Redefining wellness, one mosaic at a time

Revant Bhate, co-founder of Mosaic Wellness &Sanjot Malhi, Director and the lead for the consumer sector at Matrix Partners India cover the journey of building a house of consumer brands, aka,Mosaic Wellness & what it takes to build a consumer brand in India.

Salonie: Hi and welcome to Matrix Moments, this is Salonie and on today’s episode we have Revant Bhate, the co-founder of Mosaic wellness in conversation with Sanjot Malhi, Director and the lead for the consumer sector at Matrix Partners India. Mosaic Wellness is house of brand, focused on redefining the Indian wellness market and on todays episode they cover Revant’s transition from investor to founder and what that was like, what it takes to build a consumer brand in India and the problem they aim to solve through their recently launched brands Man Matters and Body wise. TuneIn to know more.

Sanjot:

Hi, Revant. Welcome to your first episode of Matrix Moments. Thank you for doing this. You and I have known each other for many years now, first as colleagues as investors at VC Funds and I know you and I used to speak a lot about consumer brands and how we’re both excited about consumer brands and so on. So tell the viewers a little bit about how you made that choice of going from an investor to now an entrepreneur -- or specifically creating this house of consumer brands.

Revant:

Thank you for having me first of all. You’re right, I think most investors I met during my phase either at Rebel or later at Kstart where when I became a newly minted investor I was like I had no clue what to do. So I think the first port of call was to meet a lot of other investors and discuss how they think about investing, what are the spaces that excite me. I think that’s where we sort of used to catch up a little. But I think to think about it – you know, I’ve been in the startup ecosystem for almost ten years now. And after the stint at Rebel Foods where we built a house of brands got an opportunity to do investing. And fundamentally I’ve always sort of gone back to a close friend and now a co-founder Dhyanesh for advice on what do I do now. I went into MBA, said what do I do now. I got into investment banking, what do I do now. Post Rebel when I got the offer from Kstart I said what do I do now. And he’s always been the guidance on, okay, this is how you should think about it. Because he is – while I’m a little bit of a passion, emotion kind of guy he’s the structured and objective thinker. And so we always used to keep talking about possible opportunities to invest in. We have done angel investments together.

When I got into VC we used to talk about consumer brands as such as well. And somewhere during that thought, I think 2019, we realized that venture investing into consumer brands was not the best kind of investments that VCs could make in India simply because the non linearity rate exists or network effects didn’t exist in this kind of businesses. And true VC returns as we all know get made when the outcomes are quite big. So I think that’s where this emerging thought was coming up that should there be more VC investments in house of brands per se. And while I was talking to him, you know, both of us excited that maybe one should build this way from India from the scratch rather than build one brand and think – that’s how I did at Rebel. After one brand we said we need another one to scale more, what if the idea was to from day 1 just start building multiple one of them. And though it was pseudo an investment thought process I think the more people I met with the idea everyone said this is a great idea but you should build it if you’re so passionate about it. Dhyanesh was very excited, and therefore both of us thought that maybe it’s the right time for us to give it one last shot before maybe we’re too old to start a business ourselves. So that’s a little bit about how we both made the journey from investing to entrepreneurship.

Sanjot:

Got it. Very interesting. Then coming to Mosaic Wellness, which is the company, maybe talk to us a little bit about how you think about the company, what the problem you’re solving it, what the vision is. And I know you have a very interesting sort of customer backwards approach – so maybe talk to us a little bit about that?

Revant:

I think the best learning I had at Rebel was the pure customer obsession that Jaydeep had and the quest to always do things differently. While food services was a $50 billion market most restaurants struggled to scale and we had to think a little bit out of the box which is why while we kept pivoting we also kept realizing that if you had a customer backwards view you would eventually find a model that scales with the consumer. And we built out great brands like Faasos, Behrouz Biryani, Oven Story etcetera. I think it was the same thought process that led us to think about health and wellness a little differently. When we looked at health and wellness what we saw was a large number of horizontals – some product plays, some distribution plays, some services plays whereas when we looked at the customer view what we realized that most customers had a few problems for which they were looking for solutions and they were actually going from platform to platform or business to business and it was fraught with enough friction where it was not the best experience. And that’s why we thought let’s reimagine health and wellness a little differently from a customer backwards view and even if it requires us to build a full stack model where we distribute, we have products, we have services, it may be a very hard execution journey but at least it may be the best thing what the customer needs because the customer really doesn’t care if your distribution is harder or services is very hard.

