Blume Podcast S2 E1 with Peyush Bansal

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Transcript Below

[00:00:00] Peyush: So I think if we can go back to the first principles, that kind of innocent thinking where you're not clouded by what is cool and sexy and what will get you the next round of funding and the buzzwords and now the buzzword is AI. So I think you need to cut all of that and say, what's my customer saying? And the second thing I would say is people,  11, 12 years back, I think I was listening to something from Sanjeev Bikhchandani. And he said that for people to build something large, they need to share. And they need to get the right people. So, Lenskart would not be what it is if people were not joining the workforce.

[00:00:56] Karthik: It's one thing to spot an opportunity, but quite another to build it and scale it. Everybody comes up with great ideas, but to build over a decade and see it to its grand end state of execution is not easy. And today, we have the pleasure of interviewing one such person, Peyush Bansal, the founder, and CEO of Lenskart, India's largest eyewear company.

[00:01:15] Karthik: Peyush has been building this for over a decade. He's been instrumental in driving Lenskart's growth and success. In this interview, we'll talk about how his conviction kept building as a founder. And then, we'll touch upon a little bit of his investing avatar. And finally, what he thinks about the theme of this podcast, which is the power of compounding.

[00:01:35] Karthik: Hi, Peyush. Welcome to the show. Thank you for your time. 

[00:01:37] Peyush: Hi, Karthik. Thanks for having me. Glad to be here. 

[00:01:42] Karthik: Peyush, in the first section, I'm going to go back to a little bit of the history of Lenskart. It has been well documented. Now you're a mega-large company. So a lot of people have gone in and understood that history. You've been building it for over 13 years, I think. You started with online, moved into offline, and are now moving international. I think what will be of interest to listeners is what convinced you to do two things. I'm old enough in the ecosystem to know that when you started, at least there was a Bagkart, Watchkart, and Lenskart, and then a decision went to focus on one of them. So, what drove that decision? And, I'm sure that decision was based on the fact that this could become really, really large. If you can walk us a little bit through that history and that experience in the first few years. 

[00:02:30] Peyush: I was somebody who never really had dreams of being an entrepreneur and I meet a lot of students now who are probably working or planning to do an MBA and they have plans on becoming an entrepreneur. At least I didn't have any of those. When I was working at Microsoft, the only thing that I used to get excited about every day is that the kind of impact Microsoft had had on people's life, especially in the MS Office where I used to work, and it was quite inspiring, to be honest, and you could meet everyday people who were using this. One fine day. I thought, why shouldn't I do something which is more revolutionary than incremental because while we were solving some very large problems at Microsoft, than I could see back home, it’s been outside for some time, five-six years, and there were bigger problems to be solved in India. And that was the initial thought. And I'll tell you why that links Bagkart, WatchKart, etc. because that was the initial thought. When I came to India, I kind of hustled and tried different things, but the idea at the core, which was sitting in my head, is that I want to do something revolutionary, whether I do it with someone or I do it myself, but I wanted to do something in India.

[00:03:46] Peyush: I wanted to do something which was not incremental those are the two things. And the third thing in my mind was I wanted to do something with tech because I used to enjoy that piece. So somewhere in the initial one or two years, when I tried a few things and started getting to a few like-minded people who could kind of connect on that whole let's solve some big problems kind of attitude, I came across this problem of vision. Sometimes reading helps a lot. You're not reading to find the next business idea, but you're reading,  And when you read or even listen to this podcast and through that some thoughts may emerge for somebody. 

So vision was becoming a big problem. I read somewhere that India is the blind capital, and 75% of people in India who need specs are not wearing specs. So it kind of triggered. Wow. Why is nobody solving it? And I think I was at an age when things were not as rational and logical as oh, let's look at the market size, see whether there's a business. It was like, okay, let's try and do it. That's how Lenskart was born. Actually, it was the garage of where I'm sitting and speaking right now. I live about a hundred meters away from here. This is my parents' house. And we were in a garage right here, maybe a few meters below where I'm sitting right now.

[00:05:17] Peyush: It was like 14 of us in a basement working with different ideas. Almost everybody was just fresh out of college or was interning. And we said, okay, let's solve this problem. And I think that was the genesis of it. We were so obsessed about doing something transformative, and we said, okay, let's give vision to 50% of India. I still remember those early days. Somewhere as we started that journey, venture capital happened when somebody reached out to us. I had no experience in raising money, nor was that on the cards anywhere at any point in time for me. But, because of destiny and our good luck Chiratae, former IDG, reached out. Venkatesh called us and said, What are you guys up to? I think e-commerce was hot that day. We said okay. And they said, do you have a business plan? We did not have one, but we said we could prepare one. And that's how it all started. And one thing led to the other. We signed an investment in literally a week. We didn't really negotiate that much. And then, very soon after raising investment, it was all this TAM and market size, and let's see if we can build an online Titan kind of conversations happened. Wn our innocence, again, we said, okay, let's keep doing it, let's open watches, bags, and jewelry to answer your question.

