Story of Faasos, So Far - As Told to a few Interested B-schoolers at SCHMRD

Speech and class participation

Coming and giving a speech at a business school is something I never imagined I would do. I remember sitting in your place some time back and thinking all the time “why the hell do I have to go through this torture”. I am sure many of you have been cajoled and coaxed into leaving whatever interesting stuff you were doing and coming for this speech. See, now I am on the other side, I actually think this works. At least I get to see people who had something more interesting to do, which, by definition, makes them more interesting than folks who had nothing else to do but come and listen to random speeches.

I remember that we used to play a game to make speeches interesting. Whatever the speaker is saying, someone will catch a phrase or a word and then circulate that, on a piece of paper, to the entire class, and folks will have to raise their hands and say something using that word in the garb of class participation. The guy / girl who puts that word max number of times in his / her class participation, wins a beer or something. So, if you feel like, you can practice that game today, I wont mind. I understand. Also, if at any time you find me rambling away, please make it known to me by raising a hand, making a weird sound, whatever, just make me know that I am boring you. I will stop and reassess.

No big gyan

See, Faasos is not a grand success at a national / international scale.  At least not yet. It’s a fraction of size of Flipkart for example. So, I am really not in a position to give you guys some big gyan or advice on how to build a billion dollar company. We have that ambition, but we are at least a few years away from that. So instead of advice, I will tell you the story of Faasos and the three biggest learnings I had starting and building this company. Is that ok?

Born in a Bengali family

Now, coming to my journey with respect to Faaso’s, which is why I have been invited here, I wish I could tell you that I was genetically programmed to run a business and I sold ice-creams and newspapers, when I was 5 years old. But the truth is none of that is true (that does not sound right English wise). I was born in a Bengali family of a professor and a teacher. Though my father taught economics and my mother mathematics, neither of them had any appreciation of “profit”. All of us were immensely attached to the restaurants of our lives – like shiraz, aminia, but no one ever considered that these were business ventures run by real people, let alone starting one. Plus first 17 years of my life I was in Calcutta, where, "where should I have my next egg roll or biryani", or "how can I bunk that thermodynamics class" or "is Maradona greater than Shishir Ghosh" were more important questions to me than "can I make some money on the side?"

Unexciting upbringing – last but never failed

So basically, I had a completely un-exciting upbringing – a decent school (well more than decent, in fact a terrific school), a decent engineering college and a decent grad school. Exactly like a gazzilion people in India. I somehow scraped through all of them with pass marks. I never failed a subject, but I always managed to be at the bottom 3-4 of the class. How cool is that? You are like almost last in the class but you never failed a subject. That actually was an incredible achievement in my mind. Just the required amount of effort. Nothing more. Nothing less. 

There was only this one time it caused me heart-burn.  This was the convocation of our engineering college. By a total cosmic conspiracy, the Vice Chancellor was calling out departments by alphabetical order, but the people within the department by the order of their rank in the class, to give away the certificates. Any sane person would also call students in alphabetical order, but no, he had to call by rank. Now Production Eng, my department, was last alphabetically, and I was second last in order of rank. And to my utter dismay on the day, the guy who stood last in the class bunked the convocation. I will never forget and forgive him. No one had ever hung around after getting his / her certificate, so by the time it came to me getting the certificate, it was only me and the Vice Chancellor of the university remaining in the auditorium with a capacity of a few thousand people. He clapped enthusiastically after giving me the certificate and said, “ son well done for managing to see this day”. It was pretty embarrassing.

First real job

Anyways, I came to Pune around 2000, after passing out of IIML, where I did not get a decent job out of campus ( I was selling TVs in Sikkim, I mean, I love TVs and I love Sikkim, but selling TV in Sikkim was a bit too much) and started doing my first real job. It was a start-up, so no one knew what was right or wrong, so I was gladly doing a lot of stuff, traveling a lot, selling the software to a lot of people or trying to do so, without any understanding of whether this was the right way of doing things or not. No one in the company knew, and hence I was having a ball of a time. I was traveling across the globe – UK, continental Europe, US all the time. I would do stupid things like set up a meeting with a French guy right after the France – Uruguay world cup match in 2002. France was eliminated in that match in the first round. The guy was crying throughout our meeting.  I realized I wont be able to sell him anything for the next four years.

