This is the transcript for the first episode of Some Random Podcast.
The episode is unemphatically titled - Companies that went bust.
The page for Some Random Podcast can be found here.
My guest for this episode is Raghavendra.
The podcast can be played below.
Hope you enjoy listening to it, do share any feedback that you have, through comments on Soundcloud or give us a shout on Twitter.
Transcript
This is taken directly from Youtube captions and slightly edited, should be easy to read with the podcast itself.
Sainath : Hello and welcome to some random podcast
this is the first episode and my name is
Sainath. Today I have with me Raghavendra
who has flown in from Singapore to
Chennai to do this podcast. Obviously. No
I’m kidding we had time on our hands and
we both interests in the startup so
that’s what started people do these days
so we’re decided to put a podcast out there.
Raghav : Hey Sainath, thanks thanks for having me over.
look forward to this conversation
I mean it’s just that we have these
conversations more often than not but this time we decided to record it I guess.
Sainath : I think that’s that’s what we decided to do
we anyway talk about this we decided
”Hey let’s record one of these
things and put it out there”
For whatever it’s worth. So. It’s probably
worth nothing. But so the theme for today
is companies or products that went bust
unexpectedly. Is that a good way to
summarize the theme for today?
Raghav : Sure sure.
Sainath : Right so this does have an Indian
theme to it and one of the ways in which
I’d I anyway pick the companies that I
wanted to pick was I went back and I
looked at some of the stuff I had in my
house and things like that and I was
trying to find out which of these
products are still out there you know
and we’ll be talking about a couple of
those today I hope and do you have any
thoughts on you know the idea of the
theme itself
Raghav : I think it’s very interesting. These are companies we’ve seen as you
mentioned, watched, grown up in some
sense and suddenly today they’re not relevant/don’t exist.
Sainath : Exactly right and
it’s one of the underlying themes to this I
think even to this theme so it’s like a
meta theme on some level but you know
when when you’re in the world of
startups you see like people raising
crazy money and you know everyone thinks
”Wow they’re a success” but then you see
like a crazy successful company you know
go bust
and sometimes you don’t even
realise it which happened with one of
these companies when we found out about
them going bust like last year and I
didn’t even know they were out but I own
a lot of their products
it’s it’s one of those weird things so
don’t really know how to categorize what
you can learn from this but let’s let’s
get into it. So the idea of this is not make it too
structured this is gonna have a bunch of
conversations. I’m guessing you’re
okay with that?
Raghav :Yeah, perfect.
Sainath: So the first company that you know I
wanted to talk about is Subhiksha.
You remember Subhiksha? the retail chain
Raghav: Ofcourse with food world you’d have Subhiksha
they were there everywhere, practically everywhere.
Sainath: I even remember
somewhere like near about three
kilometers from my house there used to
be two Subhiksha on the same Road.
Literally 500 meters from each
other they used to be Subhiksha’s, now,
they’re operated by different retail chains
but that was like a thing
growing up Subhiksha’s was everywhere
and they were everywhere
all of a sudden you know
for a while they weren’t there and then
suddenly whoops you know
So I spent some time
looking into this right and turns out
that is exactly what happened so in
September 2006 Subhiksha had 150 outlets
Wow okay but you’re saying about that
September 2008 they have thousand six
hundred and fifty outlets. 10x in 2 years so that that’s
how is much they scaled and they scaled from South India to everywhere and there
one of the few like proper South Indian
brands that went across India
right so it’s crazy and one of the
interesting things I found about Subhiksha
while looking into it is these guys
raised only 32 crore in equity
Can you imagine they had 1600 retail outlets with just 32 crore in equity
Raghav: 4 and a half million dollars
Sainath : Wow crazy math Raghav. four and
a half million right so it’s that’s all
they had and I can’t even imagine like
startups raising 4.5 million
Raghav: for a series a right
Sainath: exactly right so you know maybe
there are learnings from that that have
been applied since then you know most
companies so the reason they could
expand so much is because they raised the
rest of it in debt right so they had
like seven
hundred eight hundred crore in debt
right so can you do the math on that one
Raghav: It’s a 120 million
Sainath: in debt
that’s how much debt they had on their
books this is secured unsecured whatever right all the debt they had on their books
they had only 32 crore in equity which
is I guess indicative of some of the
learnings that people have we see a lot
of you know ecommerce or omni commerce
chains that are now setting up a lot of
shops and all that
most of them don’t go out after debt anymore you
know this is one of those learnings like
it’s having possibly these people on
your books maybe helps people
Raghav: or weighs you down right
Sainath: it’s a crazy story and the
interesting thing about Subhiksha they
had money from Azim Premji
Azim Premji owned 10% of a company I was
surprised to learn that right he doesn’t
invest in startups much. Does he invest at all?
Raghav: I mean he does but not to the extent yeah
Sainath: so maybe this is one of those
things where you get burned by growing too
quickly in some way.
Raghav: I remember they also put out a mobile
Sainath: yeah, Subhiksha mobiles
so it’s one of those cases where you
know two years they grow 10x from 150
to 1600 retail outlets they grow from two
states or three states to like 15 16
states. crazy story and then
overnight
literally overnight they have to shut
everything down right okay not literally
but yes so they they they try to wind
they try to do a merger with some other
company I’m forgetting the name of the
company this was back in February 2008
In February 2008 there was a merger
on the cards and they were trying to you
know fold the company into the other
company and all that but the court
intervened and said you gotta shut this
thing down.
