Naini Thaker, Forbes India
Aug 06, 2025

It’s a known fact that of the thousands of startups founded each year, only a small fraction survive—and even fewer scale to become unicorns. Rarer still are those unicorns which, after reaching dizzying heights, come crashing down. The Good Glamm Group is one such cautionary tale.

Once celebrated as a unicorn that cracked the code on content-to-commerce, the company’s meteoric rise was matched only by the speed of its unravelling. At the heart of its downfall lies a critical misstep: The relentless pursuit of growth through acquisitions and brand launches, even as cracks in its house-of-brands model began to show. Instead of pausing to consolidate and build sustainably, Good Glamm doubled down—prioritising valuation over viability.

That strategy came to a head on July 23 when founder and CEO Darpan Sanghvi announced the dissolution of the group’s house-of-brands structure. In a LinkedIn post, Sanghvi confirmed that lenders would now oversee the sale of individual brands, effectively ending the company’s vision of building a digital-first FMCG conglomerate.

Despite raising $30 million in 2024 and undergoing multiple rounds of restructuring, the group failed to integrate its acquisitions or generate sustainable profitability. With key investors such as Accel and Bessemer Venture Partners exiting the board and leadership turnover accelerating, the company’s ambitious empire—built on rapid expansion and aggressive brand aggregation—has now been reduced to a lender-led breakup.

In the aftermath of the announcement, Sanghvi offered a candid reflection on what went wrong. “In hindsight, it wasn’t one decision, one market force, or one acquisition. It was three levers we pulled, which together, turned Momentum into a Trap,” he wrote in a LinkedIn post. According to Sanghvi, the group’s downfall stemmed from doing “too much, too fast and too big”.

He elaborated: “At first, Momentum feels like your greatest ally. Every headline, every funding round, every big launch is a shot of adrenaline. And you start believing you can do more and more and more. But momentum has a dark side. If you stop steering and go in a hundred different directions, it doesn’t just carry you forward, it drags you faster and faster until you can’t breathe.”

Where The Model Broke?

In October 2017, Sanghvi launched direct-to-consumer (DTC) beauty brand MyGlamm. Most brands at the time were big on selling on marketplaces such as Amazon or Nykaa. However, Sanghvi believed, “We wanted to be truly DTC and not just digitally enabled. We believed that to own the customer, the transaction needs to happen on our own platform.”

But the biggest challenge with being a DTC brand is its customer acquisition cost (CAC). Towards the end of 2019, the company was spending about $15 (over ₹1,000) to acquire a customer to transact on their website. “Around the same time, our revenue run rate was ₹100 crore. We were spending about $0.5 million to acquire 30,000 customers a month. That’s when we realised it was time to solve the CAC problem,” Sanghvi told Forbes India in 2022. In an attempt to find a solution, Sanghvi turned to the content-to-commerce model.

And then, started the acquisition spree. According to Sanghvi, with a single brand in a single category one can’t build scale. He told Forbes India, “The most you can scale it is ₹1,000 crore, if you want a company that’s doing ₹8,000 or ₹10,000 crore in revenue, it has to be multiple brands across multiple categories.” In hindsight, this perspective might be debatable.

As Devangshu Dutta, founder of consultancy Third Eyesight, points out, the “house of brands” model is essentially a modern-day consumer-facing business conglomerate—and its success hinges on multiple factors working in harmony. While there are examples globally and in India of such models thriving, both privately and publicly, the reality is far more nuanced. “Brands take time to grow, and organisations take time to mature,” Dutta notes, emphasising that rapid aggregation of founder-led businesses under a single ownership umbrella is no guarantee of success.

In recent years, Dutta feels the influx of capital into early-stage startups and copycat models—often seen as lower risk due to their success in other geographies—has shortened business lifecycles and inflated expectations. The hope is that synergies across the portfolio will unlock outsized value, but that rarely plays out as planned. “It is well-documented that more than 70 percent of mergers and acquisitions fail,” he adds, citing reasons such as weak brand fundamentals, lack of synergy, inadequate capital, limited management bandwidth, and internal misalignment.

In the case of Good Glamm, these fault lines became increasingly visible as the group expanded faster than it could integrate or stabilise.

Scaling Without Steering

In FY21, the company had losses of ₹43.63 crore, which rose to ₹362.5 crore in FY22 and went up to ₹917 crore in FY23. Despite the mounting losses, Good Glamm marked its entry into the US market, in a joint venture with tennis player Serena Williams to launch a new brand—Wyn Beauty by Serena Williams. The launch was in partnership with US-based beauty retailer Ulta Beauty.

For its international expansion, it invested close to ₹250 crore over three years. “We anticipate that the international business will account for 25 to 35 percent of our total group revenues by the end of next year. This strategic focus on international expansion is pivotal as we prepare for our IPO in October 2025,” he told Forbes India in April 2024.

Clearly, things didn’t pan out as expected. As Sanghvi rightly points out, it was indeed a momentum trap. “You tell yourself you’ll fix the leaks after the next milestone. But the milestones keep coming, and so do the leaks. Soon, you’re running from fire to fire, never realising that the whole building is getting hotter. And somewhere along the way, you lose the stillness to think,” he writes on his LinkedIn post.

