Transcript: Pranay Gupta: Cofounder of 91Springboard & Angel Investor

Host: Hello everybody. This is Natraj, and you're listening to the startup project. In this episode, I talk to Pranay who's the co-founder of 91 springboard, a co-working space company in India.

I talk to him about his journey of starting a company like 91 springboard, of various investments he made along the way and his next venturing into Angel investing. I had a blast talking to him and hope you will do.

Host: Hey Pranay, welcome to the show and thanks for being here.

Guest: Hi Natraj, it's a pleasure. Thank you.

Host: So I want to start this conversation by, uh, let's jump into how 91 springboard started.

Guest: 91 Springboard has been a very interesting starting experience where, uh, Varun, who's the founder of 91 Springboard, he had just exited out of his previous company called My Guest House. This was acquired by Make My Trip, which is one of the biggest OTAs of India.

Host: So what is OTA?

Guest: OTAs online travel agents. So, uh, it's like Expedia or one of the various travel booking sites. Uh, and they had acquired my guest house.

Um, and once it got acquired, these are, I'm talking of about 2011-12 days when entrepreneurship and startups was still not as cool in India.

So the early entrepreneurs, you know, they started approaching Varun and saying, your company got acquired, can you help us? Got it. Uh, can you advise us? And that's what got him starting to think towards a fund.

And uh, think of it as a cross between a small fund and a Y combinator/Techstars. That was what uh, he was trying to set up.

Guest: And in parallel for me, I was running the best incubator in India at the top MBA institute of India called I am Ahmedabad. And Varun and I were from the same school, the, uh, when I say school, I mean K to 12th.

So we were in the same school, he was year senior to me. So, uh, that's where we reconnected uh, on this idea of let's do a fund come accelerator together. Uh, and Anand who's the third co-founder, he ended up joining.

So he was also in the same school and he was just back from US after kind of wrapping up his startup there, and he was taking a break when Varun pulled him in saying, you're on a break, why don't you come and help.

Guest: And that's how the three of us got together.

Host: I also see that you have a fourth co-founder Deepak Sharma, and he's the ex-global chairman of City Bank. How did that happen?

Guest: Oh, that's another interesting story. Uh, in fact, I'll let me also go through the evolution of, you know, how the business grew and that's where Deepak fits in very well also.

So Deepak is uh, he was the friends and family of Varun who you know, invested in the friends and family round. Got it. So he has known Varun since Varun was a kid.

Our fun thing is we tell everyone how Varun used to break crockery at Deepak's home when Varun was a kid. And uh, so Deepak gave a small check to Varun when we were starting.

Guest: And uh, I think one smart thing we did in whatever ups and downs we had throughout the early days, is we kept our investors updated about what's happening. Used to send out like a religious monthly report to our investors.

And uh, as we were growing one find Deepak looked at everything and said, guys, why aren't you going faster? And uh, that conversation again he flew down to India, we sat together and he said, Pranay, uh, not just Pranay, but all of us.

So guys, I want to invest in your company and plus I want to join as a co-founder. And that was amazing, right? So that's how Deepak came on board later in the journey.

Host: So whenever we talk about fundraising, right? You've touched upon how Deepak invested. How did you approach fundraising at that point? So you got this idea, you wanted to create a Y Combinator/incubator project. Were you clear in your head?

So what is the first step that you guys did? Like did you went about and see different models? What was your first sort of product/service that you started?

Guest: So the, uh, we went through various evolutions, right? The first part of what we were doing was literally setting up a microfund.

And the way the economics of a small fund works, so typically in a fund, like imagine a fund which is a $10 million fund, which will be investing in startups. Yeah.

Uh, the way the fund economics works is what's called a 220 model where the people who are managing the fund. Yes. They get 2% of the fund to manage their expenses.

Guest: Yeah. And then whenever the fund returns profits to the people who've given them money. Yeah. That's when they get 20% of the share of profits, which is called carry.

