Rajesh Yabaji of BlackBuck: Building A Startup

Hans: First of all, please tell us a bit more about BlackBuck or actually should I say BlackBuck 2.0. If I’m a fleet operator and FMCG company in India, what can I do through BlackBuck?

Rajesh: Yeah. So, trucking is one of the largest unorganized segments in India. And every stakeholder who deals in this industry has a large number of pain points. And what we are doing is making things simple for people and making things efficient. So, we as a country have very high cost of logistics. We spent about 14 % in logistics as part of the economy. And, you know, and at the same despite spending a lot clients which are basically customers like large multinationals who are want a truck, the fulfillment rates are lower, the costs usually are higher. On the fleet operator side, it’s not only that he has to deal with millions of intermediaries to get to a transaction, the utilization levels in terms of in 30 days in a month, typically he’s on the jobs for like 15 to 17 days, right? So what BlackBuck has essentially been able to create is a tech stack, which basically enables these guys do most of these most of this work in a simple way as possible, in the most efficient way as possible. So if you were a large company wanting to get trucks, when you come to BlackBuck, you would typically find a truck between 95 to 99% kind of an accuracy, kind of fulfillment rates. If you are a fleet operator in the country, if you turn to BlackBuck and work with BlackbBuck, within three months of partnering with the company, broadly you will be making 20 to 30% more utilization for your trucks. So this is what we do. Our goal is very clear. How do we support the country expand? How do we really get into the fundamental building blocks of logistics, of trucking, debottlenecking them, and ensure that you know, whenever these have to scale in the most seamless way from an availability construct from a cost construct, you know, we are able to do that. That’s, that’s broadly you know, what BlackBuck does.

Madhu: So, rewinding the reel a few years ago, how did you first come up with the idea of BlackBuck? It’s heard that you got it while working at ITC. Can you share with us how did that happen?

Rajesh: You know, for a lot of entrepreneurs, it’s like serendipity. It’s basically a cool story behind how accidentally they got to the idea, right? But for me, it was a very, you know, a long journey right from the mid stage later, as far as my former years at college. I’ve been into operations then got into doing projects in logistics, joined ITC, did the entire you know supply chain logistics work for like four years, helped ITC reduce its costs by 20%. One of the areas where we did really well but in a very small fraction was basically trucking. We used to transport in like close to about 300 lanes, and we basically picked up lane by lane, and essentially what we were doing, like if you look at that very abstract level, we were enabling the fleet operators we’re working on those lanes, get more tips, have assurance of return loads, and generate economic surplus which we were able to keep some, we were able to share some with the fleet owners, right. So this was a strategy like, you know, lane by lane, and one of the first lanes we did which had which gives us a highest one of confidence was a movement we were doing from Mysore, Mysore in India which is close to Bangalore, we were shipping tobaccos from Mysore to Chennai port for exports, and tobacco is a very you know as a commodity which we typically deal with very sensitively which means we need to have full grade transportation right. So, we used to like bring empty container from Chennai port into Mysore and then ship it back right which means you know, any fundamentalistic you know, view towards it would say that half of it is waste, right. So, that was like the one of the first drifts and what we did is that, we stood at toll gates from like Chennai to Bangalore through all these tours across the country, mapped every truck, which is coming inside carrying cargo, we noted down the shipper name, who’s the shipper, who’s bringing cargo inside. We knew definitely that the guy is bringing in cargo inside sending this container empty back right, shortlisted 20 companies from that shortlisted of companies, based the shipping line we are using. So we were using MAERSK  70% using MSC 25% and balance smaller shipping lines. So the ones who are using MAERSK more and then in that the DNA fitment right. So we froze down onto Bennett Coleman India the time you know Times newspaper The Times group company, and we matched this. Earlier we were going to have large freight forwarder, who used to go to a small broker, small broker used to go to supply broker, transport brokers or supply broker, supply broker used to go to a truck owner, right. We directly went to the truck owners who had trailers brought in about 45 truck owners who had trailers, right, give them synchronization of this load, help them plan these goods, right. And like, you know, a very rule of thumb you would think that okay, when you cut this waste by half your transportation costs probably would have been like 30-40% lower right, but not, our transportation costs went down by like 60% because we not only reduce the dead miles, we remove the intermediaries, we plan the synchronization, made the trucks to more number of trips per month, right. So the first project, so of course, this was I think the maximum saving we ever got in a project right and minimum was, you know, in the lower bounds like between 8% and 12% points, right. So this was a range 12 to 60 is where we got the savings right. Out of 400 lanes, we were able to only do it in like 25 to 30 lanes because of densities, because of locational constraints. Right? And it was very clear that in even in these lanes, the coverage was like 50%,60% because all of this matching has to happen right, with Bennett Coleman also the matching was only 70%. But we were able to do it successfully right. So, the entire thought process was that when you extract this out, you were disintermediating, you are generating more kilometers, you are improving fleet operators earnings and you are keeping surplus, right. So we wanted to do this at India level, right. That’s what led to, you know, led to the creation of BlackBuck and I was, you know, very fortunate to my work experience at ITC that it led me into this thought process number one. Number two is that ITC work experience also gave me my co-founders. So Madhu’s classmate was a junior of mine as well from college. And he was my intern, right so 2011 right. He was in third year he had to do a summer internship. So he worked in my team and we offered him full-time employment in 2014. And so he joined my team in 2014 when I wanted to start this in like 2015, I pulled in Chanakya right these are you know, one of the co-founders of the company, the other co-founder was a consultant to me. So I was at ITC from 2010 to 2015. he consulted me for like the first three years we did like a lot of projects together. He was the managing partner of a consulting firm called Miebach Consulting, it’s a German consulting firm, and yeah, so we three hit off together well and April 2015 BlackBuck started.

