21 Year Old Unicorn Founder Reveals Quick Commerce Business Secrets

Nikhil Kamath Clips
22 Sept 202319:19

Summary

TLDRThe video script narrates the entrepreneurial journey of two friends who started their venture during the pandemic. Initially delivering groceries via WhatsApp in Bombay, they pivoted to a dark store model after realizing the limitations of their initial approach. With a focus on operational excellence, they rapidly scaled their business, securing significant funding rounds and achieving impressive sales figures. The story highlights their challenges, learnings, and the innovative strategies that contributed to their success in the competitive grocery market.

Takeaways

  • 🌏 The interviewee was born in Bombay, moved to Dubai at age five, and later returned to India, noting a significant change in the country over time.
  • 🏫 They and their friend KV both had a knack for building projects and started programming at a young age, which eventually led to their entrepreneurial journey.
  • 🤝 The pair bonded over their shared interest in building things and KV's technical expertise, which played a significant role in their early projects.
  • 💡 The idea to build a career out of their hobby came around when they were 14 or 15, inspired by Y Combinator's Startup School and Silicon Valley's entrepreneurial spirit.
  • 🎓 They planned to attend Stanford University as a stepping stone to Silicon Valley, but the pandemic disrupted their plans, leading them to take a gap year.
  • 🛒 During the pandemic, they started a grocery delivery service in Bombay to help their elderly neighbors, which eventually grew into a larger operation.
  • 📈 They recognized the need for better control over the customer experience, which led to the concept of 'dark stores' – small, efficient warehouses for faster delivery.
  • 💼 They secured initial funding from Contrary Capital's fellowship, which provided them with capital to pursue their entrepreneurial venture.
  • 🚀 The business took off, growing rapidly with the implementation of the dark store model, leading to significant sales and further funding rounds.
  • 💰 They raised substantial capital, including a Series A and B, and a CDC round led by Y Combinator's growth fund, valuing their company highly despite their young age.
  • 🛑 The interviewee emphasizes the importance of operating excellence and discipline in the tough grocery business, highlighting their focus on efficiency and customer satisfaction.

Q & A

  • Where was the interviewee born and at what age did they move to Dubai?

    -The interviewee was born in Bombay and moved to Dubai when they were about five years old.

  • What was the interviewee's experience like growing up in Dubai?

    -The interviewee described their experience in Dubai as fun but sheltered, noting the absence of crime and describing it as being in a bubble.

  • How did the interviewee and their friend bond and work together on projects?

    -The interviewee and their friend bonded over their shared interest in building projects. The friend was more technical, while the interviewee focused on the talking and presentation aspects.

  • What was the turning point that led the interviewee and their friend to consider building a career out of their hobby?

    -The turning point was in 2017 when they started getting exposed to Y Combinator's Startup School, an online course that inspired them to consider building a career out of their hobby.

  • Why did the interviewee and their friend decide to apply to Stanford University?

    -They decided to apply to Stanford as a way to get to Silicon Valley, believing that attending college there would be a good excuse to be in the area and learn from the community of builders.

  • How did the pandemic affect the interviewee's plans to attend college?

    -The pandemic hit in March 2020, and the interviewee and their friend were unable to go to college as planned. They decided to take a gap year instead.

  • What was the first business idea the interviewee and their friend pursued during their gap year?

    -Their first business idea was a delivery service for local stores in Bombay, which they initially managed through a WhatsApp group chat for their neighbors.

  • What is a 'dark store' and how did the interviewee's business evolve to include them?

    -A 'dark store' is a small, tucked-away warehouse designed for efficient picking and packing of orders, rather than customer browsing. The interviewee's business evolved to include dark stores to improve delivery speed and quality, and to have better control over the customer experience.

  • How did the interviewee and their friend secure their initial funding for the dark store model?

    -They secured initial funding through Contrary Capital's fellowship program, which provided them with 50,000 USD to work on their business idea during their gap year.

  • What was the impact of the interviewee's business on their local community during the early stages?

    -In the early stages, their business provided a convenient delivery service for neighbors, especially the elderly, who were unable to leave their homes easily during the pandemic.

  • How did the interviewee's business scale up after the initial success with the dark store model?

    -After the initial success, the business scaled up rapidly, with the interviewee raising significant funds from investors like Nexus, which led to aggressive growth and expansion of the dark store model.