Host: Yeah, uh, a funny story about carry is that that term carry, right?

That comes from the 17th century lingo when uh, when people who were uh, doing this uh, trips, right, expeditions uh, in 17th century when they used to go out and uh, on a treasure hunt uh, and they were funded by investors.

Uh, and they whenever you get anything in that expedition trip, the 80% is given to the investors while 20% you get to keep.

So that's how they funded the original, you know, expedition trips and we still continue to use that uh, lingo and that's where we call it carry because it's carried by the ships that are coming back.

Guest: Wow, very interesting. I didn't know this.

Host: So, so you actually didn't start as a co-working space then. So you were initially thinking of setting up a micro fund.

Guest: Exactly. And to raise the micro fund in some sense for the the GP, which is the general partners running the fund, the ones who would get the 2% and 20% carry, we raised a small amount of money from friends and family. And then the first fundraising we were doing was actually not the fundraising to invest in the co-working business.

Guest: But the fund raising from what's called LPs, limited partners who will give us money that we can invest in startups. Yes. Uh, and here we went around talking to a lot of people.

Interestingly, I made a trip to uh, the Silicon Valley area, connected with a lot of people there too. And realized that we had really grossly underestimated the effort and time it takes to raise funds.

Uh, and in hindsight honestly this was 2013 uh, first half. Got it. Uh, and you know in hindsight all of that sounds so stupid, but uh, you know how all entrepreneurs are. So we were the overconfident guys knocking on each door.

Uh, and honestly, I mean, I have now a lot of respect for those investors where they were able to see and understand that uh, we weren't ready to manage a fund at that time.

Guest: Yeah. Uh, so well the fund never happened. We had a couple of investors who had invested in startups supported by me or Varun before. So a lot of them were really nice, really excited.

But they were clear with us where they said, we like you guys. Uh, we are happy to invest in startups that you bring to us. Hm. But we don't want to give money into a blind pool.

So we don't want you to give want to give you money which you can go around investing without us having a say in it.

Host: Got it. Uh, and that's where we came back to uh India and we were sitting, we this is where we had taken the initial money to set up a nice space. And this was the space where we'll have the startups funded by us working.

Our intent was to create a small uh really high growth environment. Uh, if I may I think at that time plug and play was already very popular. One of the interesting places. Right.

So imagine it to be not very unlike that, right where the thought was that this will be a big space, uh, a very uh nice environment where our funded entrepreneurs are sitting, their various service providers, a lot of activities are happening.

And it just creates a culture where the startups funded by us find it easier to grow.

Host: so initially your idea was the space is going to be accessible for only the startups that you are going to fund, or is it going to be a co-working space and you might use uh that deal flow and sort of find the startups that you want to fund?

Guest: So it was in between it will be primarily for startups we are going to fund, but then we'll permit some people on selective basis, uh, where we feel like they can add value to our portfolio. That was the initial thought.

So we were getting very selective. On the other side we were doing a lot of activities and events which were open to public. Got it, got it.

And that got us these events were really getting us a lot of recognition, lot of support and the the whole ecosystem in NCR. Delhi is where we started NCR stands for National Capital Region.

So the whole ecosystem in Delhi really got behind us to help the startups we were working with.

Host: I think this was very early times even for co-working spaces as an idea, right? You might be one of the first companies doing this.

Guest: We were the very first doing it. In fact, I have a funny story for you there. Uh, because we never thought of doing a co-working, right? We never googled if things like this exist. Interesting. Yeah. Uh, I we did read up about plug and play. But uh, you know, Wework was already pretty big then. I'm again by now I'm talking about 2013 end.

Guest: But uh, we were dumb enough where we weren't even aware of it.

Host: Yeah. Uh the interesting thing is the day we decided to pivot. And we were uh thinking that, you know, what do we call this? Yeah.

I still remember we were sitting in this conference room Varun Anand and me where uh we started thinking that it's like incubation but the incubator is too uncool a word. People just associate it with like these rundown government funded setups. Yeah.

