Vidit Aatrey is cofounder and CEO of Meesho. Meesho is a platform in India that allows people to resell products using their social networks. They were in the Summer 2016 batch of YC and you can check them out at Meesho.com.
Adora Cheung is a Partner at YC. Before working at YC she cofounded Homejoy.
00:00 - Intro
00:45 - What is Meesho?
2:45 - Why not just sell directly to consumers?
4:30 - What are the macro trends in Meesho's favor in India?
6:55 - A trust deficit market
8:20 - How does Meesho help users get online and start selling?
11:10 - Most impactful user stories
13:15 - Growth drivers
15:15 - Balancing growth and quality
16:50 - What if Facebook copies Meesho?
18:15 - When did Vidit and his cofounder know they wanted to start a startup?
20:45 - Their first startup idea and the inspiration for Meesho
25:05 - When did they know Meesho was working?
26:45 - How hard was it to pivot the business and how did they manage it?
29:30 - As a CEO how does he stay in touch with users?
34:15 - How has Vidit's role changed over time?
36:20 - How has he learned to be a CEO?
37:55 - What mistakes have they made?
39:00 - What was his best decision?
39:40 - What's a strong opinion he had about running a startup that he'schanged since running Meesho?
41:10 - How has the Indian startup ecosystem evolved?
42:45 - Big problems worth solving in India
43:30 - Can foreigners come to India and start a startup?
44:35 - Best advice for aspiring Indian founders
45:45 - After Meesho, what's the most exciting startup in India?
46:45 - Why is Delhi the best IIT?
47:40 - What's a must read book and why?
48:35 - What's a startup idea he'd be working on if Meesho didn't happen?
48:50 - In 100 years, what does he hope Meesho is?
Craig Cannon [00:00] - Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Vidit Aatrey and Adora Cheung. Vidit is co-founder and CEO of Meesho. Meesho is a platform in India that allows people to resell products using their social networks. They were in the Summer 2016 Batch of YC, and you can check them out at Meesho.com. Adora is a partner at YC. Before working at YC, she co-founded Homejoy. You can find Vidit on Twitter @viditaatrey and Adora is @nolimits. All right, here we go.
Adora Cheung [00:35] - This is Adora from YC. I'm excited to have Vidit Aatrey, CEO and co-founder of Meesho, which was founded in 2015, and you went through YC in 2016. Yoday, Meesho is probably one of the hottest startups in India, if not the hottest startup. I'm super excited to hear about, for everyone to hear about your entrepreneurial journey, your thoughts and opinions on not just Meesho, but the startup ecosystem here in India. Thank you for being here.
Vidit Aatrey [01:02] - Thanks so much for inviting me. I'm super excited to be on this podcast.
Adora Cheung [01:05] - Awesome.
Vidit Aatrey [01:05] - Thank you.
Adora Cheung [01:07] - Let's start off with, with I love the name Meesho, which I believe is short for which means my shop. It obviously alludes to what Meesho is today. Maybe you can start off with giving us a quick background of what exactly is Meesho, and give us an idea of how big you are today.
Vidit Aatrey [01:23] - Sure. Meesho is essentially a way for anyone, literally anyone in India, to come and start as well as grow your social store. It could be on any social platform, WhatsApp, Facebook, Instagram. Tomorrow it could be something else that comes up. What has happened over the last three years is now we have close to half a million monthly active such social store owners who are making some income per month. These people are selling across all possible categories. We started with fashion, moved to non-fashion lifestyle, now it's food, some travel packages, cosmetics, so almost everything out there. If you want to start a store and you do not have money to start that store offline, you come and start that store on WhatsApp, Instagram, or Facebook, and we give everything that you need in the ecosystem to do so.
Adora Cheung [02:13] - Most of these people, before Meesho existed, did they even have a business or most of them you have enabled them to even have a business in the first place?
Vidit Aatrey [02:21] - I'll just set some context to it. All right, so it's very, very common in India. 90% of total commerce happens in these small mom and pop stores, and for every small shop that you see there are 99 other people who always wanted to start a store but just never could get capital. India is not such a rich country. Most people do not have access to capital. These people who never had the opportunity to start a store came onto our platform and became entrepreneurs for the first time, because we do not need them to invest any money in working capital or setting up an offline shop. You can come here, start your shop on WhatsApp, access anything from our supplier marketplace, and only when you get an order, you purchase that from the marketplace. So just taking away those barriers of entry, I would say. Almost everyone who is using the app today has become an entrepreneur because of us. They were not doing this offline, like almost everyone.
Adora Cheung [03:14] - When you think about then the end consumer, the people buying the goods from the resellers and the new entrepreneurs, were they buying it from other people like them before, or what do you think about, like why not just, I guess, sell directly to the people themselves? Why have the middleman in the middle, I guess?
Vidit Aatrey [03:34] - 90% of total commerce, this is 2019, right? Today also, 90% of total commerce happens in these small mom and pop stores. You will see in societies, people will just put a board outside of their house and start selling products. Most of these products are long tail, unbranded products, where there's no pull of the product. People don't know about it. What value these people are is these unbranded products, through their trust relationships, through this trust selling, they go out and push these products. They highlight what is special about it and then people start buying. Then people start recognizing this emerging brand, right? Selling unbranded categories through a mall has never worked out in India. It has always worked through these mom and pop stores. When these unbranded products have to sell online, if you see all big destination marketplaces in India today mostly sell brands across all categories. None of them have figured out how to sell a lot of unbranded products. But now with these guys doing a similar thing, but not offline, but on these social channels, you have started to sell these unbranded products and across all categories. We're just taking the same value add that these guys were doing offline to the social platform, and giving them all the tools that they need in this new digital world. Most of these users, consumers, have been buying the same kind of products from these small shops offline, right? They have not been going to malls, and they have not been going to the Amazon of the world to buy these products.
