Had Varun Chawla been a civil engineer, the roads he would have paved wouldn’t have barricades; changing course is his thing. From changing one graduation course for another to altering the very idea behind his startup, this is a man who doesn’t stand still. He shut down four of the five startups he founded, and sold the other. His sixth—91springboard, the co-working space he founded with two childhood friends in 2012, survived the purge. The reason: It made it fun to be in office. And yes, productive too. Today, the company has office spaces in eight locations in India, and is considering entry into the Southeast and West Asian markets. His story:
I was an electrical engineering student at Cornell University in the U.S.; leveraging technology to make life simpler excited me. Yet, I switched to applied economics and management at the same varsity, and graduated in 2002. I had also spent a lot of time in the library, and taken extra classes in philosophy and architecture.
I believe this holistic approach helped me land a job at Goldman Sachs in New York. It was hectic, but rewarding. Goldman Sachs also brought me back to India, to Bengaluru, where it was setting up an office, a sort of startup. Those were heady days for startups and I was infected by the bug. In 2007, after two-and-half years at Goldman, I quit to set up my own venture, Springboard Investments. It was an investment consultancy that I had to shut very soon because it was not scalable.
The startup bug had bitten, and I launched a series of companies: Taira Mediateq, a content data business for broadcasters, Your Personal Concierge, which helped non-resident Indians with all sorts of things including renting a home, and Audeamus Capital, which helped working-class people invest in the stock market. None of these did too well, but I was convinced I had a successful venture in me. That turned out to be MyGuestHouse, a budget accommodation aggregator, which I started in 2009. In 2011, MakeMyTrip acquired MyGuestHouse for $1 million (Rs 6.3 crore).
Unlike my previous ventures, which did not require much capital and could be self-funded, MyGuestHouse had an angel investor, Deepak Sharma—a good friend of mine. Remember him, because he played a crucial role in 91springboard.
But back to my adventures with entrepreneurship. Once MakeMyTrip bought MyGuestHouse, I had the means to think of what I really wanted to do. I realised that I had the first-hand knowledge, experience, and networks needed to help early-stage startups. So in August 2012, I sat down with my childhood friends Anand Vemuri and Pranay Gupta and discussed my idea of setting up a startup accelerator. Both of them were equally determined to create a successful venture; they had no capital to invest, but offered sweat equity—20 hours a day for no pay!
It was a good team, because we each brought in different strengths. Anand is very good at operations and community-building, Pranay is really strong at marketing and financial matters such as investments and raising capital and I’m strong at business development and growth.
I wanted to call the venture Springboard, after my first startup, but the domain name wasn’t available. I decided to stay with the name, but prefixed 91 to it, India’s telephone code.
So, partners in place, name done. Now we needed capital. I had some of the funds from the sale of MyGuestHouse, but we needed serious investment. Our search led us to two angel investors from Romania, who committed $1 million. We decided to spend a small portion of that on setting up a space, and the rest on the actual business.
As luck would have it, we found an unused, 10,000 square feet basement near Okhla in South Delhi. The space had been vacant for a long time, so the owner agreed to lease it to us at no cost for the first year but chargeable beyond that.
Things seemed to be falling in place. But Lady Luck proved fickle. Our Romanian investors decided to pull out; they called us saying they had done some research on accelerator performance in Europe “and it turns out it’s not so great. So you know, we’re going to back out”. It was a body blow, because we had no money to run the business.
The investment scenario was not particularly comforting, so I turned to family and close friends. I managed to raise around Rs 1 crore from my father, father-in-law, and Deepak Sharma (remember him?). It was good money, but not enough to run a startup accelerator.
It was a troubling period, and I had to go back to the drawing board to figure out what to do. I had free space, willing hands, and some capital. I also had not given up on the accelerator idea; there may be some other way to go about it, I thought. And then, I had my eureka moment. A co-working space with a shade of an accelerator—yes, that’s my calling!
We thought we could hit the ground running, but realised there was still a lot that needed to be done. For a start, the basement needed redesign; we had originally wanted an open plan, then realised private areas were needed for certain conversations and meetings. What services should we offer? Should we have desks or tables? What about the chairs? Should the Internet be wired or wireless? And how do we price this?
In the interest of transparency, we asked our first few customers what we should charge, and came up with Rs 6,499 per user for a month. We were priced lower than most others in this sector, so were able to raise the fee to Rs 6,999 soon after launch.
The good news was we didn’t have a problem getting customers; word of mouth helped a lot. We got startups, we got freelancers, we got lifestyle companies, we even had some small and medium enterprises. Some of them came for the space, some for the community. Some of the companies, such as StartUp Movers and Paperkite Research and Technology, now called Dartboard, are still with us in different capacities.
Then came summer and the bad news: we didn’t have airconditioning in our office. And Delhi’s summers, with temperatures hitting 45 degrees, meant a torrid time for all. We had to act fast. But we had no money—again. We decided to take the risky step of buying ACs on our personal credit cards, hoping to earn enough to pay off the loan.
That was a tense time, but looking back, I see that the magic is not setting up infrastructure; anybody can do that. What differentiates us is the community we have. The idea was to give something more; to engage our members, within our spaces and across our spaces.
One thing we have tried to create consciously is a heterogeneous group; that’s how information is shared. I mean, if you put a bunch of doctors in a room, how much will they teach one another? Put a doctor, a lawyer, a sportsman, a banker, and an entrepreneur together in the same room, and ideas will fly. Where do we come in? We make these diverse people comfortable enough with each other to exchange all kinds of ideas. That’s where the magic is.
To achieve that, we conducted workshops, hackathons, panel discussions, round tables, and mentor hours. We decided to host such events right from the beginning. One of our most successful events is Reverse Pitch, where investors pitch to entrepreneurs, which we try and hold once every six months. Then, we conduct one-on-one free sessions where an experienced entrepreneur and a functional expert like a lawyer or an accountant spend about 40 minutes with one of our members. Such events create a functional ecosystem.
Since these events brought people from outside, it also acted as marketing medium.
We have also created private forums for members, using Google groups, Facebook and even WhatsApp groups. But like all good communities and forums, a level of moderation was required. Conversations on troubles like the Internet or power disruption distracted from the value-added conversations we wanted on this platform, so we set up a separate platform for conversations about the office space.
By 2013, we had grown enough to open a second space; this time, we chose Gurgaon, where we worked out a revenue share deal with the property owner. Then we made the big leap by opening up a space in Hyderabad, partnering the Pennar Group.
Currently we have office spaces across eight locations in the country, with Mumbai being the biggest. I’m very proud of the fact that we have over 600 member-companies and 1,800 members across our co-working spaces.
In future, I am looking at experimenting with larger spaces. We also plan to enter the Southeast Asian market in 2017. We are also looking at West Asia and Africa, as these are still emerging and developing markets.
Yes, this space is getting crowded; we’ve got competition from the likes of Awfis and BHIVE. In fact, I think anybody offering a similar pricing, with an added layer of community and infrastructure management is competition. That includes real-estate developers.
But ultimately, what we have over the others is the sense of community. To understand 91springboard, think of Starbucks. It’s not just about the coffee. There’s a way the barista serves you the coffee and how the whole atmosphere is; it’s friendly. We offer a similar experience at 91springboard.