On starting and scaling Indian shopping site Meesho

This is Adora from YC. I'm excited to have Adit Atre, CEO and co-founder of Misho, which was founded in 2015, and you went through YC in 2016. So today, Misho is probably one of the hottest startups in India, if not the hottest startups.

And I'm super excited to hear about, for everyone to hear about your entrepreneurial journey, your thoughts and opinions on not just Misho, but the startup ecosystem here in India. So thank you for being here. Thanks so much for inviting me. I'm super excited to be on this podcast, thank you.

So let's start off with, I love the name Misho, which I believe is short for Mary's Shop, which means my shop. And it obviously alludes to what Misho is today. Maybe you can start off with giving us a quick background of what exactly is Misho, and give us an idea of how big you are today. Sure.

So Misho is essentially a way for anyone, literally anyone in India, to come and start, as well as grow your social store. And it could be on any social platform, WhatsApp, Facebook, Instagram. Tomorrow it could be something else that comes up.

And 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. And 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, like 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. So most of those people, before Misho existed, what were, did they even have a business? Or most of them, you've enabled them to even have a business in the first place?

Yeah, so I'll just set some context here, right? So it's very, very common in India. Like 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.

So these people who never had the opportunity to start a store came onto a 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 supply 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, so almost everyone who is using our app today has become an entrepreneur because of us. They were not doing this offline, like almost everyone. So 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, you know, why not just, I guess, sell directly to the people themselves? Why not the middleman in the middle, I guess? Yeah, so 90% of total commerce, this is 2019, right? And 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 their house and start selling products.

And 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 add 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? So selling unbranded categories through like a mall has never worked out in India. It has always worked through these mom-and-pop stores. So when these unbranded products have to sell online, if you see like 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 similar thing, but not offline, but on these social channels, you have started to sell these unbranded products and across all categories.

So 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 I mean, have been buying the same kind of products from these small shops offline, right? They've not been going to malls, they've not been going to the Amazon of the world to buy these products.

Got it. And 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. So what are the macro trends in your favor in India that allows you to grow so fast today? We've been super lucky, right? In many ways, right?

So WhatsApp started to become very, very popular about five years ago in India. So, and WhatsApp was generally the first app most people use. So 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. For those who don't know what Jio is, Yeah, so Jio is the new telco that has come and has drastically reduced the cost of data in India.

So most people, a lot of people in India had phones, but they never accessed data because it was so expensive. But two years ago, Reliance launched Jio and now people can go online for almost no cost, right? And now these people have started to come using Facebook, WhatsApp, Google, now other apps, right? So these people are coming online for the first time.

They have been on internet for just like a year or so. And because of that, and a lot of these guys in smaller cities, like tier two, tier three, or 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. So 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.

Like 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. So a lot of these things have come together for us.

And fortunately, we started this business at the same time. We started seeing this behavior about three years ago, and we just kept building on it. Got it. And a lot of people say in India, it's a trust deficit market. Maybe you can explain for the audience who's not from here what that means and how do you solve that problem in particular? So trust deficit is because of hundreds of reasons, right?

So in India, most people do not believe in corporate companies. They don't believe in their own government. They don't believe in judicial system, court cases run for hundreds of years. Then they just never close. So 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? So 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? So you buy, for example, some apparel and after a month, all the color goes away.

And 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. And this is exactly the reason why unbranded products in the offline world about a decade ago was getting sold to these small offline shops but still in your community, right?

So retaining that just solves for that problem. Like India as a country is like that. Cool. And so when you talk about who your average user is in terms of the reseller, entrepreneur, what was their life before and after Meesho and kind of 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. Correct. So our average user, like 90% of our users are women and more than 80% of our users are tier two and tier three and below cities, right? So 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, right? 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 that please give me money so I can start my boutique or I can start my store selling products, but she never got money, right?

And when she came onto a 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? So 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, right?

And 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 a platform, we spend a lot in terms of how do we train these guys. So 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 very after that, when we put you in a mentorship program, where we connect you with some top trainers for a month and these guys will tell you how to start a business. So these people have never done it. These are all the entrepreneurs in your system too, as well. Yes, these are our top 5% of the users who want to do this because they get recognition.

