Who doesn’t like a bit of gambling? Sure, it might not pay off all the time, but it is equally true that those who never take a chance run the risk of accomplishing nothing in life. This the story of three 36-year olds who took a leap of faith and are around to tell the tale.
In another life, Ashwin Suresh, Aditi Shrivastava, and Anirudh Pandita would be climbing the corporate ladder at a Wall Street firm. Instead, they chose to ditch the American Dream and founded Pocket Aces, one of India’s most exciting digital entertainment companies, in 2013. Over the past five years, the company has developed some of India’s most popular digital media brands such as FilterCopy, Dice Media, and Gobble which make video content and web shows, and a mobile app called Loco, which focusses on gaming. FilterCopy, Dice Media, and Gobble together have over 12 million subscribers/followers on Facebook and YouTube. And last year they entered the big league when Netflix co-produced one of their long-form shows, Little Things. Today, with a weekly reach of well over 40 million and more than 1 billion viewers over the past three years, Pocket Aces’ viewership numbers are enviable, even when compared with the biggest names in the entertainment industry.
All this has been achieved by three people born to middle-class professional families with no history of entrepreneurship. While Ashwin grew up in Dubai, Aditi and Anirudh, who are childhood friends, grew up in Kuwait. Having left India in search of a better life, their parents wanted the three to go further West and live the American Dream. All three did, albeit briefly. They lived in New York and worked on Wall Street. Ashwin worked in investment banking and private equity at Citigroup; Aditi spent over five years at Goldman Sachs; and Anirudh worked with the likes of Bank of America, Goldman Sachs, and Ishtitmar World Capital.
It was perhaps their background in the financial sector that helped the three make Pocket Aces stand out among the digital content companies that have mushroomed in India since 2013. Ashwin says even though they weren’t the first digital content creators, they knew they would win “if we did it in a data driven manner using the latest platforms”. “For example, everyone was focussed on YouTube but Facebook Video was turning out to be the next big thing,” he says.
Aditi, who is married to Ashwin and was dating him when the idea of Pocket Aces was conceived, says a key reason for their success was that the data-driven content thesis developed in-house was implemented through a bunch of writers who were freshers in the industry. “There was very little unlearning to do,” she adds. According to Anirudh, little things like framing the video for the right content platform also helped FilterCopy, Dice Media, and Gobble stand out. For example, Pocket Aces was one of the first to do vertical videos for Facebook.
Gaming is an untapped market in India; it is going to see a lot of activity in the next three four years.Ashwin Suresh, co-founder, Pocket Aces
While Ashwin was always interested in films and video content (earning a diploma in filmmaking from the New York Film Academy in 2010), all credit the success of Pocket Aces to their roots in finance. “Unlike a lot of other media companies, we understood the business aspect from the get-go. We can talk to advertisers and investors in their own language,” says Aditi.
The focus, the founders say, has always been on monetising their content. Each of the three media brands they created has carved out a niche for itself and is generating cash for the company. For example, FilterCopy comes out with short shareable videos that often go viral. Pocket Aces has leveraged FilterCopy not only for marketing their own original web series but also to generate revenues through native advertising. Dice Media’s long-form shows are bringing in money not only through native advertising but also through syndicating on platforms like Tata Sky, and Ola Play, and airlines such as Emirates, Etihad, Cathay Pacific, and Jet Airways. Similarly, Gobble dabbles in the food space and works with food and beverage brands. Some of the advertisers on Pocket Aces have been the likes of Flipkart, Red Chillies Entertainment, Epigamia, and Manforce.
The company says its retention rate for advertisers is nearly 87%. “They really get it,” says Epigamia co-founder and CEO Rohan Mirchandani. “Pocket Aces has the ability to take a brief and bring it to life through content that not only meets our objectives but also makes it relevant, engaging, and exciting for their users.”
The market size for digital media companies is impressive. According to EY and the Federation of Indian Chambers of Commerce and Industry’s 2018 report ‘Re-imagining India’s M&E Sector,’ digital media companies raked in ₹14,550 crore through advertising revenues and ₹570 crore through subscription revenues. The figures, according to EY and FICCI, are expected to grow to ₹20,360 crore through advertising and a little over ₹2,000 crore through subscription by 2020. Pocket Aces does not want to miss out on any opportunity and is keen to partner over-the-top (OTT), or streaming platforms, to co-produce content. “As a content creator, we want to be everywhere. We want to be omnipresent. There are also genres that may not be very brand-friendly; so for those we would need to tie up with people like Netflix and Amazon who are paying top dollar for producing shows,” says Aditi.
