 This is Sonali. Thank you all for carving out some time for attending today's webinar on the episode 8 of the Business Text Learning Series in West Scale and Value. To all the attendees out there, please type in any questions you might have in the Q&A section and we'll try to answer as many as possible at the end of the session. I request you to keep the questions within the scope of today's discussion and not to your personal business queries. I would now like to welcome our speaker, Mr. Warath Maria, Chairman and Founder of the French Eyes India Group. A very warm welcome to you, sir. Thank you. Thank you, Sonali. And welcome friends and welcome to another edition of our series with Business X, which is on different subjects. We every time take a new subject around investing, scaling and how you value your business. So today is a scale, a scale we're doing the third edition. We've talked about how do you really start thinking about scaling your business? How do you really then create tools of your business to be ready for scale and then, you know, other situations. So today in next half an hour, what I will do is I will first refresh in terms of a quickly, maybe a five minute note for a lot of people who have not attended the earlier two webinars. And any kind of webinar, I mean, you've not missed because this is the eighth edition, you can go on a Facebook of Business X and see all the editions available there. So today, we're going to talk about scale and, and I'll put up a very big differentiation which I'm going to take in today's session. And because the audience of Business X in India has a lot of startups, a lot of early stage companies, even a lot of conventional businesses, which are now looking to change and look at their businesses differently. And especially I think on one side, whatever is going on in the world, you know, there's a lot of economical crisis which is going on but also we see there are many, many opportunities which are ahead of us in different sectors. And we see a very different mindset today to address these opportunities. And, and I feel that there is a very sharp line coming in now, what I call the traditional kind of businesses and, and the new age businesses. And we'll talk something on that today. And while, you know, I have seen many, many businesses have consulted over 2000 or different businesses. And I feel that if I have to go back to whatever we did for these companies over the last 15, 20 years, my strategy would be significantly different today. And, you know, something which we have told and done for these companies, I might not be advising them again because those strategies have no meaning left at this hour. So which means that the world has to really look at business models very, very differently. We don't have to look at business models in the same way. But let's go back and revisit quickly what, what we have really covered. So scale, as I define is by definition is, is S stands for the broad strategy strategy, which is evolving is fresh every time. Then C stands for three things. One is culture, competitive advantage, and core competence. These are three things which I would say C stands for unless and until your company has a strong culture, competitive advantage, and you are having understanding very clearly where is your core competence. Don't go here and there. A stands for actionable plan and accountability. How do you really create a very strong actionable plan and also set what I call internal and external accountability. A stands for liquidity. Always, you need to keep eye six months or one year in advance, how your liquidity is really flowing in or what kind of liquidity requirements would you have and E stands for execution which has to be seamless and perfect. So again, I will define when you start thinking about scale, put this definition in front of you strategy C stands for culture, competitive advantage and core competence. A stands for actionable plan and accountability and E stands for execution which has to be seamless. And once you have this in mind, then you have to work on three piece, which is what I call the people alignment process alignment and performance alignment. So if you are able to align these three things you people alignment is very important people have to be aligned with your, with your idea to scale. If they are not thinking in the sink as you are thinking, you will never be able to scale that business process alignment is very important your internal processes have to be aligned with the, with the scale which you're looking at. And I feel that the, if I have to rate, I would say 70% of very scalable ideas not able to scale purely from a process viewpoint, because they start scaling the people are aligned. Even performance is aligned, but the process is not like 70% of failures I would give, because of the lack of processes and this is where one of the areas which I like a lot of these, you know, tech based businesses, which are able to scale themselves because the process by nature is more aligned in their businesses. Then we also talked in the last edition of their only three ideas when it comes to scale and these three ideas I do not sound a corporate idea. It's always about how do you get new markets, how do you get new products, and how do you get new channel. If you are able to find these three, then only you will be able to do that. And today, I think, some of the answers are very, very certain if you really want to do some, some answers are very clearly straight forward technology is no more an option. Technology has to be part of your, your, so to say, company design. Now, from a design viewpoint, there would be no company I would say, which would not embrace technology for for every aspect of their