Foreign er of flathead, a company which took the entire internet by storm after their episode, aired.
I am here to meet ganesh the founder of flathead. Let's go foreign great to meet you how's. It been man the last two weeks, social media platforms, linkedin. How did you feel man? I was dazed to be honest in the first 48 hours uh, saturday and sunday. After the episode aired you know, phone was ringing off the hook. I tried, opening, linkedin and I I could hit accept only so so fast. The number of requests were coming much faster, so um, so I just shut down I just said here. Let me take some take some time out here, but after that yeah it's been a busy time talking to a lot of people trying to figure out a lot of inbound queries. A lot of support- oh yeah, the soul, store collaborated with flat heads and this t-shirt got sold down in how how many 72 hours 72 hours sold out their inventory sold out in two days three days. Basically, three days, amazing, so iit bombay I am bangalore bean right now, I'm guessing so why business? What is the motivation before I did my masters? Yeah I did three years of being and then five years again in honeywell um.
Eventually, what happened was in honeywell 2011 when I joined after bain I met utkarsh, who was my later on co-founder for 10 years, but we knew each other in college in iit, bombay he's from a design school there, industrial design, he was interviewing me in fact, I got hired, obviously yeah, then we were running the india for india portfolio, so we are building like a portfolio of products from scratch, so it was almost like a startup within honeywell right yeah. At that time, 3g had just launched in india right. Yes, yes, uh, the app ecosystem was exploding right, they are doing mobile payments and recharges, and in honeywell we used to go to china right wechat pain, alipay had revolutionized mobile payments, there right yeah, qr codes that was happening there in full flow. So we were really flabbergasted by this. Maybe we should do this, so that's how momo happened in 2013 when we got out, we said, could will do something which is disruptive right- and this was a great opportunity to do it yeah. So that's how we launched momo momo was mobile money everywhere there was a name of the startup yeah. You said that you sold the company to shopclues yes and after selling uh were you working with shopclues? Yes, so we had a two-year lock-in, so the chief product officer and I was leading their merchant ecosystem, so he has 150 pairs of shoes, wow and he's a designer right.
So sometimes he cuts up shoes to see. What's inside he's crazy that way, um and while we were doing this uh, one of the conversations was here: what are the right shoes for the indian climate right? Typically, you know smelly shoes and sweating is a big problem, uh in in our shoes every day. So we said if we were to design shoes from completely new thought process right. How would we do this right same first principles, thinking that we were doing at momo? We thought yeah and that's what god flattened started: I used to cold message, people on linkedin right saying you know just like the the steve jobs turtleneck and the zuckerberg here is the startup quiz startup shoe cool thing. Absolutely you should try it out and give us your feedback, so I used to ping a lot of entrepreneurs and vcs across the board on twitter and on linkedin, and a lot of people responded. They said hey. This is interesting. Let me try it out so then we started getting shout outs from people like naveen tiwari from inmobi raju srivata from urban ladder pankachada from zomato. They started wearing it and they said arya. This is cool, that's how the organic traffic built, so in fact, linkedin and twitter contributed to 30 organic traffic in the early days.
That is incredible right, not instagram, which is where all the brands go right. 30 was well linkedin and organic the sales in 2019. Yes, the rest 70, where performance marketing on facebook and instagram next year, uh. What are the sales like, so we were at about one crore is what we closed 21 at yeah. Okay, what is the gross margins of your business in fr 21? So we were at about 65 cross margin, okay, um on the shoes right okay, so we launched a polyester range. We launched uh first in india, bamboo shoes range and we also had some uh. You know natural materials like cotton. Blends is something that we would do. Okay, so this is gross. What's the? What is the net margin, removing logistics that was another 12 out so effectively 35 plus 12 47 years ago, so we were 53 net of logistics cost as well, and then there was marketing. So marketing was about 60 65, 60, 65 yeah, so net of that we were about minus 15, minus 20, minus 15, minus twenty percent yeah. Okay. What about the next year? What are the sales like in fy22 22 was 2.4 crores 2.4 crores um gross margins dropped a little because we launched uh chapels, we launched sliders, and we focused on marketplaces because the uh we wanted to expand beyond it's higher in the marketplace correct, but they run at a lower price point right, okay, so margins are lower. Was the marketing spend the same in fy22 as well? Uh marketing spends were similar um right. We were at about minus 50 a lot of the marketing was also spent on amazon and flipkart kind of marketplaces.
