From Startup to Scale-Up: The Talent Factor

SatJ: Let’s discuss the importance of talent strategy, especially in scaling a business. That’s the core topic of today. Scaling is all about realizing the full potential in your business, which also requires, you know, planning, adapting to the market situations and a very strong focus on identifying and grooming and retaining the right kind of talent within your organization. Let’s begin by understanding the art of mastering this talent strategy, especially in businesses such as yours where you have scaled. 

Before we start, our listeners would like to know a little bit about your background. You were a very successful HR professional working in a fortune company. Your wife is a very successful HR professional. Why did you land up as an entrepreneur and that too in a very unrelated industry? So we would definitely like to hear that story. 

Sreejith: Yes, that’s one question which I’ve faced since I quit – why did you quit and then second part of that question is Everybody thought an HR guy will quit to start a consulting firm or a manpower firm. This is one question which has come to the first part. So why quit is actually a journey which started during my MBA days. So I want to do something. I want to see a complete brand journey for myself. That is always there, but the ideas everybody has during college days, I also had. During my stint with my first company TVS – they had a library. I had an hours commute to the factory everyday giving me plenty of time to read. And the library was loaded with a lot of good books about startups or business books. Those fueled my interest towards starting up. A few years down my career, I realized that if you don’t reach the top by early forties or mid forties, you might lose the game. 98-97% of my MBA batch park themselves somewhere on the pyramid and only 3% rise to the top. So I didn’t want to be that 98%. And that was the second trigger. These two triggers were the reason I wanted to quit.

There wasn’t a right time to quit. I was in China for 2 years and then decided to come back and get into the health business. I’ve been in health and food for some time now. This is my fourth startup, three failed between 2012 and 2016. I started True Elements in 2017 and there has been no looking back.

SatJ: So what was your, what was your biggest learning from your 3 startups failures and how come TrueElements is a success story today? What did you do differently? 

Sreejith: Actually, first, this probably is a question which can be put into a lot of people who are starting up. Starting up is easy, but staying put is a little difficult for the first three, four years. That’s my hypothesis and to me my confidence for the first 2-3 years was that if I failed, I always had that backup of going back to Cognizant. So I think the first two and a half, three years I had that in mind and probably that is the reason why I didn’t succeed in the first four and a half, five years, because I had that backup in mind. And then after three years, I realized there is no way I can go back. This is what it is.

And then, I realized you may not become a multi billionaire, right? But, the journey is wonderful. You’re learning, you’re having fun. And money, we had the confidence someday to get made if you stay put. And then we are human beings who live on hope. So there is some hope by luck or by God’s grace was always good, which made sure that I stayed put. I don’t think there are so many variables, which are beyond your control. So I cannot put one reason because of which it is where it is today, right? There are 100,000 variables and 99% of those are beyond your control. As you cannot take credit when things go right, you also can’t take complete blame when things go wrong. The only reason I would say is staying put.

SatJ: Tell us a little bit about True Elements, the journey and what, what did it start off as? What is it today? And I’m sure our listeners would like to know what do you do in this space?

Sreejith: So when I quit, I wanted to start a chain of kiosks where we were supposed to sell in-between meals, healthy snacks and beverages. We started a kiosk inside a few IT companies across Pune and Delhi to start with. One year down the line, we realized, people who are coming to the canteen to eat don’t want anything healthy. People who aren’t healthy are not coming to the canteen. They are 35 plus and they are sitting at their desk and having the meal from home and the snacks from home. But it was almost 12 months down the line, we realized we already had a bunch of products which we were selling in this kiosk.

And one year down the line, we didn’t have salaries and then we had products. We want to look at something where we were able to bring in a good cash flow. And one, another opportunity we saw while we were inside the companies where all the companies had corporate wellness. So they were spending money on a medical check up. Then they were doing multiple interventions throughout the year. One, one cancer awareness. One, something on the right sitting. Something on movement. Multiple for drinking of water. Multiple stuff throughout the year. But all were not connected. So we thought we could build a business using tech. Whereby we could gamify the complete corporate wellness, starting with medical checkup.

And we even had a scorecard whereby project managers could get a health score for their project for a year, which could be monitored over a year. So we thought we could do that. But 18 months down the line, we realized that business is really challenging to scale because every year you need to go and re-engage with the HR guys, our own fraternity, and re-engage and re-negotiate.