Opening with Kallol- Background of Kallol

Anyways, with all that travel and stuff, I was missing some decent food all the time. So, with Kallol, I figured that the most logical thing would be to open a small roll joint (that sounds ominous) in Pune, and get a roll cook from streets of Calcutta to cook in that joint, so that we can barge in any time and ask for a roll. A bit of Kallol at this point, you can take whatever I told you so far, and replace my name with kallol’s. Good school, same engineering college, same business school  - almost same rank in class. Only difference was, he had a Bullet ( the motor cycle) in engineering college, and he used to go to the only gym in Calcutta ( I mean who goes to a Gym in Calcutta), and hence had about 15 girlfriends at any given point of time.

Start and Faasos Name

Anyways, Kallol and I started this small joint called Faasos in 2003. The name was the upshot of a very drunken conversation. There is this country called Burkina Faso and according to Wikipedia, the word meant The land of the  Incorruptible. We thought Faso must be the incorruptible part and thought it would be a cool name to go with ( being a couple of lazy Bengalis, we did not dive deeper). I remember, a customer asked us "why this name", six months into the business, and I gave him this fancy gyan about how incorruptible Burkina faso was etc etc. He listened to me for about five minutes and said "Burkina Faso is a complete hell hole, where even your mother would be corrupt, I lived there for ten years". We were like, my god. So we went back to the drawing board and reverse engineered an acronym for Faasos – Fanatic Activism Against Sub Standard Occidental Shit. I guess these were the only times, when our fancy education came up very handy.

I left my job at that time and decided that Kallol should not, as, at least one of us had to be there with the money to bail out, if shit hit the fan. Later, my wife told me that it had all been part of my cunning plan that I would leave my job within a couple of years of our marriage and the only reason I had married her was to ensure we could pay rent etc when I did that. TCS was world’s most secure job at that time. This was also roughly the time when she started remembering our college days together not by " when I met you", but by "when you were less abominable".

First store – Electricity vs Sales

Anyways, we started with 4 lacs, basically our life’s savings at that point. Our xl sheet projections told us, we should be able to build a 100 cr business with that money in three years by reinvesting the profits.  First month, our electricity bill was more than the sales. I was like “oh my god”. Second month, I kept all ACs etc switched off to cut the electricity bill, and no one ever entered the store and we did like 0 sales.

I was really really scared. After about three months of mayhem, during which time,  I started borrowing from Kallol’s and my Wife’s salaries to pay wages, Kallol and I sat again over a bottle of old monk and thought hard. Again booze sort of clouded our mind, and we decided to open a second outlet and apply all our learnings, including not having a dining space, which meant no AC. But to open that outlet, we had no money, so I begged and borrowed and stopped just short of stealing and somehow managed to put together another 4 lacs.

By the way, my first daughter was born around the time we opened our second outlet. That must have been the most accurate family planning by an entrepreneur ever. So, my wife was like this tigress watching over her money to ensure proper nourishment of the new born. Which was not suiting me at all.

  

Second outlet and going back to job
Anyways, the second outlet was a bit better than the first one in terms of sales to cost ratio. But it was not until middle of  2004, that we stopped bleeding. But the pressure was immense on me. We had this hand to mouth existence on all fronts and it was very hard on my wife and unknowingly on Jiya, who was just a few months old. So, around 2004 October, I decided to go back to a job, while Faasos continued somehow. I figured it would be easier for me to siphon some money off my salary to keep the business going. Till that time, I would be opening the shutter in the morning, urging staff to come on time, watch the till, at times make the rolls, right till mid night and come back again at 7 am next morning. I hired two people to run the business and started paying them salaries from my own salary in the new job.

