It’s time for us to retire the term “Direct-to-Consumer” or D2C. The phrase is, anyway, a bit long in the tooth, having been used since the days of the dot-com boom.

D2C used to mean selling directly to end customers, rather than selling through retailers or other middlemen. In theory, selling directly to consumers would allow a company to offer both lower prices and maintain higher margins (since it didn’t have to pay commissions to middlemen), having better products sustained through a faster innovation cycle and the ability to sell products through evolving brand stories instead of merely price.

In reality though, few brands are even remotely D2C. For instance, 82% of Boat’s sales come via Amazon and Flipkart, with only 2% selling directly to consumers. The dependence on kiranas, distributors and modern retail has merely been replaced with a dependence on Amazon, Flipkart or Quick Commerce companies.

Large and “traditional” FMCG companies, which were once acquirers of D2C startups, have sobered up. Their acquisitions haven’t really scaled up well, even as they’ve figured out how to compete with D2Cs. As a result, the acquisition premium for D2C startups has plummeted from the peak during the post-pandemic days. In some cases even a 50% discount from the peak isn’t leading to deals.

In terms of categories, electronics has scale, but profits have plummeted. In skincare, there is also a downward spiral of competition and price pressure. A good example is Mamaearth, which is now paying the price on the stock markets.

In terms of competition, the likes of Meesho, Fire-Boltt, Boult, Noise etc., are pushing prices dramatically lower. What is a differentiating factor? It’s hard to say right now. The entire category looks like a turnstile with a 2-3 year cycle.

What is the way out? What should modern brands do to build lasting and sustainable brands? How should they cultivate consumer loyalty and connections? What should they even be called?

Welcome to episode 22 of Two by Two.

In this episode, hosts Rohin Dharmakumar and Praveen Gopal Krishnan are joined by Deepak Shahdadpuri, managing director and founder of DSG Consumer Partners–India and Southeast Asia's first consumer-focused venture capital fund. We also had Ajai Thandi, co-founder of Sleepy Owl Coffee and Seetharaman G, deputy editor at The Ken and resident expert on all things retail joining in for the discussion.

This is a short excerpt from a more than hour-long episode.

The full episode is exclusively available on The Ken app with a Premium subscription and on Apple Podcasts via a separate standalone subscription.

There is also a free Two by Two newsletter. You can sign up for it here.

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Additional reading:

Boat, Noise unleashed cheap smartwatches on India. Rivals hurt them with dirt-cheap ones

Mamaearth sold investors on its FMCG dreams. Consumers had other plans

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If you’ve been a regular listener of Two by Two, consider following the show wherever you get your podcasts and leave us a rating too. You can also write to us at [email protected].

This episode of Two by Two was produced by Hari Krishna. Rajiv CN did the mixing and mastering for this episode.

We’ll be back next Thursday with a new episode. See you then.

This episode was first released on November 14, 2024, for The Ken's Premium subscribers. We’ve unlocked it for our Basic and Free subscribers for a limited time. Listen to it on your favourite podcast streaming platforms now.

For the last 24 months, the default way in which startups were exposed to venture capital and its effects has been, in many ways, paused. There’s a slowdown. Venture capital funding for the first nine months of this year is down 7% over a similar period last year per Tracxn.

There have been news stories about layoffs, company shutdowns, and downrounds at various companies from a time when unicorns were being born every three months or so.

Capital is abundant. A lot of dry it remains uninvested everywhere, but it’s just not getting invested at the same rate.

Building a company and scaling a company is getting cheaper because of AI and LLMs, which can generate code, which can generate images or just about anything that you want.

And the biggest change—there’s a focus on being profitable.

If you’ve been a regular listener of Two by Two, you’d know that VCs have always managed to sneak into most, if not all, discussions on the podcast. Maybe not in the way they’d like to be represented in general, but they have been part of the conversation in some way, shape, or form.

So when hosts Rohin Dharmakumar and Praveen Gopal Krishnan sat down for this week’s episode, they got two founders-turned-VCs to join in and say their piece on the role VCs play in the world of startups. And what they need to be doing right. Manav Garg is the founder of Eka Software and co-founder of the operator-led Together Fund (Manav has previously appeared as a guest on the First Principles podcast as well), while Rajiv Srivatsa is the co-founder of Urban Ladder, and now a founding partner at Antler India.

Welcome to episode 17 of Two by Two.

This episode of Two by Two was produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

New episodes are released every Thursday. So follow the show wherever you get your podcasts, and tell us what you think of the show.