Adora Cheung [05:03] - Got it. Is there a timing aspect here? Meaning, a lot of startups who grow really, really fast, some of the founders say it's due to luck, but luck is also due to good timing. What are the macro trends in your favor in India that allows you to grow so fast today?
Vidit Aatrey [05:20] - We've been super lucky in many ways. WhatsApp started to become very, very popular about five years ago in India. WhatsApp was generally the first app most people use. A lot of these people were coming online. Then about two years ago Jio happened. Because of Jio, a lot of these people have come online for the first time, like record number of people in India, like hundreds of millions of people in India have come online just the last two, three years.
Adora Cheung [05:47] - For those who don't know what Jio is, what is it?
Vidit Aatrey [05:50] - Jio is the new telco that has come and has drastically reduced the cost of data in India. Most people, a lot of people in India had phones, but they'd never access data, because it was so expensive. But two years ago, Reliance launched Jio, and now people can go online for almost no cost. Now these people have started to come using Facebook, WhatsApp, Google, now other apps, right? These people are coming online for the first time. They have been on internet for just like a year or so. Because of that, and a lot of these guys in smaller cities, like tier two, tier three, all lower parts of the country, these are the people who are coming online because of Jio, and these people were buying mostly unbranded products, because their monthly income is generally much lower than metros. They can't afford brands. They tend to buy more and more unbranded products. Us starting this business exactly at the time when Jio was coming big was definitely very lucky, right? UPI has become very big recently, which has taught a lot of people to start transacting online for the first time, which means people now are getting comfortable by buying products. About 10 years ago, everyone in India thought that no one could buy fashion online. You want to touch and feel the product, which is not the case anymore, because everyone has tried it, people are okay with easy returns, and they're buying again and again, with a lot of trust, especially with people you know very well. A lot of these things have come together for us,
Vidit Aatrey [07:16] - and fortunately, started this business at the same time. We started seeing this behavior about three years ago and we just kept building on it.
Adora Cheung [07:24] - Got it. A lot of people say in India, it's a trust deficit market. Maybe you can explain for audience who's not from here what that means and how do you solve that problem in particular.
Vidit Aatrey [07:35] - Trust deficit is because of hundreds of reasons, right? In India, most people do not believe in corporate companies. They don't believe in their own government. They don't believe in the judicial system. Court cases run for hundreds of years, then they just never close. Most people believe that, "Hey, only I'm looking out for myself." So who do you believe in? You believe in your community, you believe in your friends, and you believe in someone that everyone believes in, right? It's very, very difficult for a new merchant to come and build trust with consumers out there. What we end up using is we leverage trust of people in your own community who come and start these social stores, and then start selling to people around them, especially in unbranded products, where you have no idea what will happen to this product after a month, right? You buy, for example, some apparel, and after a month, all the color goes away. I have a lot of these doubts, and this is no brand. I don't know should I buy this or not. But when you're buying from someone in your community who you know very well, that trust deficit goes away. This is exactly the reason why unbranded products in the offline world about a decade ago, getting sold through these small offline stores, but still in your community. Retaining that just solves that problem. India as a country is like that.
Adora Cheung [08:50] - Cool. When you talk about who your average user is, in terms of the reseller, entrepreneur, what was their life before and after Meesho, and how do you help them get online, essentially? How do you help them get used to selling goods online? Whereas before, if they were even doing it, it was totally offline and maybe in person.
Vidit Aatrey [09:13] - Correct. So our average user, like 90% of our users are women. More than 80% of our users are tier two and tier three and below cities. Most of these are people with low financial incomes. A lot of these are aspirational entrepreneurs, people who want to start a business, but for a very long time. I can tell you anecdotes. When we started this business, we spoke to a lot of people who were doing this, like without us, which was a big pain, by the way. But when you speak to them, it mattered to them so much. This lady, who was saying that for the last 20 years, "I go to my husband every year and ask him, 'Please give me money so I can start my boutique or I can start my store selling products.'" But she never got money. When she came onto our platform and we gave her everything that she needed without needing any investment on day one, she was super happy, because she could fulfill that dream, that aspiration of starting that store, right? This is my typical user. Most of these users are people with low financial incomes in smaller cities who are looking to start a business, who are looking to do something of their own. Most of these people, what we have seen over time, and just to give you some sense of our product, most of these people, because they've not done this business before they come onto our platform, we spend a lot in terms of how do we train these guys. If you come onto our platform on day one you will see a lot of content telling you what should you do on day one, day two, day three. Even if you don't do well really after that,
Vidit Aatrey [10:46] - we will put you in a mentorship program, where we connect you with some top trainers for a month and these guys will tell you how you start a business. These people have never done it.
Adora Cheung [10:56] - These are all the entrepreneurs in your system too as well? Yes, these are like our top 5% of the users who want to do this, because they get recognition. It's like you started your own startup ecosystem within Meesho?
Vidit Aatrey [11:05] - Yes.
Adora Cheung [11:06] - That's great.
Vidit Aatrey [11:06] - Exactly, so these people are helping each other out. Like, I'll give you an example. We have a Reddit type community in our app, which is called Meesho Community, and people come and say, "Hey, I'm a new user, and I'm based out of this place in India, and I don't know what to do to get started with this, but I really want to do this." Then you see hundreds of other users coming forward and telling them what should you do on day one, like how should you get your first set of 50 customers, how should you curate and bring that value out so people start getting interested. People start doing this. The community helps each other out.
Adora Cheung [11:39] - I love the stories and what you've changed, you've obviously changed some people's lives. What is the best story for you? Who is the best user in terms of, whether they're just doing a lot of, they've increased their income a lot, or you've just changed their life so much?