And that means we are starting the business every year fresh. And second we didn’t see that becoming a multi million dollar enterprise because there are some limitations in terms of how you can grow, how much you can grow. So from there, what we had was products from our first leg. Then this corporate wellness, we had services. We put all this together into a marketplace called healthy world. which was an e-commerce marketplace for health food products and services, which we ran between 2014 to 2016, where we were selling like, so we were competing bootstrapped with Amazon. Amazon came to India in 2014-2015. So we were fighting with them bootstrapped.

We tried raising our angel in 2015 and we got a few angels investing in us. They asked a question. So how are you going to give the money back? That’s the question which made us think we need to look at a business, which also will have better visibility, which we didn’t have in the e-commerce business.

It’s a bleeding business. We didn’t have any visibility. Even Amazon was just, Amazon after 22 years became profitable somewhere in 2010, right? So we, we didn’t, we didn’t know how to run that business with that kind of. No visibility of profitability kind of business. So we thought, okay, that means we need to pivot from here.

So that was 2015 and 2016. So what we did is we need to look at more products, which we’ll sell on our platform, which has more margins. So we got top selling products on our platform into a brand of our own called True Elements, which is a private label brand for our platform. Okay. So we do just a private label only sold on our platform. And 2016 and Amazon started food. So we put our products on Amazon. That’s when we realized the profitability we were getting from our own products in Amazon was much better than our own product being selling our healthy world. Business wise, we didn’t see this making money for 2016 and we decided to shut the healthy world and focus only on True Elements and subsequently in 2017 we got VC funding, which also validated our hypothesis that this is working. So we were not aware of the current cool word, which is DTC, direct to consumer brand, when we started up, we were a private label brand. So we then became a brand again, the brand got sharpened and then the story of the brand, the brand philosophy got sharpened over next 12-14 months. So, we call ourselves behaving like a 100 percent brand since July 2017. That is when we have zero business from Healthy One. So True Elements today, what we do in True Elements is we do clean labels.

Again, we don’t call ourselves a clean label for consumers. They don’t understand or people who want to understand are way too small in the population. As such, we have good, tasty, healthy breakfast and snacks. Okay. And the philosophy of the brand is we don’t want to tinker with the ingredients too much because of which the nutrients are lost and whatever we add into the pack is only food and nothing else. So no chemicals, no sugar, no preservatives, nothing. And we do it all ourselves. We have a 55,000 square feet factory in Pune whereby we manufacture and we don’t have any third party manufacturing agents or anything, everything is done in Ops. 

SatJ: As you scaled True Elements and as you went through the journey of running ventures how important was the talent element? And what is your biggest learning here? And if you have to advise startups on how they think about talent as a strategy and how they make the right kind of investments in talent what would be your advice to them? 

Sreejith: So being an HR professional myself, since day one, that was always the priority but we couldn’t do some of those stuff is obviously our pockets didn’t allow, we didn’t have the money, but what we have done is, Since day one, we have hired or people who have worked for us – people who are from Tier two cities with a lot of fire in the belly. My team, from my first startup, came in as freshers.They have done multiple roles and now they are, they are heading some function.

Okay. Not that all those guys who we hired continued with us, but those who have stayed are people whom we wanted to retain and who are the gems. Why it worked for us is again, my campus hiring, learning and baggage, influenced here a lot. During hiring we have traveled to India and hired people who we have seen have worked are people from tier two who thought they don’t have too many opportunities. So the opportunities they got, they grabbed it by the hand and then never let it go. Tier 1 guys always have, have grown up with a lot of opportunity in front. They are the current generation. I don’t know, my generation had books and then in class we had Xerox copies and printouts, right? We used to keep it, though we may not refer to it throughout the year. Current generation have everything on their laptops, so they don’t write and they don’t, right? That’s the same thing. So the same way the Tier 1 guys think that opportunities are there, right? And, they don’t value it. Tier two guys, when they get, I believe they grab it and if you give them the right reward then they flourish, that’s what has happened, but that also became baggage for us once TrueElements started scaling, right? Not in the first three companies. When TrueElements started scaling, why I’m telling you that it became baggage is the culture of the company. Was very close knit, right? There was nothing externally coming in. We were all a group of people like frogs in the well and we were not getting an external perspective.