Hans: Excellent.

Madhu: I was the third wheel for Chanakya and his wife for four years.

Hans: So as we’re talking was complicated problem with the matching shippers and  fleet operators, how did you decide how to prioritize what you need to do and to get started? And did you spend time looking at any models elsewhere for inspiration help to figure it out?

Rajesh: So basically, today, I mean, when we started off in April 2015, there was no company, which was disrupting intercity tech, intercity transportation. We were the first ones. Now if you see the companies which are, you know, in this space of the similar business model like ours are like Convoy in the US, Uber freight and us. There is one large company in China called Man Bang, they are more subscription based models. They’re more classified, they help in matching, but they do not do the resistivity

Hans: GGV portfolio as well.

Rajesh: Yeah, exactly. so at that point in time, I think there was like, essentially, the inspiration that, you know, at ITC at a smaller scale we were able to do, and that was actually the first problem because the first 10 VCs we met in India only asked us that, you know, which is the US company, which is a Chinese company has been able to do this.  So we really did not have any example. And, you know, mostly the expression was that such a big market and globally facing it’s a 4 trillion market, 100 billion in India. How come nobody has solved this and you want to do it in India, right. So that was the question. But that’s where, you know, I think my first investor Anand Daniel, he had a thesis from last two years, like he was searching for a company from 2013 to 2015 to do something in trucking? Right? And that’s how he, I mean, I met him on April 4 or April 5, and he did the deal on April 7. Yeah. Right. So the rest everybody I met before, but none of them really understood what I’m doing. They thought that, you know, this is a clumsy, you know, space. And probably it’s all built out there DHS of the world who have built it out, right, there’s no need for you to sort of go in, right. That’s what people felt right. So there was no inspiration from a business model or an entrepreneur, you know, you know, to whom we could look up to at that point in time. But I was a shipper, right. I was basically buying freight. I was like shipping goods. So, yeah, the mindset of yeah, this is what I thought, by the way that I understood the pain points, right. the mindset of The businesses that I’m not sure I know everything what exists in this market I’ve also been able to prove sustainability across like 25 data points are able to reduce costs I can I can build this right. But when we came and started building you know, this business and the platform right first one and a half years was actually about you know, being more centric to demand. Demand is the one who has so many problems they’re not getting trucks they’re getting taxed at higher prices, how can really optimize right, this was one very obvious, until we really realized that Indian ecosystem the supply is fully broken right? Supply comes from like tire three towns in the country. Yeah, these guys do not have access to technology. These you know, India do not have companies like fleet corvex, which have like completely automated the payment system on fuel. We don’t have electronic tolling in the country, we do not have like any of the services which are around trucking and not baked out right. So fundamentally, you know, the problem statement which we define any started was that there is a problem for shippers, they’re not finding trucks, the costs are higher, one and a half year, we realized that if it did not invest, solve the supply side problems, right? Bring them online, help them make more money, right? This is not going to really get solved. Right. So the first one and half year for us was really targeting and tracking demand, really understanding and structuring the value proposition for them. The last two years right, last one of us had been all about really thinking through how to correct supply. Where do these small suppliers live? Right. They’re living in this tire three towns. We don’t even know these names. Right. So today as BlackbBuck like we are super proud, you know, of course, so proud of achievements that shippers in the country are able to ship seamlessly, enjoy low cost by working with us, right, like she would have reduced the cost by like 10 to 15% over the last four years. Yeah. Because of you know, the efficiency that you have delivered. And the fulfillment rates, you know, are in between 90 and 95%. Right. And 95 – 100%. And when we when you look at the look at the trucker side right which that we have super proud of, we look at the trucker side, we today have our penetration close to what 8,000 villages right, we man these villages, right the other villages, where one guy has four village coverage five village coverage, right go in educate these guys on what the trucking app is all about, educate these guys on, you know, what is these entire services all about? How does it make their life simpler? How will they make more money through this? Right? That’s been the story the last two years right where the economy on the shipper side is actually quite visible. Yeah. The economy the truckers are uprooting and bringing it online and trying to fuse this out. Right. And and a lot of tailwinds in the Indian economy are helping us do this. I don’t know if you are aware in India went into the electronic tolling in 2017 just right, we today own 15% market share of electronic tolling in the country and our market share is probably scaling five times the market share of the country, which means India’s market share is only 12 to 15% points of that 15% point we do we just started one year later Yeah. And for us that category is like growing at a user growth of like about 35 to 40% month on month and we are trying to from that angle right. So this is like one of the services service lines which we have, which not only like has a very strong economics which is offered itself but also is basically enabling us to go from 20% market share of supply in India to 70% market share of supply in India, which means every truck owner would get digital would come on the application, it would get trained how to use an app. Right. So that’s like that’s the India story. From December 1st, all Indian toll gates go mandatory on told on electronic tolling, right. So it’s a land grab opportunity, right? It’s basically once in a lifetime opportunity, which we are essentially trying to address. So yeah, so the entire like, you know, inspiration, like for us was very internal, right, which we, which we want to really build out, right. We really wanted to solve this problem for like, you know, the thought process you started was that the least I would be when if I start BlackBuck would be the supply chain manager for probably 200 companies in India. Right. That was the thought process right. And from there to the demand problem that you started solving? Sure. Then we moved to supply right supply is like probably probably we are able to get our hands on too. In two years. you’ve invested a lot of time and effort. And now again, it is slipping into being more demand tracking from right But like it sort of keeps changing and keeps evolving for and keeps us going.

