As recently as three decades back, it was tough for individuals from a non-business family to think of building their own businesses. Maybe they could it after working in the private sector for years and saving enough capital to start something of interest. But otherwise it would be a far-fetched fantasy. Today’s business world, however, can relate with Bob Dylan singing The Times They Are a-Changin’.
And who symbolises the democratisation of Indian entrepreneurship better than Vidit Aatrey, the founder and chief executive officer of popular social commerce platform Meesho?
Born into a family that has traditionally been into farming in Uttar Pradesh, Aatrey went ahead and completed his degree from the coveted Indian Institute of Technology (IIT) and even held stable jobs. That, until he went through his own journey of revelations and realised that a person’s “last name is no longer important to make it big as an entrepreneur today”.
Armed with new perspectives, Aatrey and others like him could further build up the courage to start up majorly because of the emergence of venture capitalists that helped them build a business without having to worry about capital—a major concern for first-generation entrepreneurs. The times are, indeed, a-changin’.
Aatrey’s father, who works as a quality control officer in the Delhi Jal Board, wanted him to become an Indian Administrative Service (IAS) officer after finishing his degree at IIT, Delhi, but it turned out to be the place that planted the bug of entrepreneurship in his son. It was there that he met people who were full of new ideas in the technology space and also realised that funding was no longer a problem if people wanted to start their own venture.
“If anyone [had] asked me in school what I wanted to become, I would not have even thought about saying I wanted to become an entrepreneur. I grew up thinking I would get a government job and stay there all my life. But, my perspective changed in college with the exposure I got,” Aatrey says.
While he gave up on his father’s IAS dreams, his first job—a management traineeship with ITC in its Chennai packaging unit—was still reasonably stable. As he went through the rigours of a new job, he saw his friends and batchmates building companies.
As he patiently waited, Aatrey’s opportunity came knocking when a senior quit her job at InMobi, one of the few Indian unicorns in 2014 and proposed that he should replace her. Without haste, he grabbed it, leaving his parents disappointed once again as he left the well-established brand ITC to join a budding and fairly unknown InMobi.
At InMobi, he saw that even the founders of the start-up had come from families that were not India’s business blue blood.
He says that earlier, there were two things that helped people from legacy business families—access to capital and mentorship. The scions would receive the former from the families to take off their new ventures. That, however, is now available to founders outside of legacy businesses with the funding ecosystem. In terms of mentorship, they would have got guidance about things like hiring the right people for crucial roles, something they must have never done by themselves before.
“But now, if you look at pockets like Bengaluru and, to some extent, Delhi, there are enough people who have already done it and would be willing to help if you ask for it. Today, the surname edge is not very strong,” feels Aatrey.
A year at InMobi further sharpened his ambitions and conviction to become an entrepreneur. He was sure that he wanted to quit the company and give shape to his own vision from the ground up.
When Aatrey decided to give up the comforts of a stable job for his own venture, his family was certainly not over the moon about it. While his mother eventually warmed up to the idea, his father did not agree with his decision for the longest time. “It is only after he saw me in the news that, like all Indian parents, he thought, ‘If he is being written about, then he must be doing something worthwhile’,” laughs Aatrey.
The Making of Meesho
His first tryst with start-ups was a hyperlocal, on-demand fashion marketplace Fashnear. That model did not work, and Aatrey, along with co-founder Sanjeev Barnwal, restructured it to form Meesho in 2015.
“Our first version was Fashnear. We tried something where we wanted small businesses to tap into local demand. That did not work out. Then we did something else, where we said, let us help small businesses create shops online. That, too, did not work well,” Aatrey recollects.
Then came Meesho, which was built to take small businesses in India online. Its two co-founders also came from middle-class families and had bought things from small businesses all their lives, but Aatrey could not think of any such business that sold online. That made them realise that there was something fundamentally broken. They had a problem to solve and Meesho had a mission.
As part of the process of creating online shops, Meesho founders realised that a lot of people were using WhatsApp to sell or buy. That helped the conceptualisation of Meesho and led to its current form—an online reselling platform that helps anyone to start a business without investment. The platform relies on a third-party logistics ecosystem and does not hold any inventory.
Until 2020, Meesho was offering customised solutions only to resellers who would use the platform to do their own business. As a reseller, one could share products listed on the app either with their network or on social media and earn with every sale. The platform has a substantial presence of suppliers from the manufacturing hubs like Jaipur and Surat.
It also came up around the time when India had just started purchasing from primarily women sellers who owned small boutiques and circulated infromation about their products through WhatsApp groups. The co-founders realised that these businesses were using an inchoate ecommerce model and had the potential to move fully online through their own websites.
The pandemic brought about another change. “A lot of consumers who were buying through WhatsApp from some of these entrepreneurs were willing to go online now and buy things themselves on an ecommerce app or so on. So, we said, why do we not offer them an opportunity to buy from us only? That is when we opened Meesho to consumers as well. In the last one year, we have scaled that up like crazy,” Aatrey says. While Meesho’s reseller base is still expanding, the platform is now witnessing a large number of end customers making direct purchases from the platform.
