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The story of Wakefit: From near bankruptcy and successive failures to building one of Indias hottest new consumer brands | FURNTR
The story of Wakefit: From near bankruptcy and successive failures to building one of Indias hottest new consumer brands

 

The story of Wakefit: From near bankruptcy and successive failures to building one of India’s hottest new consumer brands

 

For most entrepreneurs, the moment they feel success for the first time boils down to a few common events - a funding round, a revenue milestone, their app or service going viral. For Chaitanya Ramalingegowda, when he was able to comfortably pay two people’s salaries, he felt successful.

That sounds rather unambitious, considering he employs over 600 people today. But if you were coming off successive startup failures, and were nearly broke, you wouldn’t be reaching for the stars either.

That was in 2014. Today, Wakefit, his mattress and sleep solutions startup had Rs 200 crore in revenue in FY20, was profitable, and has not even used half the $10 million it raised from Sequoia Capital in 2018.

But you can see traces of his past in his current venture. That Wakefit is profitable - a word rarely associated with VC-backed startups - is because its co-founder has been on the brink of disaster, and has lived to see another day.

Let's go back further. Armed with an MBA from the Indian School of Business - one of India’s top business schools, Chaitanya did what many do.

He made money working at consultancy firms including Deloitte and Cognizant. In 2011, he left all that and started up - with a dating-related app, enabling people to meet up and enjoy common activities such as wine tasting, pottery and dance classes. It sounds a lot more nuanced than the blockbuster swiping to accept/reject technique that Tinder employs, but it did not work.

For a high-flying MBA, used to strutting around giving opinions to multinational firms, life changed fast. “To start up, I had to unlearn everything. As a consultant, having a viewpoint on everything was my job. Here I am supposed to have no biases, no viewpoints, and the customer has to tell me what’s working and what’s not,” Chaitanya says.

Online dating and interactions were new, online payments were almost unheard of, and the bit of luck every founder needs was absent too.

So he shut down Flutterby Services, but towards the end of 2012, started up again. An online community of women - again in the space of human relationships, but not quite dating.

This one showed a bit more traction, it even raised angel funding. But soon, they were only surviving by pivoting - working only to make the next payroll, working through nights, working without the larger objective that successful startups have - of a crucial product or service.

In both cases, not only did his startups fail, it failed fast. In a year each, he knew it was going nowhere, and the thrills of entrepreneurship were giving way to the chills of a depressing bank account.

One Sunday night, he went to withdraw Rs 3,000 from his bank account and realised that this has to last him a week, because he had no other money. All his savings were invested in his startups, and he was even paying rent only by doing part time consulting again - on nate days and often nights. He was approaching burnout.

“Till then I had never seen failure. I was an engineer and have a fancy MBA degree, and now neither me, nor my company has any money. As an entrepreneur you are backing yourself, but for how long?,” he wondered.

He was still unwilling to admit failure, even when it was staring him right in the face, he realises later. The self doubt crept in, and especially for an entrepreneur, self doubt can be crippling given that a founder’s biggest investment is himself and his often wild but necessary amounts of self belief.

Despite this, till the inevitable shutdown, the startup’s 10 employees were paid on time right till the end. But that came at a personal cost. Chaitanya shut down the office, moved the office to his house, where his own room was locked during the day, so the hall could serve as their office.

In 2014, he did eventually shut it down, even as he himself was close to shutting down as a person. “Entrepreneurship is the one of the few fields that doesn’t guarantee success even if you work your hardest. There is so much out of your control. Those failures took a big toll,” he says.

This is where he was on the edge. He had no savings, fresh out of ideas, inspiration and burnt out.

Chaitanya then joined Sequoia-funded Helpchat (now Tapzo, which got acquired by Amazon), an aggregator of apps which wanted to be a one-stop-shop for payments, cab booking, shopping and more. He quit his role as VP of Operations in less than a year, because he had already found what we wanted, albeit somewhat unplanned.