business almost every aspect of their business has to be technology and that's where only way you can scale that. So now this was and this we did for two long episodes and we went into different strategies and so on. So we also talked about, you know, what are the strategies available for companies to really when they're looking at developing these three, how do you develop your people mindset, how do you develop your processes and how do you set accountability in the system by performance management and so on. Today I will talk about a very different thing. You know, I'll talk about, you know, sometimes when we talk on on business growth, we confuse between growth and scaling. This is one of the areas which we will talk today. So, a lot of people really think that the growth and scale is same. While I mean in the communication in the, in the way we represent, we actually take these two things very, very simple. Similar. And most of the times, a lot of entrepreneurs would think that growing the business is same to scaling the business and, and we all want to talk about a big differentiation in both of them. And this differentiation, I would say is something which is changing in the, in the business environment. And for many years, I was astonished by seeing some companies who were able to scale so fast, so fast, and the rather, you know, multi markets, multi structures and and some conventional companies were not able to do that. While I come from a very old school with an iron company called French as India, and French as India historically had businesses which are retail businesses, brick and mortar businesses and so on and so forth. And every time, you know, for us also, I mean we were confused between scale and growth and businesses meant very clearly how do you really take this and how do you multiply, you know, your customer base and so on and so forth. So, so what is the difference? Let's go into the clear difference of this. But before we can go further, there is a timing, you know, there is a timing which is very clearly and a lot of people ask what is the time to scale and what is the time one should really look at it. And a very interesting Richard Branson has said, scale up is when you are ready. It's not when the opportunity knocks. So fundamentally is that there is no specific timing, you know what to say. Which should be really taken and scale up. It's more when you really find that you are as an organization as a mindset, ready to do it. And that's where it needs to be done. And so even if this crisis, I know a lot of companies, we are looking to this as an opportunity time to rather scale and take bigger market share. So you need to really see another thing which is very important is that you need to really catch the wave. And there is a final timeline on that also. So there is a while when you see yourself ready, then you also have to see that which side is a wave. If it is a positive wave, then you need to really not waste the time you need to go out and catch that. Now let's understand growth. The conventional companies and most of the companies really mean growth for them growth means that if you want to grow their revenue and their market share, they would grow their resources, or they would grow their costs so it's very clearly revenue is proportionate to the resources deployed, which technically means that if I was McDonald's growth would mean how can I add more stores. So every time you want to grow, you want to grow your top line, you would not have to multiply and invest into more stores to be deployed more people to be hired, more infrastructure to be deployed and so So fundamentally it is very directly proportionate. And so companies continue to do quarter on quarter growth quarter to quarter investment. So they keep balancing and keep managing their small profitability and and what are the business in that this is growth. This is very clearly a very conventional way to do that even my organization there was a time where in 10 years back we thought that we really want to grow we were in six cities and we went into 70 plus cities in India we went to six other countries. So idea was very clearly every month my only objective was to tell my HR how do we hire more people, because every time I hired more people proportionately gave me a little more growth on my top line. And I can tell you, all goes well in this structure, they continue to do that by the time the market has demand side you will continue to deploy more resources, come to apply more, you know, and structure, and you will be proportionate to your revenues would continue to grow and if you don't miss your line you will still be a profitable organization. And the problem happens when this equality of revenue resource changes and and your revenues don't come because the market has either shrunk, or you're not able to capture more market, or you're not able to convert and get the kind of optimization. The deployed resources are not able to create, and this imbalance really starts, because it is a very small market most of the times, they won on very neck to neck from your resources deployed to entire thing and that's why these conventional companies walk on a 1012, 15% the kind of a bottom line, and if there are reasons for either inflation, or you're not able to capture the next revenue cycles, or there is slow down like what we are passing through this balance would change. So I have seen companies which were relatively doing well like say we're running a restaurant chain, and suddenly my question changed my revenues dropped because a lot of people started doing delivery, like what happened in through delivery is a matter and Swiggy. A lot of these restaurant chains are not profitable, and they would start