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My encounter with that proverbial duck happened precisely a decade ago. I remember the evening vividly. I was casually chatting with a family friend whose start-up had got an Exit for 5 million dollars after nearly seven years in business. When I heard his story, the first thing that went through my mind was, "That isn't much, is it? I'd have expected a bigger exit value after seven gruelling years!"
Come 2021, after nine gruelling (albeit rewarding) years in entrepreneurship; I realized how wrong I was that evening in 2011. It'sIt'sIt'sIt's not as simple as I had thought. Of course, the man was a duck (aren't all entrepreneurs?). The come-what-may calm and enigmatic grace on the surface was merely a visage, concealing the frantic action happening under the surface. Synchronizing a million moving pieces into a seamlessly optimized symphony that delivers across stakeholders is easier said than done. The family friend deserved a salute. I had missed the woods for the trees.
Our journey of 9 years is a familiar path for founders. We started in 2012 as Giftxoxo, an experiences and activities marketplace in India. We were trying to build something similar to what a Klook, GetYourGuide, or Viator is doing today's international markets. However, we realized that this business was ahead of time since both supply and demand are fragmented in India. We made our fair share of mistakes, like wrongly estimating the Indian market and being too late for the international markets. We decided to shut down Giftxoxo in early 2018 and pivoted into Xoxoday, a horizontal technology platform for rewards, incentives, and payouts. We chose this business model because we had tasted fair success in growing the experiences business through rewards and incentives.
Xoxoday is 3.5 years old today, and we are doing an ARR of USD 5M with over 1000 clients globally. We are proud of what we have achieved over these 3.5 years. It has been an incredible journey with fun and challenges, happy and sad moments, and loads of memories and learnings. Let me keyboard some standout takeaways that might help fellow entrepreneurs in their journeys.
1. PRIORITY | Plan - > People - > Product - > Process - > Profit, in the order, with Pause & Perseverance.
These terms may be familiar buzzwords, but the trick lies in the sequence. Get that wrong, and you could be stepping into a rabbit hole of endless iteration, chaos and frustration. Get that right, and half the job is done. There is a method to the madness, and a sequential approach can fetch you vastly better results with the same levels of input and effort.
Decision-making deserves a mention at this point. It is dicey territory, especially when there are multiple founders. The secret is to get the disagreements and debates out of the way as quickly as you can so that everyone can commit to a plan. We learned this the hard way during our Giftxoxo days. In our zeal to factor in every variable and cover every unpredictability, we cast the net far and wide - soliciting opinions and second opinions from as many fellow investors, mentors and senior team leaders as we possibly could. Error 404. Too many meetings and perspectives meant we could never get the best execution – certainly not quickly enough - leading to delay, confusion and stress. All of which could have been avoided. Big learning? Rely on the data, but go with the conviction. We cut the fat from our decision-making process at Xoxoday in 2018, and today, we are a far more productive (and happy) bunch.
2020-21 pandemic gave us a good pause from day-to-day business. The work from home gave us ample time for deep work, and to fine-tune our plans and the crisis situation suited our resilience. We could execute our plans and strategies in more focused ways and have achieved better results in all dimensions in this year compared to any other year.
2. PEOPLE & CULTURE | Your biggest competitive advantage.
We did not do a good job at this in our first attempt at Giftxoxo. Being young and first-time entrepreneurs, we initially interpreted culture as annual outings, monthly town halls, pizzas, and foosball. But these are activities, not culture. They can bring in the action and excitement, but can’t bake in the belonging and alignment. Frankly, at first, we didn’t realize what we were missing. The consciousness came with time – thanks to our serendipitous encounters with books (Carrots & Sticks, Hard Things About Hard Things, and Radical Candor, to name a few) and some exceptional mentors. We realized that culture does not happen, one has to work towards building a great culture. Culture is a fundamental management tool and one of the few sources of sustainable competitive advantage for companies today.
During Giftxoxo, we made errors in hiring the wrong people at the right time or right people at the wrong time. E.g. We hired a great business guy when the product was still in its early days. At Xoxoday, we have been over-investing in our people, getting the right people in the right places, and helping them grow the business. This has been our biggest and most satisfying learning, and today our success is largely due to the ‘Humans of Xoxoday’. In fact, one of our own products, Empuls - which helps companies engage employees meaningfully and build a people-first culture, bakes in our own learnings while building a good workplace. We have seen first-hand how respect, recognition, and relationships can drive great results. Your people come before your customers. In fact, your employees are your first customers and you have to take utmost care of them.
3. PRODUCT | You can’t please everyone
In the early days of entrepreneurship when you are bootstrapped, it’s easy to be tempted by any opportunity that comes your way. When you are in a B2B business, you might end up building products and features that can make clients smile over the short term and keep the cash registers jingling, but may not be a good fit for your product over the long term. We too started out romancing the low-hanging fruit of custom features to please a heterogeneous set of clients - but took a very rigid approach from 2018, unabashedly saying no to anything that was a short-term revenue for the bigger product vision. This has helped us greatly in scaling business motion quickly and seamlessly across all teams. Defining our ICP, target audience, and target markets helped us define our product roadmap which could scale as we progressed.
4. PROCESS | Reinvent the game, not the wheel
Good processes can lead to better performance and productivity. Companies can scale only if they invest in processes and process automation. For one thing, processes free you from the micro-details, letting you focus on the big picture. For another, it makes it extremely easy for all stakeholders in decision-making.