Raghav: they didn’t even manage to
sell it to?
Sainath: nothing they had to repay as
much debt as they could wind down the
firm.
Raghav: just bad operation management?
Sainath: Bad operation management, bad financial
management right it’s it’s hard to get
enough data about exactly what happened
but from some of the things I could read
about it the owner basically said you
know in fact of the learnings the owner
actually put out in one of things I read was
we should probably raised more equity he was
looking for I think a 300 crore equity
infusion at that point or 300 crore cash
infusion at that point you know and I’m
guessing that was in equity and probably one of the
learnings that he had was you know to
raise more equity at that point itself
and unfortunately that didn’t happen so and so
Feb 2008 merger on the cards Court
intervenes
they wind down operations by May 2008
three months thousand six hundred stores
gone right and at that point these guys
had so from you know remember the 2006-2008
retail outlets numbers here is something for you
2006 they had 330 crore in turnover 2008 they had 2305 crore in turnover
this is these are numbers that you hear
about these days with regards to
companies scaling and you know dying out
and all that this is one of those crazy
stories that nobody
even discusses Subhiksha anymore and I was
trying to find out why that’s the case
one of the reasons turns out is the
owner actually got arrested earlier this
earlier last year sometime last year in
a chit fund scam so that was the only
time apparently Subhiksha has been
talked about in the past few years but
it’s one of those crazy companies that
you know you grew up with kind of it
just went away
you never heard why it went away then 10
years later because the owner comes back
and says you know you were in the chip
scam and you’re going to jail right
so it’s it’s one of those sad stories. do
you have any memories of, I remember
Subhiksha ads Aamir Khan I think was in one of those ads
I think there were some weird ads they used to have. Used to really catch the eye
I don’t recollect exactly what the
ads used to have but I used to like their ads
back in my school days. fun company
Raghav : it’s
it’s it’s so sad to see that you know
you could be so and you can grow so big and you can still fall.
Sainath : In 2 years
scale so amazingly
well maybe probably not well clearly but
scale to that level and then watch
everything go away in a snap. Madras high
court was basically Thanos. it’s crazy
Raghav : speaking about
you know companies are that large to fail
One of the interesting ones that
I came across but we
spoke about was MoserBaer, you remember that company?
the CDs, the DVDs everywhere, everywhere
Sainath : As I mentioned in the intro, one of the things I was doing
was going through my house to figure out
what products I have and I had like a
whole bunch of Moser Baer CDs where I have
like movies burnt on to it oops I
shouldn’t say will not record or
anything but you know I have so much
stuff burnt on to it and I didn’t even know
what that company was doing anymore
Raghav: So, this company unfortunately they they
actually shut down last year
so this is a one of those
crazy stories starts off very slow
start way back in 1983
Sainath : Damn
Raghav : 1983 they started with the disks, and in 1990s, they slowly
start venturing into CDs and
that’s when they start hitting the road
hard and that’s when they start innovating really well and in 1999 they start making
the CD drives and from 1999 to
2003 they had this wonderful amazing
growth period where their growth is just
60 80 percent year on year right they
figure out this way to apply or make DVDs , manufacture DVDs in a very very low cost way
they were actually one of the
in 2003 they were actually one of the
largest exporters of hardware from India
Sainath :They were exporting
CDs from India?
Raghav: yeah and they were they were they were
making money hand over fist and you know
just just like that rate the Thanos
moment there was not the high court but
the Thanos moment there was you know the
price of these disks it began to fall you had these Taiwanese
manufacturers you had you had Chinese
manufacturers coming to the game and I
think somewhere along the way the
management that’s the father-son duo
that ran the company
Sainath :Sorry, if I remember correctly, MoserBaer disks used to be like 35
bucks or 40 bucks, or 40 rupees. that’s what
it used to be
Raghav: so 35-40 is actually the
price point that they reached almost in
2006. with the movie in it you can
have like a movie that came a couple of
months ago
Sainath : Yeah that’d be like 120 - 150
Raghav: they had this
whole thing where you get your piracy
CD for 40-50 bucks and they would sell the same
just that you would have to wait for a
couple of months I thought that was
a you know I mean something we used to
enjoy as a family I still remember some of the most
popular movies we watched through the
MoserBaer CD.
Sainath : I remember
taking a bunch of MoserBaer CDs going
to a friend’s place, getting a bunch
of things from his place burnt onto
the thing. we’d go play
cricket while things got burnt because
computer were so slow back then. I think he
when I was in eighth or something went
to Burma bazaar
and all the CDs being sold there were
MoserBaer CDs and you’d buy like
collections of movies for 60 bucks right
you know in it was like, that was a
thing.
Raghav: That was the thing to do, the thing
that I find most interesting though is
even even as someone fairly young you’d
start to notice that slowly over a
period of time when you bought one of
their movies like they got it the
business of selling these movies
Sainath :Were they in music as well?