closing down or are coming down and so forth. Now that's where conventional businesses think growth, very clearly if you ask any of conventional businesses, what is your way of growth, you know, so they would say, oh, if I was a manufacturer I would say let me put more of additional facility. I'll produce more and so forth so every time it would deploy more resources and scale is on the other side very different. Scale is all about how do you really able to, you know, take the key difference between the scale is that is achieved by increasing revenue without increasing significant costs. So how can you increase significant revenue change in your business model, and without having a similar kind of a cost structure rather a minimalistic cost can increase significant value in the business that's only way I think scale would come. So a lot of new age businesses, really speaking, I to me are our companies which are designed to scale. So one of the areas which is very important that when you really have to think about scale over growth, you need to really go and revisit your business model itself and say, is the business model ready for it, because the business model sometime is not like I mean for example if I want to really say that how McDonald would do this. McDonald would be able to still continue to scale and not have to deploy the same amount of investments if they do in the conventional structure, what different they will do. So sometimes a very conventional businesses are not able to find that answer. But when you have to really look at the companies which have become the top 10 companies of the world, which are able to multiply their revenues without significantly deploying in the equal ratio. Their resources are the companies like a Facebook or a Google, even people are multiplying by without doing that. You continue to put a lot of data on Facebook, they are becoming enriched in them. So actually they've got free copywriters, free this people, more anybody and everybody using these platforms are actually contributing to the platforms and the platforms are growing. So these platforms are designed to scale, the organizations are designed to scale. So a lot of companies, especially in India, I really see that they're not ready for it. Some tech platforms and tech companies, yes, but a lot of other companies really have to ask that how can we scale, how can we grow substantially and acquire a substantial amount of consumers without putting same amount of resources. Because this old style of businesses are no more interesting in the business. So the two things which becomes a very important when you have to reconsider your organization, there are two things which needs to come in. One is innovation, how do you innovate now, how you look at the base, the overall business model. And second, what is the kind of foresight capabilities you bring in within the organization. So if you are able to do innovation and foresight within your organization and relook your business model and ask yourself how you will do that. How do you be able to reach much more customers without putting the same kind of development. You know the old school of doing things have significantly changed and that's something which one has to really see that how you are able to do that. You don't have any company which comes down to a point where there is a critical path have to be chosen. When I say critical path would mean that if what should I do next. And you're clearly seeing that I'm as an organization ready to really scale up. Second side is that you are also seeing a positive wave of your industry or your business model. Then you need to really take a call what is a conventional way of growth is right. Or I want to find a new way of scaling up without putting in time. So before you scale up and this is one of the areas which really comes in when you really start up to a really time where you can be ready of a scale up. So it's a very different timing. Start up has a multiple other issues. Start up is not even commercially proven the product and so on so forth. So I'd never say that you should even look at scaling up. You need to really go out and find yourself your feet and stabilize yourself and then only you can go to the next level. But for companies which are so to say reached that point where they are actually have what I call the product is being tested in the market. They have also seen a commercialization and early success of the business model. They feel that there is an exponential growth available for their product or service. And they also can attract a large amount of funding through CDJB and C and so on spot wherever they are. Then only I think the scale up idea can really come. So this is where you need to really ask yourself. So I call it a little bit of a checklist. How do you really bring in a checklist offer? Is it is it time for you to really do that? So what I call there is a thing called MVP MVP is a minimum viable product. So have you a viability of your product or a service which you are trying to do that has been achieved. Have your process development and management in place, which I told in the first edition also how do you really build your process management and your tool. And this is another thing which is third point is the whole culture has to be very differently organized when you scaling up. You know, it's really the organizational designs are what I call very clearly the freedom of decision making. So to say rest with that senior guys or senior management and they actually design a product and then give it to the last month and the last mile person has very little freedom. It's actually much more controlled and the freedom lies at the top and not at the bottom. So you have to turn around