So it's like you started your own startup ecosystem within Misho, that's great. Exactly, so these people are helping each other out. I'll give you an example. So we have a Reddit-type community in our app, which is called Misho 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. And then you see hundreds of other users coming forward and telling them what should you do on day one. How should you get your first set of 50 customers?

How should you curate and bring that value out so people start getting interested? But people start doing this, the community helps each other out. I love the stories in which you've changed, you 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 lives so much? So it's just never been. I'll give you some understanding about how these women are, right? So a lot of our users are women, a lot of them are housewives, like 70% of our users are housewives.

A lot of these women have been looking to start a business not just to make money, right? But to also get some sort of professional identity, right? 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 business woman in a community, people start recognizing me. I have a professional identity, I can also go out and say, I run my business, this is what I did last year. So that feeling is very, very important empowering, right? So most, like our most impactful stories are not just about how much money this person makes. It's a lot about what were they doing before.

So we have widows who are not able to sustain, like their family, feed their kids, et cetera. There are women who are like handicapped, right? So these are educated women, but handicapped so no one ever gave them jobs. So all kinds of stories are there, right? And this is the impact which tells us, hey, people are finding value.

In terms of income, our typical average user makes about 150 to $200 per month as income. My top 5, 10% does about 400, $500, right? But I don't think that number matters to us so much. It's about where were you before and how your life has changed. Most of these people are anyways, not doing this as the primary income for the family.

Most of this is secondary income for the family, which is if it is 15, 20, 30% of your primary income, it's significant, right? It's getting like a raise one year earlier for the family. Yeah. Right, 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. Got it. That's very inspiring.

So 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? So 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 and Karnataka were running these WhatsApp stores even before us because they had gone out, met suppliers, figured out how to do courier. They figured out how to use tools on WhatsApp, et cetera. But there were few.

So in like six, seven months, we onboarded a lot of them. And then we did not know what to do. And then we changed our product completely because we had to create users. Like we have to create our resellers, none of them are doing themselves. So we changed that and suddenly so many people, like every tier two, tier three women out there became our target customer.

And then the second thing that we did was how can, and which is still the North Star of the company, how do we grow income per reseller every month? Which meant growing number of categories. So we started with only ethnic fashion. Before time, we just now do everything. Now we have even set up a supply chain from China.

So you can not just access supply, which exists in India, but even cross-border, right? So now you can offer better variety. You can sell even more unique things. You make more money. Then we said, hey, can we like enable, not just housewives, but other people? Then we started going out. We onboarded students. We onboarded retired folks who are trying to make pensions.

We have a lot of men who are unemployed, who do not have jobs. And they are running these shops to sell these products. So it's now practically everyone. You're basically going to eventually employ all of India. Yeah, we want to. Cool. So as 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 wanna scale customer support because it's unsustainable. So I'm really curious how you balance growth and quality as you continue to grow really fast. Correct. So it's always been a cycle, right?

So you grow very fast, and then you realize you've carried so much debt around, a lot of ops, a lot of manual things, and then you start focusing on how do you improve quality. And I think we see that cycle almost every six months, but both are important, right? This last year was crazy growth for us.

Like we started with a number and the number we ended with, most people can't imagine how that has happened. But during that path, if we started optimizing for quality, we would have broken down as a system. And 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.

So 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? So you have to go back to the drawing board and understand why are people calling me, right? And then you start optimizing for, hey, my product is broken in these places and I have to solve them out.

So 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. And 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 on just quality. Got it. Yeah, that's great.

It's just 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. Exactly. 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 gonna ask it anyway. What if Facebook does this? Or what if Amazon?

Why wouldn't just Amazon or Flipkart or anyone just win this space? Yeah, about Facebook, I just think this is one of the so many things that are gonna happen on Facebook ecosystem because people are spending so much time there. If Facebook starts doing everything, I'm sure they'll not do what they're doing right now, right?

If you look at, for example, China, like Tencent invests 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? So you build a platform which does something. You do not want to go out and onboard 2 lakh. suppliers and make sure their quality is right, but that's not your business.

