For all newbies, a direct-to-consumer company OR a digitally native vertical brand (DNVB) is an online first/ online only product offering that’s maniacally focused on customer experience. These companies generally start with a niche and directly sell to consumers via their online website or their own offline stores. They take pride in creative products with great quality and reasonable prices. As they control their own distribution and thanks to subscription economy, they enjoy great gross margins with high customer lifetime value (CLTV).
I like these companies because, they are obsessed about their customers. I strongly believe companies who care about their customers and do whatever it takes to make them brilliant are the ones who succeed in the long run. This is the same reason why I love AmazonBasics and I so wish Amazon launches a bank and an airline.. in fact I wouldn’t be surprised if somebody somewhere is already writing a plan :)
As I kept digging deeper to find such brands, I found there are many hidden gems in India and discovering them takes time - I first found VAPH shoes on Flipkart when I was browsing through shoe listings and came across Eyecandy leather wallets on LBB. I decided to fix this problem and was inspired by Andy Dunn to create “The encyclopedia of Indian direct-to-consumer brands (aka - DNVB - digitally native vertical brands)”
I hope you will find this list useful and further contribute to the list by suggestions names.
Also, if you are a founder building a direct-to-consumer company - I’d love to help you in anyway - product/sales/recruiting/funding, so feel free to reach out to me at sudheendra.ch [at] gmail.com :)
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” - George Bernard Shaw
Unreasonable men and women are the category creators, you can see their Utopian vision in the products they build. Building a category creator is a long, tiring but rewarding journey. When I asked Pat Grady (Investor in $HUBS, $NOW) about HubSpot’s journey, he said that during the initial years, almost every quarter was a slog. The real hockey stick growth started after 5 long years of founding.
Sales cycles tend to be longer than a traditional SaaS company because your marketing and sales teams are first educating customers about your philosophy, before talking about your product. If that was not enough, you run into product adoption challenges as well. Your solution is a new way of working for customers. You’ll need to invest heavily in educating your customers. With high CAC (Customer Acquisition Cost) and low LTV (high churn, low lifetime value), it’s very hard to build a sustainable SaaS business.
Perhaps, it’s no surprise that even company like Apple had to go through this..
They say, when the going gets tough, the tough get going. The ultimate returns for a category creator is when your “Brand” starts taking over the “Category”.
Inbound Marketing vs HubSpot
HubSpot coined the term “inbound marketing”, they wrote a book, built
- a community for inbound marketers, launched Inbound Marketing certification to educate the world about this new category. It took time, money and effort. If you look today, people directly search for HubSpot more than Inbound Marketing on Google.
CRM vs Salesforce
Salesforce was not the first CRM, but they were the first ones to make CRM available on the cloud. When they went public, their stock ticker was $CRM. They did that to raise awareness among the public about CRM software. If you look at Salesforce’s performance, they really started taking off in 2010, same time when their brand was taking over the CRM category.
eCommerce vs Shopify
Taxi vs Uber
Food Delivery vs Swiggy
So has your brand taken over the category yet? Until then, keep fighting :)
It’s been 5 years since Marc Andreessen said Software is Eating the World, a lot has changed since then. Software still seems to be eating the world.. look at top valued private companies list, almost every company is/uses Software to solve customer problems.
Unlike 2010, building software is much today, so is acquiring customers and making money. If you look at this picture below, there are over 1000 software companies just solving Marketer’s problem.
So, if you are a founder/PM building Software, how do you thrive in this war? Bake magic into your software. Didn’t understand? Let’s look at the evolution of software..
Software 1.0: Buying 1.0 software in 80-90′s is like buying insurance. This type of software is designed to improve efficiency of the business. It made users data entry folks, while Buyers/Managers enjoyed viewing/valuing Reports. CIOs are the buyers, desktop/ on-premise software with multi year contracts and huge downtime when it’s time for software upgrades.