What they’re saying is I need a solution, are you able to give me that solution or not. And that’s the thesis with which at least we started, and the idea was if you have a customer backward view then you can’t have a singular platform that serves every consumer, right. You have to look at consumer segments and personas and look at their likes and dislikes and therefore while we may see it as a house of brands effectively what we’re building is looking at specific consumer segments and saying how do we solve the health and wellness for this consumer persona. Move on to the next, move on to the next and keep solving it till eventually maybe either we’re out of personas or we actually fail in this endeavor which is also a possibility. But at least we’ve started in that journey, start has – touch wood – been okay. And hopefully we can continue for a couple of years unless we find that we need to pivot to something else in due course.

Sanjot:

Yeah, very interesting. So we’ll continue talking about the business and how you’re building it. But before that maybe let’s talk a little bit about the capital and the fund raising part. I remember chasing you a little bit and you were very reluctant to take the initial meetings because I think you had some sort of thought process on how you thought about capital raising and fund raising initially. And then of course we began this journey. So maybe talk about how you made those decisions early on.

Revant:

So I don’t think it was an easy decision. I know – I think we’ve been very, very privileged to get the backing of top VCs in this country. But I think the fundamental issue if you go back to the first thing that I discussed why is consumer brands and VC not such a great fit. Fundamentally brands are inherently profitable beyond let’s say the first couple of years. There are no network effects to speak of. Yes, we see great brands like boAt, Mamaearth, now scaling to very, very good levels. But I think there is a time and distribution piece for everything at play. And fundamentally you’ll find very few outlier outcomes in brands as such. And therefore capital raising should be very prudent and that was the thesis that we had and therefore when honestly while we were surprised and overwhelmed with the interest we were still very confused that are we raising too much or should we raise this much or not. The only thing that I think finally got us to agree and raise the amount of capital was the fact that we didn’t know how much capital we would need to build out this full stack model because it’s not been done.

What we’re trying to build in terms of full stack in India I think just may require a lot more capital than – and in the end if we’re wrong we’re wrong but at least we thought let’s err on the side of caution and maybe if when capital is available at least my advice to entrepreneurs is never to say no. Of course with the caveat that when you raise capital it doesn’t mean that you need to burn through it and scale fast. At least once we got that alignment from all of you that the expectation would not be to go berserk I think we were then okay at least to take the capital because as I said we still don’t know how much more we’ll need as we try to scale this.

Sanjot:

No, I think very prudent. Coming back to the business so I think it’s clear that you’re building a house of brands and it’s a very sort of problem solution approach, you know, customer backwards like you mentioned. Maybe talk a little bit more specifically about what is the house of brands today look like, you know, how you think about picking the right problems and the solution sets?

Revant:

I think as 35-36 year old men we at least could relate to that persona and segment very quickly which is why the first segment that we built out in terms of men’s health for the late 20s, early 30s, mid 30s consumer persona who is now looking to invest in health and wellness was a I would say an easy and natural choice for us.

So we started with men’s health with the first platform which was Man Matters. Controversial name, I know but at least I was very keen to make sure that we get the thesis right because the consumer insight was very clear, right, men really don’t open up. And therefore matters of men is what this platform looks to solve for and we’ve looked at large problem areas whether it’s hair loss or skin health or sexual health which effectively are on the minds of every man between the age of 28-35 but at least it’s not being solved that easily because I think in the end somewhere I think it’s the taboo, somewhere is the fact that there’s no enough guidance or education available. Somewhere is the fact that you may start investing in this process but you just don’t stick on because it’s not something where there are 20 people on a Whatsapp group saying oh, I went to the gym and did 20 barbells yesterday, how many did you do. Right, there is no gamification possible in that sense as well because no man is going to say that oh, I’m applying this medicine every day, are you doing that same. So there’s no dopamine hits to be given in that sense – so it’s a very hard problem to solve and that’s precisely we said that okay, large market, large unsolved problem, let’s try and solve it. And that’s where we have started, the first platform.

