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August 30, 2024
In a startup world, founders are typically creators first while investors see themselves as the monitors. Therefore, conflicts between the two are almost a default feature of a relationship that in effect funds a dream. From ‘off’ chemistry to differences of opinion to what some founders see as shackles on entrepreneurial freedom, the reasons could be any or a mix of all. Watch this discussion, with a mega-panel of intense start-up founders on the one hand and investors with VC funds on the other, addressing the pain points on Cash, Control, Creativity, Chemistry and Culture in a supercharged encounter. Session Anchor, Devangshu Dutta (Founder, Third Eyesight) reflected, “Those who have heard classical music jugalbandi or witnessed jazz musicians jamming will appreciate the creative tension, the give and take that was the thread throughout this discussion, reflecting the reality of the relationship between entrepreneurs and VCs.”
Watch the video
INVESTORS:
Ankita Balotia, VP, Fireside Ventures
Aashish Vanigota, Principal – Investments, IvyCap Ventures Advisors Private Limited
Bhawna Bhatnagar, Co-founder, We Founder Circle
Nitya Agarwal, VP-Investments, 3one4 Capital
Harmanpreet Singh, Founder & Managing Partner, Prath Ventures
Vamshi Reddy, Partner, Kalaari Capital
Zoeb Ali Khan, Vice President, Sauce.vc
D2C FOUNDERS:
Abdus Samad, Founder, Sam & Marshall Eyewear
Akshay Mahendru, Co-Founder & CEO, The Pet Point & Nootie
Malvika Jain, Founder, SEREKO
Nitin Jain, Founder, Indigifts
Puneet Tyagi, Egoss Shoes
Radhika Dang, CEO & Founder, The Good Karma Company
Rahul Aggarwal, Coffeeza
Udit Toshniwal, Founder & Director, The Pant Project
Vaani Chugh, Co-founder & Director, D’chica
Yash Kotak, Co-founder, Bombay Hemp Co.
Yashesh Mukhi, Co-founder, Chupps
admin
June 17, 2020
Written By RASHMI PRATAP
A handwritten note on a piece of recycled paper plus a hand-made trinket or pen is what one receives along with every order from Gwalior-based iTokri, an online store of handcrafted fabrics, jewellery, paintings and other artworks. Just like its little free gift, all the products in iTokri’s catalogue are unique and especially crafted for the brand, which has been doubling its revenues every year since launch in 2012. The small town retailer has achieved all this without following the typical e-commerce template of being a marketplace.
iTokri online is India’s only crafts and artwork retailer with its own inventory of handmade artisanal products ranging from Punjab’s phulkari dupattas and Gujarat’s bandhani sarees to Andhra’s ikkat handloom fabrics and Odisha’s pattachitra paintings. It sources products including jewellery, dress materials and household items from nearly 500 artisans and NGOs across India. iTokri founders Jia and Nitin Pamnani believe in taking away the burden of sale from artisans and allowing them to focus on what they are best at – their craft.
The inventory model
“Artisans don’t have the financial strength to hold on to the inventory after production. If we put the onus of holding inventory on the artisan and tell them to dispatch the products as per demand, we cannot succeed. We buy from artisans in bulk, stock goods at our warehouse and courier orders from here,” says Pamnani, a documentary maker who left Delhi in 2010 to start the sustainable business in his home town Gwalior with Jia.
“Some of my friends were in the art and crafts sector. They suggested that an e-commerce platform could work from anywhere in the country. Since the availability of traditional art and craft products was still limited to government emporia and exhibitions those days, I decided to take the plunge,” he says.
Set up with an investment of Rs 50 lakh in 2012, iTokri has now expanded its reach to the nooks and corners of the country both for sourcing as well as sales in the last 8 years.
“Sometimes, artisans have ready products and we procure them. We also design our collection and send it for production, like we make our own prints for textiles and those are exclusive to us. You won’t find them anywhere else,” says Pamnani, adding that some factories make products only for iTokri.
