Anupam Mittal is the founder and CEO of Shaadi.com which was founded 15 years back, and it is now regarded as the world's most successful matrimonial site. Mittal founded Shaadi.com after he met a marriage broker. Mittal has been included in BusinessWeek's India's 50 most powerful people and has been recently conferred the Karmaveer Puraskaar. In an exclusive interview with AlooTechie, Anupam Mittal shares the story behing launching Shaadi.com and the 15 year long journey.
15 years ago, internet was a luxury in India. What was the idea behind launching Shaadi at that point of time, and especially when you come from a background in textiles business?
I was exposed to business at a very young age and I realized over time that building consumer businesses is what really excites me. My father had a textile business so I joined his business after college. In 1996, there was a lot of buzz about the Internet in India. While several internet start-ups were developing a variety of web-based solutions, I was evaluating the right vertical to get into the Indian Internet market. That’s when I came across a professional matchmaker in India and his business model intrigued me and as I drilled down further I realized that basically he went from door to door within his community, and to people he knew and carried ‘resumes’ with him. Essentially, the choice of a life partner was determined by how far the matchmaker could travel and how much weight he could carry. I wondered what would happen if we took away the spatial and geographical limitations away by putting up profiles on the Internet. Thus, Shaadi.com was set up to provide a superior matchmaking experience by expanding the opportunities available to meet potential life partners.
The business started as Sagaai.com. What was the objective behind changing the brand name?
In 1996, the launch of Sagaai.com was accidental. However by 1999-2000 when the dotcom bubble had burst in the West, I saw some serious indications of growth on Sagaai.com. It was around 2000-2001 that I bought the Shaadi.com domain name. I was certain that Sagaai.com as a name wouldn't work. We needed something short, one that could strike a chord and be easily remembered. Sagaai.com didn't have that ring to it. Plus, people spelt it differently. So I decided to buy Shaadi.com, which I was convinced was a great name for a matrimonial website at a hefty price and risk of $25,000! This was really all the money we had!
What were the initial challenges that you have faced while setting up Shaadi.com? How did you convince your consumers in order to build trust and make online payments?
Poor connectivity, low bandwidth and a lack of credit card penetration were major challenges when we started our Internet-related businesses. However, when we started Shaadi.com, most of our revenue actually came from NRIs. The number of resident Indians who used the platform at that point was low compared to NRIs, thanks to India's connectivity challenges. Over the years, this has changed. A significant portion of our revenues come from within the country.
Traditional and arranged marriages over the internet were a laughable idea when Shaadi.com started. At that time, the mind-set of Indian parents was conservative and technology–shy and here we were – a tiny company with renegade (read naïve) entrepreneurs trying to reinvent marriage in India. We had to spend significant energy on PR and significant money on media to educate people about the advantages of online matchmaking. We were lucky in the sense that the media was very friendly towards what we were trying to do and we were able to drive tremendous awareness through well executed PR and friendly reporters.
It was also a huge challenge to get Indians to pay online but overtime we realised that Indians are very value conscious consumers. Online one cannot have a sales person thus it was harder to convince them. Hence, the way we sensitize them is by providing them a lot of services free, the reason being only when you provide them with a lot of value will they be willing to pay. So for example let’s take Shaadi.com one can come there, look at profiles, click on the best-suited profiles and send in ‘interests’ but only when someone accepts an ‘interest’ is the time when we ask our consumers to pay. This works as a win-win for Shaadi.com and our customers. When we launched this model most dating/matchmaking sites in the world moved to the same.
The other big challenge was in hiring people. The first few years were spent making all the wrong hires and the next few years in correcting them. Our hiring strategy was simple – hire anybody who will join. For the most part people did not want to join a small, unknown company trying to do something as ‘foolish’ as reinventing marriage. Especially after the dot com bust this problem became worse. A couple of years after founding Shaadi.com I realized that our technology was a complete mess as we had hired the wrong people and I did not understand enough about technology to be dangerous. Luckily for me, my cousin Anand Mittal, joined as a co-founder and took over the technology reins. He has been one of the pillars of Shaadi.com since. Over time though, I learned to ‘sell’ my vision and people started to buy in. Fortunately for us, the smart ones did. Through years of mistakes and painful times, I can now confidently say that we are at a point where people want to join us and we have a very clear idea of who we wish to hire. That makes all the difference.
How has the scenario changed in the last 15 years?
15 years has been quite a journey, at that time the Internet was just starting up in India. Today, the growth in this industry has been tremendous. If you look at the Internet eco-system as a whole and if you look at India, particularly, what’s happened now is that while the growth is there, the usage is increasing and there are about 65-70 million active Internet users. The real story is that these people are now transacting online. These people have come online in the last 3-4 years and so now you’ve got about 15-20 million people online in India who are actually transacting. This lends to the e-commerce boom that you are seeing.
So, the e-commerce industry is suddenly large and matrimonials and other classifieds are a part of it. The other thing that has happened is intensity of usage. Social networks have given people a good reason to be online and that eventually benefits the entire eco-system.