The second platform is just launched this quarter which is in women’s health and I think as we hit like – we thought of launching the second platform because we hit PMF on the first and I think the cycle that we’re looking at is every platform we hit PMF once you get like you do a 0-1 as soon as you move on from 1-next you think of the next 0-1. And that’s the only way you can actually continuously have the DNA within the organization of building as well as scaling. Which I think is the hardest thing in our business model. How do you keep context switching between a 0-1 problem and a 1-10 problem and it’s very hard to do that. Which I keep getting reminded that maybe it’s not the same team, how do you structure that. So a bunch of things that are still to be figured out. But we’re only 9 months old, hopefully in the next 18 months we will figure that also.

Sanjot:

Yeah, yeah. And actually I do want to talk about that team piece but let’s come back to that. Just sticking with the business I know we call it a consumer brand and it very much is a consumer brand. But I think the how of it to me is super interesting because we’re building much more of a platform than just a product’s business. Right, there’s a product part, there’s a service part, there’s a distribution channel part and so on. So maybe talk to us a little bit about specifically because these are sort of health and wellness related problems that you’re solving how you think about the healthcare angle and the healthcare platform versus just the pure sort of products play.

Revant:

Sure. So I think the product’s play is great in health and wellness. I think we’ll see at least 10-15 great brands come out of India in health and wellness itself. In some sense maybe it’s the age but having sort of done this a little bit before with Rebel what I realized was that we had to be a little anal about solving the problem. And while a product brand would have been great in terms of revenues and market size you really don’t know whether you’ve solved the problem or not because in some way or form once you scale you’re not totally aligned with the consumer, you may be distributing offline, you may be distributing on Amazon etcetra. And somehow we wanted to keep that DNA where we’re assured that the consumer has invested in their health and continues the journey towards good health. See, unlike any other market I think education and health care again I keep coming back to that is not a onetime investment. Education, once you start learning you’re continuously learning. You have to continue to evolve. Healthcare is unfortunately on the reverse side, it’s not that you really want to spend that money or you want to continuously go to a medical expert but in the end the older we get the more health risk are associated. So it’s not – I mean, the category is defined in a way that once you start your health investments it’s actually very, very important that you stick to it. So for us we were very clear that could we create a dent in the market and create a decent business, yes, but the more existential question was how do we make sure that people stick on to their regimes not only get better but also stay on the course. Because after let’s say you’re talking about cure, once you cure a particular problem you still need to have a maintenance health regime. Maybe you don’t need to take any medication but just sleeping for eight hours, drinking eight liters of water, like all the things that are available, all of us know it, it’s just that we don’t stick to it. Which is why we were technically unwell in the first place. So there are great businesses that can be built with product plays only, there are great businesses that can be built with services plays only. It’s just that because we said that we’re going to solve the problem then I mean, then let’s actually solve the problem which is a little vague but if you look to really solve the problem then it’s impactful if there is a continuous layer of guidance even post cure on maintenance, prevention, that exists for the consumer as well. So that’s where we sort of got a little heavy on content building a lot of – like there are 25 million searches for sexual health in India over a year, right, across Google and You Tube. I mean that just shows you how much anxiety there is around the problem and who do they trust. Because in the end it’s a little taboo for them to go out and maybe talk to an expert. That’s when we realized that I didn’t know who is the expert that I can go over and talk to, who is the sexual health expert. Is it a sexologist, is it someone else. I had to figure out that okay, this is who you go to. And therefore I think it lends itself well to digital, a lot of other lifestyle issues do but educating is like the first step. Then sort of building that community of support with medical experts, then guidance, then counseling, then maybe the products come into play and post cure or post maintenance there’s a continuous focus on how do you prevent from going back into the problem.

Right, so I think it requires a very high touch high involvement approach which is what we have started with which we’re trying to sort of stitch through through a platform where it’s going to take some time. Because we actually launched in Covid and it was not easy to sort of stitch all of this together. I think we’re getting there in some semblance way or form but hopefully in 9-12 months we will see what this end to end platform looks like.