Really tricky situation and decision to study

But I absolutely hated my job. Within six months I was thoroughly bored and looking to start my life afresh. I had a young family, an absolutely horrendous job, a business that bled every month, basically I was screwed. So, I did what a Bengali would do, try to study some more and take a break from life. I applied to INSEAD for their MBA program in France. I had taken GMAT many years back and I had a respectable score. During one of my business trips in the new job, I had the final round of interview and got admitted to the program. I convinced my wife to come along with me ( about 30% of the class had families with them, as the country side of France was probably the most idyllic and stress free settings to bring up a young family). Also, I could not go away for a year from my one year old.

Money loan and scare

The whole thing cost me about 75 lacs and all of it was borrowed from unsuspecting banks, by mortgaging my father’s home in Calcutta. So, when I landed in Fontainebleau, the realization dawned on me that if I didn’t land a decent job upon graduation in 12 months, that would be the end of my life.   I was so scared that I started studying for the first time in my life.

In the meantime, the two guys I hired to run Faasos, was doing a decent job of keeping the company alive. So, I had full trust on them. I would look at the MIS every weekend on a call with them.

Kallol to Insead and THAT email

Very very predictably, Kallol decided that if I could get through to INSEAD, then it could not be that difficult and landed in Fontainebleau six months into my program.  The day he landed in FB,  I got an email from the two guys running Faasos stating that they were dissolving the company and forming their own company and the only thing they could do was send me 10,000 rs every month as a gesture of good will. That probably was the worst day of my life. Faasos was my child, ya I gave it up but it meant as much to me as my daughter. But probably also the day, when I took the most prudent decision of my life. I wrote back to them wishing them luck, but I wanted an agreement done whereby their company would be running Faasos as a franchisee and kallol and I would still have the right to the brand name. They agreed instantaneously, must be out of gratitude that I did not make it messy. That left me a door open to come back later. And I am still proud of that email, after all these years.

Study hard and get a decent job

Anyways, I studied so hard that my brain ached. By the end of the year, I was on the dean’s list, was among the toppers in the class of 900 people from 70 nationalities and landed myself a job at McKinsey and Company in London. I somehow managed to come out this whole thing unscathed. I repaid my loan in like two years, and was able to save enough money for the day when I would again get bored. But that day did not come for another four years. I had such a good time in McKinsey.

At Mckinsey, if you can make intelligent remarks at the right time in a room full of industry veterans including fortune 100 CEOs, no one can stop you. I struggled a bit in the beginning, but then got the hang of it. I went through the ranks very very fast. I became an Associate Principal in the London office in 3.5 years, which was kind of superfast.

Getting bored and coming back on sabbatical

But, by this time I was getting a bit bored of changing the world one power point slide at a time. I was missing the action. And decided to take a 6 months sabbatical, come back to India, try my hands in a few interesting things and see where it goes before going back to McKinsey.

The first thing I did after coming back to India was starting to take stock of Faasos. It was doing okay, I guess, mostly because I was not there. My two old friends were running it well enough to survive, expand to five outlets and have a bit of profit.

Consumed by the idea of Faasos again

I got really consumed by the idea of Faasos once again. It felt like a fantastic opportunity that could scale up across the globe – delivering hot meals to youngsters every where. So, I decided to start again, with one store. I let the guys who were running the 5 Faasos continue running their stores under the brand name, while I formed another company and started my own store. Once again, all from scratch.

Better equipped and short history

This time though I was equipped with a lifetime of learning, and a generally better head on my shoulders. Kallol joined be back in 2011. I left McKinsey during the sabbatical itself. And the last four years have been about putting one foot in front of the other, growing gradually, moving beyond Pune, opening cities one by one, moving the business to web and now almost 100% to mobile and all of that. It has been one hell of a journey I must say – the last four years. Doing Faasos all over again. But this time around, I could raise capital ahead of time, build a fantastic team, build probably the most advanced technology in food delivery business in the world and so on and so forth. I would not bore you with all the details, but I would like to highlight 3 things that have worked for us and will continue to work for us in the times to come.

