SPARK OF THE CORPORATE
The visionary entrepreneur, Kunal Shah, who made it big in the Indian startup space does not fit into the usual parameters or formula for being a successful tech entrepreneur. He doesn't hold a college degree in science or commerce or engineering or management or anything related to entrepreneurship. Neither does he have a Masters from a prestigious B-school. But, his brainchild, a world-class innovative digi-wallet FreeCharge, which was launched in 2010 was acquired by Snapdeal for $400 million in 2015 which to this day is the biggest deal ever in the Indian startup space. Post exit, he keeps pushing ahead with ambitious growth plans.
Instead of taking inspiration from ideas that worked elsewhere, Kunal brought a unique original idea to the Indian market. He set forth to build a company from scratch to solve an inefficiency in the country's consumer space. His degree in philosophy helped him to think and understand people. When he was 20, he promised himself that he will not work for money after the age of 35 and he did keep his promise. At 50, he wants to be a guy who played a big role in the creation of truly digital India.
A philosophy major from Wilson College, Kunal who was looking to learn the practicalities of running a business at B-school dropped out of his MBA in the second semester in Narsee Monjee Institute of Management Studies as he found little of it in the classrooms. He left behind the theorems that were not relevant in all contexts and set out to learn hands-on practical side of business himself. He read 100-150 books on human behaviour and observed people.
When his family went through a crisis, Kunal started working at the age of 15. He picked all the jobs that came his way - mixed tapes, worked as data entry operator, mehendi cone supplier, door to door chemist salesman, ASP programmer and taught computer courses etc parallel to his school/college. He went online when he was 18 and downloaded several video lectures and lessons. He gained knowledge and exchanged ideas with great people he met online.
Hailing from a business family, entrepreneurship was a natural choice for him. However, he came out of the family business approach and took up employment with a few Dotcom startups at the height of the bubble first. Most of them failed miserably and he later joined a start-up BPO called TIS International Inc as a junior programmer in 2000. Sandeep Tandon, an investor in the company, identified the potential of Kunal and promoted him as the business head. Together, they built a 1,000-seater business process outsourcing firm. Though an employee, Kunal was working as an entrepreneur within the company already. At the age of 30, as he got out of the home loan EMI, he decided to give entrepreneurship a shot.
In 2009, Kunal started the first entrepreneurial venture, Paisaback, a B2B venture to run cash-back and promotional discount campaigns for organized retailers. The company teamed up with localised centres of companies like McDonald’s, Barista Coffee, Dominos, Croma to offer cash back to the customers which were referred by Paisaback. As he always wanted to do something in the consumer internet space, he invested the profit from this offline marketing promotions company to an online recharge platform.
Having discovered that 95% of the invoicing of a mobile store was recharges, Kunal came up with an idea to make the talk time “free” by giving away coupons and vouchers for top Indian food joints and retailers along with recharges or bill payments. He stood in malls and talked to more than 2,000 people to know what they thought about his idea. After putting in 500 hours of cumulative research he decided to launch FreeCharge. He worked closely with mobile companies and created a new online model, enabled by couponing. Sandeep provided the initial angel investment and thus, FreeCharge was born in August 2010 with four mobile operators and two coupons on the website. The idea was well received and the response was to a level that website could not handle the volume. Kunal quit his job and leaped into entrepreneurship when it started doing 10,000 transactions a day.
In 2014, FreeCharge grew 1000% and emerged as a leader in mobile commerce. It took the customer online for prepaid, postpaid, DTH, metro recharge and utility bill payments for numerous service providers. Innovating at breakneck pace, the app crossed 10 million downloads and was the fastest growing app in the shopping category in India. The company also acquired Wishberg and Preburn, two emerging technology startups. It raised $120 million in funding, primarily from Sequoia Capital India, besides ru-Net Ventures, Sofina, Valiant Capital and Tybourne Capital.
In 2015, Snapdeal acquired the four-year-old FreeCharge for $400 Million (₹2600 Crore). It was one of the biggest exits India has seen. FreeCharge continued to function as an independent platform and Kunal continued to run the company until May 2016.
Challenges and strategies...
Putting together a robust tech team was a bit challenging for Kunal. Since Kunal is from a non-tech background, he did not have the advantage of bringing in talented classmates from his college, unlike many other start-up entrepreneurs. He observed that most of the talents handpicked after several rounds of interviews back out at the last moment, without joining the company. To bring down the joining drop-out rate and exhibit trust from the very beginning, he did a reverse trust hacking by sending out a MacBook along with the offer letter. To tap the rich availability of talented resources and to strengthen the tech team, FreeCharge moved it's base to Bangalore in 2013.
When he pitched the idea of coupons to retailers and mobile phone operators, many were not open to the idea. Some dismissed the idea as stupid or too good to be true. So he first chased the top three hardest-to-get premium brands and have them sign up first as the rest of the retailers would follow. This strategy also worked in his favour as he successfully partnered with McDonald's even before launching FreeCharge.
After stepping out from FreeCharge, Kunal traveled to understand different startup ecosystems around the world. An active angel investor and startup mentor, he has invested in 20+ startups like Voonik, Flyrobe, ShaadiSaga, Unacademy, TableHero, Razorpay, LifCare, and Zilingo Go-Jek, TinyOwl, Runnr, TVF, PocketAces, Rupeek. He was a part-time partner of Y Combinator for a year. In February 2017, he joined marquee venture capital firm Sequoia Capital India as an advisor.
A keen learner of behavioural economics & science and a hardcore Texas Hold ‘Em poker player, Kunal is married to Bhavna Shah, a freelance graphic designer.
Her two cents for the future women entrepreneurs...
|Be in love with being successful, not in love with your idea. The idea might fail but your love for being successful won’t end.|
|Learning from the failures and be persistent towards your idea|
|Every business idea needs to be unique and should bring value for everyone involved. More than staying rooted to your idea, stay rooted to an idea that works.|
|Ambition alone doesn’t work. Missions do.|
|When you get an idea, don't build the product. If you build it, you have a vested interest. Ask five unknown people and founders what they think of the idea. Get brutally honest answers and opinions.|
Associations and memberships...
|Advisor to the Board of Bennett Coleman and Co. Ltd. (Times Group)|
|Previous Chairman of Internet and Mobile Association of India.|
Awards and accolades...
|Received Comeback Award by Economic Times in 2016|
|Named among 40 under 40 by Times of India in 2016|
|Named among 40 under 40 by Fortune in 2016 and 2015|
|If you are persistent, almost everybody is willing to experiment with your idea. But persistence will take you only this far. However, if you want to progress, you need to show results.|
|Every successful idea need not be a copy-paste model borrowed from the West or East.|
|Most people treat education as a means to increase their income and not to learn - as an insurance policy into which we invest years, at the end of which we get our money back.|
|As decision makers of our respective organisations, it’s only when in self-doubt, we are able to question ourselves before reaching a decision. Simple questions like ‘Am I doing the right thing… making the right move?’ help in reaching a decision that is beneficial for the business.|
|Entrepreneurs often make the mistake of considering businesses akin to spouses. But business doesn’t work that way. Sometimes, acquisitions, mergers, exits, are all a necessity in the interest of a better outcome.|
Hope readers caught up the spark...