Raghav :They
were in music. so when you
bought the content you would have ads
they did I mean just sheer volume of
their distribution they didn’t segue
into that as a stream of revenue much
yeah I guess is fine yeah but they used to
advertise their own products though and you
could see that they were getting into
flash drives which is which is logical
but, they were
also getting into mp3 players, headphones, earphones
Sainath : So, they were becoming a entertainment company
Raghav :Right, they were becoming an entertainment company
making LCD monitors, they were making you know those
things where you get your thumb drive and it would read the drive
and play the photos like a digital
photo frame
Sainath :we have one
defunct thing at home which my mom keeps
asking me to get back to life but I haven’t
done
Raghav :I don’t think you should invest time into that, but, they started getting into a
whole bunch of products so if you
actually dive deeper you start to realize
that the fact that the costs of
manufacturing the discs themselves were
falling and they were falling across the
globe suddenly probably put the
management onto a
Sainath : they have to
shift to expand to other verticals
Raghav : Yeah, “what do we do” that’s where you I mean I
don’t know it’s very very easy for us to
sit and talk only they probably
know what they went through, but,
just to make that decision as to what
direction the company should take I
mean we do still have storage companies
today right, you have the SanDisks,
you have western digital, you have the multi billion dollar
wait, SanDisk is owned by Western Digital
Sainath : Transcend, is what you were trying to say
Raghav : so they’re all there, Players are still there, so, what is it that they were
going for so, very interestingly they
branched into making solar cells
Sainath : what? when did they branch into solar cells?
word there because when the difference
Raghav: in 2007/2008 they started branching into solar cells because
because the technology used to apply the
film on the disks is the
same almost same technology that they
use to apply on the solar cell so they
that’s what they felt was their
cold occupancy and that’s what they
decided to branch in
turns out they obviously had a ton of
capital just like the previous Subhiksha example that we had
Sainath : Who did they raise from?
Raghav : Whole bunch of banks they put out some bonds I’m not exactly sure I think
put out some bonds they also raised
from some banks and they raised a lot of
capital
Sainath : did they raise private equity
funding or things like that? I Imagine they would
have
Raghav : I’m not sure actually on that
Sainath : I mean if it’s in storage and tech and
all of that back then was when everyone
was like “oh India’s the place to put a
lot of money in”
Raghav : “let’s do India”
Sainath : it’s still the
case hopefully it remains in the future as well
but that was when people were getting into it
so I imagine there was like a private equity
investment as well
Raghav : so they they also had a ton of debt
just to get this venture up and
running and then 2008 happened
interesting the coating
that they would apply for solar cells
themselves the coating itself was in
limited supply so they secured,
the credit to them they managed to
secure suppliers for that who could
supply you know consistently they also
managed to secure around I think 100
million euros worth of orders from Europe
100 Million euros 100 million dollars
not not sure
Sainath :We’ll use them interchangeably, we’re not
doing forex trading now
Raghav : so they
managed to get that amount of funding so
they managed to put things in place
it’s just that 2008 happened then people
didn’t want it anymore, people didn’t want to supply
Sainath :They had no money, let’s
leave it there
Raghav: so I think just made
them take a beating and then you know how
there’s this famous Sam Altman quote it
says you you know companies don’t
die you just, they don’t die overnight
they die but it’s gradual, so gradually, over
a period of time towards 2018 there were
no workers coming to any of their manufacturing plants, the cd
business was completely dead such a
giant such a household name
I mean I don’t even know where
to attribute this to I mean in that 2003 to
2006 period perhaps which you could be
the most crucial what do you do you have
cash in the bank, you know that
Sainath : you’re basically the market leader
Raghav : and you can see that this is this is going
to fall what do you do I mean that’s
that’s I guess that’s where
Sainath : very interesting man I mean I
mean that’s a benefit of hindsight and
looking back solar cells makes no sense
you know hindsight entertainment? really
You’re going into LCDs, but, if it had worked out we’d be
here saying “wow MoserBaer is the greatest LCD company in the world”
so you can’t critique too much
Raghav : No critiquing, I’m just
Sainath :Just observations
so it’s one of those things yes
looking back I mean I’m not the founder
of the company or anything but looking
back at what those guys did yes you
could say maybe should not go into solar
cells but if it had worked out again I’d be
saying MoserBoard is the greatest, oh the founder
is like Elon Musk, so, it’s
one of those things ah that’s a tough, it’s
a tough story because I used to love
MoserBaer as a brand because one of those
few
proper hardware product companies
in India that everybody knew about
it’s one of those sad cases Ithink , I was
shocked to find out they shut down, when did they shut down? last year?
Raghav : 2018
Sainath : they were around for, so they had a life
of 1983, do the math no 1983 to 2018, 35
years,
that’s still a decent you know run
for the company
Raghav : that’s a very decent run
Sainath : and founders didn’t have like unlike
Subhiksha, founder nothing happened to
them
Raghav : no they’re fine, I think the son is starting on his own again
Sainath : best of luck to him
Raghav :Wish him the best, power to him
Sainath: Hope he builds a solid brand
Raghav : would you know any examples where you know they have
this amazing run then they have this
terrible dip and then they managed to
come back I mean, that’s something I’m not able to think of at this point
Sainath : so, yeah, you remember that,
we used to watch those TechCrunch
Disrupt
videos and all right, there was that guy that
Iranian guy I think Hosein Rahman what
is it was a company,
Jawbone
yeah yeah yeah
that wearable stuff, JawBone up and Jambox, Jawbox or Jambox, I’m forgetting which,
that company I think I don’t know if
they came back but I think I read
earlier
last week or last month that
I think there’s a
spinoff company called Jawbone health hub
I think it’s still call, they retained the brand Jawbone, I don’t
know what’s the deal there, I don’t know if it’s a spinoff, I don’t know if it’s a separate company
but I saw that that guy is still the founder of that firm and they raised like 80 mil or
something. I don’t know if that’s a comeback
I don’t know if that’s part of Jawbone. But, you remember Jawbone right?