  • What are the main sources of revenue for the interviewee's business currently?

    -The main sources of revenue are sales from grocery items, advertising income from brands, and a small portion from delivery fees.

  • How does the interviewee's business model compare to traditional grocery stores and other online platforms?

    -The business model focuses on high throughput per square foot and low fixed costs, making it more efficient than traditional stores. It also offers free delivery above a certain amount and lower prices than most other formats, including online platforms.

  • What is the current state of the interviewee's business in terms of funding and growth?

    -The business has raised over 500 million dollars and is experiencing rapid growth, with the founders still maintaining significant equity in the company.

Outlines

00:00

🌏 Childhood and Early Entrepreneurship

The speaker recounts his childhood in Bombay and Dubai, highlighting the sheltered yet enjoyable experience in Dubai. He discusses the lack of crime and the bubble-like environment, which has since changed. He never envisioned spending his life in India, but after returning, he found a new perspective. The speaker and his friend KV bonded over building projects and programming, which they pursued as a hobby. They were exposed to startup culture and entrepreneurship through Y Combinator's Startup School, leading them to consider building a career out of their passion. Their journey began with a move to Stanford, which was interrupted by the pandemic, prompting them to take a gap year and explore entrepreneurial opportunities in Bombay.

05:01

🛍️ Transition to Dark Stores and Scaling Business

The speaker describes the evolution of their business from a WhatsApp-based grocery delivery service to the establishment of dark stores, which are micro-warehouses tucked away in alleys, operated by pickers and packers instead of customers. They realized the need to control the customer experience end-to-end and began experimenting with dark stores to improve delivery speed and quality. The business received early investment from Contrary Capital, which allowed them to scale. They faced the classic 'chicken and egg' problem of supply and demand in marketplace businesses but focused on solving the supply side first by convincing local stores to join their platform. This hands-on approach provided valuable insights into customer needs and preferences.

10:03

🚀 Rapid Growth and Fundraising

After pivoting to the dark store model and experiencing rapid growth, the company attracted the attention of Y Combinator, which provided a significant investment. The founders focused on improving delivery speed, realizing that faster delivery times led to a positive feedback loop of increased throughput and lower costs per delivery. They managed to reduce delivery times from 45-60 minutes to a much faster rate. The business's momentum led to a series of successful fundraising rounds, including a Series A and a Series B, which fueled exponential growth. The founders emphasize the importance of operating excellence and discipline in the tough grocery business, aiming to build a massive enterprise.

15:06

💰 Business Model and Market Positioning

The speaker discusses the company's financial performance, noting a significant increase in sales from the launch of their first dark store. They explain their business model, which includes revenue from sales, advertising income, and delivery fees. The company operates on a low fixed cost base due to high throughput in their stores and has optimized variable costs, particularly last-mile delivery costs. They position themselves as a high-emerge business with a competitive advantage in delivery speed and cost. The founders also touch on the potential of the grocery market in India, which they see as a majority of consumption and a significant opportunity for growth.

Mindmap

Keywords

💡Dubai

Dubai is a city in the United Arab Emirates known for its luxury shopping, ultramodern architecture, and vibrant nightlife scene. In the video, it is mentioned as the place where the speaker moved to when they were about five years old, indicating a significant life transition that shaped their early experiences.

💡Programming

Programming refers to the process of writing, testing, debugging, and maintaining the source code of computer programs. The speaker mentions starting programming at the age of 10 or 11, which is a key aspect of their educational and professional development, leading to a career in technology.

💡Y Combinator

Y Combinator is a well-known startup accelerator that provides seed money, advice, and connections to help startups succeed. The video discusses how the speakers were influenced by Y Combinator's online course and startup school, which played a role in shaping their entrepreneurial journey.

💡Silicon Valley

Silicon Valley is a region in Northern California known for its high-tech innovation and venture capital. The term is used in the script to describe the ultimate destination the speakers aimed for to immerse themselves in a community of builders and entrepreneurs.

💡Dark Stores

Dark stores are small, local warehouses used for storing goods to fulfill online orders quickly. The concept is central to the video as it represents a pivot in the speakers' business model, which eventually led to significant growth and success.

