Takeaways

1. **How to think of the India market: ****

   Consumers live in little pockets. Founders need to think if purchase decisions will remain the same across these pockets. We realized that 60-70% of purchase decisions remain the same. Indian consumers should be cut in terms of class not geographies. The middle class thinks in a similar way. We started with Bangalore and were able to replicate the same strategy in Delhi, but not in Pune. Look at which cities have a middle class who can afford or who has disposable income to pay for this habit. These pockets in India make it easy start up but hard to scale. In the West, it's harder to startup, but once you do it's easier to scale since population is more homogeneous.

2. Moving a consumer to a more expensive product

   Building a defensible product means having significant improvement over the incumbent. If your product is only 1x - 2x better, then consumers won't be able to decipher the difference and their decision will be made on price alone. Your product needs to be 5x better to make them change. In our case, we started a line in collaboration with doctors (co-creating teas with doctors) and added nutritional products into the teas. Our competitors were not doing this and this caused that 5x improvement.

3. Can't sell on brand story alone

   Brand is an intangible asset and you need to live and breathe it. Stories around your brand reach consumers and make you stand out. You can never align interests of ALL consumers. Sure, you need to attract consumers with whom your story resonates (for eg: we need consumers who will like the impact of skilling unskilled women, because that's our brand story). But, as you scale, you will need to serve customers who don't resonate with your 'story', but instead, like you for a specific tangible use case. Thus, you need 2 differentiators, not just one. Having just one differentiator does not help when you start scaling. It keeps consumers within your ecosystem but it may not be enough to convert a consumer to make purchase decision.

4. Distribution

   Indian customers need some handholding. They tend to pick products they are comfortable with already. If they are not comfortable, they need to learn more about it. So brands that are "teaching the customer" need to have a strong online presence. Our consumers did not react well in retail stores, but when they saw us online they spent more time on our product page and read more, and thus bought more. Online channels are good to create customer awareness.

5. Customer Retention

   Acquiring the customer isn't they only problem, also need to retain them. We keep going back to our customers to see if we are meeting KPIs. Is our stress relief tea working like it's supposed to? We use inputs on questions like this from customers to go back and rethink the product and branding.

Notes

What led you to start Ausum? Journey from Corporate to Startup

1. Starting Ausum: I wanted to explore how people can be the best version of themselves and felt that this needs one to think of their body, mind, and soul and for all need to connect with each other. Products that are steeped in tradition, have nutritional value, and can tackle health challenges early are the best fit for this.
2. Starting a company: I was interviewing for a job at BCG and realized that I can deliver my own vision instead of helping others deliver theirs. I did 3 years of management consulting in London post an MBA and then moved to Bangalore to start Ausum.
3. Why I started Ausum: Tea is the second most consumed beverage in India - 2nd thing to touch your throat after water. Infact, we say "India runs on chai". Tea is a poor man's drink and also a rich person's indulgence. At Ausum we create everything from black teas (small set) and herbal non-caffeine teas.
4. Indian market size: India's retail consumption market is 22,000 cr. Tea constitutes everything from the Rs. 2 roadside chai to the Rs. 250 cup of tea in a 5 star hotel. 95% of the tea consumed in India is black tea. The remaining is mostly green tea and is consumed for health value. Which means that there is an understanding that tea has health benefits.

Target Group and MVP

1. Defining the TG: We identified three types of consumers for Ausum:

   1. Youngsters between the ages of 20-25 who like the new experience, like things Instagram worthy, want an experiential value, and love the beverage.

   2. People between the ages of 25-35 who have started to think about health. They can't handle hangovers anymore and realize they're growing old. Their primary objective of consumption is health.

   3. People between the ages of 35-45. This is a no nonsense consumer. They have specific problems like insomnia, heart issues, sugar level, weight-loss etc. They want a specific solution for that problem.

2. Thinking about MVP: There are two ways of doing this:

   1. Habit stacking. Look at what habits your consumer has already. This is the easier way.

   2. If you need someone to make a change, then their barrier to jump cannot be too high. Their consumption should not be one off, you need to build stickiness.

3. Learnings from our MVP

   In the Indian market, consumers live in little pockets. For example, Delhi is different from Bangalore. Their consumption patterns are different. Founders need to think if purchase decisions will remain the same across geographies. We realized that 60-70% of purchase decisions remain the same. Indian consumers should be cut in terms of class not geographies. The middle class thinks in a similar way. We started with Bangalore since we were based there. We were able to replicate the same strategy in other cities too. In some cities like Pune we failed but in bigger cities like Delhi the replication worked. We looked at which cities have a middle class who can afford or who has disposable income to pay for this habit.