That doesn't seem like in their day. And you can't do this every day. You start a new business because you want to capture all use cases. The way to do it is partnering with us, and we do work with them very closely. We 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.

But I don't think it's viable, even if they start doing, it'll have to stop at 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. Yeah. In fact, makes their product more sticky. Correct. And people are doing this. And they recognize it. Like, we are creating new merchants for them.

And these people are going to come back. You're making them bigger. Yeah. Stickier, yes. Cool. So 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 a startup. So you and your co-founder met in college, you were classmates.

Tell me a little bit about, when do you guys know you want 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 were set, hey, we're going to go out, get a job somewhere, chill out, have fun, whatever. But we used to work on a lot of projects together.

I still remember, we worked on our college project that we do in the last year. We worked on certain things that we went out for competition. We worked together. So we knew each other very well. But that time, we're not thinking about doing startups. And it's not just us, this is 2008 to 2012. Starting startups was not a cool thing to do. That started after Flipkart became bigger about 2014-15.

And after that, IIT is like, hey, everyone wants to do a startup. So it's pretty cool phase. But what happened back in 2015, like three years out of college, I was working with Inmobi and Sanjeev was working with Sony in Japan. And yeah, so he was working there. And one day, he randomly calls me and saying, hey, I'm looking to join a company in Bombay because I want to come back to India.

And can you rest 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 in a startup, let's do something ourselves first. If it doesn't work, then you go there. And 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 what problems can we focus on.

We created a Google spreadsheet, listing all the ideas we had, talking to people around us. But that's how it was. It's all unpredictable, uncertain, no plan around it. At that time, I was planning to do an MBA, like everything changed, right? That MBA is no longer needed. You got your MBA. Yeah, it's because I just felt like a very good friend of mine.

I know I can work with Sanjeev for 100 years of my life, right? And when he's saying that he wants to work in a startup, like there was no better opportunity for me. Yeah. In some sense, 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. Correct. All right. So you guys decided to start working together.

I know, I think the first idea you had was fashion year, is that true? Yeah. The first one you actually started working on. So tell me a little bit about that. How do you come up with the idea? How did you figure out like it didn't work? And then the pivot into what is, I guess, the first version of Misha that is today? Sure.

So back in 2015, like doing O2O, the hyperlocal was very popular in India. Like everyone thought that, hey, almost everything will be sold on demand hyperlocally. And we thought everyone is working on problems, but no one is looking at fashion. So we said, let's build hyperlocal for fashion and we built Fashion Year. 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 is 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 learned. But the good thing was, right, it became a starting point.

So when we built out that marketplace, we used to go to these small shops in Bangalore and we used to onboard them as suppliers. And these small shops are everywhere, like in Kormangala, where we are right now, in HSR, everywhere. And my pitch used to be that, hey, I'm going to take you online. And these guys will say, we are already online. What do you mean by that? I sell on WhatsApp.

And then you understand like one level deeper, what does that mean? They're saying, 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, hey, these are the few products left. If you want to order, you order right now. Got it. So it was like leftover.

Yeah. So these guys are 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 was super exciting. And then we met a lot of other small shops and we saw the same behavior. And the good thing was, no one in India knew about it.

So we thought, hey, this could be the idea we should work on. And we had learned a hard lesson with what we were doing before. We learned, at that time, we were speaking to VC, they recommended hyperlocal school, you will get funded, etc. This time we realized we have to do something that we believe in ourselves.

And when we had spoken to these 50-100 such suppliers offline, we were very confident that this is going to be the next big market, a lot of these SMEs are going to use WhatsApp. So we just built a tool. Think of it as mobile only. India localized version of Shopify, 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. And I know you sell on WhatsApp, used to go to exhibition, etc. And that product started to grow very well. And with the same product, we went to YC, we raised some round, angel round. But six months, nine months down the line, everything changed. It was a tool which was free.

So you're not making any money. It was growing. 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 are running their boutiques on WhatsApp.