at this structure. How can you turn around the structure that you give a little bit of freestyle at the front so that a lot of customers even to extend that it has the customization in the hands of the customer also. The customer can take a lot of otherwise it will slow down in slow down. If everything has to go back to the top and top has to take a decision is just joke. That's why these technology companies are great because they give actually a freedom to a customer to really design the product. They don't even want this to be done. So they give a lot of freestyle at the front, more freestyle at the front and the control at the back from a perspective that you are able to just control that in terms of what is going on from a flow viewpoint, but you give a lot of freedom at the front. Otherwise, I think there is a lot of control at the front. They don't allow things to change. Everything has to do that. And like older conventional style of businesses, like we are in consulting business. So our consulting business works that a gentleman or senior guy, a relative junior guy would go in the market, meet the client and client tells you this. And if there is a change in the product needs to be done, he will come back, reach out to his senior, the senior will go to the senior. Depending on where the control really lies, this whole cycle can take to generate even one single proposal which is customized to a client can take two to three, four weeks. And then the decision making so the cycles of acquisition becomes one month, two months, three months kind of a cycles. It's all foolishness. How do you really change that and how do you really build a structure where even a customer can design his own product. And this is how I'm seeing a lot of design tools, learning tools, other things available where you can go in, you can choose what you want, how much duration you want, whatever you want. So all the content companies are giving a lot of freedom to people. So earlier days, this was not available for people. This decision was very, very slow. So scaling kind of never happened. So how do you really create a balance between a freestyle operations and bringing in controls. And also another area of a checklist is that diversification sometimes becomes an idea of scaling, you know, which means that I can go to multiple things within the business, right? Like say Oyo, when they started scaling up, they are a hotel management company and they were going in multi-markets globally and suddenly they started diversifying also. They wanted to be in co-working space. They wanted to be also in the banquet management space and things of that nature. Now, all those businesses to my knowledge have not done well. So they have to really understand where is the scalability, right? I mean, today there's a great company where I'm bigger to my, it's called Lenscard. It's an eyewear company, great scale. They've brought into business because they're very O2O platform, which is online and offline kind of capabilities integrated, low inventory at the store level, very, very scalable idea. But now they can tomorrow say, if what we have done in eyewear we can do in watches, we can do in something else, we can do in something else and that's where they can go wrong. I feel that they have found the answer in the current category. Stay committed to your core competence. Don't overly diversify. Diversification cannot be an answer to scalability. It can be in some sense you have to at a certain level when you hit what I call the three cycles of your scalability. One is what I call the growth, penetration and saturation. As you start hitting saturation life cycle, then you probably have to look at some kind of diversification on your body. But not at the growth level, not even at the penetration level. And when you hit the saturation that almost everybody who really wanted to acquire in this marketplace or a global marketplace, you've already done that and then you need to now get into that, which is very clearly what Titan did. If you see Titan was in watches for 10, 12, 15 years, stick closely, very clearly in watches, then they start waiting into eyewear, then they're now into getting started in personal care, which is perfumes and things of that nature. So they every time give a full cycle to offer one category to completely mature and then they open up another diversification on the business model. So similarly, I think they've been from watches to jewelry to jewelry to eyewear and eyewear to perfume now. So that's a cycle they've done and almost every cycle has taken eight, nine, 10 years of a full maturity and saturation before they have really opened up another category to do that. And then also they really put all the systems and that's why this company is so great. That's why Titan is a phenomenal organization. Another big difference in scaling up is that in the three to five year plan, if you don't see that there is going to be a growth in the, so to say, in your revenues and your cost. Say you are starting today, your cost is at X, but your revenues is X plus. If next year you cannot go from a cost, say become X plus, then your revenues should become X plus plus plus. So fundamentally, if this substantially not growing year on year, then you will not build a huge value in the business model and that's where it would scale essentially means that on a year on year basis, the difference between your cost and your revenues would substantially increase and that's where the value would be. If you are able to design these, so to say five different checklist, then you are ready for scaling the business model. Now let's talk about seven odd strategies, which I feel would work if you're looking for scaling your business. And the