Rajeev Ahuja

We have Sameer Mehta, who is a co-founder of Boat lifestyle. It's, it's a brand, it's a product, which has taken a lot of us by storm. And, and I think all of us are loving it. So this, this conversation, Sameer is all about you, all about the company, the business, the brand, and boat head. So we will just roll and maybe Sameer, if you want to just maybe give out a brief background about yourself, and then maybe lead into what brought you in to Boat lifestyle.

Sameer Mehta

Thanks Rajeev, thanks, for having me over, good to meet you. And good to see that, you know, I have a Boat head in you. So which is a really great feeling for us. So just to, you know, start out with right, so me and Aman, we actually met back in 2014, it was more of an arranged marriage situation for me & him. And both of us were trying to get into the audio space back then. And it so happened that we reached out to a company in the states where we wanted to distribute their products in India. So I had reached out separately to them and so did Aman, and the India manager actually thought it would be a very good fit for me & Aman, and to start a company together. So he actually invited us both over to the Taj Landsend and, and said that, you know, Hey, you guys are a perfect Yin & Yan, because he's very, very good at marketing and sales. I'm very, very good at, you know, operations and finance and, you know, product development. So that's how we met. And I think we both of us kind of took a leap of faith. Three days later, we formed a company, we started distributing for this company out of the states called House of Marley, which was owned by the Bob Marley family, invested two years because we didn't have enough money to put in right to, you know, build our own brand with us, it takes a lot of investment to do that. So we started, you know, selling and distributing other products understanding what are the white spaces? How do we get into the industry? What are the kind of price points that work? What are the unique Indian features that you know, an Indian consumer wants, because people were building products, but they were not building products that were specific to India, right? And that's why we found that, you know, whitespace that, hey, why don't we give the customer what he wants? What is truly Indian, you know, how do we kind of adapt to that taste. And that's when in 2016, after two years of research me and Amman launched Boat, our first product was our base x 225. You know, your phones, which we're currently selling as well, and it's one of our blockbuster sellers. So it's been a fantastic journey. We've been growing at multiple axes year on year, you know, we did about 900 crores of sales revenue last year, and we expect to cross the barrier of 1000 crores this year. So, overall the journey has been pretty fantastic. It's it's a it's like we call the manager from House of Marley, a panditji. You know, that punditji ne milaya aur hamari shaadi karadi. And now we need we're actually seeing the rewards of coming together.

Rajeev Ahuja

So how did the name Boat come about?

Sameer Mehta

So, when we started out, right, so we wanted to like, you know, put, you know, bring a product to the market, which actually put you into, you know, into into a state of Nirvana. Right. So, so we thought that why not so when one is sailing, when you go on a boat ride, you're you're away disconnected from the world, you're in your own zone, right? You're in a state of Nirvana. So when you read Boat, there is a tagline that goes along with it, which says that Boat plug into Nirvana. So no, the plug into Nirvana is supposed to be read with Boat and that's why I know you plug into your zone so when you put on my headphones, or my earphones, you know, you you actually feel very peaceful you you're in your in your own zone. And that's why you know, Boat- plug into Nirvana.

Rajeev Ahuja

And, I mean, I mean, no, I'm not obviously a big, you know, user except starting now. Sure. But plug into your Nirvana, Boat . You almost sound like you're trying to make the product and this and the usage as personal as it can be to the user. How did that thinking about I mean, what prompted you because generally speaking, unless you're like, you know, focused on the very high end of the mobile phone or the equipment market, most people don't really use average stuff bought from from some unorganised place, but how did you get this thinking of personalising?

Sameer Mehta

So, So I’ll tell you, the consumer taste is shifting right. The consumer is evolving. So, gone are the days where you could you know, fool a customer by offering a substandard product, right. And for us, we're an online agnostic company and the user generated content actually makes a lot of difference to how people think and buy our brand. Right. So for us it was very, very important to kind of bring unique indian, indian ness to our, you know, product range. So we know we went out. So our first product just to give you an example, right, we wanted to bring out a product which would be durable, which would be classy for the customers, right. So whenever you use a normal earphone, it would get tangled, you put it in your bag, it gets tangled. So we came up with a simple solution with the tangle free cable, right, we put it into your bag in the room, there's no tangle, right. So people used to use, you know, these earphones, with their mobile phones. So we give a longer cable so you can put your you know, phone in your pocket and still plug it in, and you don't need to carry your phone in hand. So the cable was longer. People were offering plastic earphones, we came up with a metal earphone right. So longetivity was good. So these are the small nuances that we knew we know what what the Indian consumer would want. And that's how we kind of you know, what, in that truly Indian perspective to our products.