And as such, we consciously got some leads sometime in 2019, 2020, uh, from outside. Lateral leads, some worked, some didn’t work. Cultural issues. The biggest problem which we also faced were the old timers needing to let the new timers set in. That’s a friction which burns down a lot of companies. The right balance is required. Otherwise, the core of the company’s culture would get lost. So there are a lot of good elements which the old guys will have that should not be overwritten completely by the new guys. So how do you get that right equilibrium and so probably I don’t think we are completely successful there. Yeah, to an extent, we have been successful. That being that been our hiring strategy and retention strategy. Then when it comes to rewards, we have not been able to pay high salaries for most of the employees. Reason being, we are probably one of the lowest in terms of funds raised among our peers to the top line achieved, right? So we have not been able to raise too much funds, like a lot of our peers, we could not pay. So we, that way, democratize ESOPs a lot. So, uh, we have, we have given ESOPs to a lot of folks, anybody who thinks this company is his or her has an ESOP. Okay. For example, last to last year, when we were doing the ESOP distribution, we had a flood kind of situation in our old factory. There was a cloud burst. And on that night, the two security guards who didn’t behave like any security guard. They behaved like they were all of the company more than me. So even my security guard, whom you will face at the gate of my factory also has an ESOP of rules.  So that’s been our philosophy.

SatJ:.One of the things that you know, especially when you scale your operations, scale an entity, scale an enterprise, what kind of investments are critical especially when it comes to technology. And today we talk of technology as a very important enabler of the future in scaling businesses. So I just want to understand what True Elements does differently? Did you make the right investments in technology or any other investments that helped you scale your business? 

Sreejith: Yes. Technology has been very vital to our business. Not because we were running in e-commerce before, or even before that you were running a corporate wellness gamified kind of attack. But we have had a bunch of techies since day one. And my current CTO is the same guy who ported my first website in 2013. Okay. So tech has been a part of my journey throughout. Though I would say in my part of the world, which is DTC, though, let’s say social data. And AI is widely respected, rest ERP and the core old school technology which is required to run a factory and business operations still not got its due is what my due is because the lot of SaaS available for throwaway price. So people go and pick what’s available in the market and just run the operations. As we had an e-commerce backlog, we built the whole ERP stack, which is running my complete operations in house. So starting from the app, which is used by my sales guy, when the person is in, let’s say, whether in Guwahati or in Trivandrum, is the in house app, whereby the sales guy puts the order and the order comes to my ERP, which is in house built.

Thanks to that, we also got one accolade, which is a global accolade. We are top of the globally five clean tech companies to look out for the reason being we were the first Indian packaged food company whereby you could see the ingredients in the pack from farm to fork, the complete journey.

We could put that out for the consumers to see why we put it out to us because when you’re telling me my product is clean, it is a simple process, no preservatives. We want the consumer to see for the consumer to see we build this tech stack whereby when I’m growing Jowar in a farm in Chattara. The day it is sold, I have the information where it is, when it is sold, and what are the conditions. And each stage, till it comes to my factory, I have the information, I put it all out. And what is the process we do with that raw material? It’s put out. So we build that stack as a differentiator. So you can scan the QR code and reach that. Not that many consumers are using it, but we build tech because we always believe scale tech is required. Otherwise, at some point, it will be an impediment group. Right. Because you can manage with Excel and SAS and kind of multiple, uh, stitching kind of solutions, but at some point that will be implemented. So we built it all out where I completely believe tech is. Has to be there from day one. 

SatJ: For an entity such as yours for scaling up operations, scaling up these businesses, uh, how important is your HR function? And what do you think an HR function could do? We’ve all been HR professionals in our past lives, but do you see the importance of the HR function in such organizations? And, what do you believe should be their core objective? 

Sreejith: So that answer might surprise you, Satish. So I didn’t have an HR guide till I hit around 180, 190 headcount. Hiring was decentralized. We used to have no pre-access to everyone. Everybody used to hire you. What kind of people you want won’t say you’re into, right? So though we are right now, 550 people, we only have two HRs, including one recruit in this one. So the way we have structured it is probably in a language which is more universal and empowers every manager to be an HR manager than having a function running and owning it up.

Right. That’s the way it has to be. But at scale, probably we are already struggling there a bit. So the strategy was that in  summary, it was one, right. And I’m telling that man that my security guard is soft. It is respect. That’s the talent strategy. I would put it in one respect. If respect and recognition can be given, that’s the core which has to be ingrained in the overall philosophy.

That’s what we have done with all the leads. Again, we are struggling now when we are scaling, right? We are struggling. Probably we need to go the conventional way of function and owning it up and getting it done, making checks and balances. Till now we have managed it that way. So, that’s been our approach.

SatJ: One last question on the talent front. You said you made a very interesting observation that any organization should have a good mix of Homegrown talent and talent that comes from outside so that there is a good cultural mix of talent within the enterprise. Now, can you give us some useful tips when you look for talent? I’m sure you also are in the constant lookout for good talent. What are the core expectations or characteristics you look for in a candidate? 