Uh then there was this hub as a term which was going around very uh popular at that time. Yeah. I mean we have a T hub in South India.

Guest: T hub and impact hub. T hub came in later. Impact hub had already grown. So uh, but somehow the hubs were still not as uh, they wouldn't real indication of what we were trying to do. And that's where we came up with the term co-working.

And I still remember that debate where Anand said, but that's not even a dictionary word. And we went around throwing more words where eventually we decided on co-working saying this explains it the best. Yeah.

And immediately after that when we were trying to set up the site and did a SEO optimization is when we realized, hey, this exist. Globally co-working has existed for long enough. And here are we thinking we've invented a new word.

Host: So your initial idea for the name was co-working.com or something like that?

Guest: No, the name remained springboard. Okay. Uh, so 91 springboard. 91 stands for India's country code.

Host: Okay. I was about to ask why 91.

Guest: Yes. So that stands for India's country code and the springboard to signify that we really helps the company grow and go up in life.

Host: So by this point, uh, you've uh, your business model was clear for you guys, right? Uh, you are going to be a co-working space and at the same time you will invest in startups that will, you know, that will seem interesting to you. Is that right?

Guest: Yes, you're right. Just that co-working at this time also we thought of it more as a survival. Our goal was yes. So our thought was we'll still do a fund and that will be the core thing.

But uh, we basically we were looking at a bank accounts and we were realizing that we have survival money for only one more month.

And that's where we said that we have about, I think at that time we had say about 60 odd seats lying empty in our space.

Guest: And there were companies lining up wanting to be there. Got it. Because they were really finding value, the companies in our spaces were really finding value, but we were getting over selective about who we want to allow in.

So that's where we discussed and we said, hey, if we can fill 100 seats. Yeah. And at that time we were selling them for about 5,000 rupees, so roughly about uh, let me say about 70 odd dollars.

So that's where we said if we can fill this up, we can have sufficient revenue to pay for our expenses. And it will give us a life line.

Host: Yeah, I mean it's funny, uh, sort of all successful startups and or more most of the successful startups, we end up listening some sort of a pivot story, right?

Uh, you are now a co-working full blown co-working company, but the way you approached it and or sort of ended up doing it, uh, is completely different, right? Your motivations were entirely different uh, and you ended up becoming a co-working space.

So when you realized uh that you've become a co-working space company, uh, from then on, how did you uh sort of scale or looked at your company versus uh when you looked at or approached it as a fund?

Guest: Sure. So, um, I'll also explain how we realized that, right? So initially, the first space we had set up, the co-working aspect was purely to help us pay for expenses while the fund happens.

Then we had a second space in Delhi again, where a landlord approached us. It was a pre-fitted space and we did a revenue share, very asset light starting for us. And literally like Anand and me started operating out of that space.

When the first member came, we used that money to hire a employee for that space. So we bootstrapped our way into these two spaces.

We after that got offered a space in Hyderabad, and this is a city about two and a half hours flights from our flight from Delhi, where there was a pre-fitted space in a building of a company which Varun sat on the board of.

And they said here is a space, if you guys want to use it, use it. That's when we did a conversation and we realized that let's do this experiment and if we can pull it off uh remotely, right?

Because uh, it's very hard for one of us to shift completely to a new city for a small space, but if we can run it with the remote team and we can set up the systems to run it. Then that means there's no holding after that.

Host: Yeah. So I mean running a co-working space is a very operational intensive business, right? I mean you have to take care of a lot of logistics uh involved in setting up a co-working space. And springboard has grown into what around 25 to 30 locations, right, pre-pandemic. And how did you guys sort of scale from your let's say third or fourth location?

Guest: So uh Natraj basically uh once we were at three spaces and we proved Hyderabad as a model plus profitability to ourselves is when we said let's scale it up.

And that's when we started thinking of all systems and processes that we need to have to be able to scale. So uh of course part of it was fundraising. This is when Deepak joined us. Uh he invested, uh he brought in a couple of friends to invest.

