100X Live Session with BOX8 Founders Amit Raj and Anshul Gupta
A panel discussion was held between Mr Sanjay Mehta from 100X.VC and the founders of BOX8, Mr Amit Raj, and Mr Anshul Gupta. The discussion was about the efforts taken by these entrepreneurs to build their brand and business on a global scale. The impact of COVID-19 pandemic on their business and its growth was also discussed.
Both co-founders are IITians and have worked together in Deutsche Bank. They have built this company together.
About the initial stage of their business:
Amit and Anshul initially started 'Poncho', a Quick Service Restaurant Chain serving delicious Mexican food for customers in India. Mr Sanjay met these enthusiastic entrepreneurs at that time and also invested in their start-up.
What was their idea behind starting up a Mexican Quick Service Restaurant Chain?
Amit and Anshul were inspired by what they had seen in the US. Mexican food is quite popular there among the Indian community that travels or even stays there, as it is similar to Indian food. Indians tend to have a lot of Mexican food when they are in the US. As the presence of Mexican food in India is near non-existent, they thought that the idea of offering Mexican delicacies through a QSR chain should work wonders.
How did Anshul & Amit start their first restaurant chain, 'Poncho'?
They set up the first shop with the capital they could collect from their savings. As it was a minimal amount, they had to make the most effective use of the available funds. The challenge was to get their business model tested in the lowest possible capital. They found a place in Peninsula Techno Park, Mumbai, without rent and all set with equipment and initial restaurant set-up to start their business. This first outlet allowed them to test their business model with limited investment.
What was the triggering point that made them think of expanding and building a restaurant chain?
Amit & Anshul gave the initial few months to stabilize their operations and see if the customers liked what they were selling. As soon as they realized that they could manage that first outlet well, and the customers are broadly happy with what they are selling, they leapt to test the business model in a few more locations. The idea got materialized with 4 to 5 new locations, and they got the sample outlets running well across all of them.
How did they reach out to the investors to convince them to pour money into their business?
Amit & Anshul were in the process of setting up their third Poncho outlet. They were planning to expand the chain and were looking for investors. They reached out to the Indian Angel Network for investment. They connected with Mr Kaushal from this network, and investments began pouring in from a diverse set of people. They got an investment of 25 lacs, which was a considerably good amount to expand the business then.
They not only opened up the next outlets of Poncho in some other locations but also increased their offering portfolio combining Indian and Mexican dishes. The investment from the entrepreneurs at that point helped them to shape up their journey in future.
What was their mindset as they raised a fund of ₹ 25 lakhs with a valuation of two and a half crores?
They were passionate to work with investors that are entrepreneurs as they could guide to build their business. The opportunity was to work with the right kind of investors. The valuation was not the focus, yet they wanted to partner with good people to take their business goals ahead.
What were the initial strategies that helped them to be successful?
The most important secret to success is listening to the customers and working as per their feedback. Food is a category where customers easily realize and relate to the quality of products. Besides branding and marketing, the customers' trust in the food category would be based on their personal experiences about the quality they receive in almost every serving.
They focused on giving the best possible product and service experiences. The decision to add Indian cuisine on their menu was due to the customers' wish. Common Indian customers liked the presentation, yet could not connect with the Mexican cuisine. So, they decided to introduce Indian dishes. As there was no additional education needed, the idea worked. Amit & Anshul saw a huge response.
What was the bootstrapping period to materialize the idea of their 3rd store?
It took around 8 to 10 months to settle down the operations in the first two outlets and to open the outlet in the third location.
What was the reason for the success of BOX8 after Poncho?
While operating Poncho, their challenge was to introduce an entirely new cuisine and educate the customers about it. After about two years, they realized that Indian customers are not educated enough about the new cuisine. So, it would have required a lot of marketing efforts to teach the customers about the ingredients and recipes used in Mexican cuisine.
On the other side, though Indian cuisine is popular, there were no brands at scale offering it in an organized manner. They thought that this would be an empty and vacant category that they can focus on, as there is not much customer knowledge involved in it.
A good product and a good execution helped Amit & Anshul to try new business ideas and to shift from Mexican to Indian food, and they got success in the future.
What should a consumer expect from BOX8?
Quality meals created in single-portion packs is the USP of BOX8. They offer a meal with diversified dishes, nicely packaged for the customers. Delivery experience is also crucial to retain the customers, as the end consumer would consume the food after about 15 minutes of preparation. BOX8 emphasizes presentation and delivery logistics as strong pillars to deliver quality and taste of food.
Would they relaunch Poncho after the huge success of BOX8?
As Mexican food is a challenge in India, they would wait for someone to educate the audience in India and then they may think of taking advantage of the popularity of Mexican food.
Does BOX8 have a Franchise model?