Software 2.0: Also known as SaaS, software that sits in the cloud - there by faster product improvements and relatively cheaper when compared to 1.0. This is the same time, consumer internet came into picture (Amazon, Yahoo etc.) and users experienced internet for the first time and everyone loved it. Software 2.0 was built keeping user’s workflow and users played a great role when it comes to buying software. With pay-as-you-go model, easy sign-up process SaaS companies enjoyed great revenues. But there was one problem and it is becoming huge one. Commoditization of Software.. remember the Marketing Landscape diagram? same is happening with Project Management tools - Asana, Projectplace, Trello, Jira etc. and a 100 other tools - everyone solving same problem with very little differentiation. Zendesk vs Freshdesk, Optimizely vs VWO, Slack vs Flock.. I can give many such examples.
Software 3.0: If you read this year’s Founder’s letter written by Sundar Pichai he mentioned the word AI/Machine Learning 10 times! That’s how much Google believes in data network effects. If you look at Google products - they baked magic into their products - google search learns from you, so does google now - google photos automagically organizes your pictures & YouTube recommends you new videos based on your watch history and smart replies in their recently released Allo messenger are FTW!
Software 3.0 is the new SaaS, software that learns from your usage and personalizes how you experience the product next time when you login. Software is getting better every time you spend time on the app & perform certain actions(events), that means intelligent workflows for the user. And thus making it incredibly hard for a user to churn or stop using the software. Software 3.0 can’t be displaced so easily by products that have similar features or lower price as Software 3.0 has a unique advantage with “proprietary” data they gathered from usage.
So, if you want to build a successful software - ask yourself how can I bake magic (AI/ML) into my software? ;)
I consider myself extremely lucky for going to BITS Pilani - the institution which created some outstanding leaders in this world. BITS network is so strong that you literally can reach out to almost anybody for an advice - no one would say no to you!
So, I whatsapped of my mentors Phani for time and our breakfast meeting became a 4 hour long conversation which definitely had significant impact on my work & leadership style.
One of the best advices I’ve got from him was when it comes to working with people, see the glass half full - no one is perfect, everyone makes mistakes. When you start seeing the glass half full - you seem to notice how amazing every one around you is. You really start looking at things people are doing well and try to develop respect, empathy and start learning from their examples.
Simple, but amazing right? Everyone is unique, what makes a great leader is the ability to learn good and ignore bad every time you come across any new personality.
I hear this question from people I try to hire and hearing this very often these days. If startup = growth and growth is a function of the team, product, revenues, funding etc.
With the plethora of startups, everyone is looking for a developer or a designer. I get lot’s of emails asking for referrals, sometimes from startups and sometimes from folks who are interested to join startups.
A bad way to ask for referral - Hey Sudheendra, do you know any good rails developer? We are looking to hire one immediately, would appreciate if you can connect me with someone.
A good way to ask for a referral -
Hey Sudheendra, Do you know Vivek? With 2.5 years of experience in PHP he seems like a good fit for our *next big startup*. Thanks to LinkedIn, I noticed you are his 1st connection. Would you mind connecting us?
Hey, LocalOye is hiring Software Engineers. I really like what they are doing and the founding team is just awesome. Would you mind introducing to the founders?
Today, I’m launching ReallyGoodJobs.com to help startups find amazing talent and vice versa. I’m sure you receive lot’s of useless emails every day, still you open and read each and every email (unless it’s spam/junk). Why not subscribe to this amazing newsletter which sends you 5 really interesting startup job opportunities once a week? Even if you are not looking for a job, this might help you refer your friends or sometime in the long run. Don’t tell me later I didn’t know *That Amazing Startup* was hiring, go now and subscribe - bit.ly/reallygoodjobs
PS: If you are a startup and hiring for a great position (a really great one)? email me at sudheendra@reallygoodjobs.com
What is your current compensation (split it into basic, take home and benefits)? Do you have any salary expectations?
If you are hired, when would you be able to start?
If you are a startup and looking to hire someone, ask these two questions before starting the interview process. Saves lot of time! I spoke to many candidates who worked at Amazon/Flipkart/InMobi/*ANY BIG COMPANY* and willing to join startups. But the actual reason is they are looking for a salary hike. It’s good, everyone has their own commitments.
Also some of these companies have this policy of *notice period*, for many it’s 15-30 days, while for some it's up to 90 days. No point in talking to these folks if you are looking for someone who can join immediately.