You can write to us at [email protected] with your thoughts and suggestions.

Artificial intelligence will affect all facets of modern-day business in some way or another. But it will most definitely go a few layers deeper with the type of companies whose job is to be a record of business’ today – SaaS companies.

SaaS as a business model is investment-heavy in the beginning. It’s risky to build, it takes time to build, and it takes skill to build. But if successful, it is a cash cow. Think of the biggest SaaS companies – Salesforce, Microsoft and Adobe. They spent years building and iterating on software products. And today, all of these products they poured money into make them billions of dollars.

But there’s a perfect storm that has been turning the tides, and the incumbents have seen the signs and have jumped at it to secure their advantage and not lose out to upstarts.

The one thing about SaaS products is that they have to be constantly sold to their customers. But with AI, the entire loop becomes a solution that makes the customer’s life easier. SaaS products integrated with AI will be bought because they’ll solve the use case of its customers specifically. Companies which usually resort to different pricing strategies for small additional features will have to reconsider and be aligned to deliver outcomes for their customer, not a feature list which is based on purchasing licences to gain access.

And in all of this, what happens to the Indian SaaS companies as the AI wave ushers in?

In episode 21 of Two by Two, hosts Praveen Gopal Krishnan and Rohin Dharmakumar sat down with guests Sumanth Raghavendra, CEO and co-founder of Presentations.AI and one of the co-founders of The Ken, and Sidu Ponnappa, CEO and co-founder of Realfast and former managing director of Gojek India.

This is a short ‘highlights only’ version of the hour-and-a-half-long discussion.

A Premium subscription to The Ken will give you access to our long-form stories, premium newsletters, podcasts, and visual stories in addition to Two by Two.

If you’d just like access to Two by Two, you can do that too by getting a Premium subscription to Two by Two on Apple Podcasts.

You can sign up for The Two by Two newsletter here—it's free!

Tune in to the latest Two by Two podcast to listen to an engrossing discussion on how AI will shake up SaaS models across the world and what’s in store for India’s SaaS companies.

Additional reading:

The AI apocalypse is coming: Are SaaS companies ready?

BarbAIrians at the Gate: The Financial Opportunity of AI

The End of the SaaS Era: Rethinking software’s role in business

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Listen to the Two by Two 'unlocked' episode – What does Ola Electric’s future hold?

Link to the 'unlocked' episode:

Spotify | Apple Podcasts | Amazon Music | Youtube

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This episode of Two by Two was produced by Hari Krishna. Mixing and mastering for this episode was done by Rajiv CN.

Write to us with what you thought of the episode at [email protected].

This episode was first released on November 7, 2024, for The Ken's Premium subscribers. We’ve unlocked it for our Basic and Free subscribers for a limited time. Listen to it on your favourite podcast streaming platforms now.

Ola Electric’s woes just don’t seem to be stopping.

From angry customers to its mercurial CEO getting into online spats as pressure mounts, many of its problems stretch seemingly beyond its control today for it to make a quick turnaround and change the narrative. And this is hurting its valuation significantly, both in the private and public markets. Just this week, Ola Electric’s price fell below its listing price

Ola Electric can and should take credit for making EV two-wheelers common on Indian roads. It achieved this through rampant marketing, getting the word out for its product, and eventually delivering its products to eager customers as well. These did yield results in the short term as well. At its peak, Ola Electric’s vertically integrated ecosystem was a big pull, which, along with its marketing efforts, allowed it to gain nearly 53% market share in the EV two-wheeler segment.

But the strategy of moving fast and breaking things to press an early mover advantage that startups usually apply has now started to backfire, as angry customers take to social media to express their frustration with the longer wait times to get their vehicles serviced and working again.

These kinds of troubles tend to happen with startups. But when the situation is such that you can’t just fix things as you would do in an app, and you are under the scrutiny of the public markets. The need to deliver becomes absolutely detrimental.

In this week’s episode, host Rohin Dharmakumar and Praveen Gopal Krishnan try to understand Ola’s recent history, how it fared after listing on the Indian bourses, the troubles it has faced, and what the future holds.

Joining them for the episode are Jinesh Gandhi, Research Director at Ambit*, with over 20 years of experience tracking multiple sectors, and Narayan Sundararaman, an accomplished leader with over 28 years of experience in marketing strategy. Narayan has worked at Cadbury, Star TV, and was the ex-CMO at Bajaj Auto.