Rajeev Ahuja

You spend the last five years building the company out what have been some of the learnings around customer behaviour, customer adoption would have given you some interesting insights, you know, your path forward has changed, what have those been?

Sameer Mehta

So, just how we are looking at the customer, right? I mean, if you look at the customer journey that we've you know, come up with, in also our technology, there's been a shift, right, people have moved from, you know, wired to wireless to truly wireless or something that you've currently bought. And that is the way we see the customer kind of shifting over a period of time, what what we've realised is, you know, with, with India, you, you, you have to offer the right set of products, okay, you have to offer a lot of lifestyle element as well. So Gone are the days where, you know, I'm sure that you know, if you have kids at home, they would not want to buy a legacy brand, right? Because if Papa using a legacy brand, I don't want to be seen using that brand. So that's something that you know, we realise that, you know, let us give the customer something that is fashionable, that is very, very loyal to his personal lifestyle, which can compliment him him, right. I mean, so so if you look at our products, they're not very garishly loud. Now, we have a very, very good element of, you know, lifestyle with it, right. So when you wear a Boat, you feel really good, right. And that's, that's a wave that we kind of caught on to and, and if you look at our marketing that is also perfectly tuned to cater to that customer, right? So my tg is between 18 to 24. And when I'm kind of targeting them, I'm actually targeting them of how unique they are, you know, rather than selling them on technology, because technology is hygiene, you need to have a good working solid product for you to sell it, that is like very basic, right? How do I bring a customer to, you know, like my product, I give them something unique, which is suited to his lifestyle, and that's how, you know, that's some kind of an insight that we had. And that's why we built our products to you know, suit the consumer, which which was essentially between the ages of 18 and 24.

Rajeev Ahuja

I noticed you have a lot of celebrity endorsers and you use, you know, use many of them, right? And why? And then how have you benefited from that? And, you know, how does that lead to brand identification with the customer? The level of personalization you're seeking.

Sameer Mehta

So, just to break that question down right one is you know, we are very very frugal in the way we work right. So when we get these celebrities mostly it's about ROI driven marketing right if you took a talk about the reach of each of these celebrities, you know, they you know, they have about 10 million 5 million followers right. So, how do I get the best reach for my buck? So, you know, that is the celebrity marketing comes in. The second part of that is you know, what sells in India, Bollywood, cricket right. So we went to all these mediums we said that you know, and sound of course, because we had a sound company, so we have Neha Kakkar for sound, and also people actually who love music would you know, follow her and that's how you know we get that kind of addressable market with us. People love sports. People love Cricket in India, right. It is a cricket crazy country. So how do we communicate through our you know, cricketers to reach out to a mass segment where they aspire to become like that, like, like them? Then comes in the Bollywood side of things. Right? So the Bollywood side of things is again, people are crazy about movies, right? So how do we get off associated with our target segment using certain celebrities like Karthik Aryan, you know, they're the underdogs are coming up. And that is a strategy that we use, you know, kind of connecting with our audience.

Rajeev Ahuja

And and you found the ROI being amazing. I mean, usually many of these celebrities charge a bomb.

Sameer Mehta

They do actually but you know, we we made it work for us. You know, it's it's so far it's worked really well for us.

Rajeev Ahuja

Okay, and walk us through your distribution strategies which you were experimenting, wound down. You know, I know you do a lot of online sales. Now a lot of part comes from your from e commerce platform, just walked me through the discovery process of building the distribution strategy.