💡Pandemic

The term 'pandemic' refers to an outbreak of a disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population. In the script, the pandemic is mentioned as a catalyst for change, affecting the speakers' college plans and business operations.

💡Kirana Stores

Kirana stores are small family-owned shops or stores common in India, stocking daily use items. The video describes the process of convincing these stores to join their platform, which was a critical step in building their supply chain.

💡Series A Funding

Series A funding refers to the first significant round of venture capital financing after seed funding. In the script, the speakers mention securing Series A funding as a turning point that allowed them to scale their business rapidly.

💡Product-Market Fit

Product-market fit is a term used to describe a situation where a product is well-received in its market. The speakers discuss achieving product-market fit as a critical milestone in their business, which validated their approach and attracted further investment.

💡Grocery Delivery

Grocery delivery is a service that brings groceries from stores directly to consumers. The video's main theme revolves around the challenges and innovations in the grocery delivery business, particularly in the context of the pandemic and the speakers' entrepreneurial journey.

💡Marketplace Model

A marketplace model is a business approach where a platform connects buyers and sellers, facilitating transactions without holding inventory. The speakers initially attempted this model but found it lacking, leading to the pivot to the dark store model.

Highlights

The speaker discusses their upbringing in Bombay and Dubai, highlighting the sheltered yet fun environment of Dubai.

They share their early interest in programming, starting at the age of 10 or 11, and how it led to various projects during their childhood.

The bond between the speakers was formed through a shared interest in building and creating, with one being more technical and the other focusing on communication.

The decision to apply to Stanford was influenced by the desire to be in Silicon Valley, aiming to immerse themselves in the tech community.

The impact of the 2020 pandemic led to a shift in plans, with the speakers taking a gap year and exploring entrepreneurial opportunities.

The idea of starting a business during the pandemic began with helping neighbors by delivering groceries through a WhatsApp group.

The transition from informal grocery delivery to building an app, named Kerala Cart, to scale the operation.

The realization of the need to control the customer experience end-to-end led to the concept of dark stores.

A detailed explanation of what dark stores are, including their size and operational differences from traditional supermarkets.

The journey of securing initial funding from Contrary Capital, which provided a significant boost to their startup.

The strategy of solving the supply side first by personally visiting and convincing local stores to join their platform.

The importance of operating excellence and discipline in the grocery business, and the challenges of achieving product-market fit.

The growth of their business from zero to significant sales within 24 months, demonstrating rapid scaling and customer adoption.

Fundraising efforts, including a series A and series B, showcasing the company's ability to attract substantial investment.

The speakers' reflections on their experience at the age of 20-21, raising over 500 million dollars and their perspective on the journey ahead.

A discussion on the company's revenue streams, including sales, advertising income, and delivery fees, and their strategy for maintaining low costs.

The comparison between their business model and other formats like DMart and the ambition to compete in the grocery market.

The perspective on the grocery sector's significance within the overall consumption and retail landscape in India.

Transcripts

play00:00

so I was born in Bombay and then when I

play00:03

was about five moved to Dubai and we

play00:05

ended up in the same class in like the

play00:06

third grade

play00:08

um the buy was fun uh a little bit

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sheltered but fun

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why shelter there's no crime there's

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like a bit of a bubble uh so it's

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changed now no

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not really no not really now in fact

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like so growing up I never thought that

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I'd be like spending the rest of my life

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in India but now when I go back to the

play00:28

bike because India appears so bad I'm

play00:31

gonna be a little bit harsher to you

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guys no that's fine so it's just that I

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get the pasta

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we went to the typical path most people

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ended up going to either

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the UK us or Canada for University

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and so that was just like the set paths

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right and so uh so yeah we went to

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school together uh I started programming

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when I was like 10 or 11 and so we would

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work on a bunch of projects growing up

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do you live next to each other no for a

play00:57

bit for a bit Yeah by Dubai yeah yeah so

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we so basically I mean the two of us

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we

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I say both of us had a bit of an act for

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building

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um

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that's how we bonded as well KV is

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always a lot more Technical and smarter

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than I was so he built out the actual

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interesting stuff I just did the talking

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um and yeah but we used to work on

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things together by the time 2017 we said

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okay like how do we make a career out of

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this hobby like how do we build

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for a living and that's when I guess

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when you were 14 15 we started getting