They raised nearly a billion dollars
right there with Fitbit,
Techcrunch disrupt 2015, I think, were the videos we used to sit and watch
that guy was on the panel discussing you,
Oh wearable is everything, this is the deal, this is everything
I think that interview was between Michael Seibel
and Hosein Rahman, I’m not sure
I don’t know if i’m recollecting that correctly
he was there on the YCombinator panel
how to start a startup.
That was a crazy story
They raised like a billion
This is another example, of, yes
Subhiksha, debt was the problem, MoserBaer was
maybe bad strategy decisions
who knows
But, also debt
But, Jawbone, they raised nearly a billion
in equity from like the real big deals
I think a16z was an investor
I think Khosla was an investor
I think Sequoia was another investor
They had everybody
Everybody who you want on your
captable, was on your captable
They had crazy money and
they went through so many rounds of funding, I think the first time I noticed Jawbone
was when I looking up, you remembed I had that
weird phone, pen idea? or
wearable pen or something like that
bluetooth pen, where as soon as
you write, it will convert it to pdf and all of that. when I was
wearables was when I first came across Jawbone
So I was looking up Jawbone then and I knew
wearable something was there
2015 rolls around, I see that they’ve raised 600
million dollars, I think
Somewhere around 600-700 mil, they raised crazy money
back then, and they’re one of those companies
that was founded really long ago
they were originally a dot com company
they were called something-com
they weren’t Jawbone originally. Jawbone
happened, 2008
What were they doing before? Do you know?
They were originally, so,
Jawbone’s original, they had wearable fitness devices
and all that in the later days, the up line
but originally
they were a music
headset company, so they had earphones, they had bluetooth
headsets, they had a bluetooth speaker
the bluetooth speaker was called Jambox and
I’ve always felt
that the jambox design
I used love jawbones designs. Jambox design to me
is like, so similar to what you see in
Xiaomi bluetooth speaker designs today,
I don’t even know if they took
the jambox and just rebranded it or something
do you mean the criss-cross design? the square criss cross
bluetooth speaker
it’s almost exactly that thing
when I saw it on flipkart, I was like, Oh I’ve seen this before
oh my god, is that not jawbone
So, its one of those weird companies and
So, they were a dot company, they were originally just
I think just Music or
Communications, something like that
They were originally just a communications company, they had
If i’m not wrong, they were doing something with the US Army
or something to help soldiers communicate better in
war scenarios, they were developing earphones
for them or something like that, so, they were doing crazy stuff
proper crazy tech company but,
its one of those things, I don’t know if you can call that a comeback
from
sort, absolute misery
but, you know, its
maybe its worth talking about it like this.
Yes,
you know the founders failed after raising
nearly a billion at crazy valuations
their product line
was shut down, they had to auction off the stuff
or basically ran out of inventory, something like that
but, investors are still willing to back that guy
Raghav : That’s awesome
I think thats the way to look at it , one of the things
people tend to do, and I can’t say that I don’t do this, so,
I shouldn’t say people, everyone does, is
when a company fails, to blame
the founder as well, yes, you have to blame the founder, but,
the founder isn’t shut down as a person
Yes, he or she may have
made bad decisions, yes they may have
taken some wrong stratagies, things like that, but,
I think its important to recognise that only if
enough people are willing to fail can somebody else succeed
that’s true, if we,
start putting down people failing
starting up and failing and things like that, nobody will
start up, end result is no innovation
at the end of this, we have, I don’t know what jawbone health hub does
really well, I didn’t read the
announcement well enough, I just know that its there
fair enough, the name is there, the guy is there
the founder is there and he’s raised like 80 million or something
that’s good for him and people are still willing to
trust him and I used to really like listening to the guy
talk about wearables are amazing, all of that
amazing, fun, iranian guy
I think there was another founder as well but I’m not sure who the other guy was
I thought it was a sole founder company, but, I remember
looking up a long time ago, there was another guy, I forget his name, but,
again, I think the way to look at it is,
Yes, the company through, crazy ups
when everyone was looking for them, everybody wanted
these guys on their panel, jawbone
was representative of wearable tech, music and headphones
all of that, then, swoosh, they’re dead
and I don’t know, 3 years later, 2 years later, I don’t know, I don’t remember when they shut down. Do you remember when they shut down?
Not sure, 2017 maybe?
Yeah, sometime around 2017
I would imagine sometime around 2017, they shut down and then
2 years later I guess
the guy is back, people are still willing to back him
I think thats one way to look at it, I think that’s the only
I don’t know if that’s the only positive spin, but, that’s one positive spin you can put on it
and more power to him, it’s fantastic to
see someone like that coming back
It’s one of those weird cases
Do you want to stick with US firms, or global firms
Do you want to switch back to India, do you have something
you wanted to discuss
I mean, anything is fine.