And then the other part of it was imagine the equivalent of creating playbooks. Right? So uh how to set up a space, what is the kind of design we need? Uh, how do the layouts work for us? To how do we reach out to members?

Uh we started setting up our central sales team. So till now, a lot of sales were happening like if you imagine like till Hyderabad, basically it was us selling centrally. Yeah, yeah.

So that's when we started thinking through what will be happening at the hub, what will be happening centrally. Uh, and a lot of those I mean, I can go into details with these are really gory process creation details, right?

Host: Yeah. So I mean uh are there any learnings that you would you guys would do differently? I mean in terms of scaling whether it somethings that didn't work?

Guest: Uh, lots of them, lots of them, honestly. Uh, we weren't from the industry. None of us had real estate background. So, uh, we did a lot of mistakes and thankfully we learned enough to be able to survive and grow.

Uh, I think a few of them uh, if I may is uh, one uh, we were hawked, hawkeye we were looking at our cash flows. But uh, we didn't have an appropriate MIS initially to give us a good view into business.

Host: uh, what do you mean by MIS?

Guest: See, so basically, uh, MIS is a, I mean it stands for management information systems. But basically think of it as a document that you're seeing at end of month that gives you a good sense of the key numbers that you want to track. Got it.

Information you want to track. So uh, a lot of times when entrepreneurs start they're just looking at cash flow, what's coming to bank account and what the bank accounts are at.

And uh, especially in business like ours where uh, you're doing a lot of CapEX. Uh, cash flow sometimes throw you off.

So in our case for example, what we thought of our profitability from a hub and how we were taking decisions because we were only looking at cash flows, it was uh, sometimes things would be harder.

Host: Uh, so once we started so why uh why was it harder? Uh, I mean why did the cash flow didn't give you the full picture?

Guest: Again, so let me give you an example and it will again at risk of sounding like the stupidest entrepreneurs. That's okay, that's okay.

I mean, one of the things I'm trying to do with the podcast is for whoever entrepreneur listens, I mean, the things like you're talking about cash flow or uh MIS, these are the stuff people actually need.

And I think that will help fill the gap for uh up and coming entrepreneurs, right? People who want to become entrepreneurs. So yeah, it would be a good I mean no answer is a dumb answer, right?

Guest: Yes. So I'll give you an example of a cash flow versus profitability thing. Uh, we when we started in Delhi, it was winters and we were working out of a our first sub was out of a basement in Delhi. So we realized it's cold.

In fact, it's very cold. And we don't need air conditioning. So we didn't install ACs. Uh, by March, we started realizing that it's getting hot and it's getting uncomfortable. Yeah. And uh, but ACs were costing enough.

So in our uh jest to survive and try to optimize what we are spending. We brought in air coolers. Uh, these are called desert coolers in India. I don't know if you've seen them. Yeah.

But basically they use water and kind of spray of water to cool the air and throw that in.

Host: Yep. Uh, then so we brought in that. But the issue was when monsoons the rains started approaching or they were say about 20 days away, it started getting really humid. Hm. But now we were already too invested into all of this and we said, it's a matter of another 20 days, once it starts raining the humidity will go. So let's just uh figure out how to get humidity away.

Host: And we got in a lot of charcoal etc to absorb the humidity.

Guest: It was a very uncomfortable environment in the space. There were a couple of members literally coming with a towel around their neck wiping their faces while they were working.

Guest: And uh, then one find day as it had to be a big team of about 10 people decided to leave us. And this is a team which really like we had helped a lot and the founder I remember that conversation he said, I'm so sorry, but what can I do?

My team isn't willing to work in this environment. I will come back, but for now I have to go.

And that's when we looked at the figures and we realized that the revenue we lose on a monthly basis because of this is higher than installment cost of putting up ACs even if we swipe our credit cards.

