4 years hence

It’s been exactly 4 years since I quit from my last job. This morning, kept pondering over the years gone by.

4 years is a long time. I’ve had my share of ups and downs. Here’s a short long note on how things have been so far.

tapprs
The 1st Tapprs office, Basavangudi

My idea behind quitting the job was to explore an entrepreneurial opportunity. To see if I had it in me to be an entrepreneur, if I could learn the ropes, if I could build a business, make it sustainable and possibly scale it up.

I didn’t have any aggressive ambition to build a large business. I simply wanted to learn things and see how far I could go.

Clueless and being random

Initially, I was clueless about what to do. Did random stuff and felt I was going nowhere for almost a year. As late as Nov 2011 (8 months later), I contemplated going back to a job.

One random experiment that had started with a different idea, but morphed into something else, was the photography equipment rental business. In Nov 2011, I realized I was doing too many things and reduced them all to just one thing – photography gear rentals (which was doing only a few thousands a month). In December, we registered as a Private Limited company.

Looking back, that was a completely random decision – inspired by looking at Roger Cicala of Lensrentals.com. I had a few interactions with him and got highly inspired. The goal was to build the best pan-India courier-based lens rental business, just like lensrentals.com!

Things were very upbeat!

The eventful phase

If I had to recall the most eventful phase in these 4 years, it would be between Nov 2011 and Aug 2012.

  • hired employees
  • took up office space
  • grew revenue to 6 figures
  • got into the Morpheus Accelerator programme
  • more importantly, seeing customers give positive feedback on what you built was supremely satisfying
  • rented items to photographers from multiple cities

Scaling challenges

The early 2012 phase went quite well, but we were largely a Bangalore based business doing 10% or lesser business in other cities (via courier).

When I started pitching to investors in May 2012, I was pretty upbeat. However, the investors didn’t see the same picture and just deflated my balloon! Too capital intensive, too risky, hard to scale – they said. Almost everyone suggested that I should move on to something else.

I realized Tapprs kind  of business wasn’t good for investors with aggressive return expectations. I was fine with it – we could grow through other means, debt and internal cashflow (we were operating cashflow positive).

However, I couldn’t ignore their suggestions. That was a mistake. I let few of those thoughts creep in and distract me. I was pretty much all over the place in that phase – but I am glad I went through it, because it helped me learn a bit more about my own preferences and eccentricities.

Just for the sake of growth, we did a marketplace, a photographers directory and a couple of other experiments – most of them were done with wrong motivations and naturally, they didn’t do well. However, we kept working hard – our motto was to avoid status quo.

Change in business model

The single biggest blow to Tapprs came when I decided to stop the courier model and stick to just Bangalore in early 2013. It was not a good move, but I think we had to do it because courier model just wasn’t working well.

We had fired 2 employees and had limited resources. The shipments to other cities were frequently getting into issues – either Fedex grounded our packages due to interstate tax issues / declarations, or the lenses came back with focus issues, etc. Also, there was very high risk of fraud – we were hit by it once. We decided to stop outstation until things got better – we never went back to doing it again. My idea of a pan-India rental business got diluted.

For a while, I thought we would set up shop in another city physically. However, I realized I hated that model and would never do it.

That meant Tapprs would just be a Bangalore based lens rental company. We were doing pretty well for a small business, but it wasn’t something I was happy about – this wasn’t what I’d quit my job for.

“The Outsiders” – A book I loved

In the latter part of 2013, I wasn’t sure where I was headed. I had a decent small business running, but it wasn’t my ideal business. At some point, I contemplated shutting it down. However, 2 things made me stick with it – customers liked our service and we were cashflow positive. I decided to keep it running.

Also, I started taking time off from office to figure out what I could do next. I had a few team issues as well, so I had to intervene often and that annoyed me, but I learnt a ton during that period, especially about building a team.

At the same time, I found myself going back to investing – an area of interest since a long time. I read “The Outsiders” – a book on businesses like Capital Cities and Berkshire Hathaway. They had a delegated style of management that I liked, an investor driven attitude that I had. I realized I could do it at Tapprs too, though it was just a tiny business.

Delegation of operations

I decided Tapprs would stay as a business – I wouldn’t run it actively, but would delegate operations completely. I would almost turn into an investor in my own business, though I would control a few more things than just finance. I decided to limit my time at Tapprs to about 20%. I would focus on building a good team and give them control over my business – within certain limits.