So everyone's saying, I run my boutique on WhatsApp. It's called XYZ boutique, like with its boutique, like Adora's boutique. And they will 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 it to their customers. And when they get order, they collect money, give to the supplier, who will directly ship it to their customer. And they're running boutiques on WhatsApp.

And we were so inspired when we met these women. If everyone in India could start a shop like this, it will be very powerful. So in some ways, it's cool that you thought people were going to use it in one way, but actually there are another set of customers that are using in another way. And that's what actually started growing.

And it happened by itself, like by, I don't know, by luck, by chance, but people just came and they started using that tool to do something they never expected. What was the point in which you thought, this is it? Like, was there like 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.

So right after we discovered this, because our existing product was also working. So we created two teams within the company. So Misho was what we were doing earlier. And we created another product called Misho Supply. And we, I separated a team internally. So there is to be one room for Misho and one room for Misho Supply.

And these guys were building out the tool so that everyone could do what these women were doing. That was Misho Supply. And we did this on WhatsApp. So we did not build an app this time, like Sanjeev wouldn't have let me start another website. He had already put two different apps and they were not going to be a big business anyway. So we started doing this on WhatsApp.

We used to connect with these women, send them products based on whatever data we have. We created a supply 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 supply to sell. But just on WhatsApp with no app, no website, in six months, we were doubling every month, every month.

And this was still going at the same space. Retention was lower than what we expected. We thought that I could not do two businesses. I have to choose between them. And I can see this business is exploding on WhatsApp. If I build out an app, what will happen? So we just shut it down. And we renamed Misho Supply to Misho.

And that became the only focus we will work on. 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. So 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. And the co-founder starts not believing you because the belief 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. Right. So I said, we both understood what's happening.

We said, let's take a call. And then we convinced all the team members over time, they also came on board. Actually, everyone pushed back and said, hey, you keep changing what we are doing every six months. Right. Even though that was course correction, like now if you see it back, but it was important. 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. 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? So first, because I was very clear, we did this for six months. It's not a small period. We did both for six months. After six months, I could see, hey, I know we have worked on this for the last five and a half years. Right. There is sweat that has gone into this. But this is working.

Right. So you 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. Right. So we're struggling to make money. Here we were making money by charging our suppliers.

Here we were not. So it was very clear what we have to do. Right. By pure need. Yeah. Pure need. You have to do this. So everything was pointing to one direction.

So 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. And then when we just sat around with our team, I think they understood over time. It took, it took weeks. We used to come back and discuss the same thing again.

And everyone will put forward, hey, let's give 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, you can't do 100 businesses, even if you want to. Right. And over time, people came, like, came about this and everyone agreed on the same thing. And then we started focusing on it.

And even then, we continue to grow very fast. Like, in 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, hey, we made the right decision. Yeah, that's great. So when, when startups start becoming really big companies, the CEO's role changes a lot.

And many times they get further away, the distance away from the actual user and what they actually want. So 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. So love you to share what you can about what you do there to make sure you're in touch. So our business is a unique business, right?

So most people build products for themselves, that they use themselves, right? Because they felt the need themselves. In our case, we are building for a different segment, like I am not a woman, and I'm not a housewife, right? And we've always recognized this as one of the core problems since day one, you have to build for an audience, which I'm not them myself, then 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 problem for someone who can't solve their own problem, right? And we realize I'm solving problems for someone else, but have to be very close to them.

So since day one, every user that we used to onboard used to come to our app, I used to add them to 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, what do they feel about it, just keep talking to them.

And over time, I build relations with a lot of those folks, even now, like a good number of 100 to 50, like 100 to 100 people who are our top users are added on my WhatsApp. And if something gets delayed, they're still paying me. But because of that, I get to know what's happening on ground. You know, right away also, when stuff is wrong. It's very, very important.

It's like a check and balance on 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. So that is very important. And 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, right?

Because the day you start taking assumptions, start thinking on behalf of users and say this is how it should be, you start doing mistakes. So 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. So then I started doing what we call is 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, and we work on them.

It's like a town hall for our users. And it has got amazing response, like every user comes back and responds there. And with like 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, hey, what's happening? Everyone, like most of our users feel part of the company.