Reference Stories:

How Ola Electric blew its lead

Ola Electric wants to take on Hero’s Splendor. But e-bikes are not e-scooters

The real reason behind Ola Electric slashing its IPO valuation in a booming stock market

Other Two by Two episodes:

Ather Energy was a pioneer. Can it also be a leader?

*Disclaimer: The views expressed in this podcast are solely those of the analyst and do not necessarily reflect the opinion of Ambit Capital Private Ltd. The analyst does not hold any financial interest in the securities discussed in the podcast, nor do their relatives. This podcast is for informational purposes only and should not be construed as financial advice. It is essential to conduct your own research before making any investment decisions.

This episode was produced by Hari Krishna. Mixing and mastering for this episode is done by Rajiv CN. Write to us about what you thought of the episode at [email protected].

Fintech lending was supposed to be the bridge that would enable entrepreneurs, small businesses and even individuals across the country to get access to much-needed credit to build businesses. For millions of small and medium businesses, and even individuals seeking a personal loan, who’d otherwise not qualify for them (usually unsecured ones) from banks, these new-age financial institutions were the great hope and sources of credit.

Then in October this year, the RBI, like it usually seems to do these days, suddenly swept in and took action. It halted the loan disbursement activities of four NBFCs: Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited, and Navi Finserv Limited.  In fact, between the time we recorded this episode to when we released it, the RBI had lifted restrictions from one of these companies - Navi Finserv. 

But why did the RBI do this?

Here are some hints as to why. Here are two quotes from the RBI about why they did this:

“Deviations were also observed in respect of Income Recognition & Asset Classification norms, resulting in evergreening of loans, conduct of gold loan portfolio, mandated disclosure requirements on interest rates and fees, outsourcing of core financial services, etc.”

And here’s the most interesting one:

 
“...unfair and usurious practices continued to be seen during the course of onsite examinations as well as from the data collected and analysed offsite”

That’s what the RBI said.

But what did it not say?

Joining hosts Rohin Dharmakumar and Praveen Gopal Krishnan for the discussion are guests Ateesh Tankha and Mithun Sundar. Ateesh Tankha is the founder of Alsowise Content Solutions and a keen observer and critic of the financial services space, and Mithun Sundar is the chief Partner Officer at Microsoft India and a former CEO of Lendingkart.

Throughout our conversation, both Mithun and Ateesh took the time to explain how digital lending works, why private banks are hesitant to enter the ring and play the game themselves, what’s up with the sky-high interest rates charged on these loans, and, of course, why credit is so important for our country's growth and where we’re falling short.

Welcome to episode 20 of Two by Two.

Additional reading:

RBI had better explain why Navi and DMI Finance are locked out of the loan market

For fintechs, RBI is the boy who cries wolf

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This is a shorter 'highlights only' episode. If you want to listen and get early access to the full episode, consider becoming a Premium subscriber to The Ken, which in addition to Two by Two, will also give you access to our long-form stories, Premiums newsletters and visual stories. Or if you just want to listen to Two by Two for now, for iOS users, we have enabled Premium subscription on Apple Podcasts.

You can sign up for The Two by Two newsletter here—it's free!

This episode was produced by Hari Krishna. Mixing and mastering for this episode is done by Rajiv CN. Write to us about what you thought of the episode at [email protected].

We’ve unlocked this episode for our Basic and Free subscribers for a limited time. Listen to it on your favourite streaming platform for a limited time.

The government has played a pivotal role in establishing and promoting Digital Public Goods(DPG) and Digital Public Infrastructure(DPI) in the past decade and a half, and there have been few which have been integral in our daily lives in more ways than one.

The reason why these solutions exist is plain and simple: There emerged companies which disrupted the landscape of finance, commerce, mobility and a whole lot of other aspects of our lives, but as they gained prominence they also started to play by their own rules.

The regulator was not able to act fast enough in most cases to keep things in check. So the government intervened and helped establish and promote solutions which would keep things in check and protect the interests of all the parties involved.

Some solutions literally changed the way our day to day lives are, and created businesses which are built on top of these solutions. Think UPI, ONDC or Bharat Connect(formerly known as Bharat Bill Payment System).

In addition to creating and shaping these systems or frameworks or protocols, these government-backed players or GBPs, as we referred to them in this episode, also became a competitor on what they had helped build, which begs the question: what kind of system does this shape up to be?