Sameer Mehta

So, you know, we've always been an online agnostic, because developing offline takes took a lot of money back then not anymore for us, because the brand is pretty much made, right. But back then we didn't have enough money when when a distributor comes to you, you have to give him stock on credit. And then he returns it and the whole cash, you know, kind of get stuck. So we said, What is the best way to get consumer feedback very quickly? And what is the best way that we can reach our customers the lowest cost, right? So we went on, and we have our partnerships with Flipkart with Amazon. And we built on those channels over a period of time, we still do about 80% of our business online. And, you know, we feel that the feedback mechanism is very, very quick. The consumer is shifting to buying online. And that's where we want to keep concentrating, of course, post that around in 2018- 19, we realise that, yes, yes, offline is a very big part of our ecosystem. Sure, we know of our ecosystem, I think 80% or 90% of India, sensor shops are offline, right. So that's only started putting some muscle behind it. We got about 15% of our sales revenue last year from offline. And this year, we plan to grow it to what 20%, of course, the COVID, it's not it, we don't know where that will go offline is very important for us now. But we do always launch our products online first, just to make sure that you know, we get the proper feedback. So there are some drawbacks with the product, we can correct them before we go and hit offline.

Rajeev Ahuja

It's interesting. You mentioned this, because many conversations we've had with businesses which have been formed in the last five, eight years. I think they've been discovered online first, right. And then they moved, and online. And I think there lies the tale in India that actually, if you take in 15 years ago, building a brand like yours, in the traditional manner would have taken you years and years, and perhaps a lot of investment and time. Right. Whereas now you can actually launch it online. I mean, launching on online, how has that worked with the platforms? What you mentioned about your generated feedback and content? How has that been used in your business, you know, what changes which have come and usually when we look at these kind of platforms, there's a huge amount of expectation, and there's a huge amount of disappointment at the same time. Right? So maybe give me some flavour of that Sameer.

Sameer Mehta

So so just to tell you, right, the mechanism for us is very simple, we do a soft launch, before we go for a big launch, any product that we bring to market will come with a soft launch. So we'll do about 5 - 10 thousand units. As soon as we launch, right, within a week, we get a feedback from the customer, whether the product is good, or whether the product is not good, what are the flaws, right? So then we have a team that continuously does this research, right? Every week, we'll come up with you know, what is not working on our product, and it goes into an improvement cycle. And it happens for not one product or a newly launched product, it happens for all our products, including old and new, right. So using this, you know, feedback mechanism from the customer incorporating it into your product, and making sure that you know, your product is getting better. And it is up to what customer expects. That is something that we've learnt from online, right? Because the user feedback is so quick and so sharp, right? I mean, the customer is talking to you and telling you exactly what is wrong with your product, or exactly what is right with your product. And if you kind of apply yourself and you know, use those, you know those conversations to build a better product, I think, you know, you've you've kind of cracked half of the puzzle there. So we use a lot of this user generated feedback and build a better product each time. Like, like couple of our products where you know, where we've seen that people say that hey, one side stops working. So what happens in India is people people put the earphone inside the bag and yank it out right? When you yank it out it stops working. So we went and we used Kevlar infused wires in our you know your phone so that you know if you yank it out, also it will not stop working. So these are the small feedbacks that we've taken and kind of improved on our product

Rajeev Ahuja

Got it, that's pretty interesting. You know, and clearly, I think the the spontaneity of the online platform helps you do that.

Sameer Mehta

Right

Rajeev Ahuja

As you look at your business. You know, this is a very exciting market. There's obviously a lot of brand extensions in facilities. you know, now as part of Boat lifestyle and other new things you're looking at?

Sameer Mehta

So currently we are only in audio. We did launch wearable about you know a month ago and we are the fastest selling wearable On Amazon in the last one year, we did also launch our powerbanks on, again on Amazon. And again, we were sold out, we sold about 30,000 units in less than about half a day. So now we see that the brand has legs to go into horizontal directions. So wearables are something that we're currently looking at gaming is something that's coming up with for us. So we're going to be doing a lot of gaming hardware around, you know, because gaming is a large part of a youth life right now, you know, and mobile gaming, per se, is growing, you know, extraordinary in India. So these are the, you know, adjacencies that we look at, and we kind of build on that. And that's, that's planned out for the next one year. And, you know, there are other things that are in the pipeline, but we're not sure as to show whether we do those things. But as of now, Gaming, Wearables, and Powerbanks are something that, you know, we'll get into over the next one year.

Rajeev Ahuja

Understood about your distribution? What about manufacturing? I believe you import almost everything from China.