Dutta feels that a strong balance sheet is the most fundamental requirement, “to provide growth-funding for the acquisitions or for allowing the time needed for the acquisitions to mature into self-sustaining businesses over years. In the case of VC-funded businesses, the pressure to scale in a short time can go against what may be best for the business or for its individual brands”.

The Good Glamm Group’s fall is a reminder that scale alone doesn’t build resilience. Its story reflects the risks of expanding faster than a business can integrate, and of prioritising valuation over value. The house-of-brands model can work—but only when backed by strategic clarity, operational discipline, and patience. This is less a warning and more a reminder for founders: Scale is not success, and speed is not strategy.

(Published in Forbes India)

In every strategy meeting today, one metric is invariably mentioned: Customer Acquisition Cost (CAC). Whether you’re a well-funded corporate retailer, or raising your first angel round, or a well-established digital duopolist brand scaling Series C, CAC is one of the key performance metrics. “Real” spend that is neatly broken down by channel, optimised by funnel tweaks, scrutinised to the last rupee or dollar.

But there’s a metric we almost never hear about that could be costing brands far more in the long run.

Let’s call it Customer Forfeiture Cost (CFC), the residual lifetime value that is lost when a customer walks away from your business not because of price, competition, or even shifting needs, but because of a “burn”: a delivery missed or messed up, a refund that took weeks, an arrogant customer service call, or a product that failed spectacularly against the promise. In other words, when your brand hurts someone enough to make them walk away. Probably for ever.

It’s a paradox: brands are pumping thousands of crores into acquiring users, but they’re bleeding value at the other end. Yet, while CAC is a line item in every financial statement, CFC is invisible in management dashboards. CEOs don’t announce, “We’ve cut our forfeiture cost by 20% this quarter.”

Yet. every CXO knows it exists. The NPS scores, the social media complaints, the “never again” comments in reviews, the sinking feeling when repeat purchase rates fall.

Why CFC Matters More Than Ever

In every business, during the early stages each sale is a victory. Whether it was the retail chains that grew in the 1990s and early-2000s or the digital upstarts that came up through 2010s and 2020s, scale has been the mantra, and investors have poured money into scaling through the growing consumption of India 1 and India 2 customers.

Today customer acquisition isn’t cheap. The same person who clicked impulsively in 2020 now thinks twice before confirming payment. In this landscape, retention isn’t optional, it’s existential.

Every lost customer isn’t just a refund processed, or a cart abandoned. It’s the long tail of future repeat purchases that will never happen, negative word of mouth and brand distrust in the customer’s circle of influence, and increased future CAC due to declining organic reach.

Way back in 1967, management consultant Peter Drucker wrote in his book “The Effective Executive”: “What gets measured, gets managed”.

Today your CAC may be Rs. 500-1,000. If the average customer life time value (LTV) is Rs. 10,000, and a single burn causes churn after just one order worth Rs. 2,000, your CFC is Rs. 8,000, and that doesn’t even include reputational spillover.

Why We Don’t Measure It

Yes, CFC is hard to quantify. It’s not as easily attributable as ad spends. There’s usually no neat model telling you why someone never returned, because tech stacks aren’t typically designed to track emotional exits. And let’s face it, introspection about broken relationships is uncomfortable, even for management teams.

But that doesn’t mean it’s not real. If a customer leaves because your delivery executive messed up, or because your app crashed during checkout twice in a row, that’s on you, not the market. And in a business climate where sustainable growth is the mantra, LTV is king.

Ignoring CFC is like watching your roof leak and blaming the rain.

Toward a New Discipline

Brands and retailers must start measuring CFC, the value lost when customers disengage due to friction, mistrust, or neglect, and then start working on reducing it. This can be done by:

• Tracking negative exits: Build feedback loops for poor customer satisfaction scores, refund requests, support escalations, and analyse their downstream effect on churn.

• Building burn indicators: Assign internal scores to incidents where customers express betrayal or frustration, and combine qualitative feedback (customer calls, social posts) with purchase history to gauge how and when you lost someone.

• Incentivising retention, not just acquisition: Perhaps most important, align teams across functions, not just marketing, to reduce friction and foster delight. Your logistics, tech, and customer service teams are as responsible for growth as your ad agency.

The Competitive Edge We’re Not Using

In a crowded space where everyone’s vying for eyeballs, trust is the true moat. Customers don’t expect perfection – they do expect accountability, authenticity, and recovery when things go wrong.

Brands that understand and act on Customer Forfeiture Costs will quietly start building a powerful edge: deeper brand loyalty, lower CAC over time thanks to referrals and repeats and greater lifetime value per user.

In other words, real, compounding value.

As the Indian brand ecosystem matures, Customer Forfeiture Cost needs to be as visible and valued as CAC. Acquisition is the invitation; experience is the relationship. Relationships, once broken, are expensive to rebuild; if they can be rebuilt at all.

In the end, growth isn’t just about who comes in. It’s about who stays, and why.

(Written by Devangshu Dutta, Founder of Third Eyesight, this was published in Financial Express on 2 July 2025)

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Watch the video

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