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exposed to

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you know why combinators startup school

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if you guys have heard of that it's like

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uh no this was like a online course that

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they had yeah so I mean basically

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towards the end of school we said how do

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we build a career out of building and we

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figured that you know from the Y

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combinator YouTube videos and like the

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the sessions that we used to see online

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we realized that this is community

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people at Silicon Valley that basically

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build for a living right

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um we said how do we what's the best

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excuse to get there what's the best use

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for two Indian kids in Dubai to get

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there probably go to college there and

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so two of us applied forget Stanford

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would be a good good excuse to go there

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lucky enough to get in

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um and so yeah that was supposed to be

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the beginning of the journey you got in

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together

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yeah I mean he got an early I didn't get

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in early I got into the regular decision

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cycle so that's still so we're supposed

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to start in September of 2020 right and

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did you go to college

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no no no we've activated I mean we so we

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were supposed to go so March 2020

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pandemic hits

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um who was supposed to go couldn't go

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and we said okay we can start our our

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college education online uh but we had

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like four Precious Years in like Silicon

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Valley so we said you know if you're

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gonna be waste a year or sitting on our

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on our laptops in Dubai or Mumbai it's

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not really worth it and so we decided to

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take a year off and you know we didn't

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really have anything planned for that

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year like a lot of our a lot of our

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friends had internships at Goldman or JP

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Morgan

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um but we were we just said let's take a

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year off figure out you know figure out

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what we can do

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and yeah that's when we started

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experimenting what is the first

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experiment I mean we so we so we came to

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Bombay uh firstly like when the pandemic

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had came to Bombay multiple reasons why

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family was here

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um so we were staying in kv's house in

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uh in Andheri East and so yeah that's

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basically where we were so we were

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Within Reach of our family in Bombay but

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we were staying alone and we took a year

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off March April 2020

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knock down your local you know like a

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local Mom and Pop Shop was disrupted the

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online guys were taking seven eight days

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to deliver it was a pain and most of our

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neighbors were elderly

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and so we

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we're on a WhatsApp group chat and we

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just we used to deliver for them because

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we had nothing else to do uh so and you

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would charge a fee for this initially we

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did that WhatsApp group grew uh

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eventually you start hitting that limit

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uh 256. yeah 256 KV remembers but uh but

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yeah each person could see what their

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neighbor was ordering yeah it was not

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very good idea so my place was in this

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like it's called Shady Punjab Colony it

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was just a bunch of punjabis in like I

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don't know 50 years ago 40 years ago or

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something and so it's just uh I don't

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know maybe 100 200 houses there so it's

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just the people within that and like two

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or three stores nearby that we would

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pick up in yeah stuff off and so that

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was that and when it got to a certain

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point we said let's build an app out of

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it

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so we can scale this and so we built out

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the first generation it was called

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Kerala card anyway I was basically a

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pickup in drop service and that's what

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that's how we we ended up building out

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and started scaling over the course of

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like a couple of months uh and that's

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pretty much all we would do we were like

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the customer support Executives we were

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the delivery partner the delivery

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drivers we were the guys that you know

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packed the orders for the store and we

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should do that for like 60 70 of the

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time we've got some crazy stories save

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that people probably with the podcast

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um but that was that was the journey and

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like as we were going through that we

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interact with customers so much it

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became clear to us that

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if you really wanted to make something

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meaningful and scale this we would have

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to

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I mean we would have to just control the

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customer experience end to end and so

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that's when we started experimenting

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with dark stores what is the tax do yeah

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so you can think about you know it's a

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Dark Souls like a micro Warehouse or uh

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you can think of it like a supermarket

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right in the sense that you've got these

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aisles but unlike a supermarket it's

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tucked away in a back alley somewhere so

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not in a front-facing Road and instead

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of having customers moving around those

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aisles you've got Pickers and Packers

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that are zipping around you know packing

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those how big is a typical dark stone

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it's about three and a half thousand

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square foot I mean we say three thousand

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three thousand yeah

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so we started experimenting with that

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right leaks I mean not only did it help

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us deliver faster short numbers

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meaningfully better quality was

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meaningfully better speed was in and or

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at least have like a better handle on on

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pricing than we initially done so how

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did you go from delivering Groceries on

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WhatsApp yeah did you guys start a

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company where did the money to start a