Sreejith: So that’s changed over a period of time. I don’t think there’s one constant answer I had because one biggest learning, which was one approach of hiring, which we had, let’s say from 2012 to 2017 was you always thought people who have fought through in their life. That means I’ve seen multiple failures and I have still stayed put. are the people who we thought would be the perfect fit for us. Okay. So subconsciously, we have hired a lot of guys who have gone through multiple failures in life. For example, there was one guy who went to NDA, he got kicked out of medical school, then he had a few other failures in life. And, there are multiple cases like that. So culturally we had a lot of guys who have not achieved anything in life who are all still struggling. Okay, so that’s that. I dunno whether that’s the right kind of summary for 2017,  I consciously called out. I think we have, this is not working. So otherwise, when we used to get a resume like that, we thought about this higher, but that means this fellow will not give up. He’ll keep fighting. But what we also realize is people who have tasted success are also required. Otherwise, the kind of people who have only been fighting through life, who have not tasted success, are motivated to keep fighting, but they’re not seeing success. So success coming or not coming doesn’t matter for them, their milestones are not growing with each level. In a startup like ours, every 18 months, the company’s changing. Milestones are changing, company’s pivoting. My targets are growing much bigger than what I could dream. So those kinds of change, this bunch of people were not able to adapt to, right? So we changed that. That was the first phase. Second phase right now, we as of now are looking for people who are cultural fits. Cultural fit for us is people who are to the face and who will live by the four pillars of our brand. True elements. We have four pillars, which we live by – True to the food, True to people, True to the environment and True to our word. So we filter these four pillar to hire.

So if a person has to decide whether a raw material which has come in has to be approved, There’s going to be an auto stop for a product. Use these and decide. Again it’s a most theoretical kind of approach, you know, how this is required, but at the end of the day, everything boils down to whatever that decision, which is coming from your core, which is more like, why be stunning? This fellow will not be a problem, but again, we are also not very lenient and patient in getting rid of people. So some people were not working out. We have to forget a few. My employees who are listening to this – we have due respect. I’m in touch with everyone who has worked with us since 2012. A lot of them, you would have asked them to go, but it didn’t work out. So, we are also not very lenient. So we get rid of people very quickly. We don’t have the liberty of time and money, so that means the codes correct you call it hiring fire. Yeah, that’s what we are sorry, but I love the four pillars.

SatJ: Everybody’s talking about AI. So have you used AI in running your enterprise? Have you used AI in scaling your business? Have you used AI in the talent strategy or talent ecosystem?

Sreejith: For Talent, we haven’t because our hiring is not that big in numbers that you’re not used to hiring or for filtering or none of this, but AI is used by our marketing content and content team a lot in terms of reducing the pain of creating that. So AI is being used by our marketing team, whether it is creating the right content for the audience you are making, whether it is written content or imagery or even looking at the customer reviews in terms of feedback and analyzing and seeing what is sentiment analysis, multiple kinds of stuff. And we do that in that part where there is enough data, but in the factory on the, on the shop floor on, and then again, talent side, no, we do not do that. 

SatJ: Now for the interesting rapid fire round.

What advice would you give a company that has limited resources?

Sreejith: Keep the hope alive. 

One thing you wish you had known while you were scaling the firm, which you later realized was an important lesson for you. 

Sreejith: Don’t tell yes to everything which is coming your way. 

What was the biggest challenge you faced while scaling TrueElements?

Sreejith: Biggest challenge is the current market for a consumer. 

I think I’ll probably take a brief minute to educate people if you are easy permit. So when we started, it was just e-commerce marketplaces, then COVID hit. Then it was e-commerce plus offline. Then we went back and made an omnichannel online and offline. Suddenly now it is quick commerce, which is 10 minute delivery. So the channels are very important because we aren’t a brand without channels. We don’t exist. So we are a direct to consumer brand. We have our own marketplace, our own website, but these channels are important. The change we have seen in the last six years, every two years, the 50% of business every year that block has changed. If one year it was a marketplace, the second year it was offline. Now this year it is quick commerce. And the whole business model, servicing, looking at analytics, looking at everything has to change with that.

What is the best piece of advice you have ever received? 

Sreejith: Advice from my dad – If your intention of doing good is good the outcome will be good!

SatJ: Srijit, very insightful conversations, especially on how you scale your business effectively. And, your personal learnings will be a huge motivation for people who intend to grow, to start and run their own enterprise and business. And like you rightly said, keep the hope alive, trust your instincts, stay put, and, finally the best piece of advice your dad gave you, which is to stay true to being good, thinking good, and good will happen finally is something that all our listeners will definitely take back.