Host: Got it. I mean it's like the effect of losing a certain percentage of your customers often referred to as churn, right? If you have the churn is more costly than the investment that you you thought you were saving uh by avoiding installing air conditioning.

Guest: And now explaining cash flow versus P&L. The because we kept thinking of air conditioning as a capital expense, right? Say if we were thinking it will take about $10,000 to install ACs. We kept thinking of that as a massive figure. Yeah.

But the moment we thought of it as a installment on credit card, we were able to realize this is what we are paying monthly. And if it will add so much revenues to the business, it will still help us save a few in the end.

Host: Yeah. It's also investment for the future versus just thinking about the short term, right? Because it will continue to help for, you know, whatever time an air conditioning works while it also improves the condition in your space.

Guest: You're right, you're right. So there's a part of branding with and others. But I mean what I mean is like we knew that, right? We were never confused on the AC is not required.

Host: Yeah. But just on looking at numbers, we couldn't see it so clearly that it's a it's a, how do I say a dumbproof decision to just take this.

Guest: Yeah, yeah. Versus evaluating it so much. So I think that's where looking at a MIS and right formats helps versus we were just looking at the bank balance.

Host: I mean that's a great lesson of what you face in practice versus uh what you theorize what a company goes through, right?

So talking about just the co-working space, uh I first encountered your company when I was doing a different podcast and I was talking about WeWork.

And the way always I looked at WeWork or any co-working space is if you remember uh, the workspace itself was transformed by a couple of companies, right? For example, Google was famously known for having this lavish offices.

Uh, and once Google did that Facebook has to do because they they their offices are in the same city, right? There's a competition for employees. And then once Facebook did it, Microsoft has to do it. Once Microsoft does it Amazon has to do it, right?

So that kind of triggered uh, what sort of Google started the lavishness uh, uh, in the workplace and then it over time like became a necessity because employers will not be there at your company.

So I always thought we work as like uh, you know, Google office as a service.

So, I mean, you when you realized like co-working space is all about designing and optimizing space and at the same time providing all the benefits that a company like, you know, Google or Microsoft provides, how did you think about the space design and did you get additional help from architects or, you know, people who are professional at doing this sort of a thing?

Guest: Definitely. So the see the also the way the maths in the business works, space design in this case in our case is one of the most important thing.

How do you structure the space so that you can fit in right amount of people, yet at the same time it do it in a manner where it ensures it's not tight for them, they are all these interactive areas.

Uh, this also becomes very important because uh, for us as a DNA, a large part of our focus was in how can we build community? How can we get people to help each other?

And how does that flow into architectural design is something which was always very critical for us.

Host: Yeah. How does this space how does the space itself like enable collaboration, right? Because that is one of the things you were trying to do from day one. Precisely.

So you started as a co-working space uh and one advantage when you have co-working spaces and especially if you have uh lot of companies using your co-working space, then you kind of also become sort of a distribution uh channel for a lot of other services.

And uh right now like if I look at your website, you have partnerships with AWS, Sodeks, Razorpay and pixie, right?

These are all the tools and services that you guys went ahead and made deals for the uh consumers of your product that is your co-working space, right?

So what was the strategy behind that and was it just a additional revenue source for you or were you looking at it as uh sort of a customer acquisition cost or both?

Guest: Uh, so it started and for a long time it remained a customer retention cost. Where it wasn't a revenue source, but our thought was that how can we ensure that the customers is deriving more and more value by being at 91 springboard.

Uh, so a lot of these tie ups we did were really a win-win-win tie up where the organizations were anyway looking to add new customers to their service and they were willing to give a freebie out to in some sense lead to a customer trial.

All of these were curated supports. So we knew that the startups which was our primary market when we started uh needed something like this and these were the best products available.

Uh, and finally for us, uh we were just connecting, we were enabling and at the end of the day we could go to customer and say, hey, see by just being at 91 springboard, you're able to save so much value for yourself on the other things too.

Host: So it it creates a nice flywheel effect both in terms of acquisition and also retention, right? Right. Uh, and does I mean does springboard get uh revenue source from these partnerships or is it just a pure uh partnership relation with these companies?

