boAt is one of the most exciting Indian startups that emerged in recent years. But how did boAt go from a challenger brand to one of the leading consumer goods companies in India? We find out about the brand’s journey from Vivek Gambhir, CEO of boAt. In an interview with Storyboard18's editor Delshad Irani, he shares what lies ahead for the brand, winning growth strategies and expansion plans and why he along with the founders - Aman Gupta and Sameer Mehta call themselves "the three idiots". Read on.
boAt has gone from a challenger brand to a sizeable consumer goods company. What’s your report card?
We've continued to strengthen our business and maintain our strong growth momentum. We have crossed over Rs 3,000 crore in revenue. Globally, we are now the number two brand in the earwear category and number five in the wearables category. This is just through selling in India but it just shows the potential that we now have to be able to start creating an Indian brand that will become, hopefully, a global champion. The other brands are the likes of Apple, Samsung and a couple of the Chinese players, so it's a matter of great pride that a brand that was born in India, in such a short amount of time, has earned so much brand love to be now amongst the biggest brands in the world.
There are lots of brands which can create cheap products at the expense of quality and then there are expensive brands with great quality. But being able to marry features, design, quality, innovation and affordability, that's where we find our sweet spot.
Do you still consider boAt a challenger brand or has it shed its challenger brand mindset?
Absolutely not. When boAt started, a couple of 100 brands started in India at the same time. We were competing against players who were much, much larger than us. Even today, some of our competitors are very large global companies. And so it is a matter of pride that the Indian brand has managed to achieve a leadership position, where our market share today in personal audio is almost four times more than the number two player.
I believe that the future is even more exciting. So being paranoid, being humble, being agile, being obsessed with consumers, that's what keeps us going. We are market leaders, but at the heart, this is a company with a lot of hustle and a company that is continuing to be a challenger.
You joined boAt in February 2021 and you came from well-established legacy companies like Godrej, where you were CEO. So what are some of the goals that you set for yourself and how far are you in terms of achieving these?
It's very important to partner with the cofounders Aman and Sameer, who have done a brilliant job taking boAt to where it is today. My mandate was about adding muscle to the hustle. There are some incredible qualities that have made boAt successful so far. But we also know that what got us here will not get us where we want to go in the future. So being able to preserve the legacy, preserve the values, shape the culture, enter new categories, think of bigger dreams and scale up the company have been my mission. The idea is to work together with the co-founders to make boAt a truly admired global company.
We sometimes joke that we have a CMO who has not studied marketing and a chief product officer who's not an engineer. But this shows how important passion, grit, hustle and conviction are to be able to create a successful business.
You raised about $60 million recently. Where will these fresh funds go?
There are three main areas where we will deploy the funds. The first area is to make smartwatches or wearables. We entered this category relatively late, about 18 months ago and within a very short amount of time, some of the best-selling watches are boAt. We want to deploy this money to create a health and wellness ecosystem. A lot of the game being played today is largely in hardware in watches. Our belief is that if we truly want to make watches relevant, useful, and a part of consumers’ lifestyles, we need to start investing in creating a platform that allows us to offer much more advanced features, better analytics and much more reliability. The game will change from hardware to much more of a software play. And we are one of the very few companies in the world, which owns an end-to-end platform. So being able to own the platform, drive it and be able to offer these features is going to be the first area of focus.
What are the other areas of focus?
To continue investing in the personal audio category. While we are clear market leaders there, there are significant opportunities that we are seeing to be able to build stronger R&D and also start playing in the premium category. The third area for investment is around making in India, and also engineering and designing in India. This year, almost 40 percent of our manufacturing volume will be produced locally, from almost zero percent last year. We've already manufactured almost eight to nine million units locally. But making in India is not just about manufacturing in India, we have to build deeper design and engineering capabilities. During the pandemic, we launched boAt Labs, our in-house R&D team that's based in Bengaluru. About a third of our employees are involved in R&D, design and product development. We have about 65 patents in the wearables technology space. So that's the big shift we are making to be able to be a company that stands for strong tech leadership across the world.
Does boAt want to be the Apple of India?
The price points are very different and there will always be a certain consumer segment that will only seek Apple products, but that is the top 1 percent of the population. For us, the interest is the remaining 99 percent of the population in India, which will look for great quality, innovations and affordability. I think very few companies have managed to crack that – how do you make products more affordable while providing world-class quality? When I joined boAt, one of the first things I heard from a lot of people was ‘Oh! We didn't know that boAt is an Indian brand.” That’s just because of the kind of quality and designs boAt stood for.
What are key consumer trends that are forming your growth and marketing strategies?
Consumers, particularly our target segment - millennials and Gen Z, are far more aware of technology trends and so the desire to buy and use world-class products and designs increases by the day.
This is the moment of reckoning for Indian brands. There's a much higher pride that consumers are feeling about brands that are born in India.
We’re seeing a far greater consciousness within the consumer in terms of the environment and social consciousness.
It's a matter of great pride that a brand that was born in India, in such a short amount of time, has earned so much brand love to be now amongst the biggest brands in the world.
Not too long ago boAt hosted an event in the metaverse. How did that go?
The genesis of it is a brand focus. We're investing a lot of effort into the idea of ‘do what floats your boat’. It is to essentially become the voice of the generation and youth culture today and identify the passion points that today's generation can relate to, and find ways to unleash those. That's really what’s behind some of the experiments that we are doing like the metaverse event, even if it’s still early days. But part of being a brand leader is to find ways to innovate and experiment and the metaverse is an important part of that strategy.
boAt is unique in the fact that one of its founders is also its chief marketing officer. Aman Gupta is also now a celebrity in his own right after he appeared on the popular reality show Shark Tank. How has that played out for the brand in your view?
