TOP Secrets To Build A Billion Dollar Business ft. Zepto's Founder Kaivalya Vohra | FO33 Raj Shamani

So what I like thinking about is like one of the least sexy businesses. those are always the best businesses. now. like a consumer-facing. like for us cause we are consumer facing we've got this like. Purplish brand it feels sexy. It's not at all sexy, when you're operating it. That's why I think it's a great business. If any of the like. I usually think that if a business is sexy there's something wrong with it. What do you think, is one of the biggest reasons. or the emotion which. let you choose entrepreneurship as a career.

Is it, Ambition is it? Is it glamour? Is it impact? Is it, like, what was it? I had no idea what entrepreneurship was like. I didn't know what like a company was. Yeah, exactly. And then, that's where, Super cool shit. Exactly. Like that's, We were sure to build something exciting. We were just, pissed off that like. That like. Groceries were very difficult to get when we were just like. in the pandemic. And like two bachelors, living in Mumbai. And we were like let's build something cool that. might solve. We both were in Mumbai okay now let's. get to, Get to the Zepto story okay.

But before we get down to that, like I want to ask you this. The. How did you guys identify like, there's something which you can build. and people are ready to pay. a value for, or people will value. Like you said something in the beginning right. So you can. Pretty good with that. Like you can, You can figure out of this is a problem, if you're facing it yourself, right. I think for the two of us, we were in, Mumbai. Living in like this. like these two bachelors... First wave of the pandemic. At the time online players were taking like. five six days to get, it was it was,

and we couldn't manage that. Like. it started getting. Yeah. Yeah. Fastest was like three days. And we were like, And we will not like prepared for that. but I didn't and I mean not. And it's not like two bachelors, from Mumbai are like the most prepared people on the planet. but we were like. specifically not prepared. And at the same time like the local, store ecosystem was. also under I mean understandably a lot of stress right. because of the. the whole. situation yeah. The whole situation. And that's when we said. And we were also spoiled by like, products of the US.

Like instacart etc and we said you know we need to figure something out. Here. I mean it was not even like. we need to now build a product and be entrepreneurs and. build a big business that was not the. mentality. that we're just like okay. That was just like. Oh this sucks let's do something about it. yeah let's just figure out something. Yeah we were just like. We had nothing to do. We were literally. I remember we would just like watch. really stupid TV shows. and we were like, we were like. Cause it's so boring. this and like this grocery thing is painful. I should do something about it see what happens.

and that was it there was no like, This is the moment we become entrepreneurs moment. That did not happen at all. Didn't anyone else ask you like, who the fuck needs grocery in ten minutes? We were not. Lot of people on Twitter asking if, I know this. We weren't delivering in ten minutes at the time. We were just delivering local stores. That happened like, alot later. okay. so how did the end otherwise. An issue or Nina. so when you, so. When did you come up with this idea like. we want to deliver groceries in ten minutes.

So. And why did you come up with this idea? So you know the way we. Approached it. was, So when we were initially scaling this like. model that we had delivering from. You know delivering, in like. forty five minutes, an hour... There will just like. near the. You know. There were just a certain set of customers. That because they were close to where we were living from, would just get, deliveries. Faster. because they just lived closer to where we were delivering from.

And when we, so when we were scaling it. It was not super exciting they were like. some problems with the app. Forty five to sixty minutes was not super comparing for customers. and when we saw the retention rates in the mps of the time, we were not super excited. It was just not. It was not like, Mind blowing levels of exciting right. So we were like ok, Kind of something, kind of growing. What do we do with it? Not really sure. And so we started looking at the data and we said okay. How do we find product market fit and why seated he has the juice down at the. And why, see it really helps. like drills down the mentality of,

Of. Product market fit seeking. You know exercises right so we looked at all the data and we. we try to cut it in. multiple different ways so we would have to retention. And we said okay. retention looks like this on an aggregate basis if I, cut it based on. like what. people are ordering. I get this. You know. Cut it based on. the price points people ordering it, I get this. And we said okay that's not working. And then eventually we took a step back and. then we started segmenting it based on,

Delivery time. So what's the average delivery time. and we saw something pretty interesting which is. The folks that were structurally getting deliveries fast, just because of no other. reason other than the. Yeah. Other than the simple like serendipity of. living closer to where he delivered from. They will get deliveries in like fifteen minutes. Thirty minutes. Nothing special we were doing. But they just ended up getting it done. And their retention of. were much better. Their, Mps was much better. Their frequency of usage was much better. friends and. Exactly. Yeah.