But how to know what processes do you need and how do you get business automation in place? Well, insights are “in your sight”. If you have an eye for detail, you can improve processes iteratively, month on month. Even today, I read 50% of our customer care tickets every single day which is the truest source of information to improve everything about us. Though our revenues have multi-folded across countries, our support team size has remained pretty much the same since 2018. We use over a hundred software tools for automating internal processes and optimizing efficiencies across functions– all to ensure that our teams get quality time to focus only on work that warrants human attention. The rest is left to machines.
5. PROFIT | Don’t take your eyes off economics.
We have done very well in this metric. We built a profitable business by making sure every transaction brings in profit or influences it measurably. We aren’t swayed by flavours-of-the-month or fancy KPIs, though they can come in handy for tactical outcomes sometimes. Overall, this approach has helped us stay strong and grow, without raising any funds. Our profits are not only about adding new revenue but also about how we keep expanding our existing revenue and optimizing costs to improve the bottom line.
6. CUSTOMER FIRST | And second, and last.
Every founder talks about customer-centricity, but it means different things to different companies. It can be about letting the customer lead your product decisions or it can mean meeting the customer more often than is required. But this customer-centricity does not give any ROI or value to the customer in the long term. Rather, it can be about taking the lead yourself - being emphatic with your customer, co-creating where relevant, and owning the narrative. And finally, bring data-driven benefits to help them succeed with your products.
In the initial years, we were wrongly following the former strategy which led to wrong product decisions at times to get short-term revenues, a typical error in software product companies. We understood that customer-centricity is not about doing anything the customer is asking for in the product, but to deliver true value to the customer. So it was about the Why rather than the What.
At Xoxoday, we ensure that we maintain high-quality standards in whatever we do, although we still have a way to go when it comes to meeting those excellence benchmarks. We are extremely customer-centric, an ‘industry envy’ in customer churn ratios, and boast a CSAT of over 96% consistently. This is all thanks to our customer success and support teams.
7. PLENTY IS A PROBLEM | Creativity comes from your constraints.
When you have too much too soon, you are going to be a pilot brat in most cases. Our bootstrapped status has been a blessing in disguise. The entire founding team comes from humble family backgrounds. Growing up, we were all taught about the value of staying grounded and putting in the hard work. Respect for frugality and optimization comes naturally to us. It’s no coincidence therefore that the organizational DNA has – right from Day One - been about doing more with less, minimizing wastage, and nurturing a strong profit mindset.
They say when one of the body’s senses weakens, another over-develops to compensate for it. It’s why blind people tend to have better hearing, for instance. In our case, a thrifty habit has caused our creative instincts to blossom. No matter what we do – be it hiring, marketing, infrastructure, GTM, or anything business - we innovate to do it with minimal expenses without compromising on the results. Staying lean and mean across the value chain has helped us create a profitable venture and a revenue of USD 5M last year.
8. COURAGE & CONFIDENCE | Guts is the ultimate capital of the business.
In a hyper-competitive market where product, price, and promotions are increasingly commoditizing businesses, your gut is the X-Factor that can upset the equation. One can copy your product or promotions but one can’t copy your perseverance, passion, grit, or courage. We did well in this aspect, treating our competition with respect rather than fear. We won new customers and weaned customers from competitors. The only regret is that we did not show similar levels of self-belief in some of our investor discussions. In the early days, we used to lean in too much onto their opinions, ignoring our own vision and execution skills. In hindsight, we should have backed ourselves more. After all, we are one of the very few companies in the world that’s generating real profits, growing YoY, delivering solid technology solutions, and having a great team. There was no reason for us to be on the backfoot in the fund-raising process.
While we are growing well without any funding, we can certainly achieve 5X to 10X growth with the right investments. One can grow well without funding too, just that it may take a few extra years to reach the promised land.
9. STAY HUNGRY, STAY FOOLISH | What worked for Steve, has worked for us.
We have always been very open and eager in taking advice and feedback (sometimes to our own detriment, as I have mentioned earlier) - be it from family, investors, mentors, employees or even competitors – utilizing whatever insights we received to fine-tune the course. Keeping the ego down hasn’t been a problem so far either (but the ego is a tricky animal, so we can never get complacent). This has helped us stay nimble, humble, and aware of the market. And it’s not just us founders, our learning appetite runs across roles, and there’s a thick crisscross of information and insights happening across teams every day. This has helped us move the vectors in the same direction, and maintain high growth momentum.
FAMILY, FITNESS, FRIENDS before the FIRM | Don’t miss any of them, don’t mix any of them.
I was asked in an interview how I manage to balance my first family at Xoxoday with my family at home. What could have been a complicated question was in fact a no-brainer for me. Xoxoday was work, it was never going to be my first family. Not because I valued it less, but because the two lay on very different axes. Some things aren’t meant to be compared – they are designed to coexist, instead. My first family is my family and everyone at Xoxoday is very close to my heart. But Xoxoday, in itself, is just about business. The lines must be drawn, and they must be drawn with clarity and force. Founders - and indeed, everyone – will do well to understand the priority sequence of family first, fitness second, and friend third – in order to have a balanced life. I keep fitness which also involves food & nutrition before friends because you can't miss spending the “me time” working on your body, mind and soul.
You can always reverse the fortune of a business or start a new one - but it’s not so easy to reverse human life.