In episode 15 of Two by Two, hosts Rohin Dharmakumar and Praveen Gopal Krishnan sit down with Anupam Manur, Professor of Economics at The Takshashila Institution, to break down the interventionist solutions championed by the government. From UPI and ONDC to the Unified Lending Interface

Episodes referenced:

Google Pay: Big. Successful. Vulnerable

Stories referenced:

You need to download Digiyatra again. But it’s less about a tech upgrade and more about a scam

RBI is competing with its regulated entities — and killing competition

This episode of Two by Two was researched and produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

New episodes are released every Thursday. So follow the show wherever you get your podcasts and tell us what you think of the show.

Write to us at [email protected], and tell us what you thought of the episode.

Today’s episode of Two by Two is about how the marketing function has been eating itself from the inside.

Historically, in companies, marketing has always been about the long term, while a function like sales was about the near term. Marketing owned the customer—what they wanted, their dreams, their fears, and their vanities. It was supposed to tell stories of customers back to the organisation and, in return, tell stories of the company back to customers.

Today, in company after company, the marketing function has been getting sliced away, cut into parts and becoming something else altogether.

Marketing is eating itself from the inside. To discuss what changed, we had two wonderful guests: one who has been teaching marketing for decades and one who has been practising it for decades. Our first guest is Professor YLR Moorthi, who teaches marketing, brand management, and marketing strategy at IIM Bangalore. These days, Professor Moorthi’s work is focused on the impact of branding in different domains like IT and B2B marketing.

Our second guest is Deepali Naair, who is currently the group CMO of CK Birla Group. She's had a long career in marketing across varied functions as CMO for India and South Asia at IBM, and prior to that, she was CMO at IIFL and Mahindra Holidays.

In this episode, the hosts ask two simple questions: Why is marketing dying, and how can we bring it back?

Welcome to Two by Two.

What you just listened to is a short part from a more than hour-long conversation. If you want to listen and get early access to the full episode, consider becoming a Premium subscriber to The Ken, which in addition to Two by Two, will also give you access to our long-form stories, Premiums newsletters and visual stories. Or if you just want to listen to Two by Two for now, for iOS users, we have enabled Premium subscription on Apple Podcasts.

You can sign up for The Two by Two newsletter here—it's free!

This episode of Two by Two was produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

New episodes are released every Thursday. So follow the show wherever you get your podcasts, and tell us what you think of the show.

You can write to us at [email protected] with your thoughts and suggestions.

Dmart, the retail group in India, is absolutely number one on vision, execution, and consistency. Dmart opened its first supermarket in Mumbai’s Powai suburb in 2002. Like Walmart in the US, it adopted a deep discounting strategy, offering its customers low prices every day. Today, it has 381 stores. In spite of offering its customers the deepest discounts, Dmart’s net profit numbers beat the best among its global peers.

Yet analysts and investors have been becoming increasingly bearish of Dmart’s future strategy. They argue that what got it from 2002 to 2024 might not necessarily take it to, say, 2034.

One big reason is quick commerce. Armies of underpaid contract delivery workers rushing from dark stores managed by notionally independent owners on behalf of younger companies like Zomato, Swiggy, Zepto, Big Basket, and even Flipkart are challenging the conventional wisdom on retail.

Forcing Dmart to pause and blink.

What should it do? Stick to what it knows and does best? Or learn new digital and delivery tricks in its middle age? With only an estimated 5% of the $500 billion urban market for food and groceries currently penetrated by organised and modern retail, the way Dmart goes has profound implications for India.

To discuss this, hosts Rohin Dharmakumar and Praveen Gopal Krishnan invited Govind Shrikhande, former managing director of Shoppers Stop overseeing all its formats, including Shoppers Stop, Hypercity, Crossword, Homestop, Beauty Formats - MAC, Estee Lauder, Air Port & Duty Free Retail etc. Govind has spent over 40 years in the retail sector, having been part of the launches of Denim and Arrow, the relaunch of Vivaldi and the turnaround of Shoppers Stop. He is currently an Independent Director on the Board of a few Companies and a mentor to a few start-ups.

Our other guest is Seetharaman G. Seetha is deputy editor at The Ken and also leads The Ken’s coverage of retail. He’s written quite a few stories on Dmart over the years as well.

Welcome to episode number 18 of Two by Two!

Two by Two episodes referenced in this episode:

Is Zepto a gold medallist or a bronze medallist?

Swiggy needs to reclaim its past glory

Stories and newsletters referenced in this episode:

Dmart and the supersizing imperative

Zudio wanted Dmart’s apparel shoppers. Now Dmart is hurting

Dmart changes its mind on store size. Again

Dmart is not used to being in a funk for so long

What if the quick-commerce warehouse was a supermarket?

