Rohit Sharma’s Post

RareRabbit recently raised $18 million in its first funding round, and here's why it matters. Indian entrepreneurs have excelled in ethnic wear with brands like Manyavar, Biba, and Libas, but Western casual wear brands have struggled to establish a strong foothold. The Indian market for Western casual wear is divided into two segments: 1. Value Segment: Hundreds of labels sold cheaply online and in stores, typically priced between INR 150-500, mostly created by manufacturers. 2. Branded Segment: Dominated by foreign brands like Nike, Lacoste, Zara, H&M, Puma, and Levis. Few Indian brands in the casual wear space capture consumer attention or compete with global brands due to: - Market saturation with foreign brands. - Price-driven, low-trust Indian consumers. - The functional nature of casual wear with minimal product differentiation. RareRabbit stands out as an Indian brand selling at 2-3 times the price of competitors, including foreign brands. Key numbers for RareRabbit: - 70% YoY growth with ~INR 600 crore in revenue in FY24. - Significant business from D2C (website and 100+ EBOs). - 10%+ EBITDA margins while being bootstrapped since 2015. For apparel brand founders or aspiring entrepreneurs, RareRabbit’s success story offers critical lessons: 1. Supply Chain Control: The founding family of RareRabbit, Radhamani Textile Group, has decades of apparel manufacturing experience. This allows them to maintain tight control over quality, SKU introduction, experimentation, and supply chain margins. 2. Brand Marketing: Built as a high-end fashion brand with a strong retail presence rather than an online-first strategy. Not all brand-led categories can be built online, and apparel is one such category. 3. Timing: Founded in 2015, RareRabbit has patiently invested for the long term, a luxury few VC/Funded brands can afford. As a new founder, it is crucial to understand "why you will win" and "why you will keep winning" in your business. The RareRabbit founders certainly knew their "reasons to win" very well. If you are a RareRabbit consumer with different views, do share.

10 things a first-time founder should avoid: 1. Allocating more than 25% of capital to the MVP. 2. Assuming V1/V2 (MVP) will be sufficient. 3. Hiring someone with a salary over 10-15% of capital. 4. Seeking trivial feedback from first paying customers. 5. Relying on biased feedback from family and friends. 6. Competing head-on; instead create a clear differentiation. 7. Equating more hours with more output; focus on impact. 8. Relying on marketing money for traction despite weak signals. 9. Neglecting culture and allowing duplicated efforts. 10. Sticking rigidly to GTM timelines and budgets; prepare for 2x deviations. #startups #entrepreneurship

Why now is a great time to build in India for India and the World - Economic indicators are steady. - Policy stability creates predictability. - Big funding rounds are making a comeback. - Internet and consumer tech companies are heading for IPOs. - VCs, founders, and markets are focusing on profitability. - New distribution channels are emerging. - Early signs of moving from product exports to brand exports. - High ASP categories are expanding, Gen Y/Z willing to pay premiums. - Talent density is at its peak, many eager to join promising teams early. Top-quality founders are building new companies, with strong traction. From consumer brands and tech-led platforms to new-age automobile startups, space tech, and SaaS, Indians are innovating across the board. Startups were riskier a decade ago, but that has changed for the better in the last two years. There has never been a better time for those on the fence. #startups #entrepreneurship #makeinindia

How much money should you have in the bank to quit your job and start a business? This is a tricky question that many people grapple with when planning to take the plunge, and in most cases, they get the answer wrong. A big reason for this is over-optimism about the idea and the expectation that everything will go exactly as planned. However, the reality is that scaling a business often takes significantly longer than anticipated. Based on my past experience, here's a more accurate approach to answering this question. Assumptions for the math: 1. You are the sole breadwinner with a few years of savings. 2. You have no inheritance, family backing, or passive income. 3. The money needed to start the business is over and above. 4. Money needed to survive = liquid assets (Cash, Stocks/MF’s, FD’s). 5. You are not drawing or barely drawing any salary for at least the first two years. Key principles influencing the math: 1. The Rule of 10: Most businesses take about ten years to become stable and predictable. By the tenth year, a business usually reaches a point of low probability of failure. 2. The Rule of 3: Founders typically face these scenarios: a. Failing 2-3 times, with each cycle/pivot lasting 2-3 years when experimenting with completely different ideas (4-6 years of experimentation cycle, minimum). b. Pivoting 2-3 times before achieving product-market fit with one startup, with each pivot taking 8-12 months (2-3 years of experimentation cycle, minimum). So what should the savings be? Based on the above assumptions and challenges, you should aim to have at least six years' worth of savings to minimize stress and provide a realistic chance of success. Short-term planning of 2-4 years is often unrealistic, as most founders need a longer runway. Things do not usually pan out the way you imagine, so if you are serious and want to improve your odds, planning for a longer runway will certainly help. If you have different thoughts on this, do share! #startups #entrepreneurship

Mahindra (M&M) is taking the market away from the old guard (Maruti & Hyundai). Currently valued close to $40 billion, it is on track to become a $100 billion company. The Indian automotive market is doing well with positive economic indicators and a shift towards aspirational products. Mahindra has particularly stood out recently; its supercharged growth is forcing competitors to rethink their game. Here’s why: - In May, Mahindra had two models (Scorpio and XUV300) among the top 20 selling cars. - The Scorpio ranks 8th and sells at 2.5 times the price of other top 10 cars. - The XUV300 crossed 10K sales and garnered over 50K bookings within an hour of its launch. - Mahindra’s market share increased from 10% to 14% in the past 12 months. - They dominate the INR 20-30 lakh SUV range with models like Thar, XUV700, and Scorpio. - The Scorpio alone sells 14K units monthly, nearly matching Kia’s total sales across all models. Mahindra’s success comes from its thorough approach with no shortcuts: - Complete control over technology and IP: Engines, chassis, and designs are developed in-house, except for transmissions. (In contrast, Tata uses FIAT engines and JLR chassis for its premium cars.) - Product strategy: Targeting buyers who want segment-first features across all price points, from compact to large SUVs. - Timing the market: Aggressively entering the electric vehicle market with promising new products and capitalizing on the post-COVID surge in aspirational product sales. Mahindra is poised to become a global automotive leader, potentially achieving a 20% market share in India within the next 3-4 years. The primary challenge for Mahindra remains their bold bets in the electric vehicle space, while the market seems to be gravitating towards hybrids. *PS: This post is not intended as investment advice.*