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dark store come from yeah I know sure so

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and when we started getting like very

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early traction we applied to this and we

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actually met met with uh who's the first

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investor in the company we applied to

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this thing called um

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a country capital of the fellowship and

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it was a crazy idea for two kids sitting

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in Bombay they basically said we'll give

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you 40 lakhs for free and like no

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questions on us just take 40 lakhs if

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you're building something interesting

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because basically so in covert a whole

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bunch of people were taking Gap years

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yeah start up or whatever and so these

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guys had to pick five teams that are

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working on something that have taken

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time off of school so at that point

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we're like a student focused PC fund

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which I said we'll give fifty thousand

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dollars to five teams that are working

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on something in a gap year is this still

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open can people apply I know the

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fellowship is open but the fund is there

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the fund is there what is it called

play06:38

contrary Capital yeah okay and right

play06:40

well so the guy that had invested he was

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in India last weekend for the first time

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yeah so that first time meeting him in

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person since he put in that does he

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still have Equity yeah

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so he gave us basically 50k USD at a two

play06:54

and a half million valuation because you

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were like wow that's a bit like you were

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just like that's crazy like that's

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that's that we thought we were just like

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putting a fast one of these guys

play07:03

yeah I mean it was like we were like two

play07:05

kids sitting in a living room on a

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WhatsApp group chat and someone's like

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okay this is two and a half million

play07:11

dollars and I was like great and what

play07:12

did you do with the 40 lakhs so we

play07:14

started and I think like the initially

play07:16

really we didn't have much of a plan it

play07:18

was just like like our day-to-day was

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basically like 50k like in in the early

play07:21

days when you get like a pre-seed a cap

play07:24

and I'm sure you know this right most of

play07:25

it is just to like live so we barely

play07:27

spent it how did it start skating you

play07:29

had a WhatsApp group share a Punjab

play07:33

it was pretty fun so I think this

play07:36

investment happened in like August or

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September 2020 yeah and October November

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December so typically with Marketplace

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businesses

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um you have a chicken egg problem right

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for example a food delivery business

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either you have restaurants without

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restaurants it's hard to get customers

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and without customers is how to get

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restaurants so it's like a chicken egg

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problem and so we're like we have that

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same thing and so we were like okay fine

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which side do we solve first we said

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let's solve the supply side and so every

play08:01

day for those three months yeah we just

play08:03

go to a different neighborhood in Bombay

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like one day would be parale or borivali

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or colaba if you just walk into as many

play08:09

of these kirana stores yeah and try to

play08:11

convince them to join as a seller over

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those three months we went to every

play08:15

single neighborhood you'd walk into

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stores all day like morning to evening

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and just do that

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um

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so neither of us had any sort of

play08:23

background in sales but like trying to

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sell software to like a banaya is

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probably the best crash course in CS

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that anyone is unbelievable because 10

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out of 10 of them like I don't know if I

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basically yeah

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also forgiveness and two of them will

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say okay fine I'll download your app and

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by the time you walk out one of those

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two is deleted yeah right and so and

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they would give us feedback though on

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like what they need to improve would

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their margins go down versus selling

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inside um yeah slightly like two three

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percent yeah but who do you charge I

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mean at that point

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we just want to cover the payment gate

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we were trying to figure out like the

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different types of product market like

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Commerce in retail right so one the

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first core product Market fit for any

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business is customer product Market fit

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and then you get the economics product

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market so we were just solving for

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number one in 2020 how much did you sell

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we hadn't launched the customer side yet

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yeah like

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with the app basically okay 2021 how

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much do you sell so buy within 30 days

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of launching 30 to 40 days we got to

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about 300 orders a day

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average order value yeah WTF is aov but

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uh but yeah so very low average order

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value but we was we were seeing product

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Market fit and we talked to customers

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because we would be the ones doing the

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deliveries we had set up like our own

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mini Customer Support Center in kv's

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house and his mom was not very happy

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about that 40 likes run out okay in this

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process uh raise 40 lakhs and then we

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kept like raising like 20 lakhs

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follow-up from like a couple other other

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Angel Investors in countries Network and

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then when we got to like a certain scale

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got to a certain level where it started

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looking like you're gaining momentum we

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got uh approached by y combinator so

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this would have been late 2020. uh and