Do you have anything else in mind?
about jawbone?
jawbone, not specifically
its one of those good examples, where, you know,
person still at it, still trying
trying to make it happen
absolutely, so, we’ve talked about
crazy, large high level blow ups, Subhiksha
Some of these firms you might not have heard of
but, for me these are like
really big firms, and
them shutting down is shocking
do you want to switch gears? talk about smaller scale
bust ups that happened and failures that happened?
Maybe?
Sure, one that comes
to mind is
there is this
FMCG company right
FMCG for people who don’t know FMCG
Fast moving consumer goods
So, it’s called
Luv it, the chocolates actually still around
Luv it?
Luv it - L u v i t
Okay
It launched in 2016
So a recent story then, recent story, very recent story
It’s actually by a company called GCPPL
Global consumer product private limited
Ok, too many acronyms
So, the company does a bunch of things
they do this DND(not D&D) mosquito repellant coil
D&D as in dungeons and dragons?
No
Do not disturb,
Oh, do not disturb, sorry, we were discussing board games before this
So, I’m stuck with that
Okay, and they have like this whole
bunch of fruit juice products and things like that
luv it, the reason it caught my eye so much
is because it launched with such
great fanfare, in the sense, they had
promising actor, Siddharth , he was the brand ambassador
The posters were all over, on the bus stand and everything
they were all over, the posters were all over
they had these nice colors, nice design
very very promising launch, if an indian
chocolate brand, had to get a
shot at distribution, that would be it
Nice
because everyone noticed it, everyone knew it, everyone wanted to try it
where is it based? Bangalore I think
Kalasipalaya is where I saw they had their office
But I don’t where it started actually
Our man did his research
The thing is, like I said
if you had to
have a shot at distribution, this would be it, but, then
I’m a chocolate enthusiast
I love chocolates
The wrong kind of chocolates
You need to like dark chocolate raghav
Milk and white is the way to do it
The problem I had is,
I tried a couple of their
4-5 of their SKUs
and the problem that I had is
they were just
Luvits version of what’s already there
it was luvits 5 star, it was luvits munch
there wasn’t differentiation per se, they were in the same category, there was no differentiation
Okay, right.
I didn’t know if someone
ever happens to listen, but, as a consumer
that’s exactly what I felt and I bought the product
literally because of the packaging, that itself is a big win
I bought it because Igot the brand right, you love chocolates
Yes, I luv it. Let me buy this right, but, then, when I tasted
One, two, three, four of them, five of them
it was kind of a let down
and the
reason, I’m probably making this a bigger deal than
it is, but, I don’t know if you remember
This company Harnik, you remember harnik?
No
If I tell you their products, you’ll recognise
You remember those sweet cigarettes
Phantom sweets
loud noises
do you remember those heart chocolates?
yeah, the candy which would be shaped
like a heart
That’s by harnik, so,
Those sweet cigarettes are a throwback
So, that was
very Indian
It was very original, clearly parents were not too
happy with it, but, we still wanted it
as kids.
Like clint eastwood in school uniform
So
I thought that was very original
Just my personal take on it is
As a brand, Luv it, which had the potential
to get that kind of distribution, that kind of attention
if the originality was there, I mean, there’s
so many thing you could’ve, its easy for me to sit here and talk
but, then, Indian flavors,
throwbacks, kind of like what Paperboat
has been doing over the past few years
They just went for
Nostalgia
They sell Nostalgia in that bottle
I don’t even know if they had to go for Nostalgia
Aam panna, aam ras
Solid products,Kala khatta
I don’t even know if
that’s the path they had to take, but, if they were just original
or if they could give me an Indian version of Twix or snickers
With like a spin on it
that would’ve been a little more exciting, I guess that’s why
we still love the lays masala munch and the kurkure
every world cup they throw the same lays with a different packaging
and we all eat it up. Do you remember world cup 2003?
Pepsi did pepsi blue
It’s one of those things that you remember
They did blue because of team India
It’s one of those very random spins
It was around for like 30 days or something
I would buy one everyday almost
Blue color liquid - wow
You don’t need to make it Indianized, you just have to
cater to the audience on some level
if you’re a consumer focused company
that’s one way to do it, absolutely
So, their products essentially were in the same category
and their flavors weren’t too different
They were not different
I would love to , have you tasted
Masala chocolate, I had masala chocolate
I would luv it if somebody made masala chocolate
chocolate with spices in it
That’s pretty Indian when you think about it
Imagine if people came out with
spiced chocolate brand , I would love it
I love the imli chocolates, you remember the ones they used to give on jet airways?