Madhu: So you’ve written the sort of blueprint charted a new path for category creation. And in India, we’re seeing marketplaces moving from information matching to manage marketplaces to now either supply creation or demand enhancing through other ones. How do you see as these models become bigger, how do you see them scaling in India to marketplaces 4.0 or them going global?

Rajesh: So, so basically, I think like India, I have I have not come across like any entrepreneur building marketplace businesses, not have initially having to think that supplies solid, and like falling after like a year or two coming into the business that oh my God, I don’t have supply, right. I think most of us have shared these stories, right. So I think Indian businesses face with Indian demography context, which are about trust, which are about full accountability, which are about you know, what the unit economics which is involved in that particular transaction? And what is it? What is the experience that you’re giving me? Right? So I think, in that in that kind of framework, freight sort of sits in where a fleet owner, like doesn’t trust anyone, he’s like, he just trust some people of his villages, somebody who knows from a long period of time, might be okay to lose money, but he would only would want to work with them, right. So, that kind of population would deal with you know, and we are in a b2b context, where clients again need huge amount of trust, right. Companies are evolving between these models, but I think for freight in India, because we are aware of lot of companies in India, which does, which did classified, but those things did not scale in India, because of trust, you know, levels. And, and we, from day one started off as a full stack marketplace, you know, taking the accountability of the transaction. taking accountability of the experience of the transaction, right, making, you know, making, you know, material displacement for both the shipper both the trucker adding value, you know, step by step and scaling that marketplace, right. So that’s been our story, and as you’ve also seen in the recent past, like multiple marketplaces from India have gone global. Right. And, you know, a part of it is also is also because of some of these markets where companies in India went in first, right? Second is it the problems were such that if you solve that in India, you could solve it anywhere because you become so, you know, your DNA becomes stronger than anywhere else. It’s more immune. Right. That’s like second part. And the third part is that I think we also need to move out with certain cliched concepts like let’s say, if somebody asked me typically that, hey, Rajesh, you you guys BlackBuck has done so well in India, what would be the next market you would go to right? Mostly 95% of the people expect that my answer would be Southeast Asia, right. Because, because India seen these waves where, you know, either the demography and the government regulations have acted more as a anchor or a cover towards launching new markets, what that is leading to launching new markets. Second aspect would be, you know, I dealt with these consumers here. Now the consumers psyche of Southeast Asia is probably similar. Now my used case sort of appears right, but for our business right trucking. What is important is landmass, how big is the landmass? What is important for us is that how where are the demand centers? Where are the supply centers? What is important for us is that supply –  how fragmented is it? demand – how fragmented it is? Right? What is important is that if a trucker reaches a particular point, right from this point, what is the liability that he’s going to get his load back to his mother, you know, home point is really we really we actually struggling? Is there a symmetry in that market? What is important for us is that in really putting tech to this problem, what economic leavers would you move that he was generating economic surplus right, these are important. Consumer psyche of a b2b in a b2b business, a fleet operator wants to make more money or customer wants to make more money right. So for us sizing, we do it in this way, and hence we get very different results, right. So I think we have aspirations because I think we today as you as I was telling you guys the story, I think there are only three companies in the full stack matching space globally. And I think you know, our scale in between these is quite comparable and most of the times we have taken data points quite leading compared to the other two companies. So, I think we do have aspirations to look at, you know, globally what we could do.

