“Be like a duck. Calm on the surface, but always paddling like the dickens underneath.” My encounter with that proverbial duck happened exactly a decade ago whenI was casually chatting with a family friend, whose startup had got an exit for $5 million after nearly seven years in business. Hearing his story, the first thing that crossed my mind was, “That isn’t much, is it? I’d have expected a bigger exit value after seven gruelling years!”
Come 2021, and I realised it’s not as simple as I had thought. The man was a duck, of course ( all entrepreneurs are) The come-what-may calm and enigmatic grace on the surface was merely a visage, concealing the frantic action happening under the surface. Synchronising a million moving pieces into a seamlessly optimised symphony that delivers across stakeholders is far easier said than done. The family friend deserved a salute.
Our journey of nine years is a familiar path for founders. We started in 2012 as Giftxoxo, an experiences and activities marketplace in India. We were trying to build something similar to what a Klook or Getyourguide or Viator is doing in international markets today. We realised that this business was ahead of time, since both supply as well as demand are very fragmented in India. We made our fair share of mistakes, wrongly estimating the Indian market and being too late for the international markets. We decided to shut down Giftxoxo in early 2018, and pivoted into Xoxoday, a horizontal technology platform for rewards, incentives and payouts.
Xoxoday is 3.5 years old today, and we are doing an ARR of $5 million with over 1,000 clients globally. It has been a great journey with fun and challenges, happy and sad moments, and loads of memories and learnings. Let me keyboard some of the standout takeaways which might help fellow entrepreneurs in their own journeys.
PRIORITY | Plan > People > Product > Process > Profit, in that order, with Pause & Perseverance
These terms may be familiar buzzwords, but the trick lies in the sequence. Decision making deserves a mention at this point. It is dicey territory, especially when you are multiple founders. The secret is to get the disagreements and debates out of the way as quickly as you can, so that everyone can commit to a plan. We learnt this the hard way during our Giftxoxo days. In our zeal to factor-in every variable, we cast the net far and wide – soliciting opinions and second opinions from as many fellow investors, mentors and senior team leaders as we possibly could. Error 404. Too many meetings and perspectives meant we could never get best on execution – certainly not quickly enough – leading to delay, confusion and stress. All of which could have been avoided. Big learning? Rely on the data, but go with the conviction. We cut the fat from our decision making process during Xoxoday in 2018, and today, we are a far more productive (and happy) bunch.
PEOPLE & CULTURE | Your biggest competitive advantage
As first time entrepreneurs, we initially interpreted culture as annual outings, monthly town halls, pizzas and foosball. But these are activities, not culture. We realized that culture does not happen, one has to work towards building a great culture. Culture is a fundamental management tool and one of the very few sources of sustainable competitive advantage left to companies today.
During Giftxoxo, we have had errors in hiring the wrong people at the right time or right people at the wrong time. For instance, we hired a great business guy, when the product was still in its early days. At Xoxoday, we have been over-investing in our people, getting the right people in the right places, and helping them grow the business. This has been our biggest and most satisfying learning, and today our success is largely due to the ‘Humans of Xoxoday’. In fact, one of our own products, Empuls – which helps companies engage employees meaningfully and build a people first culture, bakes in our own learnings while building a good workplace.
PRODUCT | You can’t please everyone
In the early days of entrepreneurship, it’s easy to be tempted with any opportunity that comes your way. When you are in a B2B business, you might end up building products and features that can make clients smile over the short term and keep the cash registers jingling, but may not be a good fit for your product in the long term. We, too, started out romancing the low hanging fruits of custom features to please a heterogenous set of clients – but took a very rigid approach from 2018, unabashedly saying no to anything that was a short-term revenue for the bigger product vision. This has helped us greatly in scaling business motion quickly and seamlessly across all teams. Defining our ICP, target audience, target markets helped us define our product roadmap which could scale as we progressed.
PROCESS | Reinvent the game, not the wheel
Good processes can lead to better performance and productivity. Companies can scale only if they invest in processes and process automations. For one thing, processes free you up from the micro-details, letting you focus on the big picture. For another, it makes it extremely easy for all stakeholders in decision making.
