Learning lessons from a failed venture

Logistic issues shut fruit juice start-up within months, but the experience didnt kill entrepreneurial spirit
Shally Seth Mohile, shally.s@livemint.com

Bharat and Indira Rajepandhare, a practising doctor and lawyer from Kolhapur, hope their son Koustubh learns from his shelved entrepreneurial venture that sold packaged fruit and vegetable juices. Now working with Deals and You, an e-commerce site, as a zonal head, Koustubhs eyes light up as he narrates his tryst with entrepreneurship. On his way back from his regular gym workout, Koustubh sensed a business opportunity when he saw young as well as old people drinking fresh fruit and vegetable juices from street-side vendors. Why not sell them as branded, packaged juices or, even better, get them home delivered? Test marketing revealed Kolhapur was ready for such a venture. Within days of introducing the products, which included fresh juice extracted from wheat grass, bitter gourd, bottle gourd and beet root, he was swamped with enquires. within six months from the initial 100.Sales tripled to touch 300 packets a day Koustubh felt the market potential was much higher at 4,000 packets a day and customers were willing to pay a premium of Rs.3 over the street price. But as the days went by, he realized that in business you are only as strong as your weakest link. In his case, logistics and teamwork were not his strengths. He worked hard from dawn to dusk managing everything, from buying vegetables and fruits from the local market, training the support staff, sorting the juice packets on the basis of area and type of juice to be delivered to marketing, promotion and accounting. I missed a team. Besides capital, you need multiple brains to run a business, said Koustubh. Overtures to some of his batchmates at his MBA school were cold shouldered; none

of them was willing to sacrifice an assured income and regular work hours to join a start-up. To keep the juices fresh, production would happen through the night and packaging in the early hours of the morning before delivery began. Distribution was a challenge. The quantities were still too small for any distributor to see merit in the product, which meant Koustubh had to put in place his own distribution mechanism. He appointed delivery boys to do the jobbut in a few weeks a new set of challenges emerged. There were times when the boys didnt show up, and Koustubh ended up going door-to-door himself to keep the promise of delivery to customers and to save products that were perishable. The small niggling issue of absenteeism morphed into a big one and by the 10th month drove him to a point when he realized he couldnt do it anymore. It was time to shut Kings International Ltds flagship brand Neutrolics. Maybe. I didnt fully understand the dynamics of running the business, he says. The thought did cross his mind that he needed scale, but that wouldnt come without investments. May be he should have approached a venture capitalist or an angel investor who would have invested in his expansion. What prevented him from taking that route was a lack of confidence that they would see enough value in the business. After having experienced some harsh market realities, Koustubh says: It is not that I have accepted defeat or thats the end of my dream to do something new and different. Whats the use of my good education and my MBA degree if I dont take this experience as a learning and constructive feedback. It may not be vegetables and fruits but I will dirty my hands again. I treat my discount company business more like my own venture, says the 25 year-old. Within 13 months, he has a staff of around half a dozen people reporting to him. The only difference now, he says, is that he has a team to fall back on should something go wrong. The bigger challenge, he says, is an emotional one. My parents had high expectations and they found it extremely tough when they had to say that their MBA son had turned into a juice seller. It hurt when they always told my younger sister: You do better and dont be like your brother. Mint is a strategic partner of National Entrepreneurship Network, which hosts the Tata First Dot.