The result? A 19-year-old Shaan Ansari from Haryana’s Panipat could provide for his family after Covid-19 destroyed their handloom business by using Meesho to sell the doormats that his father produced. The social commerce company claims that it has given the family a way to ship hundreds of orders every day.
Today, Meesho has become an aggregator for small businesses that penetrates into India’s deepest pockets to collate all those unbranded supplies in one place, helping them tap customers anywhere in the country. The platform has half a million sellers and recently achieved the 100 millionth customer milestone. The company employs close to 2,000 people and became a unicorn in April 2021 after raising $300 million in a funding round led by SoftBank.
Unlike family businesses, Meesho, Aatrey says, will never become a company that would be run by a family. He adds that since the nature of start-ups is different, families owning them is not a possibility. “Today, I see that a lot of old family-run businesses are changing. You have some form of private equity investments happening to some extent. Larger ownership is obviously by the family, but I do see that changing as well. But, in our case, it will never be the same [like families taking over],” he reaffirms.
Ellipses Trailing an Experiment
A success story is never complete without challenges, and Meesho has seen its share. In its early days, it was one of the first companies that was trying to build something new from India. Most Indian start-ups were trying to replicate Western models. Even the leading tech companies around that time in India were firms like Flipkart, India’s Amazon, and Ola, India’s Uber.
Meesho had set out to do something different. “Nobody, anywhere else in the world, was selling products on WhatsApp. It was quite unique and different. So, for one or two years, we struggled to convince investors that this could be large. They would ask us to tell the version of this business that exists in the US and we could not find any. That was a big challenge and we solved it by growing. If the business keeps growing, at some point, people would believe in those numbers and the story,” Aatrey explains.
Meesho was one of the first start-ups in the social commerce space. Being a first in any field can come with either a first mover advantage or more risks, as one ventures into hitherto uncharted waters. He believes that starting up, in itself, is a huge risk and if it is in an area where there is no validation of similar things happening before, it gets riskier. While risks have always been present, he believes that Meesho has been a mission-oriented company. The initial idea of how to bring the whole small business space in India online as the core value holds true for the company till date. It has helped the ecommerce company raise Rs 8,000 crore through multiple rounds of funding so far. The last funding was raised at a $4.9 billion valuation in September 2021. It also helped the company brace itself from a pandemic.
As Covid-19 brought with it its own sets of challenges for businesses across sectors, Meesho’s core operations were impacted, too. After the pandemic struck and the government announced a ban on non-essential business, it brought the company’s business to a grinding halt as its platform mostly catered to fashion and lifestyle needs.
“For three months, essentially, you could not sell anything on the platform. Over the years, Meesho has acquired so many users. There was apprehension within the company—will people come back after this? Will we lose all of our users because they cannot buy from our platform?” Aatrey recalls.
But, just like most businesses tried staying afloat by reinventing themselves, Meesho also worked on finding an opportunity in the crisis.
“We were not shy to fail. We were sure that if we failed, we would try again. It is not that if we failed once, we would go back to doing jobs. We were excited by the potential impact that the idea could create so we were willing to go through having the patience for multiple failures. It was definitely risky,” says Aatrey, smiling.
Around that time, they also laid the foundation of some of their newer things, starting with trying out a grocery business. “We thought, ‘Can we help some of our consumers at this point of time? They cannot buy non-essential items, so can they buy grocery products?’ We saw that they really wanted the proposition that we built for them. And since then, we have just been investing in the grocery business. I feel if the pandemic had not happened, we would have either not done it or done it much later,” Aatrey points out.
The young CEO has come full circle by becoming an investor who has so far invested in 30-plus ventures across India and Southeast Asia, including notable names like ElasticRun, FamPay, Airblack, Loop Health, Turnip, Anar and Yellow Class. He also serves as an independent director on the board of Sachin Bansal-led Navi Technologies and is on the advisory board of The/Nudge Institute, a non-profit collective working towards the vision of a poverty-free India.
And Meesho? With its additions, it weathered the pandemic and sailed through. The customers came in, so did funding. While it is yet to become profitable, its contribution margin is positive. As Aatrey aims to become cash-flow positive by the end of this financial year, he is all set to ride his unicorn to greater milestones.
Of Many Firsts
Vidit Aatrey is not only the first entrepreneur in his family but also the first engineer. Hailing from a family of sugarcane farmers in Uttar Pradesh’s Hapur, Aatrey’s academic success is not something his family members even relate to. But for his parents, their son getting into the coveted IIT, Delhi, was the best dream they could see for him, which is probably why his father was not confident of him getting into entrepreneurship. Once Aatrey worked hard and Meesho became a success, his father did come around. Aatrey, however, is proud of his roots. “I loved going to the village when I was small. Probably working hard is what I got from my farming genes,” he says.