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You can call him a trailblazer. At 29, Alok Kejriwal left his family business to start one on the Net with Rs 5,000 in his pocket. Two years on, contest2win.com is valued at Rs 135 crore. The statistics are mindboggling. c2w has a registered user base of 2,95,000 Indian members, with 45,000 new members joining every month, generating over 7.5 million page views per month. In a freewheeling interview, the 31-year old CEO of c2w talks to Alokananda Chakraborty of agencyfaqs! about how to run a successful business on the Net.
Edited Excerpts
Would you have become an entrepreneur irrespective of the Net or did you become an entrepreneur because of the Net?
Well, I think the Net definitely propelled me faster into realizing that I was an entrepreneur. Definitely the instinct was in me - but the way the country operates makes it very difficult for full blooded entrepreneurs to flourish. However, just to give you a flavour of what I did, immediately after I was 16, while attending college, I developed a transport business, extensively traded on the stock market, transacted in the LC discounting business, before settling down in my father's socks business.
Have you been employed before? If yes, in what capacity?
I have never been 'professionally' employed before. I began working full time with my father's company - Hindustan Hosiery Industries - immediately after graduation.
What was your inspiration for starting contest2win? Was there any other site - foreign or otherwise - akin to this one when you started out?
The inspiration was simply a consumer's frustration married to his business instinct, which was translated into a business. I'll explain.
I was very fond of entering contests, but I refused to use competition postcards. Also, I refused to believe that anyone would sit down with a pen and paper to watch television! So I asked myself 'why not create an electronic post office for receiving contest entries?' Of course, the overriding thrill was to create a business on the Internet! I have to tell you this, we pioneered this concept. Even today, there is no comparable concept worldwide.
Where did you get your initial capital from?
Most of it came from my personal savings. I borrowed some bit from my grandparents.
Were you serious about the venture - making money and all that - when you started out?
I was indeed very serious. I was trying to break away from the shackles of a Marwari joint family business and there was no 'big' money around to support as well. I started with Rs 5,000, and eventually invested Rs 9.5 lakh more. The balance was VC-funded.
Did you have a proper revenue model in place when you started out? So, what was the revenue channel?
No, I did not purposely implement a revenue model, because in August 1998, the Net was almost unheard of. Hindustan Lever, for example, did not have an Internet connection. So, it was logical that brand owners (who were and are my only set of clients) would not pay for an untried and untested concept, especially from someone coming from a socks business background!
Instead, I pioneered and implemented a 'media barter' model. I offered contests to my clients for free in the sense that no money changed hands. The contests were in lieu of c2w branding on all forms of communication - print ads, television supers, and, of course, MTV veejays screaming "visit us at c2w.com!"
How did your friends and family react when you said "Ok, I'm through with dad's business and I'm going to run a contest site on the Net!"?
Very negatively. They thought I was mad. My wife, my sisters and my mom included. The time I left, I had scaled the hosiery business from Rs 4 lakh to Rs 8 crore per annum. So the decision was not a joke. It's unbelievable, but my dad was the only person who supported me.
How difficult was it selling the concept to corporates like HLL, P&G, etc? How did your first breakthrough come about?
It was bloody difficult. Yet perseverance paid off. I used to make 200 calls a day and get only two brand owners on the phone. I think the 'free' bit helped, together with my passion. I think passion is a salesman's best friend. After three months of pure struggle, I got my first break with Gunendar Kapur at Hindustan Lever with a contest for Kissan Annapurna Salt - the Bright Kids contest, which was launched on August 2, 1998.
Now, talking about the people you are targeting... There are two very distinct categories of people as I see it. One, the die-hard contestant, and two, there's a big chunk of people who just would not participate because they think they can't win. How do you think the minds of these two types operate... what are their respective motivations or demotivations? And how do you hope to convert the latter?
Of course, all the fence sitters have become avid contestants. We have for the first time created a community of 'winnaholics', and this community comprises not just the die-hard guys, but also housewives, lawyers, merchants and investment bankers, stock brokers, and even a few retired people!
The big transition c2w has seen is creating contests around the 'play2win" theme. Now, contests are no longer the boring, slogan-based nonsense. They are interactive games which are so much fun that winning sometimes becomes incidental. At c2w, we still give 'credits' for every contest the member enters - so even the I-will-not-win syndrome is taken care of!
Did you throw up your hands at any point and say "This is not happening!" How did you keep going?
Never did I think of quitting. Yes, the going was so tough that I cried sometimes.
When you started out there was no other so called 'desi' contest site. Now there quite a few. So how does it feel now? Is the task more difficult than before?
Well, it feels great to be a trailblazer. Also, the other wannabes just reinforce the models we have pioneered and make them credible because they sell a service that we invented!
How was it like running a dotcom during the boom and after the Nasdaq crash?
It hasn't affected us at all. Only our valuations have risen after the Nasdaq crash, since more and more money is now chasing very few quality deals. When you run a business like a business, market movements just seem like changing weather. It doesn't matter because work rushes along!
When did you start making money with c2w? What is your networth now?
We started our revenue stream in April 2000. For the quarter ended June 2000 we clocked a revenue of Rs 83 lakh and saved Rs 7 lakh as profits. In July, we hope to clock Rs 40 lakh as revenue. At our last valuation, c2w was valued at Rs 135 crore.
c2w keeps changing its looks very often. Why?
We shed our 'skin' based on consumer feedback. Because of the nature of the site, c2w has to look fresh and vibrant. Also, we move the bar up as bandwidth improves so as to give the user a superior experience. However, user friendliness remains the basic tenet.
What kind of traffic do you get, and what has been the growth rate of the site?
Till July 2000, we had 2,95,000 members and we get about 45,000 unique members every month. We had 7 million impressions for July. Our growth rate has been to the tune of 30 per cent month on month.
What is the question that people ask you most frequently?
Three actually:
How did you think of the idea?
How did you manage to scale this business without money?
How on earth do you make money on the Net?
What is your advice to Internet wannabes?
If the idea:
a) Makes consumers' life easier, or
b) Makes life more entertaining,
or both, then it's worth pursuing. Think of it as a real business without the possibility of easy money. Something you don't mind pursuing for 20 years, but then it should be one that has to make money. If all this excites you, then it's worth a try.
What next? Is there another new site, another new idea in the pipeline?
No, my burning ambition is to fly international flags on c2w. Nepal is already flying, and we should have at least two more by the end of this year. That's a lot of work ahead!