Sanjot:

And you know, what I find really interesting and unique is the fact that the services angle, the medical expert, the advice of an expert like you mentioned is in a lot of cases being provided for free. It’s going – it’s truly being customer first even before being business first. Right, and I think for a healthcare platform that eventually is what builds trust. Right, like if there is a confused customer they should come to Man Matters and they are coming to Man Matters whether they end up buying the Man Matters product or not. Eventually hopefully it shows up in your LTV and so on because the trust is there but that upfront investment I think really speaks volumes for the customer first approach.

Revant:

You have to be little obsessed with where is the consumer liking an experience, where do they feel a lot more trust. Which is why I think the biggest difference for us also ends up being on what do our medical experts counsel on and advice on. We’ve stayed away from doing selling per se by the medical experts because in the end that’s not the way. I mean the reason we’re giving medical expertise is because the consumer requires an expertise. They don’t require products they don’t require products. And I think that is something that we wish to remain – keep core to our platform as we scale as well. Maybe a little capital inefficient, maybe a little excess per se but at least if I look back to my career I have never found any investment done to build a long term relationship with the consumer a bad investment. At least that’s the thing that has always stayed with me.

Sanjot:

And we’ve discussed this like you said, I think some of the leading are already showing up, right, the retention cohorts, the product love, the NPS. I think these are all like early signs of people appreciating that customer first approach despite perhaps not having bought the product.

Revant:

Yeah. I think that’s – I think we still have a long way to go especially doing an NPS considering how broken some of the experiences are on our platform today. And the fact I think that we didn’t honestly expect – lot of people actually tell me that it seemed that you thought about this business model for Covid and unfortunately we got a – I mean I know it has been a bad year for most but we got a leg up in terms of demand at least for what we were providing and we were not ready for it so obviously a lot of things broke. But I think customer experience is something we still have a long way to go on. I think what we’re trying to provide theoretically is great. In pieces also customers are very happy, I think if they get a more seamless experience – but I think every startup goes through that. Hopefully we’ll get there in the few quarters down the line.

Sanjot:

Yeah, yeah. Absolutely. Now switching gears a little bit let’s talk a little bit about the how – so it’s obviously a not an easy business to build. There are several sort of layers to it, several verticals, several horizontals. How do you think about team building and the org structure?

Revant:

So I think again experience has taught me like how I ended up in Rebel was when Jaydeep had this beautiful entrepreneurs invested in this program and a bunch of us ended up in that. He is still very proud today of the program because six of them who are still there as an outcome of the program are now designated co founders. The other three who after a few years or like me who spent five years plus left have become co-founders in their own right. So he’s still – and he prefers to call it the Rebel Mafia. Shashank is obviously --

Sanjot:

Yeah, of course. He was there.

Revant:

But I think what that taught us is that – high ownership is something that is very critical when you’re trying to build something, little difficult execution heavy. And we have a very execution heavy model. So we’ve actually invested again in EIRs so we have already five EIRs onboard and the way to really make this succeed is a couple of things like the telehealth platform that we have built is a little different from how pure teleconsult businesses would look at telehealth. Because the demand side and the supply side engagements are very different.

So one EIR is sort of building that out. We have now two platforms, one is men’s health, Man Matters and Bodywise which is women’s health which has just started. Both are led by EIRs who are very passionate about what they’re building. And I think that’s what really does the trick, if people start thinking like what they’re building of as their own baby it’s far more critical especially when the execution path is not very clear. So from day one I think inspite of the quantum of money we raised we have a very, very large stock option pool which we’ve sort of made sure that there’s a decent chunk that’s available to most folks. In fact I’m not sure because we offer it to everyone, I think apart from one or two folks everybody in the company actually has stock options. I would rather again err on the side of caution and giving more equity is not going to really hurt us, it’s only going to help. There’s no downside, there’s only upside. So I think that’s one of the few things that we’ve done.