I want to ask what would you have done differently with flatheads, with all the experience that you have today, yeah, so yeah I think we struggled through two years of the you know: multiple waves of the pandemic. Uh right, we launched a normal 2019 march 2020 ayah. The whole concept of shoes for work went away. People are not wearing shoes when people are not going to work right so that itself became a proposition. That was a problem uh our offline events that we were doing weren't well, nobody was going to office anymore right. So where will we do those events? So a lot of those things went away. So, looking back, if I were to do something differently, I would have taken a couple of my investors advice. They basically said shut down. Your shop go on vacation for the time until this pandemic gets over and then come back and try again, because you cannot force demand right. If people don't want to try buy shoes, as you said, right and looking back I would have probably looked at offline presence a lot sooner, we were spooked by the pandemic right.
What? If our inventory goes into a store- and it gets stuck for four months because and that paranoia always prevented us from going into the offline stores- okay, foreign- what are the kind of designs that we need to have on the uppers and what are the materials that we need on the uppers, so we have uh shoe designers who come and design the shoes, and then we choose which ones to pick uh colorways design right. What are the color pairings and what are the kind of things we should do? That is also fed by sales, intelligence, colors and then accordingly, we choose the colorways okay and then there is uh the material design right, so material research bots are out there. So we have material expert in the team, basically sustainable materials. That's why your brand was a sustainable brand. Absolutely then we bring the assembly together, those may accessories. What is the right field that you need inside the shoe laces, all these things get designed and then they get sourced foreign, so the ability for you to extract a premium and communicator value premium to the customer is very low.
When you talk pure functionality to make emotional thought process, something that connects to the audience. What was the intent of going to shark tank that was very interesting and that caught their attention, mostly people record the founder talking and saying something right and I are sleeping on a bed of shoes. We did a really funny video and that really caught their attention. So what happened in between foreign for 33 percent foreign foreign? Please- and he said that flattered these things are not at place.
Do you agree with it to some extent, for sure we made a lot of mistakes, no right, for example, pricing we were premium. Maybe we should create a bigger range of entry-level sneakers and then do a lot more innovations on top yeah exactly right. If you talk about place, so you feel the likeness. That feel is something that you can't get uh when you're doing a picture online. Those are the kind of things that were there like. Even the situation was like that right offline, so that was an issue which is like do not die today. What was running in your head, do, you know, have the courage to shaking my boss. So one of the things I had told myself, you know I had discussed it with my you know: angel investor and friend anish as well, and the offer was way beyond yeah.
So ask her versus the offer was a very, very different world right. It was not even in the ballpark certain new corporation, pretty much with the same branding, so there are two things that really struck one anything you try does not work. Sometimes you should just take a pause and he had been through that experience himself and he said it out of his. You know very empathetic entrepreneurial thought. Anupama, the doors are always open, then I started introspecting on here. Maybe that makes sense. Maybe I should not jump at the first offer that is available out there. Yeah. Maybe I should just take a break, evaluate my priorities, think about it and then come back and do what I want to do here is an offer that is open, but I'm sure that offer is not going to go over it and I have talked to uh anupam after that as well. So the offer is still obviously that offer will be available. It is just that I didn't want to make an emotional decision at that time. Um has anyone reached out to you personally after the yes, after the episode 8, multiple people have reached out and we've had conversations as well um we're very supportive, very much also the entire inventories.
Oh, it's sold out as well. So what are the next moves for? What are the plans for you and your company after this unprecedented response? We we did not expect this right so um. Can we revive it in any way? You know pre-order campaign for a limited edition collection, one last shot of course. So maybe we should do this we'll see if the production can be revived suppliers. At the same time, we are also trying to see if there is a logical next step for flatheads um. This is not a paid promotion, so this is the rapid fire round.
You have to answer without thinking a lot. Okay, your favorite shark, from the show personal favorite, okay, what would have been an acceptable offer double award I had offered maybe uh you know, five percent stake would have been acceptable. Okay, one extremely memorable moment after the episode and aired well, when the episode I had actually uh. We had done like a mini, get together of sorts of all our flatheads employees and we were doing shots every time. I talked in hindi, so that was fun and we were completely drunk by the time and we were just doing shots all through the wow conversation. Wow next question is: if you had an option to invest in one shark, tank company, which one would it be the stage stage? No question? Ah, that the passion of those guys and their story as well right. They were running witty feed and then the company went from whatever 40 crores. They were doing to zero on one day and then the way they came back and the quality of the content is unbelievable right. So coming soon stay tuned. We are towards the end of the episode.
I know there are a lot of things happening with you right now happening with flatheads, but still you took a lot of time to do this episode. Thank you so much ganesh and guys do check out the not out edition of flatheads. The link is in description, and if you want such cool funky calendars, then ganesha's daughter, may 3, makes them. The link is again in the description. Many already goodbye
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