Further, online matrimonials are now culturally accepted as a good way to find a potential life-partner thanks to all the time and money we have spent educating people. Thanks also to our competitors, past and present, who have assisted us in doing the same. We can now focus on business metrics as opposed to trying to create awareness.
In terms of people availability, this has changed enormously in the last 15 years. We finally have a pool of talent for the Internet industry and I think that is perhaps the most important change that will determine the success of the industry in the future.
The other change I also like is that internet companies don’t have to pay advance monies to buy advertising anymore like was common a few years back.
In short, everything has changed … for the better.
How the company has been growing in the last couple of years in terms of revenue? What are your revenue expectations this fiscal?
We are happy with our growth over last couple of years and continue to execute on the business plan. Today I see the size of the matchmaking industry at 5000 cr but most of it is unorganized. The organized component is only 10%. While this may appear small, it affords a very large opportunity to anybody who understands this business and is in it for the long-term. I think we can continue to grow above 30% for the next 20 years since we have such a long way to go. The key lies in being able to understand your consumers and build products that address their pain points. We have built our entire organization around this ethos. Now, we just need to execute for the next 10 years and we would have built a highly profitable company with a Rs 1000 crore in revenue.
What was the initial investment that was pumped into Shaadi? Has the company started making profit, if not how soon you see that happening?
We started with Rs 2 lacs. Over time we raised approx. $12 m and yes, we are profitable.
What was the idea behind launching Shaadi offline centres?
Marriage is a very personal and culturally sensitive issue especially in India. Here the entire family is involved in making the big marriage decision and so it became very evident to us that we needed to provide a human touch for the more traditional mind-set. When we first launched the number of people online was also limited so another reason was to really expand the market. Today the Centre network is an assisted matchmaking business that not only helps people find partners but also helps people in understanding how to get the best out of Shaadi.com. The Centre network provides a personal matchmaking service in a comfortable setting using cutting-edge technology.
After Shaadi.com, you have launched Makaan.com, Mauj Mobile Froper.com, AstroLife.com and People Pictures. How has been the experience of operating in three extremely diverse businesses?
We were early entrants in the Internet space in India and could consequently afford to be opportunistic. Mauj/Mobango and Makaan.com were opportunities we saw in the market and we went after them. We realized that we could build valuable businesses in these segments using the core competencies that we had already developed and we succeeded. Fropper.com was a play in the emerging social media space but competing with global majors in this area was never going to be easy and so we gave up this battle. Astrolife was an attempt to organize a very large unorganized industry in India but we underestimated the challenges. We have since divested. People Pictures was a result of my passion for films and I hope to build it into a viable creative studio some day.
What are your priorities at People Group right now?
There is only one priority currently i.e. scaling up. We are in 3 great segments of the industry – matrimonials, property and mobile applications – all of which provide secular growth for years to come so everyone is focused simply scaling.
Do we see People Group going for an IPO soon?
It is hard to say for sure at this point but it is something we continue to discuss.
Shaadi has advertised both on conventional as well as new media? What were the different objectives behind advertising offline and online? Does brand building happen on internet?
When we started in 1996, advertising on the Internet was inexpensive because the Internet as an industry was not doing well. Also companies like Yahoo and MSN were selling space at meager costs. Buying an entire homepage cost pittance at that time as compared to what it costs today. What we quickly did was we used this opportunity wisely and cornered our distribution on the Internet. We had partnerships with Yahoo, MSN, Rediff and more. As a result anywhere one went on the Internet they would see Shaadi.com as the matrimonial partners.
Today branding on the Internet is an expensive affair but it is something we continue to do. However, acquisition is what we focus on as far as the Internet is concerned. Besides we use TV, Outdoor, and Radio as well. Integrated campaigns are critical to get the best result from brand advertising. Broadly though, I believe brands are built through great products and great customer service. Advertising can only support the brand.
When is the right time for an entrepreneur to exit a business?
It depends on the entrepreneur’s goals, the business he has chosen to be in, and his abilities. If an entrepreneur has chosen a very large market to build a business in, has leadership in that segment, and possesses skills to scale, there is probably little reason for him to exit. However, if the characteristics are different then he should consider exiting at the top of the hype cycle, which of course is easier said than done.
What would be your suggestion to budding entrepreneurs?
If you are looking for start-up capital send me your business plan.
One good decision and one mistake that you have made in your entrepreneurial journey!
The best decision for us, I think, was to put all the money in our bank and acquire the domain 'Shaadi.com' in 2000. Everybody advised us against it, and thought I was crazy but in hindsight it turned out to be one of the single most important decisions we took. Until then the site was called 'Sagaai.com', a term which is not very well understood and can be miss-spelt in many ways.
We have made many mistakes and we continue to make them every day. However, if you had to ask me for the single biggest mistake I have made, I will reserve that for another interview. Talk to me a year from now.