The other thing is try to build in a very strong mindset in everybody on significant bias for action and always think 0-1 a little bit. So we even though we have got some functional experts onboard whether it’s R&D, product development, social media, etcetra, I think the challenge and DNA that we have to instill all the time is okay, we may have PMF in one but what about the next one, how do we do 0-1 there. Hopefully that gets PMF then how do you do the next one. And I think that culture and DNA is something that’s hard to define, you know, we have OKRs in the business. I do keep referring to the Google’s methodology of saying 20 percent of your time do your own stuff. So for us I sort of split it as 50 percent if your OKR is 1-10 50 percent of your OKR is 0-1, right. Which again I think is a little hard to do but we have to figure this out because I have not seen a lot of folks succeed at building multiple brands, it’s a little hard to do it. Like everyone knows the successes at Rebel, nobody knows the failures. Like actually the most – I was most kicked about a brand called Olive Trails, nobody knows it even existed I think. But it died within six months. If you look at it every day let’s say you’re doing e-mailers, you’re doing Insta posts, you’re doing push notifications, you’re doing Facebook acquisitions, every day there is something new to learn. And you’re learning across product categories across brands and that’s the prowess that a functional lead has to keep developing. Right, it’s not okay I’ve figured out how to sell a shampoo so I’ve made it. And it’s very challenging, right, because we are present across medicines, personal care, nutrition, which are all very different categories. The way to convince a user to think about each of these products is very different. And therefore that context switching is also tough. Like the performance marketing lead had worked with me at Rebel and all we did was sell food and it was so easy, right, just put a delicious food shot and put it out there and users will – there would be a significant number of people who’d want to try it out. I don’t think it’s that easy to – again I keep telling them that health and wellness is not a push business, it’s more of a pull. And therefore it will take some time for us to get the users acclimatized to how one should think about health and wellness that these are full stack platforms that help. And eventually then the pull will come in and somehow we and hopefully our investors will be patient enough for that time to come.

Sanjot:

Well said. You know, one of the things I love about our board meetings is you are someone whose perhaps equally as obsessed if not more about tracking metrics as I am. So maybe talk to us a little bit about, you know, for a business that has so many business lines, so many products within it and service is layered on how do you decide what are the right metrics to track and how do you sort of instill that in the team?

Revant:

So I think it’s been a little bit of a challenge, you’re right, because I actually think we’re doing too many things which is not what I advice my own angel investments or other founders to do. But in some ways because we’re trying to find PMF, we found it in at least Man Matters, we’re now trying to find it in Women’s Wellness, which will be very different. We realized that one thing again that will keep us true to the course is look at what are the leading indicators which would largely be input metrics.

We know output like revenue etcetra would follow through but input metrics very clearly are customer satisfaction. So even before revenue post our medical expert or doctor consultations what is the kind of customer satisfaction post that we’re getting. If we fundamentally look at the kind of brand love that we’re getting on social channels if the kind of content that we’re putting out what sort of engagement it has. I think we have sort of got better and better at measuring a lot of these input metrics and leading indicators as an organization to sort of make the right choices. And I think that took at least six months to instill within the team because -- maybe because we’ve been investors and operators previously it was some learning was there but again to get the team aligned that this is how we will make decisions was something that took time. I think also educating folks most young folks who are getting into business need to sort of learn the basics of finance, I think that’s one realization. I think a large part of my learning on how to build a decent business was the amount of time I spent in finance. And I think that’s the least understood part of any business to the extent that sometimes I get accused of being too anal about numbers and not about the feel of the business. But I think we’re a little anal about tracking every small metric when it comes to financials as well. And one is track but also instill that culture within the team that how do you measure the impact of every action that you take. I mean, I know at a very broad level LTV CAC is something that most founders now understand but I’m very proud to know that at least most of my team which works on the demand side has a very strong view on LTV CAC broken down to a level of businessline to a line of now product. Like for a particular product or a particular service they actually ask that question how do we think about LTV CAC and that’s the right – now it may not end up being a LTV CAC question at all but at least they’re thinking of ROI and the choices that they have to make. And the fact that there’s an opportunity cost to every choice that you make.

Like I love to be in situations where I’m like okay, I know the numbers are saying this but gut feeling is saying that we should do this. And the more I find myself doing that the better it is because we have the EIRs who are working on the passion, the gut feel and you know, a lot more about the consumer insights. And you will not know where the numbers will come from. And you have on the other hand the functional experts who are just thinking numbers. And I think that’s a good mix where both 0-1 and 1-10 can happen because essentially in 1-10 you have to go with absolute numbers and 0-1 you’re always going a little bit with gut. Large market, good consumer insight, latent demand, you can try it out. And I think that framework now people are getting gradually that what are the choices that you make based on numbers and what are the choices that you’re making based on okay, this is the market we’re going to crack and we don’t know how to get it. It’s okay to sort of take a few punts and see where it goes.

