The wild ride of a college dropout turned internet entrepreneur

July 2016: ‘Make us famous.’ That was the precise instruction Sidharth Rao received from his new boss, Ashish Bhasin, who had just taken over as the chief of Dentsu Aegis in India. The international ad network had acquired Webchutney Studio, the online agency Sidharth co-founded (with Sudesh Samaria), in 2013. 

Cut to July 2022: Dentsu Creative Bengaluru (erstwhile Dentsu Webchutney) has become the first agency out of India to win Cannes Lions Agency of the Year, arguably the highest honour an agency can hope to win. This victory has come on the back of a campaign created by Sidharth’s team:  The Unfiltered History Tour for Vice (a US-based news website). Created during the worst of Covid, it focused on objects stolen from across the world and now residing in the British Museum.

Sidharth – ‘Sid’ to everyone - gets a message from Bhasin soon after the win. It’s as terse as the original directive: ‘You delivered on the brief.’

Ironically, Sid had quit Dentsu a month before this grand triumph. Does he regret not having gone on the international stage?

“Oh, not at all! I can take no credit for the Unfiltered History campaign except for having green-lighted the project. Webchutney has been winning major awards for years but I have never been on stage,” he declares. He had already decided to quit and it didn’t seem right that he should stay on only for Cannes and quit a few months later. It would make Dentsu look bad – and he owed much to the network.

A pause. “Actually, I don’t even see myself as an adman. I think of myself as an internet entrepreneur.”

It’s been a wild ride for this college dropout, the son of a major general in the army, over the past 23 years.  “I almost gave up several times along the way,” he admits.

His story is vastly amusing the way he tells it. It involves playing down the hard work while simultaneously highlighting his own mistakes. That’s just Sid’s style. Maybe it’s because he suffers from ‘imposter syndrome’, something he admits to? This condition is defined as ‘a feeling of inadequacy despite signs of evident success’.

After school, Sid got his parents’ permission to take a one-year break while he explored possibilities. He joined DDB Mudra at 19, later moving briefly to Grey where he got fired. I met him around year 2000 when we were starting agencyfaqs! (now afaqs!) and he was putting together Gutterspace, a site in the same space. It looked cool – “better than agencyfaqs!” he mocks me gently - and it won him assignments to make websites for corporates. That is how Webchutney was born.

Strapped for cash, he raised Rs 11 lakh when he was 20. He scoffs at the amount now but I find it remarkable that someone that young could raise any money at all in the India of that time. The entire country had less than half a million internet connections.

The internet was still a baby and Webchutney was among only a couple of creative agencies. It had won its first Golden Abby for a MakeMyTrip campaign which went viral before ‘viral’ was even a thing. But finding cash to grow was a constant headache.

When in 2005 he decided that Webchutney needed to be part of an ad network, there were many suitors – “hamare swayamvar main sab aaye”, he recalls with satisfaction. While a big deal didn’t happen, he did get an individual investor on board for Rs 60 lakh.

It sorted the immediate money woes but that particular dark cloud continued to hover: he didn’t have enough cash to expand. “And that’s when I dug a nice, deep hole for myself,” reveals Sid.

The hole was dug when Webchutney, a creative agency, ventured into media buying for MakeMyTrip in 2007. It bought media worth Rs 1.5 crore a month for which it was paid upfront but managed to secure a 120-day line of credit from Google for advertising. This gave the agency a solid short-term positive cash flow it could use to grow.

But Sid, only 28, didn’t have a lot of financial discipline. When MakeMyTrip decided to move media buying to one of the ad networks and therefore call off the arrangement with Webchutney, the agency didn’t have the cash to square off the accounts. Sid had 21 days in which to find the money. Or shut shop.

In a dramatic gesture Sid swore to his despondent team that “I will find the money – and until that happens, I won’t change my shirt.” That’s how he wore the same shirt for 21 days at a stretch – “though I did wash it every night” he hastily clarifies when I wrinkle my nose.

He worked the phone relentlessly like a man with days to live. Sid is grateful that Ajit Balakrishnan of Rediff was quick to offer an investment. In scouting for a better option, he called Haresh Chawla, then Group CEO at Viacom18. Time was running out and the two quickly inked a deal: Capital18, the group’s investment arm, would invest Rs 8 crore for a majority stake.

Webchutney Studio had survived.

Sid can’t stop praising Haresh who he now describes as a close friend and mentor as well as Sarbvir Singh, then boss of Capital18. “They were like new-age parents. They trusted me and allowed me to fly. That’s how my belief in myself as an entrepreneur and angel investor grew.” (Sid has made about 20 angel investments so far.)

It was an informal, trust-based relationship. And when things went wrong, it won Sid a sharp rap on the knuckles, most often at Toto’s Garage, a Bandra pub.

All in all, it seems to have worked. When Capital18 exited Webchutney in 2013, it had earned 3X on its investment, going by an official statement at the time. According to Sid, this doesn’t include the 12x return Webchutney got on an investment of Rs 2.5 crore it made in Network Play, an ad network which was subsequently acquired by German media giant Bertelsmann.

Webchutney Studios’ new partner was Dentsu which was then headed by Rohit Ohri. How did the change of ownership make a difference to his life?

The reply is not one I expected.

“Dentsu got in a CFO, Benny Augustine. To be honest, I was initially suspicious. But over time I realised that instilling financial discipline in a freak like me was game-changing.” Profitability began to rise year after year: last year, Dentsu Webchutney/DentsuMB had hit a topline of almost Rs 80 crore with an EBIDTA of about Rs 32 crore: things can’t get much better than a 40 per cent margin. 

His approach to running the business also changed. “For the first 14 years, I worked my arse off. But gradually I began to adopt the concept of ‘lazy entrepreneurship’ – that is, hire the best people you can and get out of the way. I saw myself as the main HR guy at Webchutney.”

And on to his angel investments. Many of them were ahead of their time. Some examples: Crude Area, an online platform to sell graphic art; Bombay Bitch, patterned on the American gossip site, Gawker; JuxtConsult, an online market research firm which wanted to be the ComScore for India. The old saying that ‘timing is everything’ isn’t off the mark.

“The thing I’ve learnt about making investments is this: bet money only if you know the founders really well. Or else, stick with the big boys and invest where they do,” thinks Sid. While most of the investments have tanked, his big hits have been Pepper Content and ScoopWhoop, each of which he claims delivered him a 20x return.

He is also extremely bullish on two other companies he has invested in – Invideo, an online video editing platform and Lio, an app which helps small and medium sized businesses organise their information. “You are going to hear a lot about them both,” he promises.

What draws him to angel investing? Is it the money? Or what? “It is the excitement of creating something new. Frankly I also feel privileged to work with such talented entrepreneurs.”

Sid is already on to creating what he thinks will be his next big thing. Because, as I’ve realised, he never can resist a punt. No surprise, then, that his new venture is called Punt Partners which he has cofounded with Bengaluru-based serial entrepreneur Madhu Sudhan.

The duo’s basic premise for Punt is that ad agencies have, over the past century, helped businesses acquire customers via the use of advertising. In contrast, marketers do not have an ad agency-equivalent to assist them in customer retention in an era of choice churn. All that marketers have is a smorgasbord of tech firms offering a baffling variety of retention tools. If Punt could have its way, it would be the foremost customer retention agency for marketers.

It’s an interesting enterprise that I expect to hear a lot of in the coming years.