first strategy is how do you really bring repeat value in the same product or service? If customers are renewing regularly with you, how does the structure of renewal work in your business model? I mean, is the same effort required to get the same customer to spend the same dollar with you or it is going to change and how it can be changed? And I feel a lot of companies, especially service-based businesses have to do the same efforts, same cost of acquisition to acquire the same customer. And that I don't think really is a good idea. First, you need to really shift the whole cycle is that how do it becomes a repeat purchase value in the business model. Second strategy is what I call put a functional depth into business model. How do you really put a functional depth? And the functional depth comes from very clearly defining all the functions of your operations and try to make it automated. Almost every system of your business becomes extremely automated. One of the companies I'm getting very impressed. Again, I'm saying the lens cut because if you really use the user experience and you go there and the company, they have really automated almost every smallest principle of the entire user experience from a user coming and telling that, look, I need a frame to have numbers of SKUs available to on the shelves, almost everything. Otherwise, there was a lot of challenges in the businesses and conventional businesses were so challenging. They don't have control over inventory. They don't know what is available in the real time stocks. They don't have real time inventories. They don't have the whole experience of acquisition to delivery to post delivery relationship and all that was processes are missing. So how do you really automate the processes and how do you bring in strong functional depth in your business model? Strategy number three, which is very, very important. How do you do, you know, been intuition to your business model and, you know, how do you do advanced intuition to your business model that you really know what is customer going to do six months from now, one year from now and so on. And so I clearly see that if you really want to understand the market need, then you need to build business intelligence. If you build a business intelligence on business lending, you can do your product development. And so your product change cycles could continue to run like that. So five, six months of building business intelligence and five, six months of a product to market kind of an opportunity. So when the product development also runs from a very clearly forward function, which is classic functions, define the product, develop the product, operationalize and launch. This is a very conventional structure of from from actually defining what people need and how they need it to get a development to get operationalize and then launch the product. But before this was the only cycle which people used to do, but it was not based on critical data. Now the data has to have another cycle that has to be layer of business intelligence and now there are a lot of companies actually coming globally who are business intelligence companies. They'll actually take all your data and give you all the data points you wanted because sometimes you are not able to turn your own data. You don't understand it. Look at companies which have large databases, telecom companies, insurance companies, they have been normal data. They don't have no understanding how they can turn their data understand learnings from them. So they need to have a lot of good technology business intelligence companies, which would really turn these data. These companies are reaching out to them and say, take our data and data was possessiveness. They never used to share the data, but now banks are sharing the data. Everybody is sharing the data because they need to understand a lot of answers they don't know where they can create future products on that. So how do you really bring strategy on that? Now strategy number four is what I call the triple E. The triple E stands for how do you build consumer reach? You're a customer reach through best of the efficiency, best of the effectiveness and best of the engagement. So how do you really get your consumer reach with best efficiency? You don't have to push so much. It's so efficient to reach out and that's why technology does it. Technology like Amazon, it has a best efficiency. You have everything. It has a strong effectively and it has a phenomenal engagement from when you bought the product or even when you saw the product and wanted to make a decision. To really when you bought the decision and though the whole supply chain delivery cycle, when it reached you and post delivery, everything is so very well managed. So how do you really create this triple E in your consumer reach from building efficiencies, building effectiveness and engagement? I think that's strategy number four. Strategy number five to me is the whole sale cycle. How do you really do what I call the triple S? This is triple S from selection. Why should somebody choose you over anything? What is your selection process? Where are you being presented? How it has been selected? So selection to sale cycle to subscription cycle. How do you shift that? And this is where I am getting impressed by companies. I mean, we are using Zoom. When I started using Zoom about a year and a half back, it was free to everybody. It's still free. You can use about 14 minutes, but my reviews I used to use it. When I used to use a review, most of the times reviews would go into one hour and so on. They critically know that good meeting would go beyond 14 minutes. It was very, very stupid to go back and do the entire thing. So I upgraded myself to a certain