everybody take over your life. was just significantly better. yeah interesting. Interesting. And so we took a. so we were like there's something interesting here then we tried. scaling it. and then we tried, You know building the infrastructure to make it. a lot better and. and it ended up doing super well. So yeah I think that's how we ended up getting here. To. This model. Amenity. Because you found out the data like people are ordering. And getting the delivery faster, Has more chances of, What do you think is the major reason. Okay. That. Why you're valued.

at where you're valued. Let's say you. Half a billion dollars is. what you're valued, current value is. Six hundred million. I mean this the CDC CDC. I mean it's just scale that I think. What we're doing and the growth. is. One of the, I mean this is. multitude of. horns but. maybe talk to. the. entire team's haunt. Were. You know one of the fastest growing companies in industry right now. In fact the. Fastest e-commerce company. yeah currently the.

fastest growing ecommerce company in the Indian industry. And frankly the. The revenue multiple that we're operating on is very low. For the valuation that we have. So, We're actually pretty. Hopefully we get. Any founder would say that but we feel very undervalued. but it. frankly we'll just close the ______ but the other thing is. It's very difficult for valuation investors to keep up. when the. when the business is like doubling every month. yeah it's it's not possible so. You know. One of the fastest growing companies out there. just to get pure revenue multiples.

we're doing super well and I think. you know. We're in a position where. and you know which is. especially important in markets like these. We're a position where we've actually drilled down. to pretty significant depth. what are the like, You know what this model looks like profitably. We've got. some of the most. mature micro markets, on every operating metric. We've got it profitable so, If you're looking from and investor perspective you're like. Holy cow this is an. insanely fast growing business. The revenue multiple, that they're operating on is very low like even as low as, Like for a business that is growing,

You know. Two-three thousand percent a year. It's like operating it public market multiples. Accept public market companies, Grow like fifty per cent a year. Yes. Right. So you've got like, Crazy multiple, Like very conservative. Growing insanely fast. And very clear picture on what. You know profitably looks like and. See frankly, we're looking at it like you know you've got. Pros and cons with every model. Right. Any model that you do especially in the online to offline would.

You have let's say food delivery or ride sharing. And I'm just. no specific context I'm just talking about it globally. Their relatively much easier to scale. because if I want a scale, A ride sharing platform, I get rider I mean I get guys with cars. part time, obviously depends on the country. But I. basically get. tons of guys set them out there and I can start scaling. Food delivery is something similar, restaurant, riders. and I can start scaling it. It's easier to scale and a little bit lighter to scale.

So less capital intensive to scale. but the corners of the. the youth economics are actually pretty tight. and like the end-state. You bedarf the business is not. I mean it's still great. And then you get, and it's. It's definitely not an unprofittable business. It will, It is. Like if you look at some like. European markets, it's already profitable and. even an ab. Yeah doordash. And even in India I think the food delivery are. Operating on, Pretty good end state. Unit economics, right now. The. but it is very tight comparatively.

So, easier to scale. Still tight on unit economics, Very do-able, people are doing it. The way we look at this model is it actually, At least in the way we've operated is that the unit economics are much clearer. It's a lot easier. So we've done it very quickly like five six months. Proven out. Full-blown unit economic structure multiple micro markets. But... It is obviously there's a. like a lot more infrastructural, it's a lot more complex to scale. Hence capital, so I'll give you the pro of this, being unit economics are clear. On being capital intensive.

Flip side, let's see if I was building a ride sharing business. Tight on unit economics but less capital to scale so, But yeah. To answer your question, why is your company valued to 600 million like, Fast growing revenue. plus. Clear profitability. Equals like an undervalued business. profitability and traction is what, So what's next for you guys? Where are you guys headed? What are the. You both are nineteen like what's the big game? Just going to build this business for the next.

many many years. How big, do you have a number? How big? I mean, It's how well. we execute right. that's there, I'm saying just. but there must be some game like you know okay. I want to take it to unicorn, decacorn, I don't know. A trillion dollar? I don't think so. There's no number. There's no number it's just like let's. What's the ambition like what's the big game? The big game is to build something that people. want. So yeah. People already want that. No, but like and get it to alot of people. So. like alot more people.