Vidit Aatrey [11:53] - It's just never been. I'll give you some understanding about how these women are, right? A lot of our users are women. A lot of them are housewives. Like, 75% of our users are housewives. A lot of these women have been looking to start a business not just to make money, but to also get some sort of professional identity. No one, it's very common in India, these women feel that no one gives them any respect. Like, "My husband doesn't feel that I'm adding enough. My family doesn't feel that I'm important enough." But now, when I'm known as a businesswoman in the community, people start recognizing me. I have a professional identity. I can also go out and say, "I run my business, and this is what I did last year." That feeling is very, very important and powering. Our most impactful stories are not just about how much money this person makes. It's a lot about what were they doing before. We have widows who were not able to sustain their family, feed their kids, et cetera. There are women who are handicapped. These are educated women but handicapped so no one ever gave them jobs. All kinds of stories are there, and this is the impact which tells us, "Hey, people are finding value." In terms of income, our typical average user makes about 150, $200 per month as income. My top five, 10% does about 400, $500. I don't think that number matters to us so much. It's about where were you before and how is life has changed. Most of these people are anyways not doing this as a primary income for the family.
Vidit Aatrey [13:24] - Most of this is secondary income for the family, which is, if it is 15, 20, 30% of your primary income, it's significant. It's getting like a raise one year earlier for the family, but a lot about how you empower me, what identity do you give me, people start giving me more respect is like much, much more important.
Adora Cheung [13:45] - Got it. It's very inspiring.
Vidit Aatrey [13:47] - Thank you.
Adora Cheung [13:47] - In terms of what's driven growth so far, obviously there's a timing piece, there's you're enabling e-commerce, you're enabling entrepreneurs to start their businesses. Is there anything else specific to what you're doing internally to help you drive this growth?
Vidit Aatrey [14:02] - I think we keep solving some very hard problem every six months. When we started off, we were just enabling existing guys who were doing this, because we saw this behavior. A lot of people in Gujarat, then Karnataka, were running these WhatsApp stores even before us. They had gone out, met suppliers, figured out how to do courier. They figured out how to use tools on WhatsApp, et cetera. But they were few. Like, six, seven months, we onboarded a lot of them. And then, we did not know what to do. Then we changed our product completely, because we had to create users. We had to create that resellers. None of them are doing themselves. We changed that, and suddenly, so many people, like every tier two, tier three woman out there became our target customer. Then the second thing that we did was, how can, which is still the north star of the company, how do we grow income per reseller every month, which meant growing number of categories. We started with only ethnic fashion. Over time, we just now do everything. Now we have even set up a supply chain from China. So you can now just access supply which exist in India, but even across borders. Now, you can offer a better variety. You can sell even more unique things. You make more money. Then we said, "Okay. Hey, can we enable not just housewives, but other people?" Then we started going out, we onboarded students, we onboarded retired folks who were trying to make pension. We have a lot of men who were unemployed, who do not have jobs, and they are running these shops to sell these products.
Vidit Aatrey [15:28] - It's now practically everyone.
Adora Cheung [15:30] - You're basically going to eventually employ all of India.
Vidit Aatrey [15:32] - Yeah, we want to.
Adora Cheung [15:35] - Cool. The trap that some startups get into, a lot of startups get into when they grow too fast is a quality issue, and I heard you say something very interesting. I don't know where, but in another interview, and you said you don't really want to scale customer support, because it's unsustainable. I'm really curious how you balance growth and quality as you continue to grow really fast.
Vidit Aatrey [15:56] - Correct, so it's always been a cycle, right? You grow very fast, and then you realize, you've carried so much debt around, a lot of faults, a lot of manual things, and then you start focusing how do you improve quality. We see that cycle almost every six months, but both are important, right? Last year, it was crazy growth for us. We started with a number, and the number we ended with, most people can't imagine how that has happened. But during that part, if we started optimizing for quality, we would have broken down the system. As soon as that year ended, like last two months, post Diwali is generally a lean season here. We just spent all our time in fixing whatever debt we had carried. You have to do both, because if you keep, for example, if you keep scaling customer support, if you need customer support, that means there's something wrong with the product, right? You have to go back to the drawing board and understand, why are people calling me, right? Then, you start optimizing for, "Hey, my product is broken in these places and I have to solve them out." Not just in terms of cost, operations, about what overhead you have, but just giving a great experience, you need to solve for these things. At this stage, we focus on it, we have a dedicated team within the company focusing on this, but in the early stages, we had to compromise. Sometimes we just focus on growth, sometimes it is quality.
Adora Cheung [17:09] - Got it. Yeah, that's great. It's taking a step back and looking at how, there's a certain point, there's a certain bar in which if you dip below it, then you kind of have to pause, and then go fix this stuff, and then just keep going to the next level. That's great. All right, so, you probably get this question a lot, but I'm going to ask it anyway. What if Facebook does this, or what if Amazon? Why wouldn't just Amazon, or Flipkart, anyone just win this space?
Vidit Aatrey [17:34] - Yeah, about Facebook, I just think this is one of the so many things that are going to happen on Facebook ecosystem, because people are spending so much time there. If Facebook starts doing everything, and so they'll not do what they are doing right now. If you look at for example, China, like Tencent invest in so many use cases that are happening on WeChat, because they can't do everything themselves. It's impossible, and it's not in their DNA as well, right? You've built a platform which does something. You do not want to go out
Craig Cannon [18:02] - and onboard tool suppliers, and make sure that their quality is right. That's not your business.
Adora Cheung [18:06] - That does not seem like in their DNA.