Madhu: Questions for Hans, you’ve been bullish on Indian companies going global, not just enterprise SaaS, but also on consumer and b2b2C. But can you explain more to our audience and where that thesis comes from?

Hans: Sure. It doesn’t take a rocket science to see that one. India has more stem graduates than anyone else in the world with the exception of China. But the English language capabilities are much stronger. So the chance of that talent to be able to produce on a work, worldwide basis, much higher big, more impact. Secondly, you look at the number of executives who have done well in the US, whereas Google or Microsoft or Citibank, or even in academia like Harvard University, you see the impact that that’s being made. And, again, doesn’t take a rocket scientist to see that given time, the talent from India can do more in the mobile internet era, as well. And then a lot of founders in India right now is first time founder, someone’s second time founder, again, doesn’t take a rocket scientist to see that over a next five years, six years, seven years, more and more Indian founders will be more experienced and be able to leverage the talents that’s available overseas. So, since China went through so much, in the last 20 years with urbanization, India can pick up and learn from that as quickly as possible. India is also go through got a lot of issues, so you can solve problems for India. You can solve problems for a lot of other places. less less competitive and less complicated. That’s the experience we thought with China. But China is not as many teams like Bytedance and Xiaomi can go global. But India is different. So once you learn those lessons, you can go global. So you’re exactly epitome of our hypothesis from a year ago.

Madhu: I’ve already seen this being based out of both Bangalore and Bay Area, I can see the trends of my colleagues and friends in Bay Area, not just Indians, but even American colleagues like American classmates going and working for Indian companies trying to expand and vice versa. This question is for Rajesh, since you founded BlackBuck, there have been several waves in India. And so from that stage of, you know, entering a category such as trucking, there was not a quote unquote, hot sector then to creating that whole category now and riding on two different cycles of an ecosystem. What are some of the noticeable changes you’ve seen?