But how to know what processes do you need and how do you get business automations in place? Well, insights are “in your sight”, if you have the eye for details, you can improve processes iteratively, month on month. Though our revenues have multi-folded across countries, our support team size remains the same since 2018. We use over a hundred software tools for automating internal processes and optimising efficiencies across functions – all to ensure that our teams get quality time to focus only on work that warrants ‘human attention’. The rest is left to machines.
PROFIT | Don’t take your eyes off economics
We have built a profitable business by making sure every transaction brings in profit, or influences it measurably. We aren’t swayed by flavours-of-the-month or fancy KPIs, though they can come in handy sometimes for tactical outcomes. Overall, this approach has helped us stay strong and continue to grow, without raising any funds. Our profits are not only about adding new revenue, but also how we keep expanding our existing revenue and optimise costs to improve the bottom lines.
CUSTOMER FIRST | And second, and last
Every founder talks about customer centricity, but it means different things to different companies. It can be about letting the customer lead your product decisions or it can mean meeting the customer more often than is required. But this customer centricity does not give any ROI or value to the customer in the long term. Rather, it can be about taking the lead yourself – being emphatic with your customer, co-create where relevant and owning the narrative where necessary. And finally bringing data driven benefits to help them succeed with your products.
In the initial years, we were wrongly following the former strategy which led to wrong product decisions at times to get short-term revenues, a typical error in software product companies. We understood that customer centricity is not about doing anything the customer is asking in the product, but to deliver true value to the customer. So it was about the Why rather than the What.
At Xoxoday, we ensure that we keep high quality standards in whatever we do, although we still have a way to go when it comes to meeting those excellence benchmarks. We are extremely customer-centric, an ‘industry envy’ in customer churn ratios, and can boast a CSAT of over 96 percent consistently. This is all thanks to our customer success and support teams.
PLENTY IS A PROBLEM | Creativity comes from your constraints
Our bootstrapped status has been a blessing in disguise. The entire founding team comes from humble family backgrounds. Growing up, we were all taught about the value of staying grounded and putting in the hard work. Respect for frugality and optimisation comes naturally to us. It’s no coincidence therefore that the organisational DNA has – right from day one – been about doing more with less, minimising wastage, and nurturing a strong profit mindset.
No matter what we do – be it hiring, marketing, infrastructure, GTM or anything business – we innovate to do it with minimal expenses without compromising on the results. Staying lean and mean across the value chain has helped us create a profitable venture and a revenue of $5 million last year.
COURAGE & CONFIDENCE | Guts is the ultimate capital of business
In a hyper competitive market where product, price, promotions are increasingly commoditising businesses, your gut is the x-factor that can upset the equation. One can copy your product or promotions but one can’t copy your perseverance, passion, grit or courage. We won new customers and weaned customers from competitors. The only regret is that we did not show similar levels of self-belief in some of our investor discussions. After all, we are one of the very few companies in the world that’s generating real profits, growing YoY, delivering solid technology solutions and have a great team. There was no reason for us to be on the backfoot during the fund-raising process.
While we are growing well without any funding, we can certainly achieve 5X to 10X growth with the right investments. One can grow well without funding too, just that it may take a few extra years to reach the promised land.
STAY HUNGRY, STAY FOOLISH | What worked for Steve, has worked for us
We have always been very open and eager in taking advice and feedback – be it from family, investors, mentors, employees or even competitors – utilising whatever insights we received to fine-tune the course. Keeping the ego down hasn’t been a problem so far either (but the ego is a tricky animal, so we can never get complacent). This has helped us stay nimble, humble and aware of the market. And it’s not just us founders, our learning appetite runs across roles, and there’s a thick crisscross of information and insights happening across teams every day. This has helped us move the vectors in the same direction, and maintain a high growth momentum.
FAMILY, FITNESS, FRIENDS before the FIRM | Don’t miss any of them, don’t mix any of them
I was asked in an interview how I manage to balance my family at Xoxoday with my family at home. What could have been a complicated question was in fact a no-brainer for me. Xoxoday was work, it was never going to be my first family. Not because I valued it less, but because the two lay on very different axes. Some things aren’t meant to be compared – they are designed to coexist, instead. The lines must be drawn, and they must be drawn with clarity and force. Founders – and indeed, everyone – will do well to understand the priority sequence of family first, fitness second, and friend third – in order to have a balanced life.
You can always reverse the fortune of a business or start a new one – but it’s not so easy to reverse human life.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YS.)