Vidit Aatrey [18:08] - Right? And you can't do this everyday. You start a new business because you want to capture all use cases. The way to do it is like, partnering with us. And we do work with them very closely. Qe share what our users are telling us, what can improve, how can this platform become better in terms of enabling commerce for these people in smaller cities. We do that. I don't think it's viable, even if they start doing, they'll have to stop it some time, because this is one of the few things that are going to happen on WhatsApp. It's not the only thing that's going to happen.
Adora Cheung [18:35] - And in fact, makes their product more sticky.
Vidit Aatrey [18:38] - Correct.
Adora Cheung [18:38] - That people are doing this.
Vidit Aatrey [18:39] - And they recognize it. Like, we are creating new merchants for them, and these people are going to come back.
Adora Cheung [18:45] - You're making them bigger. Stickier, I guess. Cool. I want to take a step back and go all the way back to your college years, in which I'm guessing you were starting to think about I want to do startups. You and your co-founder met in college, you were classmates. Tell me a little bit about, when did you guys know you wanted to start a startup together, and what were your initial ideas? Yeah, so in college, practically, we did not think about doing a startup. And in college, we said, "Hey, we're going to go out, get a job somewhere, chill out, have fun, whatever," right? We used to work on a lot of projects together. I still remember, we worked on our college project that you do in the last year. We worked on certain things that we went out for competitions. We worked together, so we knew each other very well, but that time, we were not thinking about doing startups. It's not just us, this is 2008 to 2012.
Vidit Aatrey [19:37] - Starting startups was not a cool thing to do. That started after Flipkart became bigger about 2014, 15, and after that, the IT's like, hey, everyone wants to do a startup. So it's pre-cool phase. But what happened back in 2015, like the year out of college, I was working within MobiHerd, Sanjeev was working with Sony in Japan. And then...
Adora Cheung [20:00] - Oh, he was in Japan?
Vidit Aatrey [20:01] - He was working there, and one day, he randomly calls me and said, "Hey, I'm looking to join a company in Bombay because I want to come back to India. And can you ref check that company for me?" And I said, "Why do you want to work with them?" It was a startup. If you want to work with a startup, let's do something ourselves first. If it doesn't work, then you go there. Just on that call, with no idea, nothing in mind, we agreed that, "Hey, we will do a startup." And from next day, we started focusing on, hey, "What problems can we focus on?" Started, we created a Google spreadsheet, listing all the ideas that we had, talking to people around us. But that's how it was. It's all unpredictable, uncertain, no plan around it. Antthat time I was planning to do an MBA. Like, everything changed, right?
Adora Cheung [20:48] - Yes.
Vidit Aatrey [20:50] - And that's how it is.
Adora Cheung [20:50] - MBA is no longer needed. You got your MBA.
Vidit Aatrey [20:52] - It's because I just felt like, a very good friend of mine. I know I can work with Sanjeev for hundred years of my life, right? And he's saying that he wants to work in a startup. There was no better opportunity for me.
Adora Cheung [21:02] - Yeah, and sometimes the best teams are, they knew they wanted to work together, regardless of the idea, and then they just came up with the idea along the way.
Vidit Aatrey [21:09] - Correct.
Adora Cheung [21:10] - All right, so, you guys decided to start working together. I think the first idea you had was FashNear, is that true? The first one you actually started working on. So tell me a little bit about that. How did you come up with the idea, how did you figure out like it didn't work, and then pivot into what is, I guess the first version of Meesho that is today.
Vidit Aatrey [21:29] - Sure. Back in 2015, doing O to O, hyper local, was very popular in India. Like everyone thought that "Hey, almost everything would be sold on demand, hyper locally," and we thought everyone is working on a problem, but no one is looking at fashion. We said, "Let's build hyper local for fashion," and we built FashNear. Think of it very similar to what Swiggy is for food, but just for fashion. We did that for four, five months. We learned a hard lesson, it doesn't work, because in fashion fulfillment, it's like the third thing that is most important. The first thing is selection, which you can never have around you. But that was like the lesson that we learnt. But the good thing was it became a starting point. When we built out that marketplace, we used to go to these small shops in Bangalore, and used to onboard them as suppliers. These small shops are everywhere. Like in Koramangala, where we are right now, matches are everywhere. And my pitch used to be that, "Hey, I'm going to take you online." And these guys will say,
Craig Cannon [22:23] - "We're already online." What do you mean by that? They say, "I sell on WhatsApp." Then you understand, like one level deeper what does that mean. They say, "I have created a WhatsApp group of all my existing customers who have ever bought from me. And every time new stock comes into my store, I take photographs of all of them and post in that group saying, 'These are the few products left. If you want to order, you order right.'"
Adora Cheung [22:45] - Got it. So it's like leftover, existing inventory, okay.
Vidit Aatrey [22:47] - Yeah, so, these guys like re-engaging with their customers on WhatsApp. And this guy was saying that, "I sell 30, 40% of my total business every month on WhatsApp now, and my brother who's in Whitefield does much more than that." We thought that is super exciting. Then we met with a lot of other small shops and we saw the same behavior. The good thing was, no one in India knew about it. We thought that, "Hey, let's go with the idea, we should work on." And we had learnt a hard lesson with what we were doing before. We learnt, at that time, we were speaking to VCs, they recommended "Hyper local is cool, you will get funded," et cetera. This time, we realized that we had to do something that we believe in ourselves. When we had spoken to these 50, 100 such suppliers offline, we were very confident, "Okay, hey, this is going to be the next big market, and a lot of these SMEs are going to use WhatsApp." So we just built a tool. Think of it as a mobile only, India localized version of Shopify,
Craig Cannon [23:43] - tailor made for doing commerce on WhatsApp, Facebook. And we built it out, and we started going to all these small shops and saying, "I know you sell on WhatsApp, use this tool." I know you sell on WhatsApp, I used to go to exhibition, et cetera. That product started to grow very well. With the same product, we went to YC, we raised some round, angel round. But six months time down the line, everything changed. It was a tool which was free, so we were not making any money. It was growing.