As they prefer operating the food chain themselves, they are not selling franchises. As they believe that they need to manage and control the entire value chain to ensure the best experience to customers every single time; they don't prefer franchising out. They use a lot of technology to streamline operations and processes. So, they can manage the business well.
What would they prefer, a brick and mortar store or e-commerce?
They started with outlets where the customers could come, sit, order and enjoy the food. As the real estate cost in Indian metro cities is growing, continuing with their food delivery business across bigger cities in India, Amit & Anshul had to think out of the box. So, to reach a wider audience, they prefer e-commerce and ensure the best delivery experiences for their customers.
How important was capital in the journey of BOX8's success? What are the other 3 most important elements?
Partnering with the right individuals at different stages of a start-up journey plays a vital role in its success story. Making the effective use of the capital raised is also a crucial element that helps in attaining great success.
What made them diversify in multiple brands after the success of BOX8?
They started with the identity of 'Desi Indian Complete Meals' through BOX8. Meanwhile, Amit & Anshul realized the popularity of other food categories like pizza. Indian customers across many cities had accepted and appreciated the efforts of many brands to deliver pizza to their homes. So, they decided to utilize the already set infrastructure and their experience while building BOX8 for another category of business. Mojo pizzas brought them a huge success as they reached the ₹100 crores mark within two years.
Are there any plans to launch a few more brands in some other categories?
There are plans, and the consumers would certainly get to see some more categories of food served with the same passion, quality, and taste within the next few years.
What are the things an entrepreneur should be prepared with while pitching to investors?
The focus needs to be on building a business that listens to the consumers and executes a vision for the end consumer. If the execution part of your business idea is perfect, you will find the right people at every stage of your business that would be joining you in the journey of your success. Apart from the valuation, you should also consider the opportunity to associate with quality people in the long run.
They have also faced rejections in various phases of their journey. It is significant to listen to and work on the feedback they received whenever there was a rejection. The entrepreneurs need to take rejections as learning experiences and suggestions for improvement. If entrepreneurs work on the feedback from the investors, they can improve their businesses in many ways. Ultimately, when they eliminate the shortcomings, they would find the right investors.
How has technology helped them in building better customer relations?
Technology has a very crucial role in operating an organization today. There are many factors, activities, and people involved in fulfilling every single order. Over these years, they have built a strong technology-driven platform to operate the things in the background efficiently and effectively. This results in a better experience for customers every single time.
How did BOX8 meet with the challenge of COVID-19 pandemic?
As food was categorized as an essential product, they were allowed to operate their deliveries following some basic regulations. Yet, the demand has gone down in this period. Though there was some negative impact on BOX8, due to migration of people, it was manageable. It gave them the opportunity and time to automate processes and make the business more efficient. They feel that the time they invested in upgrading things would pay off once the situation normalizes, and they would experience a remarkable improvement in their business.
How did they change the business model to cope up with COVID-19 challenges?
COVID-19 brings a change in the mindset of the customers as they would look out for trusted brands to transact with the peace of mind. This brings an opportunity for an established food brand. This transition would help organized food businesses that serve the best quality food, in time, in a hygienic environment, and follow the guidelines.
How long will it take to deliver food through drones?
It is an idea that can be in the fantasies, but may not be executed shortly. It will take time.
Does BOX8 use technology in food preparation to achieve consistent quality?
They have infused technology in every single step. They can track multiple steps behind food preparation. They can also get real-time feedback from the customers, collect them, and pass them on to the team. It is easy for them to identify any gaps in their systems. They guide their team to prepare food using technology and also adopt automation, sophisticated equipment and machinery for food preparation to ensure consistent quality every single time.
What are their views on raising their first check from 100X.VC platform?
This is an incredible initiative, and as the co-founders have worked with Mr Sanjay before, they feel quite positive about it. This is a unique and fabulous platform that simplifies the process of understanding various steps of startup success right from documentation to execution. This platform minimizes the chances to get distracted from their core business activity.
This is a breakthrough model as the entrepreneurs can get investments in a smoother and hassle-free manner in the initial stage of their businesses.
What would be the top 3 pieces of advice to any emerging entrepreneur?
It is imperative to listen to the consumer.
Try to associate with people that would support you in the long run.
Perseverance is an essential quality for any entrepreneur.
Close the feedback loop listening to your customers and working on their suggestions to improve your business.
Consistency is the key to success. So, be in it for the long haul.
Things start opening up when you remain in your business with a firm and clear perspective for many years.
What would be the next move for BOX8?
So far, it has been a tremendous journey for the co-founders and their teams to build BOX8 as a trusted brand. They have figured out processes and technology to support them on even bigger scales. They are committed to delivering the best quality products and better experiences to their customers every single time.
BOX8 is fortunate to be at the forefront of the transformation phase of the food delivery business in India. We can expect massive changes within the next 5-10 years in the way customers buy and consume food.