Take it out of that small packet and there would be 2 of them, but,
they help you with digestion
I’m not talking about the Hajmola , I’m talking about the Imli chocolate,
which is like sugar
That’s something that I really cherish
Anyway, it’s one of those things,
Brand is called Luv it is it
They’re still around and they were launched in 2016
3 year old company so they can always make a comeback
I had no idea, I think I recognise the product
now, but, I’ve actually never tasted it
I think you might have brought luv it home when
were in Bangalore
Because I don’t think I went out and,
Raghav joke : Clearly you didn’t Luv it enough
Let’s move on
Jokes by Raghavendra Ramesh, we can have 10 minutes of this
Lets, what kind of
company do you want to move on to? Do you want to stay in this
FMCG kind of products or do you want to move to Tech
Anything
I have something
that came to my mind when we were talking about FMCG stuff
So, yes, we talked about something recent now
But, do you recognise this brand called Dalda
The vanaspati brand
You remember Dalda dabba
Everybody in India knows Dalda dabba
The vanaspati brand
such an old brand, so, I looked at
dalda, prior to this
Raghav : Wow, why
because we were doing this podcast Raghav, why do you think /s
I don’t randomly go around looking for Dalda dabba
So, Dalda
There’s so much history to dalda, I was blown away that
all this is there, so, Dalda came to
India in 1937, right
So, there was a dutch company called Dada
D a d a
The product was called Dada - d a d a or Dhadha in India
and Hindustan Vanaspati limited
I think, I didn’t note that down
or hindustan vanaspati company, something like that
they wanted to bring that product here
so, at that point, hindustan vanaspati
limited hd actually been acquired by lever brothers
this was lever brothers before
it become Unilever
So, here’s an origin story of Unilever
Did you know Unilever was not its original name?
So, Lever brothers, they were originally called, I found all this out while looking this up
Lever brothers, I think, sometime
around 1950’s or 40s, I forget the dates
but, they merger with some
dutch company called
Margarine(?) , I want to say
Margarine Unie(?)
and
their merger was basically
Unie and Lever put together, which became Unilever
At that point, in India
It was still lever brothers, it wasn’t Unilever, it wasn’t
even Hindustan Unilever , it was Lever brothers
They had already acquired Hindustan Vanaspati company to
expand into India and they brought this dutch
vanaspati oil product, so, vanaspati oil is
incredibly unhealthy for you
vanasapati , don’t go there
For 60 years, we were all
Most people in Rural India were having Vanaspati oil
So, I think 50%
of Vanaspati oil is essentially
Trans Fats, which is very bad for you
That’s all I know, I don’t know enough about Trans Fats to speak about it
Nor am I going to give anyone health tips but,
So, it’s essentially unhealthy
For the longest time, from 1937 to mid 90’s maybe
Dalda dabbas were the thing, so when Lever brothers
Brought Dada to India , they added an L
So, Dalda somehow sounds, a little more Indian
Dada is
India, but, it’s not the kind of Indian brand you want to buy oils from
But, Dalda still sounds like something you want to buy oil from
Raghav ( speculative ) : Dal - da
So, again if you want to do like a 10 minute standup, we’ll do a separate session
Dalda was , they added an L, I’m guessing that
might have been, Lever Brothers L inserted in the middle
of Da and Da, I don’t even know the story behind why they added the L
But, their best marketing campaign
imagine in a marketing campaign in 1939
For dalda vanaspati oil. So, they hired
Lintas, which is now Lowe Lintas and all that
So, Lintas back in 1939
created a : film ad
in 1939?
1939
a film ad, what they would do
was they would put that onto like a Van
that was shaped like the Dalda dabba made out of tin
That super original for 1939
They did visual, film based
Storytelling in 1939 dude
They didn’t have theatres in India I think back then, this was a film ad
In 1939, it was the second film ad in India apparently
It wasn’t even the first, the first was by Chevrolet before that
Outstanding, blown away that, that could happen.
but, 1939
British India, not even India, they get these
Vans that are shaped like circular tins, like Dalda dabbas of yesteryears
and they basically played the film out in those tins
They had sampling centres
and tutorial centres on how to use Vanaspati
oil and how does it compare to oil
things like that, they were basically educating a market
back then, and
this is one of those, multimedia
360 degree campaigns that people talk about today
but, done when,
done right, done back then and they used to, the vans were meant for
rural india, so they used to just roll in to
villages with these vans
and talk to the people about it, so, this is crazy
storytelling from years and years ago, maybe stuff to learn from that
because, right now
we have most of the Indian internet users are
rural today, most of them are
vernacular, most of them don’t know enough, maybe
there is stuff to pick out from these brands
and apply it to today, but,
Dalda is like synonymous
Dalda is like synonymous with vanaspati
Absolutely, you can’t even think anything but, Vanaspati
and it’s crazy, so
1937 is when they got into India
1950s or 60s they had
some government related problem, where the government was saying
Oh, you guys are unhealthy for us
But then, it just went away, I’m guessing there was some
palm greasing happening there, I can’t really infer
from anything, because nothing gets published about this stuff anyway
but, they somehow got around that stuff, 1980s
is when they started having problems, because
Fortune, what is fortune to you
Refined sunflower oil, so, those people started coming into the market
and they were doing refined sunflower oil, you know, refined oils
which is very different from Vanaspati oil
Refined oil is still fundamentally better, Vanaspati oil in India was made
from palm oil, so, 1937, they had a
manufacturing plant in India, to manufacture Vanaspati oil
So, they were all set
So, 50 years they
were ruling it, they had
crazy market share, all of that, and then refined
oils came in, and precisely what you said earlier
Vanaspa/ Dalda tried rebranding
into refined oils and things like that
sometime in the mid 2000’s because they had
crazy market share in Vanaspati, but, Vanaspati was
a tiny percent of the market at that point, so, they were a big fish in a little pond
So, they tried to get out of it
But
Problem was , exactly what you said, everyone associated Dalda
with Vanaspati, so, when Dalda said
they were doing refined, they had to re-educate the market
that already associated them with Vanaspati oil
I don’t think anyone knew any other Vanaspati oil brand other than Dalda
I don’t even know any other Vanaspati oil brand, I know only Dalda, even now I can’t
associate Dalda with refined oil
So
remember I told you Lever brothers brought them to India, from this dutch company
and all of that, so, 2003
Hindustan Unilever, at this point Lever brothers
has gone through some transformations, Lever brothers merged with
dutch company, became Unilever, Unilever in India is now called
Hindustan Unilever limited, they’ve now acquired basically every
other company out there
In 2003, they decide to sell
Dalda for 100 crore
100 crore, that’s it
Do you math again, 16 million?