Vidit Aatrey [24:11] - Retention used to be lower than what we expected. And when we used to speak to our users, we realized that about more than half of our total users were not the same segment that we intended this product to be for. It was not that offline shop. A lot of them were housewives who were running their boutiques on WhatsApp. Everyone's saying, "Yeah, I run my boutique on WhatsApp. It's called XYZ Boutique." What's this boutique, like Aurora's Boutique. They'll create a logo, and they're selling there. And then we understood what they were doing. Like, most of these women were based out of Gujarat, which is like the big manufacturing sector in India, so it's easy to access supply in that state. So most of them were women based out of Gujarat, who were going out, getting phone numbers of these suppliers, adding them on WhatsApp, getting products from them, curating, and selling to their customers. When they get all the, they'll collect money, give to the supplier, who'll directly ship it to their customer. They were running boutiques on WhatsApp. We were so inspired when we met these women. If everyone in India could start a shop like this, it'll be very powerful.
Adora Cheung [25:20] - In some ways, it's cool that you thought people were going to use it in one way, but actually there were another set of customers that were using it in another way, and that's what actually started growing.
Vidit Aatrey [25:31] - And it happened by itself, like by, I don't know by luck or by chance, but people just came, and they started using that tool to do something we never expected.
Adora Cheung [25:39] - What was the point in which you thought, this is it? Was there a certain metric you were tracking, it was just growing really fast, or there was a story where like, oh man, this is going to be huge?
Vidit Aatrey [25:50] - Right after we discovered this, because the existing product was also working, so we created two teams in the company. Meesho was what we were doing earlier, and we created another product called Meesho Supply. I separated the team internally. There was to be one room for Meesho and one room for Meesho Supply, and these guys were building out the tool so that everyone could do what these women were doing. That was Meesho Supply, and we did this on WhatsApp. We did not build an app this time. Sanjeev wouldn't have let me start another website. He had already built two different apps, and they were not going to be a big business anyway. We started doing this on WhatsApp. We used to connect with these women, send them products, based on whatever data we had. We created a supplier marketplace on the back side, had an office in Gujarat. Same chicken and egg problem. I don't know what all we did at that point in time, figuring out how do we get some supplier to sell. But just on WhatsApp, with no app, no website, in six months we were doubling every month, every month. This was still going at the same space. Retention was lower than we expected. We thought that I could not do two businesses. I have to choose between them. I can see these businesses exploding on WhatsApp. If I built out in there, what will happen? We just shut it down, and we renamed Meesho Supply to Meesho. And that became the only focus we will work on.
Adora Cheung [27:10] - How hard was that? Because most people have a really hard time trying to let go of this one thing that's actually not doing bad. It's actually doing fine. It was very, very hard, but it was not as hard because I had Sanjeev. I have seen so many friends around me who were just not able to pivot because it was a hard conversation with their co-founder. Rhe co-founder starts not believing you. Because the believe that me and Sanjeev have is not because of what we are doing right now, it's because we know each other for more than 10 years. This did not matter. So I said, we both understood what's happening. We said, "Let's take a call." Rhen we convinced all the team members.
Vidit Aatrey [27:50] - Over time they also came on board. Initially, everyone pushed back, and they, "Hey, you keep changing what we do every six months." Even though that was post-correction, like now if you see back. But it was important. So I'm saying, just because you have a co-founder you trust blindly, it was easier, but I'm very sure if I was starting this company with anyone else, I would not have been able to do these two pivots, and most likely would have been done back then.
Adora Cheung [28:18] - How did you announce it to, the hardest piece is probably making the decision itself. And then the other hard part is telling the whole company, "Hey, listen, the thing you signed up for, we're actually going to do this other thing." How did you manage that whole process?
Vidit Aatrey [28:33] - So first, because I was very clear, we do this for six months. It's not a small period. We did both for six months. After six months, I could see, "Okay, hey, I know we have worked on this for the last one and a half years, right, there is sweat that has gone into this, but this is working, right?" We have to be logical about this. If it keeps brewing, you will make money. And the other thing that happened at that time, we were struggling to raise money. We were one of the few companies after YC who did not raise a lot of money on demo day. We were struggling to make money. Here we were making money but charging our suppliers. Here we were not. It was very clear what we had to do.
Adora Cheung [29:08] - By pure need.
Vidit Aatrey [29:10] - Yeah, just by pure need, you have to do this. Everything was pointing to one direction. Then we knew that we have to do this. The next thing was, how do you get the consensus in the team, that ,"Hey, whatever you worked on for the last one and a half years is not going to be the core business anymore." Then, when we just sat around with our team, I think they understood over time. It took weeks. We used to come back and discuss the same thing again. And everyone will put forward, "Okay, hey, let's give it more time." Let's keep investing there. And I was saying, "You need to focus on one thing." That's about belief. You can't do 100 businesses, even if you want to. And over time, people came about this, and everyone agreed on the same thing, and then we started focusing on it. And even then, we continued to grow very fast. Like, it's just three months after we made the shift of shutting this down and just doing this. Because it was growing so fast, everyone was very clear that, "Hey, we made the right decision."
Adora Cheung [30:04] - That's great. When startups start becoming really big companies, the CEO's role changes a lot. And many times, they get further away. They distance away from the actual user and what they actually want. I know you do, you've told me some, in private conversations, some really great things that you actually do to keep in touch with the users. Love for you to share what you can about what you do there to make sure you keep in touch.