We also do like few other things, like one of them is most of the celebration that happens in our office, we generally call most of our users in Bangalore to come and participate with us. So we are having a party after maybe a funding round, we call our users who also like have fun with us. So we get to talk to them, do like whatever they want to.

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.

The first thing you talk about, staying in touch with your first 100 or so users, I actually tell a lot of founders, do what Vedit did, because that will keep you in the loop at all times. So we hear you. In hindsight, that is genius. And everyone should do that. If I ever start a startup, I'm going to be stealing that one. I'm sure.

I think it's like one of the best things we have done in the last one year. And it just works amazingly well. We get to know so much feedback every month. Every person in the company knows what our users are feeling, it's just amazing. And I think everyone should do it. So 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 employees. How many employees do you have? Now we have 700. 700 employees. Yeah. So what is the difference now?

So I would say until we got to product market fit, right, my whole job was just to figure out what the business model will be in the long term. So I was doing everything on the demand side. Like 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.

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 a second product manager after we did our series B.

So 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, this 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 and hiring them and just making sure that if we change our direction which I don't think is right, making sure the course like doing course correction at times, making sure the direction of the company is right, motivation, motivating people at all times. So this is my work now. Do you ever miss the old days?

I do, I do, like many times. I 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 it's like once you get a habit of doing this, it's very very hard to come out of it but you know business needs it. I need to hire people so that we can sustain this.

As you've grown over time through your role, what are the resources here in India that you've leveraged or elsewhere to help you do well? So I think as a CEO and as a founder, the best way to learn is always talking to other founders and I have seen every problem that I have is never the first problem.

So I have 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 like founders who have built great companies such as Swiggy, Olab, others right and going to them, talking to them, hey this is what I'm facing, did you face the same thing and they would always say yes and then you understand how did they solve for it and 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 of 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 at Cleotax, we take a stroll every Friday morning and we discuss what are we doing, that's all and what is working, what is not working and he will tell you 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 as founder is speaking to other founders. Yeah, having a strong peer network is so important. Speaking of which, what's a big mistake you've made that you, now that you have, you're talking to lots of founders listening to this podcast that you hope they never ever make and yeah, what did you learn from it?

I think we made the first mistake right after we decided we want to start up. So at that time, we just kept listening to VCs. On day one, we went to VC and asked them what do you want to do, right?

The second thing once we started, we went to VCs looking for 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 was like okay now, now you do this and you get to this, then we will fund you. Never ending.

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 understood what should I do because I know they don't know, right? So it's the biggest mistake most first-time founders do, right? They think, hey, they are gonna fund us. Like if you just listen to them, things are gonna 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. Yeah, 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.

So what is the best decision you made in the early days of Misha when looking back was super critical to your current success? I think my best decision ever was to start this company with Sanjeev. Almost like a lot of other mistakes that I've done have not been such big mistakes because I started with him.

He just gave us time and we could go through that whole process of changing whatever we have changed in the business, right? 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 are doing our jobs. So I think the single best decision I've made is starting it with him. That's good.

And what's one strong opinion you had about running a startup that has completely changed or reversed since you started? Aside from the VC thing. Yeah, so it's coming back to the same thing, right? So everyone that I used to go to, like a good chunk of my friends were doing startups at the time you were thinking of doing a startup.

And most of them used to say, hey, if you don't solve your own problem, it's very hard, right? So on day one, when we were thinking about the model, we thought, hey, we'll build fashion 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 built in India will be built for tier two, tier three audiences, right? And most of these people who will be building startups will come from metros, will come from IITs. And they will not be themselves. But you still have to solve for them. Yep. Yeah.

I think it's also important if your user is not yourself, is that you care deeply about the users. Yes. 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 rapidly recently. And it seems like things are starting to click, which is great.

So maybe first question about that is how has the ecosystem evolved since you've started? Like what have you seen and what works and what doesn't? 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? Right?

And because of that, we struggled a lot in our early days, because we could not figure out a parallel for this in either or US or China. And people say, hey, all big Indian businesses so far in tech have been a copy of one of the other. You can localize it, but they are still inspired by something.