For 16 million, they sold Dalda
One of the most Iconic brands
to some private equity firm,
I think its called Bunge limited or Bung-e limited or something
Seriously, that’s it, 16 million, that how much Dalda
was worth in 2003, and that firm
has been trying to
keep dalda running and all of that
But, its not gone anywhere clearly
So, its one of those companies that you just associate as a brand
Massive brand and this is what it comes to
5 years of trying to get into
refined oils whatever, company is now
sold by its parent company to another firm, its one of those sad cases I think
I dont know if its sad, probably not very sad because
they were selling that was very unhealthy anyway, so, maybe
sad for them, yes, very sad for them
but, glad nobody is using vanaspati anymore
But, its one of those brands that, crazy success story and then, swoosh
went away, its one of those firms
I’m forgetting the name of
that movie, but, there was some tamil movie dialogue that went
”poda dalda dabba” or something, or was it some S ve shekar
drama or something, I think it was one of those
but, thats how popular it was
it was usable as an insult, it was usable
as everything, everyone knew dalda dabba
crazy what happened to them, but, again
like I said, they did a 360 degree
marketing campaign in 1939
1939 to 2019 is 80 years?
80 years ago
a 360 degree film ad
crazy story right there
really lovely story, just the fact that
if they had disrupted themselves, sometime, maybe 1960s 1970s
”We’ve found a healthier way”
I dont know
We’ll never know
Do we have time for more companies?
Maybe one more?
Okay, I’ll talk about a company that, do you have a company you want to talk about?
No, go ahead.
So, there’s one company that I actually wanted to cover
earlier, but, I thought the others were more interesting
as stories, but, do you know a website called
AskJeeves
The search company? Yes
It’s a search company formed,
formed before Google, and Altavista
and all of those, but, probably not before Yahoo, but,
yes, way back then
AskJeeves was the first search engine I used
and interestingly, AskJeeves product was differentiated
as a search product, the
What does FAQ mean to you?
Frequently Asked Questions, so, they had an FAQ for the web
That was how the website was,
So, you’d go type something out and they’d give you the FAQ most similar to it
For which, there was already a good set of answers
curated answers, things like that
it was like a very interesting product
The reason they did that was because it was Jeeves
So, No idea what jeeves is
Okay, so, Jeeves is a character from P.G.Wodehouse
series of books , so,
Jeeves is the butler so what
does a butler do, gets you things and helps
you find and all of that, so, the product
sort of resonated with the brand itself
actually the wodehouse jeeves
aren’t the same technically because
they had nothing to do with each other, but, they still used the word jeeves
because everybody knew jeeves and it was a butler as well
it was basically the same thing, but, they never gave any royalty
or anything to them, although there was some settlement
back in 2000 or something, so AskJeeves was one
of those pre-eminenet
search firms and
have you heard of the Macys thanksgiving day parade in US
so, every
thanksgiving , they have some crazy parade
on some manhattan road, I’ve never been to new york, so, I’m
saying stuff that I don’t know enough but, some manhattan road
were Macy’s the supermarket chain was
It was sponsored by Macy’s I guess
there’s like one crazy parade showcasing different cultures
and different things, Jeeves
used to be in the Thanksgiving day parade from 2000 to 2004
as a mascot, it was like a web
product, in a proper cultural symbol of
america.
that’s how significant it was
so, it was clearly one of those
well known firms, and, they
IPO sometime in 1998 or 2000
so, they went IPO during the dot com
stage
perfect timing
so, they priced at $14 a share
they ended at
their IPO ended at $190 a share
just their IPO, so, they were raking it in
everyone loved it, but, you also have to think
it is the dot com boom, so, there’s stuff happened there, you can’t really explain
but, 1999
early days of web, not early days, 8
years of web, but, people were still getting on the web, they had a million searches a day
1999, that’s super significant
very impressive, 20 years ago, million searches a day
I don’t know how many websites had that kind of traffic
AskJeeves was most popular because of its toolbar, so, you remember
those annoying toolbars?
Everyone introductory, we all
used to use Windows first, guessing
So, your introductory browser was Internet Explorer
and whenever you went to a site, somewhere along the line, something will ask
Do you want to install this toolbar?
So, Askjeeves was one of those firms
Now I get it
I see what you’re saying.