Vidit Aatrey [30:30] - Sure. So, our business is a unique business, right? Most people build products for themselves that they use themselves, right? Because they feel the need themselves. In our case, we are building for a different segment. I am not a woman and I am not a housewife, right? And we always recognize this as one of the core problems since day one. Like we have to build for an audience which I'm not myself, then I have to stay close to them. There's one line I tell most people. The best thing to do is build a product that solves your own problem. The second best thing to do is build a product that solves a problem for someone who can't solve their own problem. And we realized, okay, I'm solving problem for someone else, but I have to be very close to them. So since day one, every user that used to on board, who used to come to our app, I used to add them too on WhatsApp, and I say I'm going to do customer support for you. Any problem, you tell me. Every time we're thinking of launching a new feature, I will check with everyone how do they feel about it, and just keep talking to them. And over time, I built relationship with a lot of those folks. Even now, like a good number of 100, 200 people who are our top users are added on my WhatsApp. And if something gets released they're stamping. But because of that, I get to know what's happening on the ground.
Adora Cheung [31:47] - You know right away also when stuff is wrong.
Vidit Aatrey [31:49] - It's very, very important. It's like a check and balance in the whole company. You release one bad feature because you're not using it right now, you will not get to know about it. But my user will come forward and tell me, "Hey, this is broken." That is very important. I think as a whole company, it's not just me, as a whole company, we have built a culture which is very, very user-focused. Because the day you start taking assumptions, start thinking on behalf of your users, say this is how it should be, you start doing mistakes. All my management goes and sits in the call center every month for half a day and just listen to user calls, just understanding what they're facing today. And everyone comes out with something new that they never thought about. We do something, and I think one of the very few companies out there, as we do town halls for our existing employees in the company, we go out and tell them what's working well, what's not working well, what numbers did we achieve, what are we planning to do going forward, what new things we launched, right? We realized that our users, who are these store owners on these social platforms, are also the same part of the company as our employees. Then I started doing what we call as We Hear You every month, where I create a video and I talk about what kind of things we did last month, what kind of things we are planning to do, and what are the things that are not working well, then we work on them. It's like a town hall for our users. And it has got amazing response.
Vidit Aatrey [33:19] - Every user comes back and responds there, and with very big answers, what needs to change, what is not changing. Most people love it. Most people look forward to it, because it's like I get to know from the company what's happening. Most of our users feel part of the company. We also do like few other things. One of them is, most of the celebrations that happen in our office, we generally call most of our users in Bangalore to come and participate with us. We are having a party after maybe a funding round. We call our users who are also, like have fun with us. We get to talk to them, like whatever they want to. I think just staying with them. All of this is just to stay close to them. Because if you're close to them, they'll keep telling you what are they feeling about, and then you'll not make those mistakes that most people end up doing.
Adora Cheung [34:07] - The first thing you talked about staying in touch with your first 100 or so users, I actually tell a lot of founders. That's what, do what Vidit did, because that will keep you in the loop at all times. And the We for Hear?
Vidit Aatrey [34:21] - We Hear You.
Adora Cheung [34:21] - We Hear You, sorry. In hindsight, that is genius and everyone should do that. If I ever start a startup, I'm going to be stealing that one.
Vidit Aatrey [34:29] - I'm sure. I think it's like one of the best things we have done within the last one year. It just works amazingly well. We get to know so much feedback every month. Every person in the company knows what our user's feeling. It's just amazing, and I think everyone should do it.
Adora Cheung [34:48] - In terms of your role, tell me a little bit how it has evolved over time. Obviously, when you had no users, you were like on the ground, being super scrappy and just like, building stuff and talking to users yourself. How has that evolved over time to what you are today, which is a company of hundreds and hundreds of, how many employees do you have?
Vidit Aatrey [35:05] - Now we have 700.
Adora Cheung [35:07] - 700 employees. What is the difference now?
Vidit Aatrey [35:11] - I would say until we got to product-market fit, my whole job was just to figure out what the business model will be in the long term. I was doing everything on the demand side. I got my co-founder and another very, like a good friend and early member of the team who was looking at a lot on the supply side. But I was like, I have to figure out what the business model will be. And doing these pivots, talking to users, just keep talking to them, what's working, what's not working. I did everything on the growth side, on the product side. We hired our first product manager after we did our Series A, and we hired our second product manager after we did the Series B. I was just doing all of that work, because I knew it's my responsibility to figure this out. And after we had very clear signs that, "Hey, this is scalable, we have reached product-market fit," my job changed suddenly. I have to get the team so that we can manage this growth, right after this. So after this, my role has been just on hiring, like hiring people who believe in our culture, who believe in our values, who believe in the mission that we have, like solving for people who are like the kind of users we have. Hiring them, and just making sure that if we change our direction, which I don't think is right, making sure that doing course correction at times, making sure the direction of the company is right, motivating people at all times. But this is my work now. Like nothing else.
Adora Cheung [36:34] - Do you ever miss the old days?
Vidit Aatrey [36:36] - I do, I do, like many times. I'll just go back. I still spend a lot of time with the product team, not so much others, because I like it. Like, I like understanding what do people want more. So, once you get a habit of doing this, it's very, very hard to come out of it, but you know business needs. I need to have people so that we can sustain this.
Adora Cheung [36:56] - What are the, as you've grown over time for your role, what are the resources here in India that you've leveraged, or elsewhere, to help you do well?
Vidit Aatrey [37:06] - As a CEO and as a founder, the best way to learn is always talking to other founders. I've seen every problem that I have is never the first problem. I've built a network through our investors, through our board members who have other portfolio companies. Fortunately, I have built a good connect with a lot of founders who have built great companies such as Swiggy, Ola, others, and going to them, talking to them, "Okay, hey, this is what I'm facing. Did you face the same thing?" And they will always say, "Yes." And then you understand how did they solve for it. I think this is the best way to learn. Like, everything else, I read a lot of books, like everything that is out there related to startups, founders, but all of that is not in context to what you're doing. A lot of those books are written outside India. But when you go and meet these founders, you understand what's happening. Like, even just within our YC circle, I spend, like we, me and Archit, who's the founder of ClearTax, we take a stroll every Friday morning.