Q-commerce is taking the meat away from Licious. In my recent dig on Zepto's funding news, I was surprised to learn that Relish, Zepto's private label for meat and seafood, is generating close to INR 500 crores in revenue after just 12-15 months. In comparison, Licious, after nine years, reported ~INR 750 crores in sales with INR 500 crores in losses for FY23. As a founder, future-proofing your business is crucial, but the rise of Q-commerce has been rapid. Here’s why Licious is struggling and why it won't get any easier going forward: > Distribution: Leveraging an existing large customer base makes scaling new brands easier and faster. Q-commerce platforms have spent hundreds of millions to build their customer base and will go deeper to capture a larger wallet share of these captive audiences. > Gross Margin Focus: Grocery and fresh produce are low-margin categories. Q-commerce is shifting from Average Order Value (AOV) to Gross Margin (GM%). Private labels offer higher margins, disrupting categories with low brand loyalty, such as meat. > Supply Chain Control: Access to clean meat is not unique to Licious. Fresh food categories with reliance on sourcing alone will be disrupted by Q-commerce. Nuts, dry fruits, and packaged snacks are similar categories at risk. The 10-minute delivery model started with standardized SKUs to build a customer base and achieve higher AOV. Startups are now focusing on GM% and aggressively pursuing private labels. Key Point > The 10-minute supply chain has changed the distribution game and this will open new categories to private labeling. If you are a manufacturing-led brand, the margin delta from supply chain control will help fight off Q-commerce players to some extent. The pre-10-minute world looked different for the fresh produce supply chain, but the status quo has changed for good. #startups #quickcommerce

Are you an entrepreneur struggling with product-market fit? You’re not alone. This is the top reason for startup failures. Here are two steps to find solutions to PMF: 1. Be clear about the value proposition you’re selling. What is the benefit for the consumer? 2. Ensure the realization of this benefit is clear and timely, convincing users to continue purchasing. While most entrepreneurs focus on the first point, the second is often overlooked. The key is the "TIME TAKEN FOR GRATIFICATION." When consumers buy a product, they expect certain benefits. Examples include: 👉 Better skin from a cosmetic product 👉 Luxury and status from a premium car 👉 Pride in your child attending a top college 👉 Relief from sore feet with a new shoe brand 👉 Energy from a chilled cola on a hot day 👉 Satisfaction from a crisp white shirt after using a new detergent To thrive, customers need to know: 🎯 Did the product deliver the expected benefit? 🎯 Did it meet or exceed the average gratification timeline of similar products? The goal is post-consumption gratification and minimizing the time to realization. Evaluate your product’s value proposition with these points in mind to address PMF challenges. Examples of immediate gratification: 👉 Social recognition from a new Mercedes 👉 Chemical-free shampoo that doesn’t make a baby cry Examples of poor gratification: 👉 A disappointing meal at a recommended restaurant 👉 Organic cotton apparel that underdelivers on benefits Examples of delayed gratification: 👉 Toning your body at the gym 👉 Coding classes for a young child Great products provide immediate gratification, while poor ones delay or fail to deliver it. As a founder, be aware of the benefits your product offers and assess its performance relentlessly. If introducing a new product, educate consumers about the gratification timeline. In crowded markets, surpassing gratification timelines can attract consumers quickly. Stay tuned for more on leveraging different types of gratification for your product. In entrepreneurship, gratification is key to success!

The hardest thing all 1st time founders learn is that you can work your ass off but it wont take you anywhere if you are working on the wrong idea/solution. Founders are able to catch core issues with the product much faster subsequently (2nd/3rd attempt) and continually going through this process can make entrepreneurs really sharp in a few years. Ruthless MVP run throughs and quick pivots are what seasoned entrepreneurs master overtime, and new founders suck at it. There are no shortcuts to this journey.

Lessons Learned as a Solo Founder: [-] Absolute Commitment: Launching a venture solo redefined my understanding of giving 100%. It's a whole new level of dedication that reshapes one's work ethic permanently. [-] Burn Rate Realization: Transitioning from working at VC-funded startups to founding one taught me the crucial distinction between spending someone else's money and my own. I found it unacceptable to run a business without a clear path to profitability. [-] Financial Awareness: Witnessing how quickly fortunes can reverse, I've developed a profound respect for financial prudence. Burning through savings accumulated over years alters one's perspective on money fundamentally. [-] Value Beyond Profit: Long-term decisions now prioritize more than just monetary gain. I reject opportunities solely driven by greed, seeking value that transcends mere financial rewards. [-] Personal Fulfillment: Despite the challenges, shutting down my venture ultimately brought me greater happiness. Embracing entrepreneurship, I encourage others to pursue their dreams while managing risks sensibly. [-] Balancing Intent and Output: Solely focusing on output without considering the underlying inputs and intent is a recipe for disaster. Prioritizing speed to reach goals can swiftly derail one's original intentions. My journey as a solo founder left me with invaluable insights that have reshaped both my professional and personal outlook forever. #startup #entrepreneurship