Guest: So we started monetizing it much later down the line. Uh, now uh there's some amount of uh revenue that we have from that.

But I must confess it's a much smaller figure compared to our compared to your core business, which is co-working, right? Uh, so I mean you guys have started originally with the idea of to invest in the startups, right?

And it co-working space is sort of like a breeding ground of next successful startup. Every startup uh, I mean before pandemic uh started in some sort of a co-working space beat in US or in Bangalore.

So how did the investment side of the thing progress uh as you are, you know, developing your co-working business?

Guest: So it was very interesting uh, uh, so one, we kept our acceleration investment bits alive. We didn't have funds to invest, but a uh interesting evolution that it took was where a lot of the investors we had talked to earlier. Uh.

They had been in touch and they told us that whenever you find a good startup, let us know.

And on the other side, uh, primarily because of our backgrounds to Varun Anand however busy the co-working would keep us, we would keep meeting new entrepreneurs, we would keep helping them in some way or the other.

Guest: And uh, all of these we'll pull in into a advisory sort of a role. And I had a small team which was helping out this manage the advisories to the startup and help syndicate rounds around them.

So we built a portfolio of about 20 companies where uh we had helped syndicate around and we had some advisory equities in them.

Uh, but on the other side, it's very interesting where uh whenever we would talk to a investor and especially a VC, they would initially look at us and say, hey, all of this is interesting. The space thing that you're doing is interesting.

But the real dough lies in the diamonds which are sitting in the space. And uh, it took some effort on the other side to tell them that how a small fund, if you think of it, can never be a billion dollar business.

Funds by design are meant to be selective. And uh, I mean there is no fund globally which is a small which is investing in early stage startups but it's a billion dollar fund. But on the other side, co-working is a billion dollar business. Right?

Yeah. So, so so there we were very focused where we realized that uh, we uh want to have our core as co-working. And a lot of these incubation activities we are doing is something which is one division, but the core remains co-working.

Host: So this model of uh sort of investing in your in the companies that are part of your co-working spaces has been replicated elsewhere.

One of the ideas I thought and uh I want to know from you if this happened or not, uh is uh you could do something sort of like why what Y combinator does, right? Like give them a 150k check and take a 7% equity in the company.

Uh, but you could do a slightly modified version of that where you could do, hey, you can use our co-working space, like you can allocate a certain percent of co-working space for a certain time and in exchange for equity.

Did you guys uh do any models uh of you know, investing a startup in such format?

Guest: We initially thought of it but we parked it honestly. Uh, I think uh, the key reason and something I I can keep debating till we try it out. But the key reason uh, we had was that what will naturally happen?

Like imagine the flow of conversations, right? Where they are members coming to your space and applying. And then to a few you're saying, hey, you are great and I'll take equity in you.

But by the way to the others you'll say, you're not good and I want you to pay up.

Host: Yeah. And that passing a judgment on your customer while they're coming in and especially while you're trying to create a community and have people interact with each other. Yeah. It's uh I mean that's a great point. It won't be a great dynamic.

Guest: Yeah. It doesn't make sense in terms of how your incentives are aligned.

Guest: Right. And then the third thing and I'll kind of link that back also is I think uh the reason money was invented and barter was done away with is money just makes life simpler.

So even if we were doing that the transaction would have been where the customer we would have said I'm giving you so much worth of space for free. Yeah. And you give me equity equivalent of that. Yeah. I mean that that's why money was right. Yeah.

So it's simpler, you pay me for the space and then if I like you, I'll invest in you.

Host: Yeah. Because uh, I mean now that I've asked the question, it's much more clear that if you do if you have done that way, you're also uh limiting your original business which is the co-working space. Precisely.

So, and finally it also, you know, keeps you more honest. Yeah. It's very easy to think that hey I'm collecting equity worth so much which will one day get monetized and kind of lose your sight on economics and profitability of a space.