We sometimes joke that we have a CMO who has not studied marketing and a chief product officer who's not an engineer. But this shows how important passion, grit, hustle and conviction are to be able to create a successful business. With Shark Tank, the brand has benefited quite a lot and Aman keeps asking me for a raise saying that we're not paying him enough for all the brand value he's generating. I think he's a natural as far as Shark Tank is concerned. What's quite interesting is that now he talks increasingly about the role the company and he personally can play to nurture the entrepreneurial ecosystem in India. Shows like Shark Tank are also showing that the time for entrepreneurs is now in India and what role we can all start playing to build the next generation of millions of entrepreneurs.
Maybe a boAt incubator for budding entrepreneurs?
We’ve been talking about some campus programmes, growth hackathons along with some social work to start playing a deeper role in smaller towns and partnering with NGOs to make this entrepreneurial movement into a revolution. It can truly become a revolution, particularly if we want to get to our $5 trillion GDP goal. It will be very important for us to now create millions of Aman Guptas and Sameer Mehtas over the next 10 years or so.
You came from well-established brands to a startup. How has the journey been for you so far? What was the founders’ pitch to you and what did you ask them?
So my first question to them was the company is doing really well, why do you need someone like me to be part of the team? And Aman described it well by saying look we know what we know. And we don't know what we don't know. We have been quite successful at scaling up this company to a certain level. But beyond this, the 1,000 to 10,000 journey, it's not something that we either know how to do or would enjoy doing and so it's better to find a partner to collaborate with us to be able to really harness the full potential and exciting dreams. So in that sense, it was never about replacing them, it was always finding a way to partner with them. Both of them have some extraordinary skill-sets and having me on board is enabling them to play to their strengths. So Aman can focus more on the brand and Sameer on the product and I can focus a lot more on running the company, ensuring governance and being able to define the strategy for the next three to 10 years or so. For me honestly, the decision was quite simple. We had a few conversations. We spent a couple of days together to thrash out what our respective roles would be. Ultimately, it was about the dream they had, the kind of platform they created, and the potential that I saw.
That’s remarkable clarity and self-awareness. How are they different perhaps from some of the other founders you’ve worked with?
One of the biggest impediments to founders scaling up is when to either give up or sometimes they give up too soon. What's really important is for founders to have a much stronger sense of self-awareness and to really be clear about what their strengths and weaknesses are, and also be clear about what will be required for the next scale-up for the company. This is where I found Aman and Sameer to be remarkably self-aware about what they wanted to do and also what the company needed. Me coming on board was not an investor decision. It was actually a decision driven by Aman and Sameer. Ultimately, it is all about self-awareness, being honest and being clear about what gives you that meaning or high in life. This is where they've been generally quite different from a lot of other founders that I've worked with.
Making in India is not just about manufacturing in India, we have to build deeper design and engineering capabilities.
I read that you called the boAt office space in Delhi not conducive for deep work but rather for something called ‘constructive friction’. Talk about that and the learnings you’ve brought here from previous experiences and the things you’ve had to unlearn.
Some of the fundamentals of what it takes to build an enduring, sustainable company are the same whether it's a large or a small company. Some of my learnings are in terms of what it takes to build enduring brands, how do you build brand love, how do you drive clarity around mission and purpose, how do you have a maniacal focus on consumers and how you play the long game that is a lot more focused on value, not valuation. I think those are some of the hallmarks as far as companies like Godrej are concerned. Having said that, what we are also seeing now is a tremendous amount of changes that are being brought about in terms of consumer behaviour. There are significant opportunities to disrupt the status quo. So this is where I think new-age, digital-first companies are coming in and creating a massive amount of disruption. The two biggest learnings I've had is how to be much more agile in execution and being able to drive a much higher level of speed and velocity. The second is to be able to experiment a lot more. I've had to be able to adapt my approach to be far more agile and to be far more willing to keep on taking smaller bets and experimentation. I've adapted myself to a company like boAt, which operates on a very different clock speed than some of the larger companies.
Also, I would imagine it would be very exciting for you.
The thrill is there every day. Obviously, some of the challenges are there. We know we need to put a little bit more method to the madness. Structure, systems and processes need to be made future-ready. The biggest challenge is how do you leverage the benefits of scale with agility. You don't want the company to slow down ever. But at the same time, at this stage, we have to be a little bit more systematic and more structured. That's the juggling act.
The other big challenge always is how do you instill a strong sense of founder's mentality, that there's a certain sense of mission that the company was built around. It's very important to preserve parts of that culture. There's a reason why founder-led companies still outperform by a ratio of three to one, globally. So being able to keep the founders’ ethos alive while building new muscles and new strengths is the biggest challenge we are collectively working on.
The global economic climate is challenging and there are significant headwinds. What’s your outlook for 2023?
The biggest challenge in times like this is how do you balance growth and profitability. For the Indian consumer, as far as demand over the next 10-20 years is concerned, it is incredibly exciting. The key is to be able to use this uncertainty to get operationally more efficient. From our perspective, we are putting our learnings into place. We were forced to rely on China from a supply chain perspective. This year 40 percent of our products will be produced locally. Covid-19 was a wake-up call. We used that to our advantage and we fundamentally changed our supply chain model. So being able to drive greater operational efficiencies, change the business model and use this uncertainty to one's advantage is very important.
The second is frugality and prudence. Companies that do have funds available have a war chest. That's exactly why we decided to go and raise this funding because it will be a huge amount of strength for us as we keep on investing.
Companies that managed to actually take advantage of the downturn end up being far stronger. That's happened consistently across every single downturn. There is no downturn today in India. There are certainly challenges - inflation and some concerns about rural demand, but, I think, companies that continue to focus on the basics, getting their share of consumers and coming up with winning products will emerge stronger. The key is to play the long game.