Sanjot:

Very good. And then final question, maybe share some learnings that you’ve had – I know it’s been under a year so far but things that have gone well, perhaps not so well. And any advice to founders starting up now?

Revant:

So I know it’s been about 9 months since we launched. I was a little surprised with the kind of investments people are making in their health. But maybe it was a post Covid situation. I think this year we’ll really get to see what is the sustainable investment that people are willing to make in health and wellness. But our thesis remains unchanged that anyway we’re building for the next 10 years, right, so at least that growth seems to be there and maybe we got a better than expected start because of the latent pent up demand on health and wellness or digital help per se and we’ll see where it goes. But that was a little bit of a pleasant surprise for us.

What has been the little tough to solve is again maybe Covid related where for a 0-1 stage, early stage company even with the kind of funding we had I think it was just very hard to get team alignment remotely. I think the serendipity and just walking over and discussing two new ideas was very, very hard for us to do. I think we’re getting better at it now considering most of us are back in office but I think maybe these are Covid related. If I look at general advice to founders I think there’s enough – I think Matrix Moments has done a great job in making sure that if you can follow half the advice that is given on this podcast I think most people will end up building great businesses. I don’t know if I can add – maybe I’ll leave it to the VCs to impart that gyan now. I mean stay focused, stay true to your consumer is the only thing that really builds value in the long run. One thing I’ve at least realized this team culture is very critical. I have been at a difficult end of it, I’ve never built large teams. One big realization for me is if I look back at my 15 year career I’ve always been either individual contributor or had very small teams. Even at Rebel actually I had very small team because I used to build something and then move on to the next. Some people say because you were always a 0-1 I actually think it was a mixture of being 0-1 as well as actually being unable to work in a very structured environment where the team sizes are large. But now that you know, we have to build this for the next ten years inevitably the team will become large. So I’ve never had technically if you ask me what I call ownership of careers of a lot of folks who work with me. And that’s a very new feeling which I don’t think is an easy journey to navigate. It’s fraught with multiple decisions – like I was telling Jaydeep and asking him something about culture a couple of weeks back. And so him and a couple of other founders are my go to folks whenever I have a question. And he gave me a few guidance thoughts and I said okay, this makes a lot more sense. And I was telling him that whenever I have to take a decision before there was already always someone who was not – I was not the final fall guy, right, even in Rebel, even when I had to take a decision I could go to Jaydeep and say accha kya karna hai?. And if a decision went bad at least he was the CEO, I was not. And as CEO the buck stops with you, so you’re always sort of second guessing yourself a lot more and I had not – I’ve been quite – my speed of decision making was quite fast before. I think I’ve become a lot more thoughtful now considering that there are sometimes repercussions that you’ve not thought of. So I think it’s a little bit of a journey that every CEO and founder will go through, the biggest help that I get during these times is having a very strong mentor pool. I think Gaurav talks about this a lot, right, an academy. And I now relate to that quite a bit. And to be fair I think the mentor pool has to be other entrepreneurs who have gone through early stage. I mean no disrespect to you guys, you guys are great mentors, but woh jo entrepreneur ka dard hai, on that decision and their framework may not necessarily come from business management books or first principle thinking of VCs. So I think that operator experience did help but I think a specific CEO’s view when you’re the final guy who as the buck stops with you I think that sort of mentorship and guidance is something that most entrepreneurs should definitely try and build over a period of time. at least that is something that I’m consciously spending a lot more time on and I would I think need that help in the coming few years as well.

Sanjot:

Very helpful. And thank you for being so candid, Revant. Always a pleasure. Thanks.

Revant:

Thank you for having me.

Salonie:

Thanks for tuning in. For more Matrix Moments episodes, you can head to www.matrixpartners.in/blog. You can also follow us on Twitter, LinkedIn, and YouTube for more updates.