[00:06:55] Peyush: Because now we were in a different race. The race of building a large business, building a large GMV, revenue, next fundraise, all of that. And then we raised the second round with Ronnie Screwvala. He had just started Unilazer, and he visited our factory-cum-office in Okhla, where we were running eyewear watches, bags, and jewelry. And then, almost one year into, with both Ronnie and TC Meenakshisundaram of Chiratae (TCM) being partners, I was sitting at Ronnie's house on a Sunday, and he was just questioning me. Ronnie was asking, what do I want to do? And I think somewhere I said that I want to transform and give glasses to these people who don't have them and give glasses to 50% of India. So that conversation kind of was not a work conversation. We were not sitting with the paper or a diary. I still remember we were sitting in a corner where there was a sea breeze coming into Ronnie's sea-facing house. We were casually talking and from that emerged that if this is what I want to do, Ronnie said, then why are you doing everything else?

[00:08:02] Peyush: And at that time, Karthik we were like Rs ten crores a month in revenue, and Rs eight crores used to come from these watches, bags, and jewelry because these are expensive products. Glasses were not so expensive. 70% of our team was doing something else. And 30% were doing glasses. And I think in the conversation, Ronnie asked, where do you spend time? And I told him I spend 80% of my time on Lenskart, and for the rest, I've hired leaders. In that moment, Ronnie told me, if you were to do only Lenskart, then I would give you more money. And this way you don't have to go out in the market and raise money, and we'll keep it a fair valuation, etc. And my only condition is I'm the only one who should be putting money. I thought about it, went back to Delhi, slept over it, and I took a decision. Yeah, that's what I want to do. That's what I left. 

[00:09:01] Karthik: The thesis seemed to have come from there.. So went back to the roots.  

[00:09:03] Peyush: I was not into entrepreneurship because I felt that this is monetarily better or anything. I was doing it purely out of a very simple emotion. So I took that call, and then TCM said, Ronnie can't do it alone, and I need to be part of it. So they both came along, and we agreed that screw the Rs ten crore of revenue, let that vision stick. And I think from Rs 10 crore, we went to Rs two crore. And it wasn't like we could not raise money at Rs ten crore. We could have, and it wasn't like we did it because there was no money. We did it purely because of the vision. So, I think it's sometimes important to have that thought clarity. And I think that has stuck with us for now. It was good learning early on. It has stuck with us even after we raised huge amounts of capital, which we, at some point, didn't even know what to do with. We stuck to the core and never really did anything else. We wanted to transform. 

[00:10:01] Karthik: It's amazing. I've let you go on because it's a super important lesson. We speak about it in a different way internally. We talk about the pathological obsession of a founder to solve a particular problem. And I think, yes, India sometimes feels like a small market, and you feel like you have to diversify once you reach a certain scale. But in the early years, in the early part of the journey, if that obsession is not driving the founder, why do you want to build something large in the first place, then why even bother,  As you said, the entrepreneurship of the eighties and nineties was around, “yeh dhanda hai, paise aise bante hai” [this is business, that’s how you make money]. In the 2000s, 2010s, if you're not thinking about, or even more so relevant in the current era, the only thing that sustains you somehow over like a decade or two, there is no compounding of anything else other than obsession around wanting to build something super large, super important to you personally. 

[00:11:00] Karthik: There have been attempts in most markets now, like Warby Parker or Owndays. And I know now you own a big chunk of that business. There have been attempts to start these independent eyewear brands and chains. What do you think has made Lenskart one of the best examples of this globally in terms of starting from scratch with an online model and winning big in terms of even upsetting the legacy offline players?

[00:11:37] Peyush: Only two things. I would say one is customer obsession, truly, in every sense of it, obsessing about customers all the time. Thinking about them, meeting them, being objective, willing to adapt, willing to change, and being able to listen to the tough ones. You may be feeling that you are building Mercedes, but then a customer tells me, no, you're not building a Mercedes, you're probably building a fatfatiya [a bike or a motorbicycle]. So it’s really being honest about that. There was a point in time when a lot of investors came on, they used to ask me, Peyush, do you know what is the revenue of Warby Parker? Do you know what their business model is? And people used to ask me how are your numbers compared to Titan? And I kind of felt stupid for a long time. We were so engrossed in doing what we were doing, like everybody may think that we were checking out what others were doing, but we were not. We started early. We ended late. There is so much to be done. You get it done. There's hardly time to even take a break. It was an obsession of a very different kind. It's like you know, maybe there is a COVID happening, and the world is falling apart, but we are worrying about whether the customer got the glasses. 

It wasn't by design, but it was driving the whole thing. And I think that it kind of always works. I'll give you some anecdotal examples. We started opening stores, and a lot of people today ask me, you were the first person to start Omnichannel. You know, I never started Omnichannel. I didn't even know the word Omni. All we knew was that there were customers I was talking to, and they used to come on the website. And while everybody was trying to figure out how to get more people on their website, I wanted to understand why people who are coming to our website are not buying.