But what has happened, right, over the last three years, and a lot of that has changed because again, of Reliance Jio, and with UPI, which is the new payment system in India, people are able to transact online, and people are online. So now you're building products for like the tier two, tier three, tier four, they don't behave in the same way as Western users do.

So you can't get the same Western inspired product into India and make it work for them. Yep, right. So 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 this exists in the US. Yeah, 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? Yeah, and 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, can we solve housing for them, education for them, healthcare for them. I've seen the journey 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. Yeah, yeah. Right. So how do you solve for where do they spend more time? How can you build and train from entertainment for them? Everything else.

So I'm sure there are hundreds of possible ideas that will come for, but it will come from the same audience and people who are close to them will be able to figure out the right answers. Makes sense. Do you think it's possible? It's great that, you know, 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? I think it's definitely possible. But it's difficult. And now especially for sure, like 10 years ago, you could have just done like 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. Yep. Right. So I'm sure people can do it. And the great thing is, especially for Western audience, unlike China, people mostly build product in English. Right. 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 learned out. So someone who can do it maybe can build it out. So it's harder, but not impossible. What is your best piece of advice for aspiring Indian founders? 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 in vernacular languages? Or 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 the problem solved. Like 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, suddenly 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, if you're super user focused, people will figure out answers. And there need to be a lot of problems solved for these audiences. That makes a lot of sense. All right, so I want to finish off with a lightning round, which is like five quick questions. So one, after Misho, what is the most exciting startup in India? It's hard. I would say ShareChat, right?

It's ShareChat because they're one of the few other companies who have built a product for India, right? Building out for the tier 2, tier 3. Like a lot of people are coming and spending all their time on ShareChat. Yeah, for the audience, what is what is ShareChat? So ShareChat is a vernacular social network in India, built for smaller towns and cities.

And it's where people come and go through content in their own language, written by people around them. There's so many languages in India. Do you know how many? Yeah, there are a lot. Too many. Yeah, so it is said that a dialect at least changes every two kilometers in India, right? So it's insane. Yep, cool.

So you went to IIT Delhi. So one, why is Delhi the best IIT? I think being in the capital obvious helps. And if you see most of Unicorn founders in India are from IIT Delhi, you look at Flipkart, Zomato and a lot more, right? It's always been and I'm proud of it. If you ask me why did I start this company, I was super inspired by what Flipkart founders did. Right?

And I said if they can do it, we can do it as well. Yeah. And that's what inspires and a lot of IIT Delhi founders go out and start companies. So I'm sure people took this because people were close to Apple. That is definitely there. Sort of becoming like a Stanford equivalent. Yeah, for sure. What's the best IIT after Delhi?

I don't think there's any. But if I have to pick a name, because a lot of my friends, very close friends come from IIT Kharagpur, I would say. Okay, fair. What's a must-read book everyone should read and why? There's a book that I read every year and again and again. It's the hard thing about hard things, right? Because I just feel for a founder. Ben Horowitz.

Yeah. Because you go back and a lot of situations you face, it's just written in that book. And it's written, it's not saying, hey, this is good and this is bad, but it's a very neutral perspective. This happens and sometimes you have to take calls, right? A lot of things I've done enabling me to take the right decisions. I saw many times this framework that exists in that book.

So I've read it, I think, four times in the last four years. I just go back and revise everything. Yeah, that's my favorite. When people ask me what books I read related to startups, 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. I'm not the only one.

All right, what's a startup idea you'd be working on if Misha didn't happen? I don't know. But as I said, if I do a startup today, I will do it for the tier 2 and tier 3 audience. I will not build it for the metro audience. Makes sense. All right, last question. In a hundred years from now, what do you hope Misha is? I think a hundred years is a long time.

Like business change, tech will change. I don't know if it'll be mobile, it'll be something else, right? So a hundred 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, hey, we should stay user focused.

And I think if that framework is there, if the team continues to believe in that even a hundred years from now, I think we will stay for a hundred 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. That makes sense. That's a great answer. Cool. Thank you so much. Awesome. Thank you so much for having me. Yes, cool.