In just five years since its launch in 2016, boAt Lifestyle’s founders Aman Gupta and Sameer Mehta have led the audio tech brand from India on the road to almost 100 per cent profitability.
Launched in 2016 by Aman Gupta and Sameer Mehta, audio tech and wearables brand boAt Lifestyle is already profitable. It also recently emerged as the 5th largest wearable brand globally, according to IDC’s latest Worldwide Quarterly Device Tracker report (4Q20).
The brand almost tripled its earnings from sales to Rs 700.44 crore in FY20 from Rs 239.4 crore in FY19. Its profits went from Rs 9 crore in FY 2019 to Rs 48.5 crore in FY 2020.
In the past year, boAt also doubled its employee strength and established a local R&D centre in Bengaluru, expanded into newer categories like smartwatches, besides launching over 20 new products in the audio category in FY21.
“Being an entrepreneur requires you to surf through different turfs in one go. This needs passion and love for what you are doing. Find what you like. Find your purpose and everything else will fall in place,” Aman tells Shradha Sharma, Founder and CEO, YourStory, at the launch event of YourStory’s Brands of India initiative.
In a fireside chat, he shared boAt’s playbook of becoming a global iconic brand from India.
Here are some key takeaways
- Look at ROI in everything you do
- Do things the right way and money will follow
- Do not give in to the peer pressure
- Understand customer needs to know when to expand
- Find ways to create differentiation
- Relying on expensive bets is not necessary to build your brand
- Keep innovating
- consumer feedback is the best way to identify your product-market fit
- Place your core focus on building your product and brand
- Accept the fact that you cannot know it all
Look at ROI in everything you do
Aman, brought up in a Baniya family, and Sameer, a Gujarati, believe they had business in their blood. “In our blood, we have ‘dhandha’ as a way of life, and I am an ROI driven marketer,” he chuckles.
Also, a chartered accountant by qualification, his instincts have always been towards not spending too much money. Aman is the one who handles boAt’s sales and marketing functions.
“Everything I do, everything I spend, I look at ROI. Even when Samir and I started, we were at a coworking space, at a time when coworking was not as popular as it is today. Later, it became a fad, and everyone started doing it,” he adds.
One of his mantras is to save wherever you can, learn and do what you can on your own. Here are some examples:
- When a digital agency asked them to pay Rs 50,000 a month, Aman learned digital marketing and did social media marketing for boAt on his own for the next two years.
- Another example is celebrity branding. The team touched down most celebrities at an initial stage of their popularity and gained awareness through them as they grew and were cited in media using boAt products.
“Marketing is one area where we did not stop investing but we didn’t waste money either. We used to make money on every sale and the profitability was given back to the marketing. So, our expenses were very low. We never hired expensive resources. At the time, when B2C was not as hot as it is today, revenues were also very less. But that mindset of being frugal helped us,” he says.
Do things the right way and money will follow
boAt is among the few companies that have become profitable while raising limited amounts of external funding. [enter funding details]
It was not that the company was not looking at funding but it had to bear the brunt of some of the unfortunate events that happened in the telecom industry.
Aman says, “Jaise wo likha hota tha na Amitabh ke haath mai ki ‘mera baap chor hai’, to mere bhi likha hua tha. That was written before we were born; how we will die. It was a very challenging time for us when we started and we realised very soon also that for us, it was more about doing the right things.”.
Do not give in to the peer pressure
Although boAt founders did not waste money, they struggled a lot on the personal front. As Aman shared, he did not take a salary until last year and even took loans from his dad. Also, being a CA and an MBA from ISB, his peers started doing even better.
“But you do what you have to do. I know that I love selling. I love doing what I’m doing. So for me, I just wanted to do what I love, and the success followed,” he says.
Look for customer feedback to know the right product-market fit
Aman believes that one should go with customer feedback to understand their needs and if they are in a ready state or trust the brand enough to try new products being launched on the platform.