[00:13:37] Peyush: And they used to tell me that we want to try. So we said, okay, we'll send stuff to your house and get you to try. And then they said, we want an eye test. So that, okay, we'll do an eye test at your house. And even then, it was going to a certain extent. And then I spoke to them, and they said, boss, we don't like people coming to our house. Some of them were not okay, some of them were okay. But investors would say, Oh, the whole model is very exciting and this is truly Uberization and all, but these people are saying, I like to go in a store,  So I said, okay, I'll open a store. That's how it started. And then we felt, okay, why keep inventory in the store? Because these guys just want to try it in the store so we can still deliver it like an e-commerce order. 

So I think if we can go back to the first principles, that kind of innocent thinking where you're not clouded by what is cool and sexy and what will get you the next round of funding and the buzzwords. And now the buzzword is AI. So I think you need to cut all of that and say, what's my customer saying? And the second thing I would say is people. 11, 12 years back, I think I was listening to something from Sanjeev Bikhchandani, and he said that for people to build something large, they need to share. And they need to get the right people. So, you know, Lenskart would not be what it is if they were not people who were joining the workforce, and in amongst every person who would join the workforce, I would kind of very early spot or get a feeling that I need this person to be there with me for the long-term.

[00:15:08] Peyush: Because this person is changing the game. And I think that joining those people to the group and pretty much all of them who I wanted to join have stayed on. And the world will again look at noise. What is attrition? It doesn't matter. What matters is that you are expanding that core group of people because you only need that handful of people, but you can't do it alone. And I think that obsession over saying that I need to do this with you. Otherwise, this will not happen. This vision will fall apart without you.

[00:15:48] Karthik: These are awesome examples. Thanks for sharing. And, actually, you've kind of pre-empted some of my questions in the third section, which were around how you compound growth of the customer base in terms of trust and loyalty, of the organization and team building, and each of the points that you raised already is giving me answers to that section where you're saying this is what you always focused on. There’s one more question, then we'll move to the Indian customer in the Indian market around D2C brands and how you've been one of the pioneers.

You're my favorite example, which I cite to various investors, global investors on the macro level, though we're not an investor in you. We do talk about the potential of the market using the Lenskart story. So I'll come to that in a minute, a couple of things, I think. Going back to your personal journey, we know that some things don't scale, but we yet have to do them, and they're not things that necessarily compound in the early stages of the startup.

Are there good examples of things that you've had to do where they are counter to what you just said, these could have been COVID examples or could have been prior to that so that you're balancing sort of short-term objectives with long-term sort of orientation of building a legendary profitable company.

Just curious if you have good examples of this because founders always grapple with this. I need to get stuff solved. Let me focus on all this other stuff later. It hurts the business. I'm sure every founder goes through it. So if you can relate any examples. 

[00:17:27] Peyush: I mean you gotta get the car moving while you convert it into something else. And I think it's that oscillation between short-term, midterm, and long-term is very important at the back of your head. I kind of know that this is something that I'm doing for now, but I know I don't wanna be doing it for the very long term. And that acceptance is there. And with that acceptance, I am even to date doing a lot of things, which I don't think I should be doing, but I know that this is going to change. I have to change it in the future. And there are many of these things, like even getting a salary to people on the first of every month,  You have to do it ethically.

You got to do it. And for that, if you need to do some overtime and get stuff done. Yes. You have to do it. But at the same time, you need to balance. There are innumerable things. It could be setting up Gmail accounts for employees or it could be finding an office space, or it could be searching on LinkedIn for the next person who's going to join you because you're not able to explain to a recruiter what you're really looking for. Or going to a social event to find people. 

So I think when shit hits the fan, you need to really, your orders are not delivering. So you need to maybe take a few specs and start making them and start shipping them yourself. You need to do all of that. But one thing you need to balance with all of this is you need to start finding people who can take over these jobs. And because you have kind of done it, you have a much better understanding, and you have a much better empathy, what that person needs to be like for them to be able to do this job. Even today, there are things I'm doing, which some people would come and say, you know, you should not be doing it at this stage.

And I'm like, yeah, I know. I realize that, but I have to do it at this stage, but I know in the future, we won't be doing it this way. I have even kind of figured out who should be allowed to car park in the office because there are only limited parks in offices. And somebody outside will say, why is the CEO doing it? Because there's no one else to do it right now. We don't have an HR operation function. So you got to do it. 

[00:19:48] Karthik: While you built with extreme focus and from what I'm hearing from the story, this was pardoned or excused for a long time in the Indian ecosystem growth at the cost of anything and capital was assumed that it will come. When did that thought process sink in at Lenskart, and you started reorienting the company or orienting the company to saying, hey, we need to survive for 10, 20, 30 years? These are fundamental to the business and cannot be ignored anymore.

[00:20:17] Peyush: So firstly, we were very clear as founders, as the core team, why are we doing what we are doing? We were doing it to create something really institutional. It was very clear, the motivations. I used to read this book called the High Performance Entrepreneur, by Subroto Bagchi. And he said there’s a difference between a company and an organization and an institution, we were very clear that we wanted to create an institution, which is not short term and it needs to be really long term and sustainable. That was the question you kind of start looking at. We always used to study what Maruti has been able to do. And then we found, Chirate knew Manish Choksi (one of the promoters of Asian Paints). And we said, can I get a meeting with Manish and understand how they built Asian paints? And then when TPG came in, there was Manish Chokani, and I remember we were sitting with him, and I asked Manish you've been on this journey for so long.