Rajesh: There are like two times during the entire funding, my company had these two large macro events: demonetization and GST, where the entire business was shaken, but for the better, yeah. So, demonetization was exactly when we actually as a company, realized even more deeply the need for a services infrastructure around trucking to enable these guys, right. So, I think, after the demonetization, I think people, this industry which works on 90% plus cash. I think after that people really appreciate it because trucks were stranded for like days on Indian Roads for cash, cash was not there, right. And most of the notes which are used in the trucking segment are 500 rupee notes and 1000 rupee notes and, like, everything was out, right. So I think, you know, after, you know, after demonetization, I would say the cash used in this segment would have probably come down to 90% of the level to probably 80%. But it’s of course back right. And that’s point number one, point number two is that if you if you look at the entire input on infrastructure creation by the government in the past, like you know, you know five to eight years has been very high, the road speeds have definitely improved, which which dramatically will improve the macro index index of, you know, the the macro freight index, right. So the so the road speeds have improved with two reasons. One is better quality roads itself, I think we’ve built large number of kilometers of roads in the last five to eight years. Now, point number one, point number two is that after GST, most of the border check posts right. So in India to before GST, it was more difficult to cross the border between Karnataka and Maharashtra, than Germany and Poland. Right. I mean, like Germany, Poland could do easy business, but two states couldn’t do easy business. Right. So, I mean, we as entrepreneurs used to always, like, you know, feel super, like bad about this idea. So I think a lot of that has got rationalized. Right. But I think there’s still a lot of room for improvement because it’s not fully seamless. It’s not like you need not stop there is still manual checking, which happens, which is not needed. Right, I think. But that still happens. So there’s still scope for improvement, right. The next thing which we have seen is that, you know, because the trucking is, like, major part of the economy, government has been looking at this particular areas continuously, right. So electronic tolling is going mandatory on first of December right? now, that like not only creates a wave of digitization from a fleet owners, it just it just lifts up the efficiency because at every tollgate if you calculate right when I was telling you that our truck works for only 15 to 17 days in a month, I actually did not knock off the truck waiting time at tollgate. And the check There is still additional time it is still in this 15 to 17 days right. So, everything starts becoming more and more efficient right. So, I think, you know, you know consumption took a shock in both these areas, but after that soon recovered very fast right. And for logistics, I think things have got much more streamlined things have got much more useful, like we have a very standard available number, earlier we used to have pretty we have one one compliance for lievable number earlier we used to have for all the 26 states independent compliances. So, we had created a technology product if a truck is starting at Bangalore and going to Delhi and it is going to touch four states automatically. We used to lock you know, ways to get the credit crawlers which used to log into these government websites because the government says what our API’s we still log into these government websites fill all these details from our servers automatically, create this compliance documents right. So a driver used to like when he is going to start used to have these all compliant documents for four states, right, that is all used to manage right and, and that product matured and GST happened That product went out of order. We don’t need that product anymore. Right. So I think trucking as a segment has been, you know, a very a very decent beneficiary to these large economic changes. And I think a lot more could be done right I’ll throw some points right. let’s say a truck from Poland can go to Germany and can do three shipments within Germany and then it has to come out because it’s a production law which the government’s have created for themselves right. In India, a truck from Hyderabad which is registered registration of Andhra Pradesh, right Alyssa Telangana will come to Karnataka get unloaded in Bangalore, it cannot if it is finding the next load in Mysore. It cannot take a load from Bangalore to Mysore, it has to go empty. This is state protection laws, it doesn’t make sense. We still have that law. Right. So, given we are we are long distance transportation, it still doesn’t like affect us. So you know, highly but it still affects the country. Right? In deadmines. It still affects our country in increased transportation costs, right. So I think we to leapfrog and all of this right, second part, right, all of us know that large capacity vehicles is more efficient than small capacity vehicles. India had small capacity vehicles only because of infrastructure, but infrastructure has improved. Now it is paving the way to large capacity vehicles. Now, I’ll give you one economic incentive. Right. So when you pay for permit, and you look at a permit cost per damage level, right, it’s costly for a large capacity vehicle, which means is dissuading you to buy a large capacity, which has to be the reverse, right? Because you need more cost efficient transport modes to be enabled in the country. Right. So I think some of these policies, people like us probably have much more like narrow I do, working with the government, like, you know, you know, giving them all this information every three months, or like we have, we have about 350,000 trucks on our platform we have we actually actively track like almost a large portion of them. So we know all the hot pockets in the country. We know where trucks are spending the largest amount of time, we correlate that with, you know, breakages of bridges or breakages of compliance checkpoint. Right, all of these, you provide all this information to them, you know, the ministry, but they work on it on a priority basis as well. I think there is a very close coordination between, you know, between the the authorities and us in terms of what can be priority, what we could work together, how will we do all of this? I think we are offer a very, you know, very, very strong underlying, I would say, measures, I think we are going to reap benefits in the next, you know, probably coming years, two to five years is where I think we can probably see the sector becoming much, much more seamless and impactful. Yeah.

Madhu: Switching back on the startups ecosystem, the much earlier stages of your journey. What is some of the advice that you would give to entrepreneurs who are building category creating products, both in fundraising, mentors and talent?

