The intent is to keep Flatheads alive: Shark Tank fame Ganesh Balakrishnan

Shark tank fame Ganesh Balakrishnan is set to make another attempt at reviving his footwear brand Flatheads, as the company experienced a significant increase in demand after his pitch aired on national television earlier this month.

"The intent is definitely to keep Flatheads alive," Balakrishnan, co-founder of the footwear brand, told Moneycontrol.

The company, facing financial struggles due to high burn, appeared on Shark Tank India 2 to seek funding from the judges, including Aman Gupta of Boat, Vineeta Singh of Sugar, Anupam Mittal of Shaadi.com, Piyush Bansal of Lenskart, and Namita Thapar of Emcure.

Flatheads received a flood of orders, selling out all of its remaining stock within two days of Balakrishnan's Shark Tank pitch. The pitch also went viral on the internet, and the founder, who broke down in tears on national television, received overwhelming support from other entrepreneurs who resonated with his story.

Flatheads, founded in 2019 by Balakrishnan and Utkarsh Biradar, is a direct-to-customer brand that makes comfortable, casual footwear from innovative and natural materials such as bamboo and banana fibre.

With no money in the bank, Balakrishnan is turning to crowdfunding to give it another shot. Moneycontrol spoke with Balakrishnan about his future plans with Flatheads, insights into the offer he received from Bansal and Singh, and more. Edited Excerpts:

You put up a LinkedIn post two weeks ago, expressing your embarrassment after the Shark Tank pitch teaser aired. After everything that has transpired since then, how do you feel?

I’m still trying to come to grips with what is happening. Mentally, after the pitch was done, I decided to close the chapter and move on. Now, with this entire, wave of support and encouragement, we're really reevaluating what we want to do with the brand.

What was the biggest effect of the episode airing?

We had a limited inventory left before the episode aired. All inventory in India sold out within 38 hours of the show’s airing. Saturday and Sunday (January 7 and 8) all orders came in, and we spent the entire weekend packing them and sending them out.

We ran out of inventory on Sunday. But there is still so much traffic coming on the website. We thought we should give them something. The Souled Store founders reached out and we decided to collaborate. I spoke to them on Monday morning, and by evening, we launched a t-shirt that said “you are down, but not out.” They even offered the profits from it to help revive Flatheads. We sold out 800 plus t-shirts within two to three days.

You also launched a limited edition NOT OUT collection that you have launched. How did this idea come up and what are your plans ahead with it?

With the t-shirts, we were also looking into what we can do to bring shoes back since the demand for them was growing. Amid the hype, somebody on LinkedIn put out a post saying, instead of saying sold out, you should start collecting money and crowdfunding. We decided on going with it. We finally got a confirmation from our suppliers on January 15 that they can make 900 pairs and so we launched it on the morning of January 16.

Since the payment needs to be made in advance, we are running it as a crowdfunding campaign. We are open for pre-orders right now. Once we get to 600 orders, we will pay the suppliers in advance and get the shoes manufactured. We will ship it within 60 days. We launched at 8:30 am and at 11:50 am and we were sitting at 140 orders already.

So what happens if this works out?

All the questions that the sharks asked - do you have product market fit? Is international the right way to go? Is the pricing right? Are the shoes boring to look at? All these questions still need to be answered.

If this brand has to be resurrected, we need to get some capital infusion into the company.

The episode went viral, almost every regular internet user knows your story. How does that make you feel?

It's an entrepreneur's dream. We are building brands, trying to craft a message, tell a story, and hope that the audience will resonate with it. Suddenly, now I have it. There are so many people who have completely bought into the whole story of the journey itself.

If this had aired in September, I would have given it a chance with Flatheads because it was still alive at the time. It's a bittersweet feeling because reviving Flatheads now requires double the effort and energy.

There were so many supportive comments, posts, and stories about you on social media. Could you share some that have stuck with you?

What has really hit a chord with me is people sharing their stories. There are posts that say I went through the same thing, I had to shut down twice, and I'm trying the third time, and so on. A lot of people had to go back and take up a job because things didn’t work out for them.

A lot of these stories, which were bottled up within people's minds are actually coming out.

Have you thought more about Anupam's job offer?

I am still very passionate about the consumer brand story. I want to go back and try again in the D2C brand space. Anupam’s company doesn't fall directly into that category. When he contacted me later, I told him I really wanted to give it another shot. He's a great guy; he said no matter where you land, we'll meet again. The door is always open whenever you want to chat.

What was going on in your head while you were standing outside contemplating Piyush and Vineeta's offer and what made you take the decision?

The offer that they made was far away from what our expectation was. I was fairly clear in my head that I'm not going to take this offer because we have raised Rs 10.2 crores for 33 percent earlier. Accepting the offer is basically recapitalising the company, which means starting from scratch all over again.

If I closed this down and start from scratch again I will be able to raise at least half a million for the same 30-35 percent. Building this brand from scratch again, I know, will take more than 70 lakhs. So I'm basically shooting myself in the foot. Plus the conversation that I had with them also gave me the perspective that the way I've been doing things is not working.

If you had to negotiate, what would have been an offer you could have accepted?

I would have said anything less than 10 percent equity for Rs 70-75 lakh. We had agreed upon something close to 7-7.5 percent. But, in the tank, if they had offered something closer to 10 percent, I might have considered it. But when they made the offer, they stated that it was non-negotiable.

What were your family’s and team’s reactions?

Since I started up, I always had this thinking that on a bad day, when I get home, somebody in the house is going to say ‘I told you, you shouldn't have left that job.’ That has never happened to me in the 10 years that I've done this. You know that is a testament to my family's faith and support.

I watched the episode with the employees. They were quite emotional about it, but they have been deeply involved. We had 13 people, and when we lost the offer in August, they went their separate ways. Now that we're trying to do something with the brand again, we've all just agreed to give it one more shot.