And I remember having a conversation about what Maruti has done in India. Maruti brought the comfort of a four-wheeler to a lot of Indians. You want to do that. And in that conversation, it's kind of coming out clearly. Then if you want to do that, then we will need to think long-term. And we also need to ensure that at least at a unit level, whatever we are doing, we should be doing it in a sustainable way at every unit. It could be hiring people. In terms of sustainability, it shouldn't be like, let's hire people. Forget about tomorrow. Or it could be like, okay, what should be the margin I should be making on this product for it to be sustainable? It's not like, okay, let's sell it for loss today. And in the future, it will all be okay.

Or, it could be thinking about the costs of where you should be operating. We were operating in Faridabad for the longest time. And for over seven, eight years. Everyone, when they looked at our visiting card, they say, Oh, Faridabad. I would say early on in the whole institution building even we used to ask that, okay, what is our plan? Do we want to sell this company and start another? That's not what we want to do. So from that, the pieces were already in place. And then at some point when we said, okay. We always used to question why is it not converging towards profitability if all the pieces are in place, and despite all the pieces being in place, I can tell you sometimes you don't hit profitability. I have like always kind of touched it and then not get there and touched it and kind of not get there.

Till we started realizing that for it to happen, it just requires a little bit more discipline. We were like 80% there. We just needed a little bit. 20% more conversations around it, and looking at when you're reviewing your weekly numbers, can you just, okay, we would only review customer. Can we also review some of the other bits? It started happening kind of automatically. I won't obsess about it. I think obsessing about revenue and obsessing about profitability is dangerous. Obsessing about customers is what I would always do, but at the same time, I would want to build a discipline that I'm aware of what I'm doing and I'm doing it to make it sustainable.

[00:23:30] Karthik: By the way, I'm obviously wearing Lenskart. I couldn't be wearing anything else. So basically, avoided wearing reading glasses for maybe a better part of four, five years as I turned 40, and then realized that it's inevitable. But kind of going back to the example of your customer, I think the hesitation was always, I need to go to Optometrist. And then I started seeing Lenskart stores pop up. So the motivation to walk in became higher. I didn't know at that juncture what the store experience was like and how inventory works. I guessed a lot of what you were doing intuitively, I mean, as a VC, I would say that was the right way to run it. I just love the fact that everything was as per my guestimate when I walked in first into a Peddar Road store. And since then, for the last five years, I've only bought Lenskart, and I probably rotate, you know, two to three pairs every year because I either lose them, break them, whatever, scratch them.

And I pretty much live off them today. So I'm a very happy customer. And, you know, that's why I said I speak about the customer experience to people who want to hear the India story, even though I'm not the investor. I speak about it as if I were one because I do go through the customer experience.

But tell me, you did touch upon this one anecdote, but given where you started from your vision, how do you think this eyewear market or the sense of people recognizing that they need to pay more attention to their eyes, have you made this fundamentally easier? Have you expanded the market as much as you thought you would, or are you slowly nudging away at the unorganized offline share that existed before you came in, what do you think you've done as Lenskart? 

[00:25:23] Peyush: A bit of both, but largely market creation, I would say. We kinda were very firm view again, very, very long term. We could see two things: we were seeing that myopia is growing. I remember I once visited my sister in Mumbai. She said that I have to now watch television closer to where I used to, but I would not get my eyes checked kind of thing. So it was becoming clearer to me that people were coming closer to the TV, but they were not getting their eyes checked. So fundamentally we have people who need glasses, but they are not getting their eyes checked, and that we established very clearly. And the problem is not about money. The problem is not about rural, the problem is really in our houses. So we have to create an ecosystem where we can do eye tests. We do 50 lakh eye tests a month now, Karthik.

I think we kind of said very early on that we will do one crore eye tests a month, and we hopefully should get there next year. And then we can say 10 crores. So we knew that we needed more people to do eye tests because if they do eye tests, they will discover vision problems. Today about 60% of eye tests that happen at Lenskart are people who have never got their eyes tested before.

[00:26:42] Karthik: Amazing. By the way, 60% is a remarkable number. It used to be the number that budget airlines used to cite in 2005 - 2006 as the number of people who took a flight every day who had never been on a flight. How crazy market expansion can be when it starts happening! 

[00:26:58] Peyush: So that was one underlying thing that, yes, there are people who need glasses. They don't get their eyes tested. So let's open up the platform, democratize it, and make it super simple. And if you know your Lenskart stores, nobody hopefully tells you that you have to buy from us to be able to get your eyes tested. We continued the home service because we knew we were reaching more people. So that was one. And second. I'm a big fan of Uniqlo.

[00:27:25] Karthik: Yeah, so am I, by the way. Every trip overseas, something gets bought.  