I set 2 important criteria:

  1. customer service should be very good
  2. should earn at least a specified % of profits

We started building the team around the delegated model. For a while, it looked like it wouldn’t work as the team always had some issue or the other (however, it was rarely a customer facing mistake, something I am proud of my team about).

I had a lot of lessons about team building in this phase, esp because I was not actively running the operations and had to find people I could trust the entire business with. Almost all the employees I have ever had have been good people! Even in the 2 cases when things went sour, I don’t have any bad feelings now. However, I felt very annoyed when one of my operating managers quit the job and started a competing rental business incognito (and had registered the business while still working at Tapprs!!), esp after I had done a lot of handholding / mentoring about the business. We now have a non-compete clause in our employment terms.

Team taking over

Over a period of 1 year, we tried several things and tweaked our delegated operations style. Few people quit and I had to replace them. I took control over finance, purchasing and hiring, and delegated operations completely. As always, I pushed the team to obsess over customer service.

Things seem to be working fine now. The team is largely independent of me and I only visit them once a week or two. However, we look at operations data daily.

If they perform well (keep customer service high and meet target profit %), we will reinvest almost everything in the business and even perhaps add more funds. In return, the team will be rewarded for good long term performance.

It is still a small business – but then I only spend a fraction of my time at Tapprs and from a time-value point of view, it works pretty well. And this phase has been very rewarding from a learning perspective.

Investor-entrepreneur

I’ve been a small investor in Indian equities since 2005. After 2010, I had slowed down a bit due to Tapprs. Post June 2013, I’ve become pretty involved in equity investing again. Like they say, running your own business actually makes you a better investor – it is true in my case. I’ve improved a bit.

I find investing easier than entrepreneurship. However, I think I cannot be a full time investor – it makes me feel empty. Investing is something where you make money without adding much economic value to the society (largely, though investors do add value). I find that boring – I want to contribute real value to the society. In that sense, Tapprs is a very rewarding experience. I would want to continue being an entrepreneur.

2013-14 was a fantastic period in Indian equities. Thanks to a good run in equities, I am financially in a comfortable situation to give another go at entrepreneurship. Also, I’ve realized that I am pretty passionate about business in general.

However, like I wrote here, I am not a natural entrepreneur – I am more of an incremental entrepreneur. One who has to learn his way through things, make mistakes, fix, rinse-repeat style. I am still learning. At the same time, I’ve been able to tackle most of the challenges thrown at me – that is somewhat comforting.

What next?

I’ve been thinking ‘what next’ for a while now and have no clear answers! I will continue being an equity investor because that is my natural skin. Tapprs will continue to be run by my team and will keep growing.

However, that itch to build and run businesses is still there. I am a bit disappointed that the original idea of pan-India rentals didn’t work out, but I’ve my lessons to be happy about.

I am looking for opportunities. At the same time, I am in no hurry. I have at least 40 more years of active work to do!

8 thoughts on “4 years hence

  1. Hey Prem this is navin…your breeks memorial school mate..I keep following you and keep mentioning about you to my friends or juniors about your journey ….the good thing is…when you look back in your life…you will exist..I meant you will feel accomplished for following your heart….
    Wish you grand success and surprises ahead….more experiences to share….a beautiful success story of yours
    Regards
    Navin

  2. Hi Navin,
    Been a really long time :). How are you?

    Happy to see your comment here, hopefully, the story will be even better from here on :). Thank you for your wishes and wish you much success in life too!

    cheers,
    Prem

  3. Hi Prem,
    I have been following your blogs for a long time.
    The best thing about you is your analysis and you honestly admit your mistakes/wrong decisions.
    I am only into photography but love to do something like you 🙂
    You Inspire 🙂
    Wish you more success in all your future endeavours 🙂
    rgds
    prasad,photographer

  4. Hi Prem,

    Very nice and motivating blog. I still know those days when you were busy with your equaity doing Dwh project together and I was learning from you as a fresher in IT.

    You are good inspiration mate.
    Wishing you very good future in your equity and entrepreneurship.

    Regards,
    Mahesh

  5. Hi Mahesh,
    Nice to hear from you after a long time!! I keep thinking of the fun we had at Fujitsu :). Thank you for the wishes dude!

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