level and started using their pro line. And then this was unlimited. You can go into that. But still, now with the platforms now coming in, you need to do a lot of webinars. You have a large audience to bring in. Now some of our platforms, we have many subscriptions of Zoom. Some of our platforms are a thousand plus people. There is one platform we use in our real set network, which has 10,000 people. So depending on the need, which was continue to evolve and new things I wanted to do that, I'm continue to upgrade myself in that structure. So what they did was they gave me something to try on. So I attempted on selecting them. Then they shifted me to a sales function that I started paying with them. And I started recognizing the service was good. And now they're making me subscription. And they know that in a life cycle, I will become a subscriber for Zoom. And if this is a new normal, and this is going to be 20 years, and next 20 years, me and my company would continue to pay Zoom multiple dollars. And continue to upgrade the services and so on. And they would continue to understand what are the next level of requirements we need to have. Like these guys, we use a lot of Paul in this entire structure. There are multiple other things would come in, depending on what is the ask now. What are what do we want to do? And these ask would be their continuous development structure. Like there are many tools now, people use a lot of learning, a lot of training. So you need whiteboards, you need this entire structure. So all that pieces would start coming in, in so and so on. And each piece, you will start subscribing more and more and more. So fundamentally, you will, you will start using the entire. So what they've done is that they move this triple S structure from selection to sales to making a subscriber. How do you really create that? And that thing and also how do you really continue to build more value addition on the on the structure. Six strategy, which is a strategy I always believe in scale, you need to really do. How do you do multi-channel? How do you reach multi-channel? How do you reach multi-market, multi-product? So if you do all three together, then also apply these three things. Don't think about one. If you really want to scale, you need to really three multi-channel, multi-market, multi-product. And then only scale would come. A seventh strategy is where I come from. And one of the industries which we have really popularized in India for the last 23 years is franchising. We feel that franchising is also a great scale strategy. Why? Because again, you don't put your own capital and you have a product or service and you use your, the most structured channel, which is franchise and use franchising for scaling up. That is a great strategy. It's been a classic strategy for many, many years. Companies have used and that's why franchising becomes such a more powerful tool to really scale your business or scale your product or service. So this is what the difference was that today's session was all about really about how do you really differentiate between a growth and a scale? And how do you really create strategies around it so that you are able to take your business ahead? It's a good time. It's a good time to reinvent your business model and go back and really see how do you really would like to scale your business without putting substantial cost on books? And that's where the value is coming in. That's where I think a new age businesses are doing extremely well. And while old school businesses are struggling and they would continue to struggle more in next two years unless and until they revisit their entire business model again. So this was the today's series. We will obviously take up the next week. There is a session on value. We keep it 30 minutes. I think I've taken five, seven minutes more. So it's normally a 30 minute capsule and all the earlier seven capsules is the eighth edition, but all the seven capsules are available on our Facebooks at Business X. You can go and visit. So every week we take one edition either on investing, scaling or how to value your businesses. And we at Business X are a platform for companies, startups, entrepreneurs, business owners to either raise capital. So if you want to raise capital, you obviously can come to us and we can help you. Or if you want to really sell your business, a lot of businesses which want to take an exit. And both if you are profitable and if you're not so profitable businesses, you can come to Business X and we can help you get the right buyer. First we help you to value your business. We have a separate vehicle called biz equity, which is a fintech product. How do we quickly value your business? And then we actually help you to sell your business. So over to you. So Nali, if you have any question for me, then I can be happy to take that. Thank you so much for another wonderful session, Gaurab sir. It was a pleasure having you as always and we do not have any major questions with us for today. So I would just like to thank you for your session and I would also like to thank all the attendees for your time. We will see you next time, next Saturday at 3 o'clock for another session as Gaurab sir said on creating value in your business. And if you have to have any question for me and if you want to reach out to me, I will write my email ID. It's gm at Gaurabmariya.com. So please reach me if you have any thing which I can help you in your business or if you feel that your business needs capital or needs franchising, licensing, any of our categories which franchising the group really works on. Thank you very much for your time and thanks for joining us next Saturday at 3 o'clock another session with BusinessX platform. Thank you.