Dmart and investors rekindle their love

Dmart’s e-commerce bet has gone from counterintuitive to obsolete

This is a shorter 'highlights only' episode. If you want to listen and get early access to the full episode, consider becoming a Premium subscriber to The Ken, which in addition to Two by Two, will also give you access to our long-form stories, Premiums newsletters and visual stories. Or if you just want to listen to Two by Two for now, for iOS users, we have enabled Premium subscription on Apple Podcasts.

You can sign up for The Two by Two newsletter here—it's free!

This episode of Two by Two was produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

New episodes are released every Thursday. So follow the show wherever you get your podcasts, and tell us what you think of the show.

You can write to us at [email protected] with your thoughts and suggestions.

We’ve unlocked this episode for our Basic and Free subscribers for a limited time. Listen to it on your favourite streaming platform for a limited time.

Ola and Uber are in a “late-stage duopoly”.

After spending billions and billions of dollars, they have finally secured pole positions in ride-sharing in India.

Both of these companies together control 70% of the market and they have created network effects that make it much harder for anyone to enter and compete with them.

However, this particular situation is facing some new challenges and just like how Uber and Ola conquered city after city using a disruptive model and technology, the same thing threatens to happen to them.

Ola and Uber are facing structural disruptions from multiple fronts in India.

In today’s episode, hosts Praveen Gopal Krishnan and Rohin Dharmakumar try to answer how the disruptors are getting disrupted by upstarts who are coming in with both business model innovation and newer fleets which offer a significantly better experience, which was the original promise of Ola and Uber as well.

So what is the next stage of disruption in ride-hailing look like in India? Is it EV fleets? Is it democratized tech-enabler platforms like ONDC which enables platforms like Nammayatri? Are we looking at the return of local taxi operators? 

And most importantly, what should Ola and Uber do to defend their position as new incentive models are introduced for both drivers and passengers?

Welcome to episode 14 of Two by Two.

Joining the hosts for the discussion are Nilesh Sangoi, CIO of Fincare Small Finance Bank, previously CEO of Meru Cabs; Pradeep Puranam, Head of Revenue and Operations at Yulu, ex-Udaan and -Uber; and returning guest Professor Srinivasan R, who teaches Strategy at IIM Bangalore.

Episode referenced:

Will Flipkart become Phonepe before Phonepe becomes Flipkart?

Stories referenced:

Rapido rips up the Uber-Ola playbook for cabs

This episode of Two by Two was researched and produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

New episodes are released every Thursday. So follow the show wherever you get your podcasts, and tell us what you think of the show.

Write to us at [email protected], and tell us what you thought of the episode.

For the last 24 months, the default way in which startups were exposed to venture capital and its effects has been, in many ways, paused. There's a slowdown. Venture capital funding for the first nine months of this year is down 7% over a similar period last year per Tracxn.

There have been news stories about layoffs, company shutdowns, and downrounds at various companies from a time when unicorns were being born every three months or so.

Capital is abundant. A lot of dry it remains uninvested everywhere, but it's just not getting invested at the same rate.

Building a company and scaling a company is getting cheaper because of AI and LLMs, which can generate code, which can generate images or just about anything anything that you want.

And the biggest change—there's a focus on being profitable.

If you’ve been a regular listener of Two by Two, you’d know that VCs have always managed to sneak into most, if not all, discussions on the podcast. Maybe not in the way they’d like to be represented in general, but they have been part of the conversation in some way, shape, or form.

So when hosts Rohin Dharmakumar and Praveen Gopal Krishnan sat down for this week’s episode, they got two founders-turned-VCs to join in and say their piece on the role VCs play in the world of startups. And what they need to be doing right. Manav Garg is the founder of Eka Software and co-founder of the operator-led Together Fund (Manav has previously appeared as a guest on the First Principles podcast as well), while Rajiv Srivatsa is the co-founder of Urban Ladder, and now a founding partner at Antler India.

Welcome to episode 17 of Two by Two.

This is a shorter 'highlights only' episode of an hour-and-a-half-long podcast. If you want to listen and get early access to the full episode, consider becoming a Premium subscriber to The Ken, which in addition to Two by Two, will also give you access to our long-form stories, Premiums newsletters and visual stories. Or if you just want to listen to Two by Two for now, for iOS users, we have enabled Premium subscription on Apple Podcasts.

You can sign up for The Two by Two newsletter here—it's free!

This episode of Two by Two was produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

New episodes are released every Thursday. So follow the show wherever you get your podcasts, and tell us what you think of the show.

You can write to us at [email protected] with your thoughts and suggestions.