In 2019, boAT claimed that it sold over 6,000 units per day with four units sold every minute. Later, 10,000 pieces of one of its wearable brands were sold within one minute of launch on Flipkart. That was when they shifted gear, from audio to wearables.
“The kind of response we received from ‘boAtheads’ gave us the promise that the brand was of good quality at a logical feasible Indian price point. So, the fact that our community responded so well and bought our wearables gave us confidence to expand beyond audio. And that is when we launched our new brand Misfit, which is into personal grooming devices,” he adds.
Find ways to create differentiation
When boAt started out, there were 200 brands — both local and international — already selling audio devices in India. So audio was a cluttered commoditised market, and highly competitive.
In order to create differentiation, boAt first started hiring a lot of millennials who understood the behaviour of the brand’s young consumers. “Even today, I never hire a veteran of marketing. It’s these young guys who can do it better than me or most of us,” says Aman.
At the time of the brand’s launch, whether people would buy it was a big question. However, the turning point was the realisation that today’s consumer is using their headphones and earphones as a fashion accessory rather than only as a utility product.
“That’s the change we saw. And that’s where we bring in differentiation in form of price points and product quality. We called ourselves the Zara of electronic fashion. While our brand struck the cord with young ones, we also attracted those in the middle age group,” he adds.
Aman believes that once a startup reaches a certain level of success, it becomes necessary to invest in R&D and be on your toes as the industry changes very fast.
He says, “I’m passionate about what I do, but I’m also paranoid about a new brand coming up. I don’t want what I did to others, I don’t want somebody else to do to me. So that’s why I found myself to be paranoid about competition. And that keeps me awake.”
Find the right pricing
“We sell our product at a margin. We never lost money. We do not have too many expenses that we have to load too much on, so we kept the pricing logical — not too cheap, not too high. Just logical right pricing,” adds Aman.
Place your core focus on building your product and brand
Brands usually sell through three channels — offline, online or a combination of the two. boAt was born on marketplaces and then went offline, and now it is going to consumers directly.
“Throughout our journey, we have been focusing more on product and marketing, and not particularly on distribution and logistics. We found this experience much better on the marketplaces. So we kept our focus in building our product and the brand,” Aman says.
He also believes that once a brand becomes popular, the channel of distribution doesn’t matter.
“Today we have 10-15 percent of our business offline. We will do more than Rs 300 crore only offline, which is higher than a lot of B2C brands that are doing it only directly. So we have to only spend on the bottom of the funnel and probably keep that consumer with us. So, it was just about how we wanted to position ourselves initially,” he explains.
Accept the fact that you cannot know it all
When the founders appointed former Godrej Consumer Products executive Vivek Gambhir as its CEO, they were flooded with questions from the industry about their decision.
The problem, says Aman, is that most founders give into their egos and the misconception that they know it all. “But sometimes we don’t know it all. We need help and there’s no harm in asking for help,” he says.
“While hustle is embedded in me, Vivek is bringing in the muscle into it. He is bringing in a method to our madness. He is bringing in the structures that are required to grow from here,” he adds.
The co-founder adds that one needs to do things that are right for the company or the brand. Sometimes, there are founders who don’t want to let things go but instead of learning it the hard way, it’s better to understand them along the way while taking help from people who can do a better job.
On a closing note, Aman emphasises that if a brand doesn’t listen to its consumers, they will buy something else. This is a time when Indian shoppers are getting attracted and giving due respect to homegrown brands, which was not happening earlier.
“So keep listening, keep adapting, keep changing. That’s the mantra with which you survive. Just get the consumer and the value proposition right. And then you know, you can do it,” he concludes.
Brands of India is a YourStory initiative to catalyse the growth of India’s D2C economy. The initiative will bring together D2C ecosystem stakeholders, including brand builders, D2C startups, investors, corporates, and policymakers, to discover, build and help daring entrepreneurs create an additional 500 Brands of India in the next three years. To know more about this initiative and the D2C ecosystem, visit brandsofindia.yourstory.com.