Sameer Mehta

Right? So essentially, yes, you're right, you know, the ecosystem is fairly, you know, developed in China. And in terms of pricing, you know, nobody can beat China, as of now, that's something that's been going on, but this latest, you know, issue between India and you know, the geopolitical issues that are happening, has prompted us to kind of move a large part of our supply chain to India. So we built out an entire supply chain team who can start manufacturing in India very soon, we would have a couple of products, which will be designed in India and made in India, which would get launched post October. And if things go well, you know, we will definitely try and move at least 50% of our supply chain back to India within the next two years.

Rajeev Ahuja

Wow. That's, that's something Yeah. And and how does now your relationship with the platform, work in terms of you know, I mean, you you get your payment pretty much as the user buys it, and you run a kind of a negative working capital, or how does that work?

Sameer Mehta

No, so for us, we don't sell directly on Amazon, we have third party sellers who actually sell on Amazon platforms, we do offer them credit, but we essentially go on an early payment programme with them. So it kind of helps us, you know, cover for our cash flow requirements. Yeah. Our relationship with both the platform's two of the largest in India is very, very good. You know, we work very, very closely with both of them. And, you know, we're a large a large part of their audio businesses, but so there's a joint, you know, business model that we develop each year as to what should come in what should be phased out. So, you know, that kind of joint exercise is something that is done and on an annual basis. And, you know, that that's how we kind of go about building, you know, newer categories, new product portfolios.

Rajeev Ahuja

And what has been the impact on your investment and capital, because of the way you've started your business? Because manufacturing is almost built to suit. Yeah, and, and, and, and you're selling online. So current periods are pretty much pretty much non existent. And I also noticed that you raised money only once, right? Like, a very tiny amount.

Sameer Mehta

Right. So we are very hyper efficient. So the company is being run by a Gujarathi and a Baniya. So it's in the blood, right to kind of be very frugal. So we've been frugal for the largest part of, you know, the past four or five years that we've been in existence, we made sure that we we don't waste money. Of course, wherever we have to spend on marketing on product development, we do. We've kind of raised very small rounds of equity, but a large part of our, you know, money is already gone is mainly into working capital. And we know we've got some support from our suppliers that we get some credit, we have nice banks like yours which give us some credit cash credit limits, which helps us kind of, you know, meet our working capital demands. And that's how we've been able to get to this point over the last, you know, two, three years. So our equity base, really small, but we're a profitable company. So every penny that we make, we plough it back into the business. So, you know, that's kind of helped us get to this level thing.

Rajeev Ahuja

Interesting, you know, I see many startups in the consumer space. And many of them have burnt so much money and you know, in a variety of ways, and you guys have built a consumer brand, you have built a fairly large base, I mean, very, very good turnover, you know, this is quite remarkable and against the grain of a lot of startups. And that goes back to the DNA of you and Aman.

Sameer Mehta

Right, so No, not having a lot of money is also a good thing, right? I mean, you get creative with, you know, whatever limited funds, there's access, there's, you know, access to a lot of capital, you don't know, you know, maybe you take some wrong decisions. So for us, we've we've been very, very prudent in the, in the way we spend our money, we've been profitable day one, we've never made a loss in this company. So you know, that's, that's how we've kind of gone about building it. So just to give an example, up until 2018 end, and we didn't even have an office we were working out of a co working space in. It is actually I don't know whether you heard of social. social is a restaurant, and a co working space by day. That is cheaper for us to do. So we worked out of a co working space for a dough for about three years. We didn't even have a CFO till the time we reached our 500 crores of top line. So we've we've been very prudent because we could manage those things back then. But now we are on our journey to you know, build out build up an organisation. Yeah, we've done tremendous amount of hiring in the last six, eight months, in fact, through the COVID, because we got some time to you know, sit back and think on the larger vision. Me and Amman went about setting up an r&d team in India, we have a fairly large r&d team, now we have a fairly large supply chain team in India, our top management is coming along really well we are our recent hires have been, you know, who have the industry. So we've kind of you know, now it's about for us to go to, you know, be called Boat 3.0. So, the 1.0 was when you're launching your brand, and 2.0 is the time we got to about 1000 crores of revenue with 3.0 is about building a large company, which can you know, kind of, it has a life of its own, you know, it can work without, with or without me and Aman and that's, that's the dream for us to kind of build that out. I'm not sure how successful we'll be. But that's the effort, you know, over the next one or one or two years, it's going to be a concentrated effort to kind of make the company get a life of life of its own.