Yeah I mean. if you actually really want me to. tell you the real objective. and this is the right answer. Try to maximize shareholder value. That's the right answer. that is the end state objective technically like I'm supposed to say and I. I don't think I'll get in trouble for saying something like that. but... But yeah I think like the objective is. we're going to build. a company that we're proud of. that whenever we look back and we've got alot of time, on our hands in life. So whenever we look back. whatever ten, twenty, thirty years from now we'd just like, proud of the fact that we build a really solid organization like if,

Like R.K Damani when he looks back at Dmart. You know he probably feels pretty good about that because he. because he build a really solid organisation. And so, The object and see the object is to build. a very large, enduring, generation of business. That we can feel, Something all is US and yeah that's the only objective and. Like that's the personal objective and the proffessional objetive is. to maximize shareholder. Now. what's. the next. big step that you're taking. to make that possible?

Next like give me like an exact step, okay are you getting into white labeling or are you getting into. some kind of different products? What do you think can be your next blue star? If you're allowed to say it. yeah I think there's more like. we are not allowed to share but. I think I'll give you a. like a. A true but very boring answer right. I think one of the things that. Like one of the reasons why we've been able to execute as well as we have. Is just because of. the relentless focus we have on what we're doing. So we don't get distracted. And I think we just like. We know the business that we're building and that's all we do. And it's a. It's a very big market.

It's a very big opportunity. so we don't want to lose sight of the ball. Right so. We are. Focused on what we're doing. The very simple answer right now is we're. like building and scaling a machine. We're going to expand into more geographies or going to. Like. Keep improving the customer experience. in multiple different ways that means in. Freshness you know what kind of products that people want to buy. You know. how can we improve the consistency of our delivery experience. So. the long and short answer is that we are very focused on what we need to do.

We're just going to keep doing that. and keep growing that, keep improving and keep. constantly improving on that experience. And yeah so it's currently just like that like. Mantra machine of just scale, well. That's what we're doing right now. I heard that you guys are pretty entrepreneurly from the beginning right? Yeah. I mean I was, I was always. Something. So like from day one you guys knew that. we're going to be fucking entrepreneurs one day. Like how did it happen? Both of you like, let's just. let me just acknowledge and.

Like feel really really. small right now because you're fucking nineteen. Both of you. Nineteen year old kids. I'd say. building some. incredibly cool shit. So. You guys are nineteen let's just say that. Well said. And then like he was telling me about. That. This is not your first thing you started with something else. and before that also you were doing something like car pooling and shit. What like and at what age like, at twelve you realized that I want to be an entrepreneur?

I think. For KV and I it was just. I think building came to us fairly naturally right. Was just like. I knew at some point. I was going to do it, the thought process was ok go to college, Work somewhere, Why did you got to college then? Like if you guys knew. that. That you were going to do something like this why? Is there a reason? I think. So the. I think the thought process. I think we just we definitely discussed this. The thought process. we had at the time was.

Like that. We were getting reasonably good at a certain point. At like identifying products that people were deriving consistent value out of. But. The piece that. we. Didn't know as much about was how do you build like. the enduring organizations around that product. And how do you build a. an Air bnb or, An Amazon or uber or dropbox. and we figured probably the best place in the world. You know slightly debatable nowadays but. the best place in the world to go learn that'd be silicon valley in California. Yeah.

That was what. I mean I guess. to an extent like. College was an excuse to be in that ecosystem. But. I think, I don't think we actually ended up learning. A lot about company. I mean. I learnt quite a bit but we didn't learn the bulk of company building. That I think it was on the job. Like I told you right. When I waas in school I read that snapchat book, and. About how Evan Spiegel. built Snapchat while he was at Stanford. I said that's why I decided to fly. Pretty much that. I think I knew yeah. knew that eventually I was going to do something like that.

What do you think is the next big opportunity in India? Like... A bunch of folks which are walking. again circling back to the initial point like. These years entrepreneurs are by choice. So they want to become an entrepreneur I don't know maybe it's glamorous, maybe they want to love it, maybe they're not finding the joy in what they're doing. I can't imagine how like. I feel no glamour. yeah. Or like. I understand this. He gets it. Yeah. I know like where you guys coming from. I know this. It is just like the. the most intense.

