moreover for us, offline is a sales distribution channel since no major services are offered from these centers. The truth is we will continue to be an Internet company. But since our centers are running well and growing, I don't see any harm in having 200 centers across the county which will continue to provide a human interface for users who may or may not be technology ready for such a portal.
CIO: Indian e-commerce has gone through a complete turnaround. What's your view on it? How has this turnaround impacted your business?
The best way to describe my view is through an example: You can jump as high as you want in a room with a 10 foot ceiling, but you're not going to jump higher than that. So you can keep trying but you're only going to break your head.
Similarly, when we started, the market sizes were limited, our target audience was limited, so there's only so much we could as expand in multiple categories. But when you are trying to grow the market with supply constraints and limited Internet access-- that defines how big your opportunity is.
Today, with ecommerce offerings and even Facebook, people in the last few years have found many strong reasons to be online. More than ecommerce, which has been an important enabler, it's the Internet access part which is really revolutionizing the businesses. A lot of that has also come from Facebook, but ecommerce is teaching people to transact online, which is really good for our business.
CIO: When we last spoke to you in 2006, you told us about launching Makaan.com and Mauj Mobile. How are you juggling between these four different businesses?
In my life, I have met some wonderfully talented people who have helped me build strong management teams for all our businesses. They are growing really well. With the support of people like Badri Sanjeevi, President and CEO at Mauj Mobile, Aditya Verma, CEO at Makaan.com and Gourav Rakshit, CEO at Shaadi.com -- I know that I have incredibly talented people to lean on and manage all my businesses effectively. Otherwise it wouldn't have been possible to manage so many startups together. Building one company is hard enough, imagining building three or four.
When I started these companies, the growth of Internet in India was pretty diminutive, but I had faith because you never know where the next million users will come from. That's why I invested in multiple categories in the dotcom space. But if I were to start again, I would focus only on one and build on it.
CIO: The fact that you have been called the most engaging brand on Facebook, did launching Fropper.com teach you anything about social media engagement?
For us, today's world is changing quickly. We can't just do TV campaigns anymore. The truth is people don't care about brands anymore. Instead they are interested in what the brand can do for them. People care about what their friends think of that brand, and they care about the responsibility a brand takes where social issues are concerned. So I think brand is moving away from being a product to becoming a philosophy.
So one of the lessons that we learned early on was to never try to sell our product on social media. We only use social media as an expression of our philosophy and personality and not to sell products. That takes care of itself. As soon as people realize that you're trying to sell them something, people will run away.
For us, social media is an expression of that philosophy. So if we can use social media to cultivate the philosophy or the principles what we stand for, and hopefully we can get like-minded people to like our brand - that's good for business in the long term, for our users, products, and brands. It's a win-win situation if we use it properly.
CIO: Are you also venturing into mobile apps?
Half of all our new users are mobile users. You must watch our latest ad with a tag line that goes -- happiness is just an app away--and how a couple meets on a mobile app. It's our best campaign so far. A lot of people ask me about mobile Internet in India--look there's no other kind of Internet in India. All Internet is mobile and it will be so in the future. So one has to develop capabilities on that front.
CIO: How does technology tie all these businesses together?
As far as tying all of it together is concerned, technology is not tying our businesses together. Instead, it has given us capabilities--for building a HR system which allows our employees to perform operations such as promotions, skills, and reimbursements, or build an in-house finance system which allows our employees to carry out financial approvals. The performance management system has also been built in-house keeping in mind what we think is important in terms of performance for building a valuable business.
However, all these capabilities, while they are not directly business related, they help growing our businesses very effectively. We are one of the few group of companies which has done this really well. So technology has helped us build capabilities that others don't have.
CIO: How are you using analytics in the matchmaking business?
When it comes to Shaadi.com and Mauj Mobile, analytics pays a huge role. Analytics helps us answer some of these questions, and so is very critical from a match making perspective. We have a CTO who looks after projects in the infrastructure, engineering, and product development space.
Going forward, I think cloud, mobility, and analytics are three critical areas and priorities for us. Cloud helps us reduce cost, but analytics and mobile are critical for the growth of our businesses. And that's something we are investing a lot in. Recently, we also doubled our engineering team just for mobility initiatives, and in terms of analytics, we invested in significant platforms this year. Those are two big areas of investments for us.
CIO: A report recently revealed that some of your competitors are eyeing IPO in 2014. When do you plan to go the IPO route?
One always should be aware of what the competition is doing. But to be very honest, we don't really care of competition, and we don't pay attention to them. We only care about creating great solutions for our customers. As far as going IPO is concerned, it's not a milestone for us. Today the world is at a place where a business doesn't have to go IPO just for the sake of it. In fact, look at companies like Uber, Facebook, or Twitter who took a lot of time to go IPO -- only when they were 100 billion dollar businesses. It's just in India that we feel compelled to go IPO. I feel no such compulsion. We will do that when we are ready. Our businesses are doing really well. All the capital that we need is available to us. If our investors need an exit, we can always let them go and bring new investors. So I don't see IPO as a compelling need, but if we feel that the time is right and we are mature enough, we may choose the IPO route.
CIO: You are also a venture capitalist/angel investor with investments in a number of startups. How did that happen?
The consumer Internet, cloud, and SaaS, excites me a lot. Now you know I said in the beginning, as entrepreneurs, our blessing is our curse. Our blessing is that we are opportunists and we are able to identify them, but at the same time, it becomes a curse because it distracts you. So while I have been building these businesses, my focus lies in scaling all the three businesses such that we can top in all the three categories.
So while I have enough on my plate, the least I can do is I can invest in ideas and entrepreneurial ventures that excite me. Till now, I have invested in over 40-45 companies and have got incredible returns of 100 percent year-on-year. In our industry, we always run the risk of being obsolete, because ideas become rusty and we don't have that much energy. So, meeting all these young and talented entrepreneurs keeps me on my toes which is good for me and my business.
CIO: Do you think there will ever be a time when arranged marriages will cease to exist?
We don't think of Shaadi.com as an arranged marriage platform. To explain further, let's go down to basic human attributes. Human beings are social beings and they have a very inherent need of belonging. Right from childhood, we innately evolve with such a strong sense of belonging that marriage becomes such an integral part of who you become. Frankly, marriages won't cease to exist, because the way we perceive it today is unsustainable. Instead, marriages have to be reinvented and expectations will have to be redefined.