[00:27:29] Peyush: Yeah, and now it's in India, so it's easier. But I kind of felt, look what is happening to the world now? There is so much innovation happening. People are buying, and I was talking to somebody, and he said, these are my slow running shoes. And in these conversations, I was speaking that people are talking about slow running. Forget about running. Earlier, the conversation was about sports shoes. Then they said running shoes and walking shoes. Now it's long run, marathon running shoe and a fast-paced running shoe. So what was becoming clearer is that at some point in the future, this has to happen to eyewear. People will, if we give them products, which will improve their quality of life, that is where that part you said, maybe we are taking, you know, either taking unorganized to organize or telling people, okay, why own one? Why not own five? That number, which used to be one glass every two years is expanding to four, five, and six glasses every two years. 

[00:28:30] Karthik: From both personal experiences, I can see my wife go through this. So yeah, once you hit the forties. Essentially the market suddenly opens up like crazy privately. 

[00:28:41] Peyush: We are doing it now in villages, Karthik, which was, again, part of a transformation I personally wanted to bring in Rajasthan. We have some 500 women scanning people's eyes in villages. And the problem is huge.

[00:28:56] Karthik: The problem is really huge. I can imagine. Yeah. They've never been exposed to this. And so the choice of. I'm sure it's not either, or it's both, but you're essentially, you're, you're committed enough to the segment clearly that you're going down to segments that could never access this product.

And you're also seemingly going overseas. You're buying into other sorts of brands in the regions. Where do you see this journey going? I mean, is it in these two directions equally, and is this enough to sustain you for the next decade? Is there a big difference between how you viewed the market in the first decade and the second decade is where I was actually coming. 

[00:29:38] Peyush: I don't know if I viewed the market in any way, but I did kinda, only for the first decade, it was all about, there are people who need glasses, and we want to give them glasses. So let's make awareness and access and affordability were the only three things, the three A's. Make people aware, give them access to vision care and make it affordable. The only other thing which I would have added in the second decade is the piece about let's give them so much greatness in improving their quality of life. What we tell people is we are 20 years behind in eyewear as compared to apparel, shoes and every other lifestyle category.

Let's bridge that difference. Let's get people what they truly deserve in that area. And how we kind of sum it as the first ten years are only about letting people do more, which means if you can't even see, you can't do. And the next 10 years are also about letting people be more. So combine the do more and be more. So that's how I'm looking at it. 

And on the international part, I think this problem of myopia is pretty big in Southeast Asia. And we, the latest I was reading in article in the Economist, which said 80% people are myopic now in Southeast Asia. And when I think of the next 10 years and not two, three years alone, I see the kind of transformation that we are able to bring in India.

Because we wanna still dream bigger, we felt that let's make attempts and see, can we solve this problem for a larger set of people in Southeast Asia, the Middle East. And that was really the thought process. So we are very early in that journey. When we started doing some experiments, we realized the same problem of people not getting their eyes tested, people not getting enough access, and people not getting awareness and affordability are very similar as much as you may feel that these countries have a lot of money and, but these countries also have a lot of costs if they have a lot of money.

And they're all struggling when it comes to this, and to the extent that they can, they want to avoid getting their eyes tested. So we kind of found those patterns. So we started investing in it with a 10 year view 

[00:31:55] Karthik: Awesome. And then two,  questions on the market before we get to,  compounding, you're building this massive facility in Rajasthan. Is that true? 

[00:32:05] Peyush: Yeah , That's true 

[00:32:06] Karthik: So I think historically, when Lenskart was in its early years, perceptually, it felt like your manufacturing bases were overseas. I think there's this incredible confidence now, both as a country and specifically with Lenskart to say that we can service, and build world-class products in India.

So from a manufacturing trend, do you see that as the future of Lenskart where all of your demand globally gets serviced from this mega factory in Rajasthan? And the second question, maybe connected to it, is, how much is technology on the front end? This is the back end changing to accelerate and ease the pace of adoption.

So my anecdote on that, by the way, is the last set of Lenskart glass pair that I bought was bought while sitting on a three-hour drive from the airport to a game park. With your app, testing everything and then showing it to my wife and kid in the backseat and basically getting their approvals on which look made sense.

And so it is fantastic because I haven't gone to a store in two years now because the last pair was bought online. So Generative AI, AR, VR, all of this other nonsensical stuff that, as you said, is getting woven into every narrative, but from your perspective, it's about vision. So it is relevant. So where do you see these two trend lines, manufacturing and AI, VR, AR, playing a role in Lenskart's journey?  

[00:33:33] Peyush: To be honest, Karthik, our decision to build this massive factory in Rajasthan, and we hope to build many more, didn't come because we felt that India was ready for manufacturing, and it's the next cool thing to do, just like Omnichannel. And I know it's kind of happening at the same time now where people are realizing it. We kind of did it because when Jio happened, and we said, look, why was this company able to grow that much so quickly and able to make a difference, because we kind of drive inspiration from the fact that what Jio did, we want to give glasses to 50% India and Jio came, and kind of did it so quickly.