So, they AskJeeves toolbar
was in almost Internet Explorer browser
As soon as I say toolbar, everyone will get it, because
everyone has seen it, nobody has used it, but, everyone has seen it
So, that’s how they became really popular
Toolbars became annoying to people, because they weren’t
space people wanted ads to occupy, you wanted to do stuff with it
and, so
Macy’s thanksgiving day parade, 2000
to 2004, super popular,
became popular with toolbars and everything
2001, they had a $425 million loss
at their crazy popularity, so, this is
after the dotcom bust, so, boom
go from $14 to $190, bust
$425 million loss, suddenly people are asking
questions, all of this, 2002
from $190 offering at IPO,
they’re at $0.86 a share
86 cents
and they’ve just been cut down
I don’t even know if anyone could’ve seen it coming
I guess you could’ve with hindisght now, yes
Google was amazing, they had amazing product and everything, but,
So, Yahoo was there,
Excite, I still know somebody with an excite email id
I know one person who has an @excite.com
email id, so,
its like so weird, so this guy was one of the old
users of the internet but,
crazy stuff right, so,
they, in 2005,
they were sold, I’m forgetting to whom
for $1.85 billion
even after all that
they were sold for $1.85 billion
and then that firm
dropped Jeeves from its name, rebranded it to Ask.com
and
in 2010,
they stopped doing search. Ask.com
stopped doing search?
So, they went from 1995 or I’m forgetting when they were founded
95-97 sometime they were founded , they went from being
a search firm that got featured in Macy’s thanksgiving day parade
and things like that to, not doing search
in 2010
To me, its one of those
yes, there are more famous internet stories
there’s stuff like
Pets.com, which anybody in the us
will tell you about if you ask them and all of those things
Yes, all of that was there, but, they didn’t show enough promise, for it to warrant
that much, Ask.com was, they had
a mascot,
a product catering to the mascot, it had a personality
they even had merchandise and things planned
So, they had a jeeves merchandise line and things like that
and that company to not
do search from 2010, was very
interesting, so, I googled . Wow, I googled
askjeeves and one of the websites, so,
there’s ask.com which has search actually, so, they stopped doing search
its no longer a business vertical of the firm, so they still have search
but, one of the websites you get is askjeeves.net which is a google custom search website. I think that’s just really really sad.
You type into that search bar and it redirects to google custom
search and you know its crazy
yes, but,
I dont know what can be learned
They had a good product
They had interesting branding, they had all of that
Tech maybe, this is one of those cases where
Superior technology actually wins
We keep hearing superior technology, superior product, all of those, but, it doesn’t happen often enough. Google is always the example everybody gives
this is one of those cases where you beat
outright the competition, exactly
I wonder what Ask.com is doing now though
I actually don’t know enough, they have some things under it
They have, maybe they do news or something
But, there’s not enough in it,
It’s not shut down, because its been acquired
but,
Askjeeves is gone, its one of those
Random companies that nobody will ever talk about maybe
but, it was one of those pre-eminent internet firms
that unfortunately didn’t make it.
again
since you have a VC background
this is like preaching to the choir, but,
goes back to saying, when you have that
kind of distribution, and you stop sort of adding
value to your users
its just a matter of time before things
its also probably like going
away from your product focus, going to merchandise
going into macys thanksgiving day parade, going into all of those
things, like the MoserBaer LCD
and also, maybe on one level
Askjeeves was a learning, you can’t make
a consumer friendly brand
on the internet
you know what I’m saying, you can’t do pokemon on the internet
Pokemon couldn’t have been an internet company
Askjeeves tried to make it a
mascot, can you think of any,
startup or company or whatever out there, that
has a mascot
Android, I would think
Really?
Google has a place where you can go take pictures with
the android mascot, that’s in Google dude, who will go there?
You and I will go there, it’s not a consumer
I’m not able to think of examples right now, but, I’m sure
like the, you remember that
e sticky pin thing that microsoft
Yeah, clippy, yeah, but,
they didn’t make a mascot out of it
Mascot
It doesn’t resonate with, that’s not the brand, clippy is there, but, it was in Microsoft Word
Words’ Icon couldn’t have been a mascot
Does that happen though?Just curios
I’m trying to think actually, nothing comes to the top of my head
Cloud maybe?
Cloud is too generic
I’m just not able to think of something
Maybe if anybody listens to this, if you
think of something, give us a shoutout, happy to listen to that
Is there any other company you wanted to discuss?
I think we should call it.
Yeah,
Surprising, we were hoping to do 30 minutes of this, but,
We’ve almost done an hour, so, good job
but, thank you for listening to this.
if you’ve come this far, then thank you
even if you didn’t come this far, then, we’ll send our thank yous to the universe for atleast trying to listen to this
Thanks to Raghav for doing this as well
Thank you Sainath
One of the things I wanted to close this with,
The reason I wanted to start with companies dying
One of my favorite books is this book called Seven Habits of Highly Effective people by Stephen R Covey, I don’t know if you’ve read it
I’ve recommended it to you enough times, but, you haven’t read it
The first chapter in the book,
is Begin with the end in mind
So, that’s one of those principles that I try to
out into practice in my life in general
and I thought i’d put it into practice with this podcast as well
So, we’re beginning with companies that ended
in mind and, its one of
everybody will talk about those successful
crazy stories, but, there are always those brands that you love that
you wish were still around
Its always worth talking about them as well, its only because those brands were there that
you learn so much, everyone learns, you can
have success stories only because people fail often enough
just wanted to ended that sort of sombre note maybe
Thank you for listening to us
This is Sainath signing off
Thanks, thanks so much for having me over
Bye, thank you.