Rajesh: I think I would say, you know, personally, I think I was inspired by I think it’s a good story for me because I was inspired by, you know, Flipkart funding, when they founded when they created it. I saw all of this happening in front of me, right? As a middle class boy, I think I would never have a kind of courage to throw in my decently paying job and trade off with a risky career. And, you know, I saw, you know, I started reading about Sachin and Binny every night and that was my inspiration. And it’s so it’s so, you know, I’m so lucky that, you know, Binny has been on our board for the last like, you know, two and a half years. He’s supporting the company continuously, right. And yeah, so, you know, the people I got inspired from, got them to partner in my journey, and are there with me, you know, as I keep building it larger, right. I think that is like, I think good part about for entrepreneurs starting today because they have examples. It’s not a completely unknown territory. It is, you know, probably something for everybody. It’s not only for people with a very high aptitude right at the highest capability, right. I think that’s how the ecosystem is transforming, right? My advice for, you know, category creators is to, is to remember that when you are creating categories, people don’t understand you. Right? You come out you would say a story. People will 90% of times they won’t get you. Right. So I think that was happening to me right for you and when it started, even today, when I look at different spaces when I am like you know, looking at different values, different areas where we are to create value, I think more often than not, you are not understood, right. I think my advice would be to if you have found out, narrowed down onto an opportunity, which you think is large with you thing is going to add phenomenal value and impact to the Indian economy to the country to users, right. Stick to it, right, believe, not just giving your opinions right. But at the same time. I mean, you have to you have to know how well you’re making decisions. You have mentors around you whom you’re bouncing off things with.

Hans: You should make the right decisions.

Rajesh: Yeah, right. I think, you know, being being foolish, like painfully headstrong and foolish is your friend. That’s like unhygenic. Yeah, but really believing in yourself that doing your math properly knowing your numbers properly, doing your unit economics properly, right from day one, that you’re creating something, right? Yeah. Is it value to anyone? Will anyone pay for it? or Why do you exist? Are you going to like unlock something which will, you know, make you a business model or not? I think that’s something which is really important. Yeah. So I would say that category creators have to believe in themselves have to believe in their inner voice right? And go according to that.

Hans: and fundamentally, if you’re helping with country building, in a long run you you will win in our people will change your mind to know that you’re doing the right thing. Yes. Yeah, that’s that’s definitely key lesson we learned from being in China.

Madhu: Hans, what advice do you have for category creators as it as far as it comes for funding and for growth?

Hans: I agree with Rajesh’s point that sometimes investors tend to want to mitigate risk and look at successful models elsewhere, and encourage their founders to adopt or copy that model. But each country is different despite their similarities. So you have to figure out a way to do the analysis and make sure that you are adding value to country building. If you are doing that. I think that the opportunity will be so massive that the smart investors will come around sooner or later. You were featuring HBS key study? Yeah. How did that come about? And what were what were your own lessons after you’re going to experience?

Rajesh: Yeah. So I was basically trying to look at how to build a board. I was making, I was meeting people from the industry. I was meeting established entrepreneurs. I was meeting academia. So that’s where I got introduced to Professor Shikhar Ghosh. And it was basically a session to know each other. And, and I mean, the org structure in my organization changes every six months. Right? I mean, people ask me that, like, you know, and and the there is a case being written on dynamic city in an organization. Yeah. Right. So the meeting with Shikhar went reall well. One our meeting we just like kept on over lunch is expanded to like two to three hours meeting. Yeah. And he was very curious on, you know, how did we like, outpace and out scale, like, you know, within like, you know, six, nine months of funding and also the initial part of scaling, right. And also, when he looked at how the competition of funding team was, how did these guys split equity? How did these guys really build the initial leadership team? Right? He was very curious because all these decisions were very unorthodox. It was very unconventional. He did not have any, any in our meetings. He was always confused. Why did I make that decision? But it was like, None of this makes sense.

Hans: Right. To him.