Unlike other retailers, who follow the marketplace model and charge sellers or artisans a commission for using their platform, the inventory model is more capital intensive. “The working capital requirement in an inventory model is high as the retailer holds the inventory. Moreover, overheads like warehousing add to costs,” says Devangshu Dutta, Chief Executive at retail consultancy Third Eyesight.
In the case of Pamnani, warehousing is not a big cost as his family already owned one when he started the business.
But Dutta says an inventory model offers some advantages. “The biggest benefit is that you have the complete control over curating a product as well as its production and branding. This helps build a consistent customer experience,” Dutta adds.
Besides, when products are not generic, there are significant margin advantages to retailers. A case in point is itokri masks, the largest variety of which can be found on the online shopping site. From hand-woven handspun Eri silk natural-dyed masks to Lucknowi chikankari and ajrakh print cotton masks, the retailer has them all.
“There is a huge amount of margin play in that. If you are a marketplace, the major margin in such a case will go to the merchant and you will only receive the regular commission for usage of the platform. But if you own the inventory, you can decide the margin and selling price,” Dutta says.
Artisans love iTokri
While Pamnani has bootstrapped the venture so far and is fully in control, he has managed to keep away from increasing his margins to generate higher profits. “iTokri keeps the least margin of all the retailers we work with,” says Jaipur-based Ahmed Badhshah Miyan, award-winning master craftsman of resist tie and dye technique leheriya. He was associated with the Ministry of Textiles for many years, supporting textile traditions, and has won many national and international awards.
Award winning tie and dye craftsman Ahmed Badshah Miyan at his workshop in Jaipur. His son, Shahnawaz Alam, says during the lockdown, iTokri was the only retailer that did not stop payments to artisans.
“iTokri supported us and made payment for all orders as per schedule so that artists are not impacted.”
Alam and his father, who have been associated with Pamnani since 2012, say that iTokri trusts artisans with designs and colours, not forcing them to deviate from the tradition to meet mass requirements. “We don’t repeat the collection sent to iTokri,” says Alam, who supplies leheriya dupattas and sarees to the retailer.
iTokri also provides the name of the craftsman or organisation below every product detailed on its website, giving them due credit.
Hyderabad-based A G Govardhan, Padma Shri master weaver for ikkat, says Pamnani does not try to bring down prices by negotiating rates with craftsmen. “He wants perfect, authentic quality. Unlike others who are now mixing power loom products with handloom, iTokri’s only expectation from us is high quality genuine products. This supports traditional weavers like us,” he says.
t is this exclusivity, moderate pricing and following of the traditional craft processes that has helped iTokri gain a customer base of over 3 lakh across India and overseas.
Nearly 20 percent of these are from the UK, US and Canada and almost one lakh are regular buyers.
Despite its rapid growth, iTokri has not roped in any other investor so far. “We don’t want to go for funding as we are not yet ready for it,” Pamnani says.
It was love for sustainability that brought Pamnani to Gwalior in 2010. And it also helped him keep the business going even when the country was under total lockdown from March 25 till mid-May. During this period too, iTokri’s 8 am e-mailers announcing the collection of the day did not stop.
“There was enough in our warehouse to keep sharing with our customers. And we resumed operations in the first week of May itself after getting clearance from local administration,” says Pamnani.
The advantage: Gwalior, being away from the hustle bustle and without the population density of a metro, has reported only 150 cases of COVID-19 so far and most of them have recovered. “If we have to understand small businesses and work with them, we have to understand sustainability. And that comes from de-centralisation, not necessarily being in big towns,” says Pamnani.
At a time when most businesses are still struggling to resume operations in the COVID-19 world, iTokri’s toli (as its team is referred to) is busy writing lovely notes for putting in their customers’ orders.
And that’s the beauty of being a sustainable enterprise — it can sustain even during a crisis like COVID-19.
(Rashmi Pratap is a Mumbai-based journalist specialising in financial, business and socio-economic reporting)
Source: 30stades
Devangshu Dutta
December 5, 2013
(Published in ETRetail.com on 6 December 2013)
Franchising isn’t rocket science, but advanced space programmes offer at least one parallel which we can learn from – the staging of objectives and planning accordingly.