Rajeev Ahuja

You mentioned about being able to hire really good talent. And that's been something which has happened more recently, because you become more visible, and people are willing to take a chance with leaving fairly, fairly established careers with that, is that happening now?

Sameer Mehta

Absolutely. So so there are there are two or three levers that we cannot use, right. One is now people know about the brand. So they are not so scared. Right? Oh, second thing is, you know, we are profitable. So you know, there is no runway problem, right? After 10 months, if I don't have money, you know, company might shut down. So that is the second part. And the third part is, I think, we also started believing that, you know, we can actually build a large organisation now. So that's, you know, something internal and something external, of course, COVID kind of helped, because, you know, a lot of good talent was available. And we said that, you know, it's the best time to get people on board for, you know, give them a confidence that a company who is hiring during COVID times as a sustainable company. So, you know, that, that I think these three or four things are kind of worked for us.

Rajeev Ahuja

Sure, so you mentioned that you didn't know Aman until the time you were set up by the panditji. And interestingly, he's based in Delhi, you're based in Mumbai, you know, and it's that you guys are pulled off something very interesting. How is this two states marriage, managed?

Sameer Mehta

We get asked this question so often, works perfectly well. So I think, you know, between 2016 and 2019, I think me and Amman would have spent more, you know, hotel nights, than me and my wife have so you know, we've travelled so much together. So, you know, that kind of helps, you know, they don't get that you know, relationship stronger, making it stronger. Because we both of us kind of handle different aspects of the business. So, you know, it's fairly easy for us to, you know, not be in the same state or same city or same office. And third is I think it's best that both of us are slightly away so that you know, Rojki, you know, miya biwi wali kitkit nahi hoti. So we talk once a day, we have our own conversations, we know, on the strategic side, how to go about it. The good thing is either of us don't second guess each other, which is a very good quality. I think that both of us it's developed over a period of time. And unless it's a fairly large decision, nobody's second guessing anybody because everybody believes that you know, whatever was being done is in the good faith and in the best interest of the company.

Rajeev Ahuja

And if you look the next three, five years, the segment and the sector you're in obviously has tremendous tailwinds and in some manner, COVID has made that even more I mean, all of us are buying better equipment, home equipment. And so that that's a very strong tailwind. And, and your thoughts that, let's say a year from now that settles down, then you, you basically have your other businesses coming in which will start building growth in terms of gaming in terms of, you know, wearables and all is that, is that how you think?

Sameer Mehta

So currently, yes, I agree that there are a lot of tailwinds, you know, especially with work from home and cinema at home and IPL at home, right. I mean, you want some bars, you want your phone, you want headphones. But if you look at the larger shift, right, a lot of the customers who are buying offline are shifting online. And that shift actually helps us because, you know, when they start buying online, and we being an online agnostic brand, it helps us quite a bit to kind of, you know, scale further. So this deal went, of course, is helping us but we don't see it kind of dying down, because the kind of user journey that's happening from offline to online will definitely help us to scale further. In terms of the next growth waves, yes, wearables is one big, you know, growth wave that we look at the games and other routes that we look at, along with that, yes, strengthening our product portfolio. Also, going forward will also you know, we are we're barely in like three categories. To be very honest. Right now we are into home audio, this is our first year for home audio, actually, we've been fairly accomplished in you know, personal audio, which is your wireless speakers and wireless your phone and stuff like that. But there are other you know, product categories that we need to get into voices, one such category where you know, Alexa power device or power wise, or you know, home audio with Dolby in it, you know, Wi Fi speakers, these are, these are going to be coming out, you know, in the next one odd year audio within the audio space as well. And that will also lead our next wave of growth.

Rajeev Ahuja

And when you, when you think , some of the, you know, trends in the next three, four years, what's the thought about eventually, you know, taking the company public, or, you know, what other things, because, you know, you build a great brand, and your top line looks exciting. And this is the, this is the moment for young companies to list actually, you seen guys, a few of them, List in, the last few days and week.