Rajesh: Yeah, it did. Right. So he said he wants to deep dive right. So he flew in, he spent, you know, couple of days with us. He, you know, spoke to a lot of my leadership team members. Yeah. Right. And they were a company, when you build a company, you go through a series of journeys, right. So there was there were ultimately definitely very high moments, you know, in the first year, but also low moments, because, like, you know, we were able to break even with a Series B, yeah, after Series B. Investors, you know, we got, and we got a lot of investors and everybody was like saying that, hey, at this point in time, there’re like, two large companies, one of them gross margin is negative 70, one of those gross margin negative 40. You guys have gross margin 15. And you guys have raised enough money. Now you need to scale right? So I was like, Okay. And then I started scaling, right? And I didn’t cross minus 10. And I thought minus 10 is a very respectable number. Right? And, but 2015 was an environment like this very beyond, you know, you know, a good entrepreneur, if you throw the stone a million dollar come back. Right was like that. 2015, 2016 was a freeze. Right? Right. Everybody started asking the business, you know, the bottom line is if it’s a business, it should make money. where is money in your business. This is the first question. My money was right, but now I was told to scale.  And it ended hit me in like march april 2016. That you know, business is business, right? The entire of the company, which was in September October, like very clear of unit economics, doing a transaction if it is 15% doing a transaction, which is double digit margin, keeping costs low, like we still have, like, you know, in the entire company, only product guys and engineering guys have Mac books that do from 2017. The rest of us have Dell laptop. That’s the kind of business in logistics, you can’t be. I can’t have a culture like Google right, I mean, we have to fight for pennies, right. So so so that was a culture which we built. Then from this culture, we evolved into the culture of expansive growth, right. And everybody thought, you know what happened, right? Why is why is this guy talking like this, but everybody acclimatized by like, November. They’re all he means scale right there, nothing else. So the entire DNA changed. And then I had to, again, take my DNA and fix it back. Right. Right. And it was like so all right, I told him I went through all of this and for Shikhar this was very, like, unusual, like something as a, of course. I mean, like, it’s a case, you know, but by the concept of a case study, you’re like a specimen was so, so that was that’s what that’s what happened to us. And we like came back from a very, you know, very bad situation where, you know, we didn’t have payrolling right. And from that situation, we bounced back Yeah, right. So, the case talks about the and this puts the entire entrepreneurial bonds in stress, this puts co-founders ship, you know, how co-founders gave each other you know, under through various like, you know, areas, what are the reactions, how do how do I evolve, right? So, the entire case study will actually on studying our behavior. As a company, how did we evolve? How did the DNA evolve? What did we do? How did we take decisions? And it comes to that point that, hey, this is situation? What should Rajesh be doing? Right? And so, you know, I had really nice time because I think Shikhar has a detailed study of what worked and what didn’t work. And he has this study where on a cube of three, right, so let’s say a software company has a multiplication, multiplication of three, right, which the company company has three people, nine people, 27 people, 81 people, you know, in 243 people. The entire you know, what methodology you need to manage an organization changes. And his thoughts going through that, going through these six, six to seven shifts within nine months. Yeah. So he didn’t know how we manage. Within nine months, you went through all of this, it was really close to find it people by mid 2016. And like you did all of this, how did you guys do it? So it was that case. So I was able to learn from him like every concept, what really has worked and what I did, right and and I even taught the class last year. I’m teaching the class this year. So it was it is good and and the kind of perspectives the students came up with which was more very rational perspectives, all the decisions with which we took where they were completely against it. Like this is not the way you should have done right but the only outcome was that there’s nothing right there’s nothing wrong but it’s what is needed to build a mission to build a story to build what something wants to. So yeah,

Hans: very good.

Madhu: So on the rational decisions, you once said it was engineering over joining the army is the most crucial decision you’ve ever made in your life. Can you tell us more about that?

Rajesh: It was not rational. It was basically I wanted to join forces, my father did not want. So it was basically you know, a simple Indian family. Having a discussion with a 15 year old is having a discussion with you know, a father Yeah, and the father has essentially given his entire life to educate the kids. We have four kids in the family. Yeah. And it was essentially and my father served in the army. So I wanted to be a fighter pilot. So my entire thing about you know, the adrenaline and flying and you know, all of this is more my personal want but what surrounded this want was that because my father in army was a noncommissioned officer, as a soldier, and they used to be like his bosses, who were very young were like, 17 year old kid was gonna be you. Yeah, exactly. And these kids in front of my father, my father used to they just stand up straight and then solute right? What these guys man, right, I mean, my father is 40 and these kids are 17 this coming on my father just standing up and saluting, and I’ve lived through my life seeing that right and, you know, this huge amount of respect in those positions. Right, right. So do you and when father always, you know, obviously, you know, really respected those, you know, officers, etc. And nowadays I always knew that my father respected them. Right. But I think my father knew more about me as well. Right that I think he can, he did not do that he definitely could get into that, because I cleared everything. I had to just go for the interviews to get through. But yeah, I think it was more a family choice. So it was not rational. It was a family thought process. And as I told you, right, I think, you know, there’s nothing right. There’s nothing wrong, it’s a decision, and you need to get into that and make it work. Right. So yeah, and then engineering, I didn’t know anything. So it was more like okay, so you want to you should be an engineer. So which is the topmost school, okay, it is. Okay. So who gives the preparation for that? Okay, these are the preparations so okay. You just go study. It was like that. Yeah. Yeah.

Hans: I was told you’re also an athlete. How has sports affect your views of entrepreneurship?

Rajesh: I think, so, in college. I was a sprinter. And after college I was marathoner.

Hans: That’s are much more relevant. being a marathon runner is more relevant for startups.