At Helpchat, he met Ankit Garg, who wasn’t using that skill at the time, but was an expert in the mattress industry, and the foams and materials which make your bed inviting for a nap.

In late 2015 they launched Wakefit, an online retailer of mattresses. A direct-to-consumer D2C brand, before D2C became the buzzword to land a term sheet from an investor, and a micro-sector with dozens of startups today.

By most accounts, and definitely compared to his previous startups, Wakefit has succeeded. Despite the pandemic hitting business hard, it has bounced back. While it had Rs 25 crore of revenue in August 2019, it had Rs 50 crore of revenue this August (pre-GST, Chaitanya cautiously adds).

It is also expanding beyond mattresses, to become a furniture brand and retailer. Furniture is about 15% of Wakefit’s revenue today, but expected to be much more because India’s furniture market is 15 times larger than mattresses, he says. According to a report from RedSeer Consulting, the India’s mattress market is expected to be worth $2.5 billion by 2022.

According to sources, Wakefit is also closing in on a $30 million funding round valuing it at $300 million, a 10x jump in valuation in two years.

So after being bogged down by failure, does eventual success feel like a million bucks?

“I just felt overwhelmed and grateful that it is working out,” he says, without confirming talks of a deal.

But he’s still no  exactly happy. Across our calls, a slight annoyance, discomfort and restlessness can be felt. That is because during this pandemic, customer reviews have butchered Wakefit.

One Pankaj Batra, who is unable to return his mattress fast enough, says he will post a video on YouTube burning the mattress. Deliveries are also taking longer than promised, and irate customers flood the startup’s Twitter handle with complaints, rants and garden variety threats.

Except the Wakefit Twitter account, which like many startups, responds to customer queries and complaints quickly enough, Chaitanya himself also wades into the muddy water, constantly and patiently apologising, promising better service, fast-tracking refunds and trying to ensure the brand isn’t ripped apart on social media.

“The customer feedback these days is pretty bad and this is totally against our DNA. Customers are brutal and if they have one bad experience, they will never come back to you,”

Wakefit is now bracing for a bumper Diwali, and stockpiling mattresses big time, to make sure that in the top 8 cities, it can fulfill every order in two days.

There is still a sense of equanimity in all Chaitanya says and does. His response to each angry customer is calm and measured, and no matter how good business is, or how bad anything else is, there is a little detachment.

“I don’t get attached very easily. I tend to be dispassionate and look at facts. A lot of people say I am unexpressive and emotionless,” he admits.

This also goes back to his past. Being on the brink of bankruptcy and failing repeatedly chip away at your emotions just a little. But it also ensured that neither does Chaitanya get carried away by months of solid revenue growth during a pandemic, nor do the reviews get under his skin.

“Once you have been through that (his earlier startups), nothing scares you anymore,” he says.

But don’t mistake equanimity for indifference, because he has big dreams for Wakefit. He wants to have a revenue of Rs 1000 crore in two years with happy customers, continue being profitable and wants his employees to live the dream. “I want it to be a dream job for every employee, and not just your ‘job’, even when we are a billion dollar company. The customer experience has to be paramount. We can’t ever be a generic company, no matter how big, where our customers don’t love us,” he says.

But what if Wakefit also hadn’t worked out? Not just in terms of surviving, but also showing hypergrowth- the minimum expected from internet startups. What would he have then?

“I would have fought and clawed my way back to a corporate leadership position somewhere. I would never be happy being an unknown face anywhere. My name should be known for something,” he says. If investors, competitors, analysts and other founders are to be believed, Chaitanya’s name definitely stands for something in the startup and consumer brand ecosystem.

 

 

https://www.moneycontrol.com/news/business/startup/the-story-of-wakefit-from-near-bankruptcy-and-successive-failures-to-building-one-of-indias-hottest-new-consumer-brands-5874661.html

News Author : Çetin KAYA

430 viewed times. / 30-09-2020 added.

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