Sameer Mehta

Also, I think all of this will come out of, you know, building up the organisation having governance, internal controls, you know, systems and processes. So being a startup, I'm sure you know, right workflows are not streamlines, you know, people are hustling all the time to get things done. So now we've got the right talent on board who would come in and set up all these systems, right? So we'll go about building out the entire, you know, company in a way that, like I said, right, it gets a life of its own. And ifa IPO comes along, maybe in the next three or four years, so we'd be happy to look at it. But the idea is to build a company that is repeatable. So you know, we are putting the building blocks in place for that right now.

Rajeev Ahuja

Any business person who's inspired you for years, I mean, whom you read about look up to?

Sameer Mehta

Elon Musk is somebody that I love and appreciate and I have read all his books. I think he's one of, I think, a guy who can, you know, change the face of a space industry? I think he's got to be a brilliant guy. Right? So yeah, read about him. understand that, he's got a very different philosophy to work. He said that you can't change the world at 40 hour weeks, you know, but I think, I think each one to his own. But he is a true inspiration.

Rajeev Ahuja

We don't see Elon Musk's in India, we we see good entrepreneurs like you, but people who are transformational. And, you know, obviously, I mean, you see, it's happened to China, it's happened to the US, right, but markets like India, this country like India haven't seen, you know, those transformational industries being born by sheer force of nature. That is Elon Musk, I mean, what's the reason? I mean what what do you think about it or maybe Am I oversimplifying it?

Sameer Mehta

I mean, even I don't have the answer to it. But I think what we lack in India is you know, the ability to look 10 years down the line and build you know, things from today for 10 years later. That whole investment and you know, creating a great product and believing in that is something that was missing until at least a few years ago. And I'm looking at you know what is happening within the space right if you look at you know, where the companies in Fireside portfolio like Mama Earth you look at what they have done right. They have done fantastic brand, which is you know, talking to all the audiences, you know, Earth neutral products, it also now I think people have started believing that we can do that in India. Because earlier either you needed a lot of money which nobody had the private equity space was non existent. So you don't have how much capital Can you put in of your own unless you're coming from a industrialist family, right. So I think now the whole VC and the PE space is helping people realise their dreams. And there are people who are going out there and, you know, building great brands right, Mama Earth, Vahdam, you know, all of these are great brands that have been built. And you know, these are built by Indians, right, people who found a need gap in the market and came out with the right set of products. So I think, I think it's about putting in the investment, the effort and the time to kind of build out something, which is long term.

Rajeev Ahuja

And, and you're right, I think, I think we needed role model, we needed our own role models, because you know, every place is unique. And we also had a shorter, I would say, stint of few years, rather than 15-20 years, though, I do agree that some very interesting companies have been born. And one of the things we see is that actually, talent, which is building these next generation brands, the little bit more experienced than young people. I mean, you know, we've had the first round of young people. And now, you know, people who've had different stints, you know, 10-15 years here and there, who bring different levels of, you know, insights and discipline. So, you know, I do think that in many, many mama earths and many, Boats, years to come, good, good. Some of you, so all thank you so much for this conversation. You know, I'm, like I said, you know, for me, for learning, for what you guys have gone through and some of the insights you've provided, frugality, you know, how do you do a shared, you know, ownership, management, but in two different geographies. Now you make that work. The product market fit, personalising a product or segment which needed that, and how you're responding to, you know, changing India, and changing, you know, geopolitical structure as well. I think, you know, it's something which I think young companies like yours can show the way many traditional companies who are kind of hardwired in the process. I think the trick is when you become 3000 crs annual sales, how much time do you spend on a day to day how much time you spend on capital allocation, mentoring your teams, and thinking about the future, and then connecting the dots back to the grindstone. I think those will be very interesting, back, at least for me, really appreciate your time. And it's great that you build something remarkable like this along with Aman. More power to you. Thank you.

Sameer Mehta

Thank you, Rajeev. Thank you so much for, taking your time out. And you know, speaking to me, it's it's been a pleasure and have had wonderful support from you know, you guys and your team in terms of the whole journey. Right. So, last two years, you guys have been very, very critical to our success. The support has been tremendous.

Rajeev Ahuja

Thanks for your time, take care of your health and and continue forging ahead because you guys are the new India. Thank you so much for your time. Thanks

Sameer Mehta

Thanks. Thanks a lot.