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they would have been half a million or

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something yeah it was five it was it was

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125k it was 125k how does one apply to Y

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combinator they have a form so they run

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two batches every year January to March

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and then July to September you have a

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bunch of questions to fill them in and

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apply yeah so and you meet them in

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person in a non-covered but uh sometimes

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yeah so I think the interviews are

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virtual now so they have like a 10

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minute interview yeah

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like before covert they used to come

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down the back door and do it uh but they

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also do it virtually okay so 125k then

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so we launched zero order sprinted Feb

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is when we launched okay sorry mid Feb

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yeah around that time Jan Feb so we

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launched within 45 days we got it like

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about 300 orders per day but when we

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were doing it we realized you would

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speak to customers right and they would

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tell us upfront hey we're using the app

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there's a lockdown we don't really want

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to go out but we don't really like the

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app it's not that good right uh once

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this is locked out is over it's going to

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go back to like buying offline

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and we said so we don't need to

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have product Market Fair like we had

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induced product Market fit because of

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like the weird circumstances and so

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that's when we started talking to them

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and like like that's pretty much what we

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spent like a good week on just talking

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to people

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and we realized that okay our speed

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sucked so that was one and you allowed

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me to take back then 60 minutes 45 to 60

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Minutes that sucked it sucked because

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you know you've got the local I mean you

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can just go downstairs and pick up pick

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it up in 5-10 minutes otherwise right

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what is the difference in cost between

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delivering in two hours in 20 minutes

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we're giving all the Trade Secrets like

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us but we've got the the

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the lower your distance per delivery you

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actually get into this positive flywheel

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where you're delivering faster and the

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lower your distance whatever you

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actually do more throughput per delivery

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partner like what KB said so with the

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same like if I'm paying somebody to give

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you a sense right what is your last mile

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cost per order it's how much you paying

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a delivery driver per hour divided by

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how many orders are you doing per hour

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what is that typically

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like varies by city but let's say 75

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rupees per hour varies by City varies by

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vehicle type yeah petroleum buy could be

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75 other people yeah yeah other formats

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would be would be different but yeah so

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75 rupees per hour and if he does one

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order but audio course February delivery

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75 but if he's doing two orders per hour

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why doesn't everybody else do this

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deliver fast

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I mean people are all right people are

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living faster you saw the Amazon memo uh

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globally right they're all pushing

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foreign

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we see this meaningfully in the

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retention difference okay so 2021 end

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2022 Financial year how much did

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ready fy21 yeah nothing like probably a

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couple Lacks 22. July 21 we actually

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started like the first dark store and

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started running the business just to

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give some context end of March 45 days

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into mid Feb to end of March basically

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decided that okay this Marketplace model

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not working and we said we'll pivot to

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the Darkstar model spend a couple of

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months then hiding a bit of a team

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figuring it out and then July 21 is when

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we launched the first tax

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and yeah from July 21 to

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today like about 24 months

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went from order zero to to like today

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north of 5 000 crore in sales

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um so crazy that was crazy that's like

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that's uh that is when did money come in

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for the first time like serious

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fundraise yeah so Nexus

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um they essentially did our series a and

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they were so this was actually like we

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so they approached us

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and we told them hey they said okay this

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business is interesting what are you

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doing kirana card 300 per day pretty

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quickly maybe you can scale we actually

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the first meeting we told them we're

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going to shut this down this doesn't

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work like we're talking to customers and

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they're just telling us this doesn't

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work right uh so we're shutting it down

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and that was the first meeting like they

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said we're interested in finding even we

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started shutting this business down so

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like don't forget us

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um and then we started and then said

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okay we're shutting it down what are you

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gonna do and we told them that we think

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this model has got better part of Market

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fit and so when you walk them through

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the thesis we actually showed them the

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customer data they were like okay this

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is exciting and that's when they funded

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us so they put in

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that was a 10 million series here that

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they that was that this was right before

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July 2021 but then it went pretty crazy

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so July 21.