A franchise development programme can be staged like a space launch, each successive stage being designed and defined for a specific function or role, and sequentially building the needed velocity and direction to successfully create a franchise operation. The stages may be equated to Launch, Booster, Orbiter and Landing stages, and cover the following aspects:
Stage 1: Launch
The first and perhaps the most important stage in launching a franchise programme is to check whether the organisation is really ready to create a franchise network. Sure, inept franchisees can cause damage to the brand, but it is important to first look at the responsibilities that a brand has to making the franchise network a success. Too many brands see franchising as a quick-fix for expansion, as a low-cost source for capital and manpower at the expense of franchisee-investors. It is vital for the franchiser to demonstrate that it has a successful and profitable business model, as well as the ability to provide support to a network of multiple operating locations in diverse geographies. For this, it has to have put in place management resources (people with the appropriate skills, business processes, financial and information systems) as well as budgets to provide the support the franchisee needs to succeed. The failure of many franchise concepts, in fact, lies in weakness within the franchiser’s organisation rather than outside.
Stage 2: Booster
Once the organisation and the brand are assessed to be “franchise-ready”, there is still work to be put into two sets of documents: one related to the brand and the second related to the operations processes and systems. A comprehensive marketing reference manual needs to be in place to be able to convey the “pulling” power that the brand will provide to the franchisee, clearly articulate the tangible and intangible aspects that comprise the brand, and also specify the guidelines for usage of brand materials in various marketing environments. The operations manual aims to document standard operating procedures that provide consistency across the franchise network and are aimed at reducing variability in customer experience and performance. It must be noted that both sets of documents must be seen as evolving with growth of the business and with changes in the external environment – the Marketing Manual is likely to be more stable, while the Operations Manual necessary needs to be as dynamic as the internal and external environment.
Stage 3: Orbiter
Now the brand is ready to reach out to potential franchisees. How wide a brand reaches, across how many potential franchisees, with what sort of terms, all depend on the vision of the brand, its business plan and the practices prevalent in the market. However, in all cases, it is essential to adopt a “parent” framework that defines the essential and desirable characteristics that a franchisee should possess, the relationship structure that needs to be consistent across markets (if that is the case), and any commercial terms about which the franchiser wishes to be rigid. This would allow clearer direction and focussed efforts on the part of the franchiser, and filter out proposals that do not fit the franchiser’s requirements. Franchisees can be connected through a variety of means: some will find you through other franchisees, or through your website or other marketing materials; others you might reach out to yourselves through marketing outreach programmes, trade shows, or through business partners. During all of this it is useful, perhaps essential, to create a single point of responsibility at a senior level in the organisation to be able to maintain both consistency and flexibility during the franchise recruitment and negotiation process, through to the stage where a franchisee is signed-on.
Stage 4: Landing
Congratulations – the destination is in sight. The search might have been hard, the negotiations harder still, but you now – officially – have a partner who has agreed to put in their money and their efforts behind launching YOUR brand in THEIR market, and to even pay you for the period that they would be running the business under your name. That’s a big commitment on the franchisee’s part. The commitment with which the franchiser handles this stage is important, because this is where the foundation will be laid for the success – or failure – of the franchisee’s business. Other than a general orientation that you need to start you franchisee off with, the Marketing Manual and the Operational Manual are essential tools during the training process for the franchisee’s team. Depending on the complexity of the business and the infrastructure available with the franchiser, the franchisee’s team may be first trained at the franchiser’s location, followed by pre-launch training at the franchisee’s own location, and that may be augmented by active operational support for a certain period provided by the franchiser’s staff at the franchisee’s site. The duration and the amount of support are best determined by the nature of the business and the relative maturity of both parties in the relationship. For instance, someone picking up a food service franchise without any prior experience in the industry is certainly likely to need more training and support than a franchisee who is already successfully running other food service locations.