Adora Cheung [38:08] - I love that.
Vidit Aatrey [38:09] - And we discuss what are we doing, that's all. And what is working, what is not working, and he will tell me what is working for him, and I will go and try it out in my company, and vice versa. And it works fabulously well. So I think the only way you can learn is founders speaking to other founders.
Adora Cheung [38:24] - Having a strong peer network is so important. Speaking of which, what's a big mistake you've made that you, now that you're talking to lots of founders, listening to this podcast, that you hope they never, ever make? What did you learn from it?
Vidit Aatrey [38:39] - I think we made the first mistake right after we decided we were going to start up. At that time, we just kept listening to VCs. On day one, we went to a VC and asked them what they want to do. The second thing, once we started, we went to VCs looking funding, and they said, "If you do this and you get to this metric, then we'll fund you." And we spent the next three months just getting to that milestone. And then we went back to them, and it was like, okay, "Now you do this, and you get to this, then we will fund you."
Adora Cheung [39:04] - Never ending.
Vidit Aatrey [39:05] - Yeah, and then we wasted four months of our time. But it was such a big lesson. After that, I've never gone to them asking what should I do, because I know they don't know. Right? It's the biggest mistake most first time founders do, right? They think that, "Hey, they are going to fund us. If we just listen to them, things are going to work out." But it's never the case. You have to believe in what you're doing. You have to believe in the idea. You have to believe in the product. You don't have to make someone believe in something, you just do it for them.
Adora Cheung [39:31] - Makes sense. VCs, no matter how smart they are, they're never going to be the expert in what you're doing, that's for sure. What is the best decision you made in the early days of Meesho when looking back, was super critical to your current success?
Vidit Aatrey [39:44] - My best decision ever was to start this company with Sanjeev. A lot of other mistakes that I've done have not been such big mistakes because I started with him. We just gave us time, and we could go through that whole process of changing what we have changed in the business, hiring people who are like us, hiring people in our own network, going through those highs and lows that we were never prepared for when we were doing our jobs. The single best decision I've made is starting this with him.
Adora Cheung [40:12] - That's good. And I guess, what's one opinion you had about running a startup that has completely changed or reversed since you started, aside from the VC thing.
Vidit Aatrey [40:23] - It's coming back to the same thing, right? Everyone that I used to go to, like a good chunk of my friends who were doing startups, at the time we were thinking of doing a startup, and most of them used to say, "Okay, hey, if you don't solve your own problem, it's very hard." So on day one, when we were thinking about the model, we thought, okay, "Hey, we'll build FashNear for us." I don't like to go to a mall, but I still want to try it. But I start thinking about my own problem, and in all times, you may not have problems that you want to solve right now. You may not recognize them. It doesn't mean that you can't solve others. But because so many people told me, I thought I can't build a product for someone else. It has to be my own. But when we went through this whole discovery process, I think that I don't hold that opinion anymore. You can build for others. It's hard, definitely, much, much harder than building a product for yourself, but in many cases, especially I think for the next 10 years, most products that we build in India will be build for tier two, tier three audiences, and most of these people who will be building startups will come from metro, will come from IETs. And they will not be themselves. But you still have to solve for that.
Adora Cheung [41:30] - It's also super important, if your user is not yourself, is that you care deeply about the users, and it's clear from how you talk that you do care. All right, so, switching topics a little bit, I want to talk a little bit about the Indian startup ecosystem, because it's been growing pretty rapid recently, and it seems like things are starting to click, which is great. Maybe a first question about that is, how has the ecosystem evolved since you've started? What have you seen, and what works, and what doesn't?
Vidit Aatrey [42:01] - I think one very positive thing has happened in the ecosystem is, when we started, everyone was like, tell me what are you a copy of, either in US or in China. And because of that, we struggled a lot in our early days, because we could not figure out a parallel for this either in US or China. And people will say, "Okay, hey, all big Indian businesses so far in tech have been a copy of one or the other." You can localize it, but they are still inspired by something. But what has happened over the last three years, and a lot of that has changed because, again, of Reliance Jio, and with UPI, which is a new payment system in India. People have been able to transact online, and people are online. Now, you are building products for like the tier two, tier three, tier four. They don't behave in the same way as western users do. You can't get the same western-inspired product into India and make it work for them. Now, a lot of new companies are coming up who are taking a very new approach, like first time building out for these users, understanding bottom-up what their problems are, not thinking top-down, this is how it should be because it exists in US.
Adora Cheung [43:09] - Yeah, makes sense. So I think this is a very big positive development for India. Aside from what you're working on, are there other big problems in India that you think founders could focus on or should focus on?
Vidit Aatrey [43:20] - Most of this would be for the same audience, right? So, all of these users, tier two, tier three, tier four users have come online in the last three years, and we have started to solve commerce for them, which is obviously the most basic need. But then, people will start focusing on, okay, "Hey, can we solve housing for them, education for them, healthcare for them." I think the journey has just started. Over the next 10 years, people will figure out everything for these guys, because these people right now use only WhatsApp, Facebook, maybe a couple more apps, maybe Meesho, and that's all. So, how do you solve for where do they spend more time? How can you build entertainment for them, everything else? So, I'm sure there are hundreds of possible idea that can come forth, but didn't come from the same audience, and people who are close to them will be able to figure out the right answers.
Adora Cheung [44:05] - Makes sense. Do you think it's possible, it's great that people in India are building stuff for themselves now. Makes total sense. Do you think it's possible for foreigners to come into India and start a startup here? Would you suggest it at all?
