Co- Founder, Hector beverages

ByS.KRISHNA CHAITANAYA NAIDU

•Neeraj's corporate career started after he completed his

MBA from MDI, Gurgaon in 1998.

• He worked with Union Carbide and later Wipro before

joining Coke in 2001.

•He had an amazing run with Coke- the kind that becomes

a part of Corporate Folklore (the jury is still out on whether

there is an entity that may be described as Corporate

Folklore) with the high point being his time in Bangalore

when he seemed to have settled the much-touted Cola

battle conclusively.

•In 2008, he headed to Wharton to do a second MBA and

is now in the thick of the action as CEO of Hector

Beverages Private Limited, India.

My schooling was in Panipat a small town in Haryana and I graduated out of MDI, Gurgaon in

1998.

I joined Coke in 2001 and worked for 7 years.

I worked at Wipro for some time. Then I went to Wharton to do my second MBA.

I came back in 2009 and started a start-up called Hector Beverages.

Before landing a job with the cola major, for a brief while I dabbled in my grandfather’s tailoring

business in Karnal.

It was more to help out the handful of tailors working with him, as their trade was dwindling.

Readymade garments were fast catching people’s fancy. I managed to bag some orders from

export houses but logistical bottlenecks put paid to the effort. It was time to move on…that’s when

Coke happened.

Things moved fast at Hindustan Coca-Cola Beverages. I got a promotion every 12

months – from an area sales manager, shifting to one department from the other, till

I became the general manager of their bottling plant in Bangalore, in charge of their

P&L.

Working for a MNC, which was the market leader, moving up the curve so early in

my career made me cocky about success.

Vandana felt I had turned arrogant…Maybe…I wanted something more

challenging and stimulating.

I was fancying a bigger role at the Atlanta HQ. So, I went to Wharton.

It was 2009, after my summer internship with

Helion Ventures in Bangalore. I was reporting to

Kanwaljit…it was great interacting and learning from

him.

But working alongside Helion’s portfolio companies,

sitting through series of investor presentations got me

thinking…

“Everybody out here is high on energy and wants to

change the world. What am I doing, sitting across the

table! Why had that ambition never entered my thought

process?”

That feeling kept building up and my zeal to get to

Atlanta started dripping.

What am I doing, sitting across the table! Why had that ambition never entered my

thought process?” That feeling kept building up and my zeal to get to Atlanta

started dripping.

The very thought of being on my own was so endearing…so much so that I didn’t

even stay on for my last semester at Wharton. I completed the course via distance

learning – I had to or else father would have been furious! He was anyway upset

about my quitting a job to pursue higher studies, the only consolation for him was

that I hadn’t settled down in the US…but I still hadn’t told him what was on my

mind.

Suhas from those days at Coke was looking to start something new. He had already

dabbled with entrepreneurship. Since I was pretty clued into beverages, both of us

felt it was a good opportunity to look at functional ones. At this point, James,

whom I knew during my Wharton days, too joined the venture. The three of us put

together 1.75 crore to bootstrap Hector Beverages. I pooled in my entire savings

of 75 lakh, Suhas pulled in 25 lakh and James the rest. We discussed and debated

on the target segment, the product…during one such session Suhas came up with

the idea of a protein-based drink. The rationale was that since Indians are protein-

deficient, there was a humungous need for a veg-based protein drink. It was like a

eureka moment…we were kicked, thinking it was a great insight. If we could make

a tasty product, people would be eating out of our hands…

We got moving on the idea…sourced soy isolate from

DuPont and got the product made out of Chennai. Priced

at 30 per sachet, Frissia was the first offering, a protein

powder that one had to mix with water and gulp down. It

was that simple. But we felt influencing consumers through

doctors would be tough, so why not hit the gyms…The

instructors would be our brand influencers and

ambassadors. Boy! How pumped up we felt about our

marketing strategy!

We would urge the regulars to try our unique offering…little did we realise the

reason why protein drinks were being sold in big jars.

While we were tom-toming “protein piyo, sehat ban jayegi”, the guys were not

impressed. The common refrain was, “Teen-chaar din se le raha hoon, phir bhi kuch

doley vole nahi aa rahe hain.” It was so exasperating convincing them that it would

take six to eight months for the results to be visible, that it wasn’t going to happen

in days.

But no one was buying the product. The only faithful ones consuming the product

were the three of us! Our startup lost 80 lakh on the experiment and my dad is cool!

It was time to move on. That’s when we chose to enter the energy drinks market.