And we were feeling a little bit left behind. So we said, okay, they took many years to lay the optic fiber and then they just came and did it in two years. So they kind of put in the input. So we said, okay, if we wanna serve a few hundred million people in India, then do we even have the supply chain for it? Because it kind of keeps becoming the bottleneck. We have more people in demand, and we are not able to serve them. So we are trying to manage, and we are always in this struggle, and then the customer experience always kind of goes for a toss for that little while. And the dependency, and we really want to make it more affordable for people and, and capture that.

So we said, okay, if we are so confident about doing this so why not take a bold bet, let's put a hundred million dollars into building a factory, which can serve 50 million people a year, because if you want to serve 200, 300 million, then it would be required. So let's make a factory to serve 50 million. And then we'll make another one to serve a hundred and make another one to serve another 200. So by the end of it, we are serving 350 million people, and 700 million people in India need glasses. So that's how we'll get to 50%. That’s the math we were thinking in our heads when we made that bet.

We again took inspiration from what Asian paints and all’ve done in India. And what we are realizing now is it is a good environment to do so. And you can bring a lot of technology and really think world-class for what it's worth. India is a great place to do manufacturing because if you want to do something which requires engineering and technology, we have that. We may not be totally there in terms of infrastructure if you compare Apple to Apple from some of the other parts of the world, but we will get there. But what we have is the ability to combine engineering minds in manufacturing, which you don't see in every part of the world,  with the same level of availability of talent.

So yeah, you can do a lot of creative manufacturing in India, which is what we need because we have so many constraints of cost, like logistics is not as streamlined. So when you work with those constraints in manufacturing and the dust environment that we have you become stronger by the day.

In terms of technology and front end and AI, so you asked early on this question, you know, there are parts of the job which you are doing, and you feel like you don't need to do it. We always kind of felt that nobody's been able to crack how to sell glasses online in a big way. And while we were doing all of this, we knew that at some point, just like shoes and lifestyle and apparel, people would come here, you know, and we are not in a rush to do anything,  nothing needs to be done tomorrow.

So we need to start investing here. And as we start generating profits, we wanted to start investing. So we really are investing in AR. We knew that the next big milestone is when people can scan their eyes on mobile phone, because it's a deterrent to still go to a facility. So while generative AI is really a good welcome, we kind of said that as we generate profits, there are two, three areas where we will continuously invest back our profits, a certain portion of our profits. And with a long term faith, one was technology. Second is data. And third was people, you know, really upping the bar on people.

Like if you find great people and talent and raise the bar, you bring them, into the ecosystem. And because it's like math, it's like a disciplined reinvestment of profits. We are not really disturbing and doing it. And you can say, okay, if I'm making 600 crores a year, I want to put 20% of this profits back into this. That's all it takes. And if I do it over the next ten years repeatedly, so I think that's what we are doing. We didn't win some of these battles to be honest. When an engineer comes out of IIT, or NIT, you know, their first preference to work is an Amazon or a Google or a Facebook.

We said that they have to wanna work at LensKart. Wanna work not by paying them shitloads of money to do it, because we do not buy them, but they wanna work. It all starts with talent and those talent wanting to join. And so the focus, I would say, is to really build talent, which can then start doing and solving these problems for the long term.

[00:38:43] Karthik: Amazing. Amazing to hear all this. And actually there's very little left to cover on compounding because from the last 40 minutes, essentially, you've given phenomenal examples and conviction on what builds a great consumer brand. What drives that kind of loyalty, adoption, trust, you know, literally decades.

And this is a lifelong sort of brand, in terms of brand experience for even the end customer. Lenss, unfortunately for most people is a one-way street. If you require the product, you require it for a long time. The second is, of course, how do you think about compounding at the scale? Impossible to do it without building a defining culture that looks for quality, excellence, and aspirationally to be one of the best companies. Neck to neck with any sort of big MNC out there. And I think you've expounded enough, about what drove you to build in that fashion, all first principles thinking has been fantastic.

[00:39:45] Karthik: And the third is this delicate balance around profitability and growth. So never endanger the company, but basically grow knowing that you can get profitable if you have to, but basically investing in whether it's technology or people or other areas. So I think these are the ingredients per se,  you've touched upon all of them just to recap each one of them, maybe one or two things that you can maybe give us tips for younger founders 

[00:40:16] Peyush: I just want to add one thing on compounding,  I think one core thing, which is above all of it, I spoke about customer obsession, team obsession,  thinking, investing in the core, I think is to compound is culture. A lot of people say that a lot of D2C companies don't cross beyond a hundred crores and this is something I keep hearing from the market, but there is another thing, a lot of large companies don't cross maybe seven- eight thousand crores, a billion dollars, let's say, or maybe don't cross three-four thousand crores.

A lot of people you will see stuck at that two and a half thousand crore. And revenue is not of significance. I'm talking about size. I think, at least, I can tell you from moving from a midsize company that we are to a really large impactful companies that have created very significant impact like Maruti and Asian paints or globally, Amazon, Netflix, and Google. It will boil down to culture and talent. How are you executing? Because you are not executing. It is the machine that is executing, and you need to know what is the machine that you're building. I don't want to use the word machine in the sense that it is machine, but it is a self-running ecosystem that needs to run on its own.