Rajesh: but But in today’s day the startups it’s actually a marathon of sprints. Right so basically the sprints, but keep hydrating sprinting, keep hydrating, right? So it’s basically like a marathon, you just carry a bottle and keep hydrating. Right? I mean, you just virtually don’t even stop, you keep drinking and you keep moving forward. Right. So I think sport has taught me a lot. I think some people you know, a little also say that Rajesh you do not win every time. Right? So I think the winning attitude keeps in very strongly. Yeah, right. I think you know, I’ve been battling basketball and during my sprints and pole vault, like very serious, very serious injuries. But I think you know, in the match in the games, you know, that you know, you can contribute in a particular level to your team so you will do it right. So it taught me very strong winning attitude. Yeah, very strong about that if you’re not practiced, you will do shit in the games. Right. So, so it has taught me that without preparation, you’re nothing. Yeah. Right. It has given me the the tenacity to go at a journey at a mission. Because, you know, as various teams, we were nothing, but when we, you know, exited when we were in college, we were a good team, right? Which means that, you know, how much you want it, you know, essentially get there. Right. And, yeah, and it, I think, perseverance, right, I think I mean, we I used to, like I typically used to practice every day for like, six to eight hours, I’d starting off to cough like 5pm Eastern, like 11,12pm on the court, to keep doing all the stuff and after that, we still do dramatics after that we used to do like different societies, you know, different cultural activities. That was how the entire, you know, college experience was it was more for me. 80% not work and 20% not studying. Yeah. 20% was more studying and courses that was how my college experience was.

Madhu: Now the round of quickfire questions, what’s your source of inspiration recently and why?

Rajesh: Building India. I can see that I can be the material contributor towards the logistics economy of India.

Madhu: What’s the most frequent advice you give to other aspiring entrepreneurs?

Rajesh: I told you before, repeating again, believe in yourself, believe in your inner voice and be hungry. be hungry, keep going at it, you will succeed.

Madhu: What’s a habit of you that has changed your life?

Rajesh: Coming out of duality, for a very personal thing, I should not drink till 2016 I started drinking because I was also in in I was at the alternative it used to help me be out of it as well. Right and I should not like the taste right. You know, believe in duality of life. I think so far, probably. starting up has made me realize that duality isn’t right. Yeah, there’s nothing in life which is good or bad. I think what is apt, what is truth,is very, like non obvious and like very simple, generally.

Madhu: What do you do for fun besides marathons?

Rajesh: you took over marathons? Really? Playing with my son, he’s two and a half now. So he brings a smile on my face and irrespective what I’m going through on that day, so he walks to me, he walks with me to my office at least five times a month. I spend at least half my Sundays with him. And yeah, he’s, I think he’s, he’s super exciting. And like, with him, I think I’m able to forgo duality very easily because I think he doesn’t proceed any he doesn’t, he does not have any framework to make decisions. Right. So I can actually see him being very neutral and direct right on something. I think that is good in life. Yes. Because I think visions Yeah. So I love spending time with him. My wife is very jealous of that.

Madhu: For our listeners, if you’re wondering walking to the office, the office is right next to their house, the co founders lived together under in the same building. I’m curious and what does 996 mean to you?

Rajesh: I think 996 to me is actually, I didn’t I didn’t really get the philosophy of 996 till I visited China two years back. Right. I met a lot of entrepreneurs. Yeah. read a lot of books. Yeah. Right. And, I mean, very candid, I knew that Chinese people are doing well. I didn’t know that they were like, multiple notches apart above right. So 996 to me is basically you know, a definition of the framework of how to go at tough problems. And, and countries like ours, like in India, still we have 30% people, you know, in poverty which we need to lift, I think 996 is still understating lifestyle maybe I think we need to go much harder. Right? So yeah, so I have two hours more than average Bangalorians, my office and home and, and like me and Chanakya can like continue our chats over dinner after dinner. We just stay in different floors. Sure. Right above.

Hans: Sure, make sense, maximize efficiency.

Rajesh: Yeah. So So even if you don’t assuming 996 for us, it’s easy to do 12126.  We don’t spend those extra two hours we will spend double six. Yeah, so yeah, so I think I think Chinese culture is also now changing from nine nine to more, I think, you know, eight eleven six?

Hans: We will see. The millennials. They grew up in a different China, so may not have the same hunger or drive that India is going through right now. So we will see.

Rajesh: Yeah, we are.

Hans & Madhu: Yeah. Okay. Thank you so much. Thank you.

Rajesh: Yeah, thank thanks so much for having me.