Though we had failed in our maiden endeavour, we were never short on

confidence, nor were our first set of angel investors.

Helion was keen to invest, what we wanted was a $1.5 million cheque…for Helion,

the minimum ticket size was $5 million. So we chose to tap angel investors.

All the past associations came in handy…Kanwaljit invested in his personal

capacity, Shripad, whom I knew from Coke, and two of my classmates each of

them invested 25 lakh.

The big moment was when NRN came on board as

our first major investor, thanks to Kanwaljit, who

knew Josh at Footprint Ventures. Josh had

previously worked at Infosys as manager, corporate

planning, and had a good rapport with NRN. He

came down to meet us, liked what he saw…we

were stunned when he said, “I would like you guys

to meet NRN.”

The fear of rejection – that paisa nahi milega toh kya hoga thought was there at the

back of our minds…our plan was all on paper. But suhas tried to defuse the tension

by saying, “agar kuch nahin hua, toh zindagi mein yeh ek bucket list tick hojayegi

ki hum nrn se mile.”

Thankfully, there was chemistry the moment we introduced ourselves to NRN. He

liked our background, academics and more importantly the idea that we were

presenting…“This is our unique soft packaging …aimed at breaking the clutter and

moving away from the world of Tetra Pak….it is less damaging to the ecology”…I

went on passionately, showcasing the packaging for what would become Tzinga.

” I just mumbled, “Sir, I was nervous speaking in front of you.” That was it and

within minutes NRN went out of the room. We clicked pictures with him before

that…As we walked out of his office, we were kidding that I had battle scars all

over me. Josh was unsure, but I intuitively felt that our idea had resonated well…

I wasn’t wrong…we raised 5 crore in the first round in September 2010 and went

on to raise $4.5 million in two more tranches. It was around this time that Neeraj,

whom I knew at Coke, came on board as a partner, chipping in 50 lakh as capital.

It took us one-and-a-half year to work on the product. We launched it in 2011. The

product was good, but it wasn’t growing as fast as we wanted it to.

After more than a year, the burn rate wasn’t exactly inspiring. Maybe it was

that…somewhere down the line, we lost interest in developing the drink. Had we

continued only with Tzinga we would have been a relatively small success story.

But the launch was a good lesson for us in terms of branding, about how

distribution mattered.

One morning, James mentioned that his parents were coming down from the US

and he wanted them to have a local experience, especially gol gappa and aam

panna.

Sequoia Capital came on board. I vividly remember the first meeting with VT and

Sakshi at our Gurgaon office. It was January 2012.

Sequoia did invest… $5 million and $12 million over two rounds.

We built the company around those two words. By

creating this traditional drink we were being

authentic – the products were how they should be.

At the same time, alive meant it was modern,

contemporary, and cool despite being a traditional

recipe.

Marrying the two aspects to create a strong brand

was Ashwini and her team at Elephant Design.

They came up with a unique design and brand

name…Paper Boat. I believe this is Ashwini’s best

creation by far...

The plan was to launch aam panna, but we

realised that were no suppliers of green mangoes!

Most waited for the fruit to ripen.

Till such time that we fixed the supply chain, we

launched jaljeera, a concoction of lemon juice and

spices, and aamras, a ripe-mango smoothie, in

flexi laminated pouches with a plastic nozzle for

rs30 in 2013 in Delhi and Bangalore.

The initial reaction from retailers was “jo cheez

ghar pe banti hain usey koi kyun kharidega?”

Today, there is no looking back. We finally launched aam panna in 2014…we have

eight flavours, which are available through the year, and in eight seasonal flavours.

It takes one-and-a-half year, on average; to create a new drink…some take longer.

There are some flavours we haven’t given up on yet.

There is kaanji, a probiotic drink made from purple carrot that was once available

in the North, it is no longer is available in any part of the country.

The search for the elusive carrot took me all the way to Turkey! What a trip that

was…I had stuffed close to 30 kg of the produce to be brought to India for trial

tests, only to have it trashed by the customs department, thanks to the paranoia

around mad cow disease.

With your vast experience what would you like to advice

the young entrepreneurs for a successful start-up?

Definitely my first advice would be that if entrepreneurship is his/ her ambition,

then one should go for it . What I’ve seen among Indian youth is that most of them

are bound to do something new but many don’t come out due to the fear. One

should conquer the fear first. India as a country requires a lot of entrepreneurs.

Believe in yourself and your idea and go ahead. Indian youth are extremely

capable. Second thing I would say is choose the right thing at the right time. Be

clear on your idea and go ahead.