Vidit Aatrey [44:19] - I think it's definitely possible, but it's difficult, and now especially for sure. 10 years ago, you could've just got Uber here or maybe something else here, and that would have worked. But now, if you have to go and understand nuances of someone that you don't culturally relate to, it's harder. I'm sure people can do it. The great thing is, especially for western audience, unlike China, people mostly build product in English, and since people speak English outside, they can come and build for the same audience. But understanding how do people use it, a lot of that has to be learnt out. So someone who can do it maybe can build it out. It's harder, but not impossible.
Adora Cheung [44:57] - What is your best piece of advice for aspiring Indian founders?
Vidit Aatrey [45:02] - My best piece of advice for aspiring Indian founders will be, just go out and stay very close to users. The only thing that has worked for us, and I think will work for a lot of people when they build out for this audience, is being super user-focused. Do not listen to anyone except what your user says. Stay close to them always. Do not assume things for them. Challenge everything that exists as a default right now, as what status quo is. Is the UX the same? Do you build it out in English, or do you build it out on acting languages? Or do you, maybe the journey, user journey will be very different. Maybe you have to let go of saying, "Hey, I will not have a call center." Maybe these guys need to speak to someone to get their problem solved. Then you have to challenge all notions that are good and bad out there. Because a lot of these users think in very different ways. We have seen, if you speak to a user on phone, certainly the trust level goes up, because they think they're speaking to a person, not a company, and they trust a person more than a company. I'm saying you will have to challenge a lot of ways of how startups are built, of how products are built. But if you stay very close to users, you're super user-focused, people are going to figure out answers. And they need to do a lot of problem solve for these audiences.
Adora Cheung [46:17] - That makes a lot of sense. All right, so, I want to finish off with a lightning round, which is like five quick questions. One, after Meesho, what is the most exciting startup in India?
Vidit Aatrey [46:31] - It's hard. I would say, ShareChat. ShareChat, because they are one of the few other companies who have built a product for India, building out for the tier two, tier three, like a lot of people are coming and spending all their time on ShareChat.
Adora Cheung [46:50] - For the audience, what is ShareChat?
Vidit Aatrey [46:52] - ShareChat is a vernacular social network in India built for smaller towns and cities. It's where people come and go through content in their own language, written by people around them.
Adora Cheung [47:06] - There are so many languages in India. Do you know how many?
Vidit Aatrey [47:10] - Yeah, there are a lot. There are a lot.
Adora Cheung [47:11] - Too many.
Vidit Aatrey [47:12] - Yeah, yeah. So, it is said that a dialect at least changes every two kilometers in India.
Adora Cheung [47:18] - Oh my god.
Vidit Aatrey [47:18] - Right? So it's insane.
Adora Cheung [47:20] - Yup, cool. So you went to IET Delhi. So, one, why is Delhi the best IET?
Vidit Aatrey [47:28] - I think being in the capital always helps, and if you see most of unicorn founders in India are from IET Delhi. You look at Flipkart, Zomato, and a lot more. So it's always been. I'm proud of it. If you ask me why did I start this company, I was super inspired by what Flipkart founders did, and I said, "If they can do it, we can do it as well." And that what inspires a lot of IET Delhi founders to go out and start companies. So I'm sure people took risk because people were close to the apple that is definitely there.
Adora Cheung [47:57] - Sort of becoming like a Stanford, pulling in some of the--
Vidit Aatrey [47:59] - Yeah, for sure, for sure.
Adora Cheung [48:02] - What's the best IET after Delhi?
Vidit Aatrey [48:05] - I don't think there's any--
Adora Cheung [48:05] - Oh no, okay.
Vidit Aatrey [48:07] - But if I have to pick a name, because a lot of my friends, very close friends come from IET Kalapur, I would say IET Kalapur.
Adora Cheung [48:13] - Okay, fair. What's a must read book everyone should read, and why?
Vidit Aatrey [48:18] - There's a book that I read every year, and again, and again. It's The Hard Thing About Hard Things. Because I just feel, for a founder--
Adora Cheung [48:26] - By Ben Horowitz?
Vidit Aatrey [48:27] - Yeah. You go back, and a lot of situations you face, it just written in that book, and it's written and not saying, "This is good, and this is bad." But it's a very unique perspective. This just happens, and sometimes you have to take calls, right? A lot of things I've done, enabling me to take the right decisions, I many times use frameworks that is in that book. I've read it I think four times in the last four years. I just go back and revise everything.
Adora Cheung [48:51] - Yeah, that's my favorite. When people ask me, "What book should I read related to startups?" That's that, and Founders At Work by Jessica Livingston are the only two books. And I remember reading it during a rough patch during my startup, and I was like, "Thank you. Oh my god. I'm not the only one. All right." What's a startup idea you'll be working on if Meesho didn't happen?
Vidit Aatrey [49:14] - I don't know. But as I said, if be, if I do a startup today, I will do it for the tier two and tier three audience. I will not build it for the metro audience.
Adora Cheung [49:24] - Makes sense. All right, last question. In 100 years from now, what do you hope Meesho is?
Vidit Aatrey [49:31] - I think 100 years is a long time. Business change, tech will change, I don't know if it'll be mobile. It'll be something else, right? So 100 years is a very, very long time for technology. But as an organization, I think one thing that should stay until then has to be that we should stay user-focused. And I think if that framework is there, if the team continues to believe in that, even 100 years from now, I think we will stay for 100 years, and we'll build products which will be very scalable, which will impact lives in ways that most people can't imagine. But I think it'll be a company which will still be user-focused. Could be doing something else with new technologies, I don't know.
Adora Cheung [50:08] - That makes sense. That's a great answer. Cool, thank you so much.
Vidit Aatrey [50:11] - Awesome, thank you so much for having me.
Adora Cheung [50:13] - Yes, cool.