Manish Taneja: The Beauty Conjuror
The co-founder and CEO of Purplle, a beauty e-commerce unicorn, was always very passionate about creating something from scratch and making it big
Entrepreneurship has got little to do with your background. I think it has got to do more with what you are passionate about, said Manish Taneja, co-founder and CEO, Purplle, when asked about why he chose a venture in the beauty space, after completing a dual degree (BTech and MTech) in electrical engineering from IIT Delhi, CFA from CFA Institute, working as an analyst in Lehman Brothers and associate in Avendus Capital, none of which has got anything to do with beauty care.
"I was very passionate about creating something from scratch and hopefully making it big. IIT trains you to be very confident in life, its biggest contribution in my view. Right out of college, I joined financial services as I was always excited about stocks. So I joined Lehman Brothers, worked there for a few months, and then in 2007 and 2008 when the crash happened, I moved to investment banking and then the private equity side eventually. I loved investing and helping startups raise capital. But at the same time, I always felt like I was playing a role on the sidelines. I was never in the middle of it. I think the person in the arena matters the most and that's the role I was really missing. And so entrepreneurship was very high on the cards," said Taneja.
Another factor that instilled an entrepreneurial dream in Taneja was what he calls 'the guy next door effect'. A lot of people from his college and hostel had become entrepreneurs already, and Taneja saw that they were doing pretty well. To name a few, Binny Bansal and Pankaj Chaddah were also from Taneja's hostel.
"So, when I was speaking to these people, I realized that there was something happening in the internet which is why their traffic was growing every month. So, that's when I decided that I needed to do something in this secular wave that was coming our way, which was the wave of the internet," he said. He also believes that most successful entrepreneurs start businesses because they want to solve a consumer's problem, something that they don't necessarily suffer from.
Beauty as a segment
Taneja and his co-founders, Rahul Dash and Suyash Katyayani, had laid out three criteria to choose the right industry to start their venture in. The first one was that it needed to be a large industry so that even if they were able to take a small share of that industry, they would build a large business. The second one was they were sure of entering a category that has inherently very high gross margins so that they could make profit and loss work. And third, was that the category should be high on repeat.
Beauty fit into all three criteria and thus, the co-founders went on to launch Purplle n 2012. The startup has so far raised total funding of $215 million and is currently valued at $1.1 billion. It is backed by South Korean Investment firm Paramark Ventures, Premji Invest, Blume Ventures, Kedaara Capital, among others.
"Even if you look at the Target Addressable Market, and not the entire market, it was still a good enough market for us to be and this was in 2011." Even though he was not a consumer of the space before launching Purplle, today, Taneja knows everything about cosmetics and makeup. "Given that I have sensitive skin, I can appreciate skincare products really well. Over a period of time, I have learned the knack of makeup. I can try makeup products on my own and tell you whether it's a good quality one or not," he said.
Is entrepreneurship lonely?
"Entrepreneurship is a little lonely journey in general and it has got nothing to do with the category that you choose," he said. But, having said that, Taneja feels that having co-founders has helped him a lot. "You can't discuss your fears with a lot of people. So luckily, there are two things that have worked really well for Purplle and for me. One, I have had amazing co-founders who have 100 per cent respect for each other. Also, when you have three co-founders, even if one person is feeling a little low, others are on a high. And so it kind of balances out. If one person is getting very aggressive, others are a little passive and so that also averages out. I think that's the biggest benefit," he said.
Moreover, all three co-founders bring different skill sets to the table, which reduces the burden on one. For instance, Taneja understands marketing and knows how to raise capital, Dash has a knack for operations and Katyayani is strong in technology and data.
Taneja also believes that having investors who have the same passion and dream helps in ensuring the entrepreneurs stay calm through ups and downs.
Velocity of experimentation
Purplle believes in what it calls the velocity of experimentation. Taneja explains. "The more experiments you do, the better it is. Because, out of 10 experiments, maybe five will fail, three will do really well, and two will do moderately well. So that's what we refer to as velocity of experimentation," he said. The company encourages employees to do a lot of experiments, but within a set of guardrails.
"Within those guardrails, I would urge the team to do as many experiments as possible. I won't say that tomorrow, if an employee comes to us and says, he or she wants to do so and so thing in a parallel route, should we do it? The answer is absolutely no. There are certain core fundamentals that we have set for the business. Within those fundamental areas, I would say, do as many experiments as possible and do as many informed experiments as possible. Because we feel when youre ain uncharted territory, there is no playbook that anybody else has written for you. You have to write your own playbook," he said.
However, the founders are always aware that experiments can always fail. But, they don't hang on to it, they learn and move on.
Before wrapping up the interview, Taneja explained the USP of Purplle by sharing an anecdote of a consumer, who opens the Purplle app every two-three days.
She is a homemaker from Lucknow who finishes her everyday chores, sends her child off to school and in her 'me time' checks out social media and apps like Purplle. "If you are a more value-seeking consumer, you basically see purple as a very beautiful app that engages you very well. This lady has learned about CTSM (cleansing, toning, serum, moisturizing) from us and gets all of this within INR 800, which is not very expensive for her to buy. But these are products that she had never imagined that she would be able to buy at such high quality," he said.
That, Taneja, believes is their USP.