The most interesting piece in Pocket Aces’ strategy puzzle could be Loco, the freemium mobile gaming app. “Gaming is an untapped market in India and it is going to see a lot of activity in the next three-four years,” says Ashwin. In future, he says, Pocket Aces might even put video content on Loco which people can access by paying with the app’s currency. “We are great believers of in-app purchases,” Aditi adds. For investors, Pocket Aces has turned out to be that rare company in the digital startup ecosystem that doesn’t just burn cash, but makes it too. FilterCopy, Dice Media, and Gobble are already profitable, according to Ashwin, and only Loco has not yet broken even because of the costly tech resources the mobile app requires. In the five years of Pocket Aces’ existence, it has raised a total of $5 million from an impressive list of investors which includes Sequoia Capital, Axilor Ventures, and 3 One 4 Capital But what made the trio from Wall Street who was living the high life in New York take that leap of faith? The 2008 global financial crisis. Wall Street was caught in a wave of pink slips and could not shake off fears of more market failures further down the road. Ashwin, Aditi, and Anirudh survived, but saw many of their friends being let go. Many others shifted to Silicon Valley. That’s when these avid poker players decided to take a gamble. “The question was always in our minds on whether we should also do something else,” says Aditi, recalling what was going through their minds as they were toying with the idea of moving back to India.
By 2011, Aditi and Ashwin returned to India. Aditi, who was passionate about working in the development sector, joined advisory firm Intellecap. Ashwin, a movie buff who complained about the lack of good quality Indian content and nursed hopes of working in the media business in India, joined Reliance Entertainment. He then helped Bennett Coleman and Company Ltd set up its movie studio, Junglee Pictures. By 2013-end, Anirudh, who studied electrical engineering with Ashwin at the University of Illinois at Urbana-Champaign, joined his two friends in India. Having completed his MBA at the Wharton School of the University of Pennsylvania, Anirudh took the decision to take the road less travelled because of the technology revolution taking place in India. “When you are talking about what is happening with the Internet in India, it is a multi-year secular movement. That is the way I look at it. The way technology and the Internet are growing here in India, it doesn’t happen often. This was a big motivator to leave behind what I was doing.”
By December 2013, Pocket Aces was formed. After figuring out what to do in the first year-and-a-half by picking up intellectual property in the form of scripts, books, etc., the three eventually decided that digital was the best way to reach out directly to consumers.
Unlike a lot of other media firms, we understood the business aspect from the get-go.Aditi Shrivastava, co-founder, Pocket Aces
The numbers show that the decision was right. Falling data prices and an increasing number of people with smartphones meant that the number of people watching videos online has grown sharply in India.
According to EY, 250 million people viewed online videos in 2017, a 64% jump over 2016 and according to the audit and consultancy firm, it is short form videos of roughly 20 minutes or less that are gaining in popularity. EY also adds that increasingly it will be millennials—aged between 15 and 35—who are watching videos online. According to EY, nearly 190 million millennials viewed online videos in 2017 and this will grow to 410 million by 2021.
The next decision was the type of content. In 2015, a year after the National Democratic Alliance under Narendra Modi came to power, politics and other news was an obvious choice. But the founders decided not to follow the crowd. “While political content gets a lot of engagement, a lot of that engagement is hate,” says Aditi. And, according to Ashwin, the company was formed to entertain people, not to change the country.
Pocket Aces decided to focus on everyday urban stories. For example, Little Things is about a young live-in couple in Mumbai dealing with everyday issues of relationships, friendship, and love. The show introduced actors like Dhruv Sehgal and Mithila Palkar, who recently made her Bollywood debut. Similarly, What The Folks, which just completed its second season, is about a young married couple and their interaction with their in-laws. The second season saw popular TV star Renuka Shahane join the cast.
Pocket Aces derives its name from the best hand one can get when the cards are distributed in a variant of poker called Texas Hold’em. Yet, even pocket aces, which is a pair of aces, won’t ensure one victory if he or she is not subtle about it and does not use it with skill. In five years, three cash-making digital media brands, a promising mobile gaming app, and to top it all, the rush of taking a high-risk bet and winning it—Ashwin, Aditi, and Anirudh certainly seem to have played their pocket aces well.
(The story was originally published in Fortune India’s special collector’s edition - Business of Entertainment.)