Not even like a grind, a hustle, sort of like a. It's the most like. I tell you the best, The best quote I've ever read on Instagram I don't knoe who the fuck. said it. The best quote on Instagram about entrepreneurship was, I left nine to five, And now I work 24/7. Yeah. And that's entrepreneurship 101. You work 24/7. Is not glamorous at all. But people who want to watch, like people who're watching this and want to get into it they. want to get their hands dirty. What. do you feel that where is the. biggest opportunity? We see you hang out with a bunch of cool people investors, YC.

you have your friends. If not, let's say. You guys were not doing Zepto. If not Zepto then what? We had a very interesting Ed-tech idea. Remember that? yeah. yeah those are. I think. You guys wanna spill that idea out? No. I'm saving it. I'm going to save that for my little brother man. Insane. Definitely do something like that but. What's the most interesting opportunity in India today.

I mean tons of. Honestly. I think there's a. You know. Next billion dollar opportunity? So what I like thinking about is like one of the least sexy businesses. those are always the best businesses. now. like a consumer-facing. like for us cause we are consumer facing we've got this like. Purplish brand it feels sexy. It's not at all sexy, when you're operating it. That's why I think it's a great business. If any of the like. I usually think that if a business is sexy there's something wrong with it. and they get like that's my philosophy so like when I.

Look at. The opportunities in India, There are alot of. there are a lot of like really boring. Like. for example there's this company. And the. They're doing really well. while I was in the Navy exactly but they. Work with like. cattle trading. In like really rural India like a software company, like software that. like helps facilitate cattle trading. And they are huge, they are growing insanely fast they have a like. like one crore downloads.

A lot of them are the ones, you're talking about. A lot of value constant picking unorganised stuff to organised. so everybody's like. It is construction. Construction is. not a sexy market. These companies aren't doing, And like Infra market is. doing phenominally well. Because it's just like. Why would anyone want to work. in that market. on the face of it like. doesn't sound exciting like a construction. Construction. Like the construction. I always wanted to start a startup in construction. like to help facilitate. Like again I'm not much too familiar with the model right. All like for example a really. boring business. there's this via com in a business called. ironclad.

Which is essentially like. Not in India. it's a software business. and. and I think it's in Seattle. right. They just do like. contract software. like software to help lawyers pass through contracts better. and it's massive, it's massive, like the business is huge. So. the way I look at it is that. ideas like that. Like. Software. facilities, not something that's on the surface. Not something that's immediately like visible. those are the opportunities that I'm always usually excited by. The opportunity is.

Almost inherited the. Nobody gives a shit. like it's not sexy. so we won't have like a. hundred people running trying to copy you. And like. On that point to build off of that like what we're building on the surface. seems very sexy. When you go into the details. now that we know how insanely painful it is, Our bet is that, not many people are going through that pain like. I'm not willing to but. I'd try to but then. not. Will not go through that pain. Yeah I think. but if. If I had to get specific.

I think right now. I can't name a specific industry. probably like, There's. There's. A lot. there's a lot I think. I mean if. what I would be doing if I wasn't doing. Like. online to offline e-commerce. Probably. A deck. I would definitely not be doing a crypto company. Yeah. I do understand. I mean you do and I mean both of us understand it's. just like. I'm just very. I I just don't see anything about crypto because I know that it's.

Probably I mean definitely very big. but like I'm not invested in it or like you know I haven't taking it but. Then you know how if like people in the nineteen eighties and nineties. thought the Internet was going to be a fad. they must be really stupid right now. so I just don't see anything about it. Like my worst case scenario is I would just be a passive observer. So I don't think I'll do a crypto company it just doesn't excite me. for whatever reason. I think ed-tech take would probably be. interesting Ed-tech is great. Yeah Ed-tech in India is huge.

I knew I'd always end up doing something. atoms or something. it on yeah. I really like it and it's it's pretty statistic. I really like Atoms. Yeah this is. especially yours however. atom specific. or. like bits of like online businesses. So I think. Adit is a big fan of. online offline stuff so. No margins. Or very limited margins in that. Yeah, thats just pretty interesting. Thanks man, thanks a lot. it is. nice to learn about both of you guys. You guys are all. crazily optimized and cleared about what you got to do.

What are your strengths what you exactly are trying to build. I love the part where. I was trying to get like lot of answers at lot of different places. but. Like throughout every answer. throughout the conversation one thing stood out it's like. You're pretty focused about what you do. And that stood out in pretty much every answer. in fact I saw that. Like if there's some kind of answer which would you got to take, Both of you knew that he's going to answer. Like there's no clash dude that's very rare because usually they're.

both the founders speak, or both the founders know what to speak what not to speak but. This is pretty good. Thanks man. Appreciate that. Also thank you. Thanks yup.