Will going through these steps guarantee that the franchise location or the franchise network succeeds? Perhaps not. But at the very least the framework will provide much more direction and clarity to your business, and will improve the chances of its success. And it’s a whole lot better than flapping around unpredictably during the heat of negotiations with high-energy franchisees in high-potential markets.
Devangshu Dutta
February 2, 2008
Creating an entrepreneurial ecosystem is absolutely critical to a healthy and vigorous society and economy.
Creating a “democratic” entrepreneurial ecosystem is even more critical to sustaining that health. A democratic entrepreneurial system is like all other democracies – inclusive and widespread – and vital to improving the baseline quality of life.
As we’ve pointed out elsewhere, retailing is not just a fundamentally entrepreneurial business, it also offers up a platform for the birth and growth of other entrepreneurial businesses.
Obviously, big retailers offer a change for companies to scale up faster, once they meet the performance criteria set by the retailers.
The interesting thing is that small retailers offer an even more interesting growth opportunity since, as their own business grows, they grow their supply partners as well.
Countless companies and brands have been launched on the back of the likes of Wal-Mart, Carrefour, Tesco, Marks & Spencer, and in India retailers such as Pantaloon’s and Spencer’s (and even some of the early modern retailers in India that don’t exist anymore).
In view of this, it is wonderful to see 2-9 February 2008 being celebrated as Entrepreneurship Week (on the National Entrepreneurship Network’s website) and also its powerfully worded pledge.
Devangshu Dutta
April 15, 2006
(This was a Case Study Analysis for The Financial Express on the justification for implementation of ERP in a start-up modern (organised) retail business – 15 April 2006)
Most consumer, product-supply chains have evolved into fairly complex chains for two main reasons. Firstly, despite all the talk about removing intermediaries, there are still many people involved in the entire supply chain at different levels — for no reason but that they do add some value in the steps they are handling. Whether this is breaking of bulk, or handling of disparate products, shipping or storing goods, or providing bridge finance, each intermediary is in the chain because he has a role to play.
Secondly, and more importantly, product diversity has increased tremendously. Whether it is the number of brands available of biscuits, or the number of types of melons, or the package sizes of shampoos, the growing market has created more suppliers, more product segments and more variety for the retailer to handle.
With perishable items, a third factor gets added in: date of production and shelf-life. Clearly, even in a developing market like India which has lax regulation and low compliance, consumers are increasingly aware of perishability of products. And as companies grow in size and profile, their vulnerability to litigation also increases.
The retailer, who is the critical link between the consumer and the rest of the supply chain, must effectively manage not just the diversity and the perishability, but also communicate with and manage with the rest of supply chain. And given the nature of the complexities, Mr Paul’s business would have no choice but to implement an effective IT system that would keep the company’s executives clued into the information on as near-time a basis as feasible. For a company that is planning operations at a certain scale, even the opening of one store without the IT system would create a huge gap to overcome in subsequent growth.
However, the IT system alone cannot guarantee the success or failure, and certainly not the profitability of the venture. Technology may be seen as the easy quick-fix, or as the stick with which to drive process discipline. But to me it is the last link in a chain that begins with ‘People’ and leads to ‘Processes’. Without the right orientation, training and skills, effective processes cannot be created. Without effective processes, the best IT system in the world is, at best, very effectively enabling a bad organisation.
The advantage of an existing branded product is that it is more ready for roll-out than a bespoke (custom-developed) system would be. Not just would it take more time to create a bespoke solution, it would also require the involvement of senior management. Senior management time is a rare commodity in the best of times — in a start-up business, it is even more scarce.
There is also the premise that a branded IT product that has been implemented across other companies will have some amount of best practice built in. With the assumption that poor practices are not also built into the system, it might actually help the management to leap-frog the business learning curve.
On the other hand, Mr Paul may be paying for features and capabilities in the branded IT product that his fledgling business will not use for a long time. Customisation and implementation needs may also push the cost over the limit.
Therefore, the ERP system must be evaluated just like any other business investment or expense.
There must be a clear rationale for it, a very clear set of objectives and deliverables, and a well-structured programme and project plan for implementation. Like any other investment, IT must also be evaluated for returns.