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the first stocks to be launched in

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bandra went crazy and we started growing

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and these were good times we started

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growing 100 a week it was like crazy how

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did you match for that skill you need

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physical people to deliver right yeah

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yeah so or did you have idle drivers who

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were delivering one order an hour and

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they generally yeah

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initially when we launch a dark store

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but yeah so we're going 150 a week we

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raised like this 10 million dollar

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series a within 45 days of that again

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without exact like it was crazy but

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within 45 days of that we closed a 50

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million dollar series B and then the

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business started really going crazy this

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is post-covered craziness post covert

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craziness right like 150 a week 200 a

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week we were like multiplying the

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business every week it was it was like

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it was on like we were barely sleeping

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like three four hours a day without

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exaggeration and then yeah like 70 days

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into that

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videos like the 100 million dollar CDC

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and then yeah CDC it was December 21 it

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was led by y combinators growth fund and

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how many have you done now

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we just started our fifth round

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how much have you raised totally 5 30.

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how does it feel to be 20 years old and

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get 500 million dollars 21 and eight

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days

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obvious question right people must ask

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you this a lot

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I mean it's like it doesn't it doesn't

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feel like much you've got a lot more to

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do a long way to go so I know you have a

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lot to do but how does 500 million

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dollars feel no I mean really I mean how

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much is left the last round I'm sure is

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left

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do you guys still have relevant

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significant enough equity on the cap

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table yeah I mean so the two of us own

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about 25 total and on your say unit

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economics say 75 rupees per hour driving

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costs at some point of Time how much are

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you passing on to your client today and

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how much are you charging the Dark Souls

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that we we work with

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they do multiple times more throughput

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per square foot than any other format of

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Commerce in the country offline and

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online so rent is a percentage of sales

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for us is nothing it's one one and a

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half percent so the fixed cost base is

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so low because of how much throughput

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that we've been able to do within the

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same store because of how like how much

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customer demand we see in the way that

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we've designed the stores so throughput

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is crazy fixed cost is very low and then

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on the variable cost side which is the

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last mile called solid per order costs

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that's something that we optimize but we

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basically like we've gotten it to a

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pretty good level right now you

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basically make you know margins from the

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sale and we make advertising income so

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like a Unilever Procter Gamble will will

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you know advertise on the platform we

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make a meaningful amount of advertising

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income uh this is 100 margin business

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because I was talking to me show and

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they said delivery income is a big

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portion of the revenue yeah yeah so if

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you had to break up your Revenue into

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four quadrants yeah can you break that

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up it's three I mean it's like sales

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um advertising income and delivery fees

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inventory sales is like what most of it

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is and then add income and delivery fees

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is like between one and three percent

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response yeah delivery fee is very small

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so we do free delivery above 199 rupees

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right so we don't really rely too much

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until devices that's also because like a

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market-based business I mean shows like

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a zero commission business and so they

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have to charge delivery so compared to

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most of the formats of grocery we

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actually have a meaningfully high

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emergence structure and we are also

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cheaper we're not as cheap as let's say

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the Demons of the world

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um that's very deep but we're like

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meaningfully cheaper than most formats

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are closely I was talking to someone

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about zepto and they compared you with

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dmart are you guys trying to compete

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with dmart or are you trying to compete

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with Commerce like because we I mean the

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way that we look at it right it's like

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you know this business is so tough it's

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like one of those businesses where you

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need to have this like insane obsession

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with operating excellence and discipline

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if you crack it somehow then you can

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build a massive business

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um if you look at what percentage is

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grocery of consumption because I was

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trying to work out this number 70 of

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retail is whatever but if you were to

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say broadly consumption let's say

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Indian GDP 65 is consumption we leave

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exports and all of that out 70 of 70 of

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that let's say in America for example 70

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of consumption or 60 is qsr if I were to

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break apparently that way yeah food is

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that such a big component in the US yeah

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okay if I were to break that down for

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India and put a tag against groceries

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what percentage would it be

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70. I can say the it's the majority of

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consumption like so if you

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X is GDP 70 of US 65 of this consumption

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70 of 65 is grocery like your definition

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of groceries like by dating right

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perishables milk you know in some cases

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meat I'm guessing organized is not more

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than 10 20 organizers

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all right hi I'm nikhil garmad I'd love

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to know what you thought of the episode

play19:13

uh comment like And subscribe and thank

play19:17

you for watching

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Related Tags
Startup StoryGrocery DeliveryEntrepreneurshipPandemic PivotSilicon ValleyY CombinatorDark StoresSupply ChainCustomer ExperienceFunding Success