₹5,000 in 4 Years. ₹1 Lakh in 30 Days.

In 2012, we asked our investor for permission to start a nutrition business. His answer was: “Not even a penny of our investment should go into this stupid idea.”

He had a point. Our existing nutrition business had generated just ₹5,000 in revenue. In four years.

My partner and I were running a successful chain of fitness clubs. We had raised funding before the word “startup” had become cool in India.

But we realised that most clients came to us for one reason: weight loss. And we knew that nutrition played a much bigger role in weight loss than exercise alone. We were solving only a part of our customers’ problem, and that didn't make us happy.

So we went to our investor and asked for permission to expand into nutrition.

He asked, “You already have a dietician at every centre. How much revenue does the dietician contribute?”

We looked at the numbers.

“₹5,000.”

“One centre?”

“No, all centres combined.”

“Profit?”

“No, revenue.”

“Last month?”

“No. The last four years.”

He was furious. “Are you mad? How can you think of such an idea? Not even a penny of our investment should go into this stupid business.”

When entrepreneurs hear NO, sometimes they hear YES.

We were even more determined. The problem was that we had no capital, no experience, no knowledge, and no successful Indian nutrition business to learn from. Dozens had tried and failed.

The shit was real.

What my IIM-A professor taught me

I remembered a lesson from my professor at IIM-A. He had successfully started a pharma company without being a doctor. His philosophy was simple: if he couldn't afford to hire a doctor, what stopped him from learning enough to understand the subject himself?

So I read over 100 books on nutrition in six months and experimented with what I learned on myself. I lost around 10 kg.

And then we had an important insight.

The missing piece

Generally Indians don't like paying for intangible services. Globally, most successful weight-loss companies sold food products alongside their programmes. In India, nobody was doing it successfully.

Maybe that was the missing piece.

The secret ingredient

Another great insight came from Kung Fu Panda. Po believed that his father's famous noodle soup had a secret ingredient. He also believed that the Dragon Scroll contained some magical secret that would make him a great Kung Fu warrior.

But when he opened the scroll, it was blank. His father then revealed the truth: there was no secret ingredient in the soup.

The same was true of the Dragon Scroll. There was no magical formula. Po had to believe in himself.

We realised we did need a “secret ingredient” for our business. Fortunately, ours could be real.

We created the concept of Super Foods — the best foods from around the world that were not easily available or popular in India. We experimented in our kitchen and came up with five products.

₹20,000 we didn't have

Now came the next problem: how do we manufacture them? We couldn't set up a factory. We didn't have the money.

So I went to a small kirana shop and asked the owner if he would make the products for us. Reluctantly, he agreed. His cost would be ₹20,000.

We didn't have ₹20,000 either.

I asked him for 30 days' credit. He refused. “I am meeting you for the first time. How can I trust you? ₹20,000 is my entire month's profit.”

I don't know whether I used the influence techniques I'd learnt from Robert Cialdini, or whether I simply looked poor enough to deserve charity. But he eventually agreed.

And suddenly, we had ₹20,000 worth of products sitting in biryani aluminium packets.

No brand. No packaging. No factory.

The only question was: would anyone buy them?

We took them to our existing fitness-club customers, who were already asking us for help with weight loss.

They did.

It took us just 30 days to generate ₹1 lakh in business from our first batch.

From ₹5,000 of revenue in four years to ₹1 lakh in 30 days, a new business was born.

The 5 lessons

1. Constraints can be a competitive advantage. Lack of money and resources forces you to ask fundamental questions and solve problems from first principles.

2. Solve the biggest problems first. Don't try to solve ten problems simultaneously. Identify the one to three assumptions that matter most and test them.

3. Don't confuse planning with progress. You don't need to figure out every detail before starting. Execute, learn and adapt.

4. Treat a new business as an experiment before treating it as a business. Don't invest in the full infrastructure until you've tested whether customers actually want what you're building.

5. An MVP doesn't have to be elaborate. In many established businesses, even the “minimum viable product” becomes unnecessarily expensive and time-consuming.

0 to 1 is a different game

Building a business from 0 to 1 requires a very different mindset from scaling a business from 1 to 100.

At 0 to 1, your biggest advantage isn't capital. It is your ability to learn quickly, test cheaply and change direction before you've invested too much.

Further Reading

If you want to explore the thinking behind this approach:

1. The Lean Startup — Eric Ries

2. Running Lean — Ash Maurya

3. The Four Steps to the Epiphany — Steve Blank