This is the first in a series of Q&As tracing the journeys of startups that have become household names in India.
At 11 am on July 12, 2012, UrbanLadder.com went live. The furniture retail portal had a catalogue of just around 25 items, the brainchild of two people with no background in designing or selling beds and sofas.
However, Ashish Goel and Rajiv Srivatsa—Indian Institute of Management Bangalore batchmates with earlier stints at McKinsey and Infosys, respectively—had spent the previous year traveling across India. Their goal: understand what consumers wanted and identify suppliers.
Their hard work began paying off on day one.
The first order on UrbanLadder.com came within an hour of the launch from an old friend of Goel, and the first non-friend, non-family order was booked about seven hours later.
Seven years on, the portal now has a catalogue of over 2,500 items and clocks about 1,000 orders a day.
Urban Ladder has become an enviable furniture brand in India due to its fresh and elegant designs, and innovations such as providing perspective on the size of each item by adding to the catalogue an image of a human figure standing next to the furniture. The company has an impressive list of investors, including one of India’s best-known industrialists, Ratan Tata.
In 2016, The Economic Times newspaper listed Urban Ladder among the 15 Indian startups that are poised to become unicorns.
Last year, the Bengaluru-based company was reportedly valued at around Rs776 crore ($119 million).
Quartz spoke to Goel, the company’s founder and CEO about his journey as an entrepreneur, Urban Ladder’s highs and lows, and plans for the future. Edited excerpts:
What was the first day of Urban Ladder’s launch like? Did you do lots of marketing on the day to announce your arrival?
We had already raised the first funding round in April 2012, but we did not spend on any advertising as such. We wanted to first launch the products and see whether customers liked them or not. Anyway, furniture is not an impulse purchase, so we would not gain much from a marketing campaign.
But we had put out a number of interesting posts on social media with photos of our products. For some reason, those photos went viral on the day of the launch and everybody was talking about us. It was an amazing day.
When did you book your first order?
Technically, we had got two orders even before the launch day. The first of those had come with a reference from Naveen Tiwari (founder and CEO of InMobi). I had met him a few times and told him that we were working on an online furniture platform. Some days later he messaged me asking for some photos of our products because a friend of his had moved back from the US and was setting up a home in Bengaluru and was looking for some furniture. So that was how we sold our first product, a dining table, on July 9, 2012.
Online marketplaces with catalogues that ran into tens of pages were pretty popular in Indian e-commerce back then. Why did you decide to stick to only a limited number of designs?
When we launched, we had 25 or 27 products live. Pepperfry had launched some seven months back and they had 3,000 furniture products live. FabFurnish had launched three months before us and had 847 products live. There was a lot of conversation within our team also because we wondered how can we launch with such few products.
Actually, when we had first thought of getting into the furniture business, we had also considered a semi-marketplace model. But the challenge was that there weren’t enough well-designed high-quality products available.
We wanted to be confident about each product we sold. Let’s say if you buy a bed from us, we will know the detail of each and every nut and bolt. How many products will you do that for? Even now, when we have 2,500 products, there are about 100 that hang to my heart and I feel they need to be better.
Secondly, you have to find the best way to execute your business. In India, we have very little domestic furniture manufacturing. What we have is very small-scale, not well established, not ready to ship products, and those products are not designed sharply, their consistency is weak, and so on. If you look at the US, there are thousands of brands and wholesalers in different parts of the country, serving pretty much every product you may want. And they are all above a certain quality mark.
Theoretically, it seems there will be a lot of scope in a marketplace, but that hasn’t happened. We have multiple competitors, and many of them have spent much more money than us. But they have not been able to create a furniture business that is larger than us.
Around 2017, Urban Ladder introduced furnishing. Some observers said it was because you wanted to get into low-ticket fast-moving items to increase sales volumes. Was that the reason?
It was never about entering the volume game. You will feel like I am a broken record when I say this, but it all goes back to what the customer was saying. Our customers said, “You are selling us furniture right now, but I need a lamp also.” So we started selling those things, too.
We are primarily a furniture business and we have no doubt about it. So whether it is fast-moving or not, it doesn’t matter to us. Volumes and frequency are all investor speak. Our business has a lower frequency than fashion, but its value and stickiness is more.
Earlier this year, you reportedly laid off some employees. Is it true that the layoffs were due to a funding crunch?
When a situation like that comes, it’s super painful all around. All of these are fantastic professionals, so everybody has found a great opportunity elsewhere.
What was very clear to us was that there is no way for a business to be around for the long term if it’s not profitable at a scale we believe is fair for profitability. Last year we had a business of about Rs350 crore ($50.8 million), which is a reasonable scale to be profitable. We had made a lot of progress in that direction in the past few years, but we were still some distance away. Now, this year, (the financials will only be out 14 months from now), we are already on track to be EBITDA positive.
