Tying the knot online
Anupam Mittal has succeeded in transforming Indian marriage customs by creating the People Group and its crown jewel, the online matrimonial site, Shaadi.com
Except in Bollywood romances, Indian marriages rarely start with “boy meets girl”. That is a detail that comes a long way down the line. The process starts with the family of an eligible boy and the family of an eligible girl matching compatibilities among a multitude of variables. These range from religion, caste, astrological fit, social and linguistic background, to education, food habits, tastes in music, entertainment, professional prospects, etc.
Boy gets to meet girl only after the elders of both families have gone through this complex and ritualised matching of checklists. Every Indian community plays its own riffs and the process can get so convoluted that it requires a 1,500 page door-stopper like “A Suitable Boy” to describe in detail. Rather than take on such doorstops, families resort to marriage brokers.
The broker maintains a database of eligible boys and girls. Indian matchmakers come with ancillary skills. Astrological competence is a must, for example, since the process is initialised by matching horoscopes. Also, they need to have complexities of caste and sub-caste at their fingertips. Brokers are paid commissions when a suggested match fructifies in marriage.
This is no small market. According to Vivaha Interactive, a wedding organiser, India spends the equivalent of $ 27 billion per annum on its 12 million-odd weddings. The wedding market is estimated to be growing at about 25 per cent. The demographics of a young population with a rapidly growing middle-class make it likely that it will remain a recession-proof industry.
Entrepreneurial preparation
Anupam Mittal, still unmarried, comes from a Mumbai family and started working in the family’s textile business as a high-school student in 1992. He even set up a new export division. It lost money. The experience, though chastening, was instructive: “It made me realise two things. One, I didn’t like textiles. Two, I needed to learn a lot about running a business.” So he shipped off in 1997 to Boston College to get an MBA, with a specialisation in Operations & Strategic Management.
In Boston he set up a Web company called Satyanet Services and struggled to think up revenue models for it. It was to be a technology-enabler that would provide the expertise to help customers set up online businesses.
On a brief return visit to India, he bumped into another idea - in the form of a broker, who was trying to negotiate a marriage for one of his relatives. The man carried some 20 CVs in his briefcase to communicate to customers. The encounter got Mittal thinking – “How many bio-data’s can this man carry? How many people can he visit? Does this man's physical strength and leg-work determine his success rate? What if someone based in Mumbai needed a soul mate in Timbuktu?”
Mittal was wondering if Satyanet would gain more financial traction if he launched a set of verticals that each had strong USP and branding and together cross-promoted each other. The Timbuktu connection led naturally to the thought experiment, “What if we put up all these bio-datas up on the Internet and allowed people from all over the world to interact with one another? That’s when I knew what the first vertical was going to be online matrimonials.” Thus in 1997 was the online matrimony site, Sagaai.com (later to become Shaadi.com), born.
Following receipt of his MBA, and while bridging the predictably long wait for the online matrimony site to gain mass, he took work in the US. Between 1998 and 2001, he acquired IT and internet-related management experience by working first for Lotus Corp, then for IBM, followed by a Silicon Valley incubation outfit, Microstrategy, where he initiated a string of corporate partnerships.
Entrepreneurial takeoff
The tipping point for the matrimony site occurred around 2001, probably driven by liberalisation of Internet and broadband service in 2000 and the removal of government monopoly. There was exponential growth in Indian net-usage as cybercafes proliferated and surfing costs dropped from $ 1.25/hr to $ 0.30 and less. As Mittal recalls : “From 1997 to 2001 we did not see much growth. We would get 100-200 profiles a day and maybe 10-20 success stories per day. Today we receive over 8,000 profiles daily and close to 50 success stories a day. We have managed to match close to a million individuals, cutting across boundaries of religion, culture, caste and geography. Also we managed to create goodwill for the brand among South Asians. It helped everywhere else to overcome initial scepticism due of the medium.”
It was also in 2001 that Mittal returned to India and created People Group. It became the umbrella brand for a string of Internet-based businesses aimed directly at consumers. “We wanted to follow the FMCG pattern wherein they have multiple brands in various segments while using the same core competencies of distributional marketing for every brand. Hence we thought, why cannot we be FMCS (Fast Moving Consumer Services)?”
Eight years into its life, the group now consists of three companies, employing 800 people. Of these companies, People Interactive is the consumer Internet arm and owns the matrimonial portal Shaadi.com. It also owns its bricks-and-mortar counterpart, Shaadi.com Centre, along with a real estate site makaan.com, a friendship and social networking service Fropper.com (Fropper stands for friend hopper), and an astrology portal Astrolife. A second company, People Infocom describes itself officially as Managed Services Provider to Telecom Operators, Media-Entertainment Companies and Consumer Brands. It extends its services in managing these applications and facilitating content through its brand, Mauj. A third company, People Pictures is into media production and was founded to serve the market for new-age Indian cinema. It is also partnering with Star TV to set up a marriage reality show. In 2008 People Group employed some 800 people and generated $ 73 million in revenues.
While Mittal’s enterprises largely base on the Web, he himself is not an IT-person by training. Indeed, he says he is uninterested in technology, except as an enabling factor for people-centred businesses. He explains his customer-centrism this way: “I simply wanted to be in the consumer space offering ways to make life easier for people. My businesses arose from servicing the need to form connections, be it for finding a life partner (Shaadi.com), making new friends (Fropper.com), or zeroing in on just the right home (Makaan.com).”
This customer focus means focus on brands as Mittal attests, “For our marketing, we adhere to classic branding principles in all our communication to build a well-known, trustworthy brand.” And when it comes to brands, the issue of names can be key. Sagaai was not a happy first choice. But Mittal was willing to divorce from that initial brand name: “In hindsight one of the single most important decisions we took was to grab the domain shaadi.com in 2000, though everybody advised against it. Until then the site was called 'sagaai.com', a term which is not very widely understood and it can be misspelled in many ways.” Shaadi is a common word for ‘marriage’ across most Indian languages. Received wisdom suggested it was too plebeian to use a vernacular word for a swanky website. But it made search and recall easy, and therefore has stuck.
This episode carries a further lesson. Mittal believes that entrepreneurs who learn things the hard way probably attain more wisdom and maturity. Mittal’s early errors in the family business had taught him a lesson: “Even if one fails, there’s some learning to be achieved from failing. I made some good decisions and some that haven’t really worked in our favour… but the motto has always been to accept failure quickly and move on.” The name Sagaai had its drawbacks and Mittal moved on, successfully.
While there were mistakes and growth was slow in the initial years, the group managed to get off the ground and survived on internal accruals and funding from Mittal himself. There was a revenue model in place from early on. The model was that of subscription - individuals would pay to view a certain numbers of profiles. The subscription model was tweaked in response to feedback, and Mittal claims that since 2000 it has grown at close to 200 per cent per year.
It was only in 2006 that People Group started raising funding from outside sources. By then, the workforce had grown from 20-odd in 2001 to over 400. Sequoia Capital offered $18 million VC funding on undisclosed terms and Intel Capital came up with another $2 million. That cash helped a fast ramp-up of business. In the two years following the capital infusion, employment doubled and the People Group footprint now extends to nine offices, including centres in the US, UK and the Gulf.