Only then can you compound at that rate. Otherwise, you won't be able to compound. You may be able to incrementally do this because now your compounding is of a larger base and on a larger base compounding at 30- 40% a year is not easy. So they're just focusing a lot on how are we executing, the clarity of thought, leadership, ways of working, being very clear. How will we make decisions every day? Because now you're not making decisions. Somebody sitting in some other geography is going to have to make decisions. What should their decision-making framework be like? This becomes so crucial and investing in finance, HR, which maybe you can still kind of under ball in the first four-five years. And you cannot, it needs to be your strongest functions. 

[00:42:27] Karthik: This is like a Godsend podcast, 45 minutes of punchy advice for most growth founders who essentially like you said, are at a point where they have to make this choice on whether they truly believe in the compounding story for which they have to make these investments in people in finance and in culture. I think you get a second shot at recalibrating it. You don't get a third shot, is my take. If you can do this in the first six to nine months, fantastic, you're building a legendary company. A lot of founders don't necessarily get it, or they're too young to know this, or they've not worked long enough to know this.

Then, as you said, maybe you get a second shot. Luck has played its role in getting you the capital, getting you the initial solid team. You've built broadly with first principles, but you haven't really thought about it. Great, then you get to the five, six-year, eight-year point. And then you get another shot to say, is this it?

Are you going to be an incremental company from here? Are you going to become a sort of path-breaking? The equivalent of, and I always dream about this future Nasdaq index equivalent that we will build in India, I always wonder who will be those 30-40 companies that we look to. And if you want to have a shot at being one of those companies, then all these lessons that, you know, all this, all the great guests on this podcast are giving, including you, are very, very essential.

And so that's for the growth side, a little bit of a flashback, what are the tips for young founders? I mean, you know, that's the top of the funnel. There are all great lessons once you've reached a certain scale, on all three aspects. So the first one, which is: Customer brand compounding and obsession, I know you've spoken about it, but any one or two tips that they can copy, what should they be looking at as young D2C founders or young any founders, 

That's one. The second is on team culture, things that you could have done better or got right in the first two years. What can they do to get things right in the first two to three years? And the last part is this. You know, one assumes there'll be capital, but a lot of people, as we know, there are, the funnel sharpens dramatically, 

It's series A, it's series B, etc. So, how early do you need to build, a sustenance muscle? Like, if I don't get capital, can I survive? Is that practical? Maybe not in a lot of businesses, but I think in at least half of the businesses it is possible. We're seeing late bloomers a lot in our portfolio.

And you can be lucky. You may not be so capital intensive because you need them to be able to compound to your glorious state in a record pace and time.  Of course, it is the customer who drives your biggest finances in some sense by buying your product and your team, if you can flashback to the first three, four years and give tips to founders on what they can keep their eye on, on the ball, on a few of these things that you got right or mistakes you made, which they shouldn't, either way, is fine, but their learnings either way. 

[00:45:33] Peyush: Firstly, have a lot of clarity of thought on what impact you want to create. I have that clarity of thought. I am doing this for this, at least you, if not forget everybody else. You should be very clear about why you're doing it, what you're doing, and what your motivation is for doing what you're doing. And that could be different for different people. I think that clarity of thought is very important. And then translating that clarity of thought to the rest of the people so that they are clear about what, because sometimes not having that clarity and what some people say the purpose is. Because then you are in this world where everybody has a point of view, but the only person who doesn't have a point of view is you.

And then you're kind of like a football moving from one direction to the other because somebody is saying, okay, you're a bike company. Somebody saying, no, you are an EV company. Somebody saying, Oh no, no, you're a battery company because that's what makes sense because you don't know what you want to be and what's motivating you. So I think that. And then of course, I'm assuming everybody knows customer obsession and team obsession. These are kind of known things, but having that is very important. You have to build something real and you have to know that the honeymoon ends. You know, everything ends and all glory is going to be fleeting.

And just because you raised your 2 million right now, and now you're in the news and ET writes about you, don't assume that you've arrived in life. For you, arrival is what you should know what is arrival for you. It just lets you be at peace and not get carried away,  along with a lot of things. I don't know if that makes sense. 

[00:47:12] Karthik: It's poignant and philosophical, and you know, again, young founders should hear more of this, this absolute clarity. 

[00:47:19] Peyush: And I think it's important, why it's not philosophical is I think it's important to say things for you to make them happen. I know you could go and say, I want to change the world and whatever, but if you don't even say it and you know that I want to do it, it won't happen. But at the same time, what happens is that you get all these VCs, you meet around people, somebody will say this, somebody will say this. If you don't know what your point of view is, it becomes kind of difficult. 

[00:47:42] Karthik: I know you play a role as an investor on television as well, but broadly, I'm sure you meet hundreds of entrepreneurs. What do you look for in founders when you're meeting them? I know it's an angel bet. It's an intuition. 