Three Big Learning - this is going to be boring 

First: Team.  When I started off again, I started looking for talent from restaurant industry. But here were two people trying to get industry talent for their one store company. Did not happen. For a couple of years, we were getting absolute dredge of the industry. People who were utter rejects, thrown out of a dominos or mcdonalds. They would come on board, figure out quickly that I knew jackshit, and try to fleece the business right from submitting 20 mineral water bottle vouchers for a single day to making money on the side for a property deal. Around 2012, again one of those now proverbial sessions between Kallol and I, we decided that we would get rid of all these junk the next morning and try to hire people, who would be willing to work their backsides off, give it everything, behave as it is their business, and build cities, functions, channels exactly the way we would ( or at least try). 

Thus came our now legendary program called FERs – Faasos Entreprenurs in Residence. I floated a blog ( http://brownianmusings.blogspot.in/2011/11/entrepreneurs-wanted.html ) asking people to write to me. I was focusing on people who had left B-school or Engineering college about a year ago. That is the time, when you actually wake up and say what my life has come to. Doing mindless power point presentations in a consulting firm to getting drunk in some obscure town with soap distributor. That’s Accenture and Unilever by the way. Your dream day 1 jobs. But once you are on these jobs for a year, you will know what I  mean. I got inundated with replies from all over the country. We hired 9 rock stars over two round and these are the people, who built the business. The only reason we are able to operate across 10 cities from Delhi to Chennai is that this group of people have done stuff that I would not have been able to do in my dreams. Over time the culture of the company became extremely entrepreneurial (our utter laziness to micromanage had a role to play).  And because of this culture, eventually, we started getting fantastic entrepreneurial talent even from F&B Industry. I actually feel, that Kallol and I merely started this business, but it was really founded by this group incredible youngsters, who are now becoming veterans - Raghav, Sagar, Adarsh, Ankush founded new geographies, Ankur founded our supply chain and food function, Revant founded our Finance function ( that was natural as he was the only gujju in the team), Shashank and Vipin founded our training function, Soumya founded our technology,  and Isha and Aditya founded our HR function. So, we are basically a group of co-founders in this journey. 

Entrepreneurship  now permeates every function from ops to tech to training to supply chain at Faasos. People take up responsibilities and build things without being asked to do anything. That suits a lazy guy like me very well. So, at least at Faasos, my learning has been hire the right people and the culture takes care of itself. People they will hire, processes they will set, will be defining your culture. So, please hire the first few guys with utmost care and ensure you have a view on every recruit.

Second: Technology. Solve problems through tech. Example, customers used to call up to know how much time it would take, where the food is. Because people give static guarantees. We started giving dynamic guarantees - first in the world - based on real time data on distance, inventory, traffic, load at store and prep time for items ordered. This meant customers have complete transparency throughout the journey and status call volume dropped massively. There are many other problems that we constantly solved through tech - from mass production of food to supply chain to customer experience. We are as much a tech company as we are a food company. So, I would say, if you are facing a problem in business ( not in life necessarily), solve it through tech and not by throwing manpower / money. It will serve you well in the long run. 

Third: Disrupt yourself ahead of anyone else. When you see trends that can kill you as a business, you got to be disrupting yourself. We are a paranoid bunch and have closed parts of the businesses ( for example high street stores) when it was apparent that the unit economics of a dark store enabled by tech is the way things will happen in future. At any points in time there are at least 5 teams in the company, who are working on stuff that has nothing to do with our current business / revenues - from one click wearable to order food to personalizing everyone's app with his / her food based on big data. I have no idea, whether some of these will actually scale up. But this attitude served us well so far. 

Now, my sincere apology for talking for so long. I have this habit of going on and on at the drop of a hat. I will shut immediately and let you ask me whatever you have in mind  - from faasos to the beautiful stress free life in calcutta.