But didn’t you consider these constraints back when you were hiring these people?
I will give you a real and pragmatic answer to that question: Let’s say you have moved to a new city and you want to set up a new home. That will require a lot of effort and you will sometimes involve your friends, your family members, or you’ll hire help. Once it is fully set up, how much effort does it take to run it?
Now, in our context, three years ago we were scaling up very rapidly. We had to set up a lot of new things, all in parallel. We had to set up international sourcing; China had to be set up, Malaysia had to be set up, and we set up one more country that did not work out so we shut down there later. Then, we had to set up stores, start our business in a lot more cities, add new payment methods, and we had to expand the catalogue and product line significantly. If you try to do many tough things in parallel, you simply need more good people to handle it. As an organisation matures, things begin to stabilise.
Becoming a unicorn is generally seen as a milestone in an Indian startup’s lifespan right now. Is that something you aspire for?
Not at all. And you may feel I am being politically correct here but I mean it. I frankly don’t care.
So if tomorrow Urban Ladder raised funding at a billion-dollar valuation, wouldn’t you see that as an achievement?
I truly don’t care. I know it sounds like a very extreme thing to say, but you can talk to my investors also and they will corroborate what I am saying.
If it is important for us to reward our shareholders and our team members, or provide capital for the business and we have to raise capital at a better valuation, that’s absolutely important. Would that make me happy? Absolutely yes. But beyond that, I don’t care about how much money I make.
I personally abhor vanity of any kind. For me, the journey is the end.
Raising funds is an important and hard part of entrepreneurship. What is your one advice to someone who’s just started up and wants to raise funds?
I see fundraising as a sales process and for any sales process, you prepare yourself as well as you can. A lot of times people tend to think about fundraising differently and wonder why should I prepare this much or how much should I prepare? You should prepare as much as you possibly can. You are basically going in for a sales pitch, so everything that convinces other people about you, is an asset. Be super rigorous about this process, whether it is about creating the docket around your team, or having the business numbers at hand, or your customer voice very strongly represented. I think the value of rigour cannot be overestimated in a fundraising process.
Last year, IKEA made a frenzied entry into India and is now expanding in the country, offline and online. Does this affect your business and does that worry you?
It’s been about 10 months since IKEA launched in Hyderabad and the facts are somewhat on the table. I don’t know how their store is doing, but overall in furniture, we have not been impacted. We had held off our store in Hyderabad because, at the end of the day, IKEA is a juggernaut and we could not predict what would happen. But now, we are confident about investing in the city.
We have an insane amount of respect for IKEA. My idea is that IKEA has been doing very well in what we call the homewares segment—kitchenware, tableware, etc. It’s not clear how well they are doing in furniture.
Generally speaking, IKEA is an early starter household brand, like a few fresh college graduates moving into and setting up an apartment together. And that’s an area that nobody can beat them in. That’s not a market we are present in. We believe we know how to service a customer who is starting to move forward in life.
What are Urban Ladder’s plans for opening new stores in 2019? And besides stores, what will we see from Urban Ladder in its eighth year?
In the next 12 months, we would have stores in all the 12 or 13 cities that we operate in right now. In Hyderabad, we are finalising the property, and if that happens, we should be able to open the store sometime in mid-September. Pune and Chennai are both coming up at the end of August.
In addition, you will see the quality of our products and services improving. And 18 months from now, we will be able to say that we have a million happy customers from around 500,000 now.
Is there something that entrepreneurship has changed in your personality?
I am a very accepting person. When I am with friends, I am pretty much okay with most things like what to eat or where to go, etc. But I am fairly uncompromising with my own standard of work. So, at the office, that would become a problem because I would end up doing somebody else’s work. Or the end outcome would suffer in some shape or form.
Over the years, that has changed and I have become uncompromising in my expectations from people around.
Do you still spend the same number of hours at work as you did in the early years of your venture?
I clock around 70-75 hours a week at work. Actually, it’s not very different from the initial years, and why should that change? No matter how much you can delegate or how big the team grows, your work schedule or your ethics stay with you.
What’s the one tip you would give an engineering student who aspires to be an entrepreneur?
Be desperate and curious to learn about a lot of things. Learn whatever you can.
In engineering college, I used to run a for-profit summer mess with a few friends. I am not saying we did a good job of that, but we made some Rs5,000-6,000, which was a lot of money at the time. And all of us had three big dinners out of that. That experience taught me about things like product mix, what are the different market segments, etc. At that time, we didn’t articulate it in these terms, but there was a lot of learning.
So just exposing yourself to different things and staying curious can help a lot. You never know where that all adds up.
What’s your one tip for someone looking to run an internet venture in India?
There is a lot of power in talking directly to a customer and hearing a customer’s voice. Leverage that in whatever shape and form and make that a central part of your business.