Did all the things a startup shouldn’t do
Did all the things a startup shouldn’t do: Craftsvilla co-founder Manoj Gupta
It’s never easy to lay off people, our first two years were chaotic, we ate through our funds, sold our home and did all the things a startup shouldn’t do,” says Manoj Gupta.
Founded in 2011 by Manoj and Monica Gupta, Craftsvilla.com, an online marketplace for ethnic products is among the few Indian startups to have remained afloat and scaled without raising funds in 2013 and 2014. Offering excessive discounts, seeing no repeat customers, acquiring sellers with fake shops; burning Rs 50 lakhs in cash each month, eventually lead to sacking 70 employees in October 2012, resulting in a change of strategy.
The startup had completely exhausted the Rs 10 crore early-stage and series-A round of funding from Nexus Venture Partners and Lightspeed Ventures, which was followed by the couple selling their home and cutting down their employees to a 10-member team. "We were giving double the amount in terms of salaries to employees, we cut down to one person for finance, one for tech and so on," says Gupta, "Basically retained the barest possible skeletal structure which we could survive on." The focus changed from managing people and giving away consumer discounts to gaining strong seller acquisitions, using technology to automate systems for selling and customer care, automating inventory updates, tracking numbers in bulk and even charging sellers for marketing.
According to Gupta, focusing on increasing the checks and measures in place for sellers reduced the chance of them creating shortcuts. The startup also focused on optimising SEO in order to bring in more traffic, relying heavily upon social media marketing, specifically through Facebook. "From burning Rs 50 lakhs a month to bringing it down to a few lakhs, we eventually were generating profits of Rs 3 lakh a month in 2013 and 2014, which we either invested in marketing or fixed deposits," added Gupta. According to the startup, their present customer acquisition strategy ensures they do not incur more than Rs 100 for acquiring each consumer. Craftsvilla presently takes a 20% commission on each transaction and has over 25,000 artisans and designers on board.
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Thanks to retail.economictimes.indiatimes.com