Guest: Yeah, yeah. So we thought let's just do it this way.

Host: I mean uh I was uh scrolling through your Twitter page uh and I found this interesting image where you are receiving the uh award from President of India for being the best emerging technology incubator. Uh, how did that come about?

Guest: So this was our as I said our we continued running the incubator. And even though uh it was a kind of a parallel division for us. We tried to integrate the the philosophy of incubation into our core. So the way I um I called it is where I said we are a community led incubator.

Guest: The whole focus is how can you make the whole space work like a incubator and there are some of these which are startups which are uh, which you are supporting, but more importantly everyone in the space is helping each other.

So that philosophy we kind of grew on and try to keep track of what kind of companies are coming out, how we are helping them. And uh thankfully Government of India they recognized it.

Uh we I I don't remember exactly but I think we were at about 12 spaces at that time.

And which honestly uh like if we look at the numbers and number of startups supported or anything, we were probably uh 10 times bigger than the closest incubators in India. So that's how it came about really.

Host: So uh were there any really successful companies that came out of your incubation?

Guest: Quite a few. Uh, again uh the reason I'm taking a pause is I don't want to sound like if we weren't there the companies won't exist. For sure, yeah. Right. So and we were a lot less high touch, right? So rather I should use the word we were low touch compared to a lot of accelerators or incubators you see otherwise.

Host: But that said a lot of uh good companies out of India. Uh, we've seen the founders and their core teams uh grow out of our spaces. So be it uh Revigo, which is one of massive logistics company uh which has grown out of India, lens card, another unicorn focused on uh basically eyewear. Yeah. Uh, so so bunch of these honestly the list can keep going on.

Host: Yeah, when I was in college, I used to use lens card to buy sunglasses. And funny thing about lens card is they have a brand name of their first sunglass, which is based out of an entourage character. Uh, the TV show entourage.

Uh, that's how uh the name always stuck to me because the entourage lead character name was Vincent Chase and their brand initially was called Vincent Chase. It still exist that.

Yeah, they still use that brand and whenever I look at that brand, oh this is Vincent Chase, you know, it's it's a creative name they got out uh but it looks nice uh and it was also cheap at that point of time.

Uh, and and lens card is doing great, right? So Yes. The rest is history. In all your answers, right, when I'm listening, one thing which stood out to me is uh your focus on margins and profitability from day one.

And today we have, you know, startups and companies which are, you know, even some of the huge ones which went to public even for the Ubers of the world, the Airbnbs of the world, right?

They've went to this humongous side with and I mean the poster child of co-working space, WeWork, right? They were hardly focused on um uh making profits.

Host: So, I'm kind of wondering what your take is in terms of like profitability versus scaling and uh, what did you guys think while you are in the thick of it?

Guest: Sure. So, interesting that you mentioned WeWork and uh, it's taken us a lot of effort and we continue to kind of undo a lot of things that they've put out in the industry as a way of talking of this industry.

Uh, but I mean coming back to profitability, especially talking of Airbnb and Uber, I think a lot of it really Natraj is about uh what business model are you in? For Uber, it just makes sense. It's in a winner take all market.

And once there are 10,000 Uber cabs running in the city, it's very hard for someone else to start a cab company. So for them to burn money to capture the market just makes sense. We, I feel in co-working is not as much of a winner take all market.

Because uh, especially post covid, there is a benefit of having multiple centers across India, companies are demanding certain amount of flexibility in locations where a multi-location operator can give some benefits.

But other than that, if you think of it, till pre-covid, almost 90% of customers of all co-working spaces were basically team sitting out of a location. Yeah. And which means if there is a great guy running a single building next to yours.

Uh, and if he's do he or she they're doing a great job of it. Then just because you have 10 other locations in India, it doesn't matter. Yeah, yeah.

Similarly, uh you could sort of talk about locking in a customer, but at the same time once the lease is over. I forget that, right? If you're truly a co-working space running in

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