'Market share and mindshare go hand in hand'
Jun 04 2013, 15:14 | By SME Mentor
The smallest ideas can bring about the greatest successes. For Varun Agarwal and Rohan Malhotra, both 26 and founders of Alma Mater - a firm specialising in customised memorabilia and merchandise for schools and colleges - the starting point was simply loving their school.
Their shared passion transformed into a business idea, which led to the creation of their start-up in Bangalore in 2009. In just four years, the company has grown into a successful merchandise brand having supplied products to over 2,000 educational institutions across 140 cities and 6 countries. Their success story, however, had very humble beginnings.
Agarwal graduated with a BTech degree in Telecommunications and was running a film production company called Last Minute Films. Malhotra was a BCom graduate and working as a management consultant at KPMG. Both friends were alumni of Bishop Cotton School, Bangalore, and were fiercely proud of their alma mater.
During an alumni get-together in Mumbai, they wanted a simple 'Cottonian' sweatshirt but had none. They also realised that students and alumni everywhere would love to own similar merchandise. Thus, the seeds of their start-up were sown.
The duo had to work through challenges like their humble beginnings, lack of business experience and creating a market space. Today, these proud alumni look back at the early days and revisit the things they did right.
Varun Agarwal Co-Founder, Alma Mater
"It was difficult and we were clueless. We didn't have any business experience and we learnt as we went along. The biggest challenge as a young entrepreneur, at least initially, was getting people to take us seriously. Whether it was the principal of a school, a vendor or our own parents, it was frustrating to have age as a barrier. However, we weren't talking to people with only an idea. We had samples, we had sales, and we had already taken strides towards starting our business.
Believe in your idea
Sometimes you have to be impulsive and take decisions on the go. If you believe in something, go for it! You may be right or not. But both ways, you win. If you are on the right track, consider yourself lucky. If you're not, you will learn. We focused not only on market share but also on mindshare. We wanted the customer to know and follow our brand, and owing to our unique product we decided to evoke a connection and a sense of nostalgia. Our focus was on creating a brand and connecting with the audience on an emotional level.
We started the company with Rs 1 lakh from our personal savings. Initially, we were worked out of a garage till we moved to our new office. We kept rotating the revenue for two and a half years and ran our business without taking a single loan. It was only in 2012, with a solid client list, brand name and working business plan that we received our first angel funding from IAN (Indian Angel Network).
No substitute for hard work
It is only when you start your own venture that you know what 'working hard' really means! It's not only about working long and late and over weekends; it is also about multi-tasking and not just being the 'CEO'. Being an entrepreneur is a lifestyle choice, not a career choice. It is hugely challenging and extremely fulfilling.
Creative and cost-effective marketing
Don't go the regular way when you're a start-up because you have to think of the most creative and cost-effective way possible. We were competing with people who had money and were using TV and newspaper space as marketing tools. We decided to stick to our strong points and focused on online marketing. Social media like Facebook can take you miles and we started capitalising on it to spread the word to attract customers in many different cities.
Creating the right revenue model
Our revenue model is through the sale of merchandise. Around 90 per cent of our business is bulk customised orders from students of schools and colleges. The remaining 10 per cent is selling official merchandise of schools/colleges via the online store. The company pays per transaction royalty to schools and colleges on any merchandise sold online.
We started with a hybrid model, where some of the things were outsourced and some were produced in-house. We continue that today and have around 60 employees in the production and front-end business with our own stitching and printing units employing 40 people in-house.
With over 3 lakh followers on Facebook and a turnover of Rs 7 crore in four years, Alma Mater has firmly established itself. Varun Agarwal's book about their venture, 'How I Braved Anu Aunty And Co-Founded A Million Dollar Company' is already in its third edition."
As told to Sonali Chowdhury
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