[00:47:59] Peyush: Yeah. And sometimes you go wrong.

[00:48:02] Karthik: Of course, we all go wrong. But what are you trying to gauge in that very short period of time around founders? 

[00:48:07] Peyush: That clarity, to be honest, that clarity and desire to go make that change. And you may later get surprised. Sometimes that's not the motivation, which is totally fine. 

[00:48:18] Karthik: Yeah. You don't have enough time to judge it.  

[00:48:18] Peyush: Yeah. You don't have enough time to judge it, but yes, I do think that having a clear mission, a purpose and it can change, I'm not saying it should not change, is important to me. The second thing I would say is that after having invested in many of these companies and early-stage founders, I think they focus a lot on just sales and marketing. For them, the only way to grow a business is through marketing. If you ask them, what is one thing you need? I need to market. I think my product is good. Everything is good. And I would just leave two thoughts with them. One is it's not just important to be good. It's important to be great. So  1x, 2x, okay. Your product is good. You like it. People like it. Your packaging is good. People like it. You like it. It's okay. And, but, now you need marketing to sell it.

I have a different point of view for you. Make it great. Make it 10x better. You know, that reduces your need and desire and focus there. Marketing will happen when it happens. That's not what you need right now in the early stage, you avoid it till you can, but focus on making things better, 10X better, and 10X is like I'm half the cost, but I'm 10X in quality. And that is how you think about it. And the second is to focus more on people. I see every early-stage founder is like, how do I find people? I'm not able to pay their salary. You have to be the recruiter. The only way you're going to progress forward three months from now or six months from now is finding people, get some like-minded people. Otherwise, how will, even if you have a great idea, great proposition, and great clarity, how do you change the future? So those are the two things I would leave them with. 

[00:49:59] Karthik: Great advice. A delighted customer is far better marketing than anything, any marketing dollar you can put, they sell the product, far, far more than anything, any marketing dollar will. And, I think this people point,  I first heard it in my early days as an investor from Naveen Tiwari, who told me that he was in the interview room for the first 400 or 500 employees that InMobi ever had. And same with Aditya Ghosh when we interviewed him for a founder session during the pandemic and he said the same thing, I think for the first 500, 700 employees of Indigo, his core role was actually to be in every interview, trying to judge whether this person had those values and can build on 

[00:50:46] Peyush: Because it's kind of the right thing. If I'm doing sale and I'm doing marketing, I'm using my time judiciously, but if I'm interviewing, leave that part job to HR…. 

[00:50:58] Karthik: There is, it's a psychological barrier, and I think it has to be crossed. 

This is going to do a fun segment around these rapid-response questions. We'll run through a handful of them, and then, and then we'll call it a day. 

What does wealth mean to you?  

[00:51:12] Peyush: I think some people have it by destiny, and I don't know why they have it. It's a question I always have at the back of my head, but it has to be put to good use.  

[00:51:25] Karthik: That's a great answer. I agree with the second part. Which Indian entrepreneur or business person has had the most influence on your outlook on life, your career, on building Lenskart? 

[00:51:38] Peyush: I think Ronnie, in India, yes.

[00:51:40] Karthik: Superb. And I think, in those early days, he's shaped a lot of the journey. So great to hear. And by the way, he was an investor in our first fund. And for the limited amount of time that I've spent with him, he's a great business person. What motivates you given how much you've already built and scaled this business? What gets you out of bed in the morning to say that today will be better than yesterday? 

[00:52:08] Peyush: I get out of bed earlier every year that passes by. 

[00:52:11] Karthik: Yeah, that's fantastic too.  

[00:52:12] Peyush: It's the desire to build a global impact out of India. 

[00:52:19] Karthik: We need more of those stories. So thanks, Peyush, for carrying the mantle. We're wishing you a lot of luck.  if you could meet one person from Indian history, who would it be and why? 

[00:52:30] Peyush: Mahatma Gandhi, I guess 

[00:52:31] Karthik:. Yeah. He's always an intriguing guy. 

[00:52:33] Peyush: Yeah, I think. He kind of had his own view, very opposite of everybody else’s and carried it forward. So going back to that same element of having a view.

[00:52:44] Karthik: Great, great reason for it. One, any other startup that you wish you had founded? You really admire from the recent past last 10, 15 years?  

[00:52:53] Peyush: I won't say I wished I would have founded it, but I admire. I think First Cry is one of them. I think they're doing a good job 

[00:53:06] Karthik: Happiness is? 

[00:53:08] Peyush: today, you know, 

[00:53:09] Karthik: Lovely, lovely live in the moment, sir.

[00:53:11] Karthik: Thanks for your time. I think this is a perfect end to a fascinating, full-of-insights kind of conversation. I think listeners will love it. Again, thanks for being super candid. I'm glad it's important that my guests enjoy. I think that brings out more sort of real takeaway, take-home advice and makes it more fun for our listeners.

[00:53:34] Karthik: So once again, thanks a lot for this time and for all your inputs.  

[00:53:37] Peyush: Thanks, Karthik. Thanks for having me. It was lovely chatting. Thanks