Arun Gopalaswami, Co-founder of Recotap – Entrepreneurial learnings

Arun is the co-founder and CEO of Recotap, a fast-growing ABM platform. He is someone who has pursued his dream, showed grit, and perseverance all along his entrepreneurial journey. He tried out things, learned from mistakes, and found his calling. 

Let us read through the words of Arun on his insightful entrepreneurial journey and suggestions to upcoming founders.

Welcome to Yellow Chapter. It is great to have this convo. 

YC: We would like to hear your journey from the very beginning. Can you tell us about your childhood?

Predictable

Arun: I was a 1970s kid, born and brought up in a sleepy little town near Coimbatore, Tamil Nadu. Pollachi is known for its natural beauty and is a popular destination for the film-making fraternity. 

My father was a professor and an agriculturalist. I grew up on a farm. I had a strict and disciplined upbringing. I was expected to study well, score good grades and become an engineer. I still remember the dinner table conversations were like, “you gonna be an engineer one day”. Being an engineer was kind of fed at a very early age. A very predictable career choice. 

I was an average student, quiet, and did everything to avoid the limelight. But, I had my dreams. At a young age, maybe when I was just 10, I had this fascination for automobiles. I dreamt about having a business in something that had to do with cars. 

YC: What was the journey to college and beyond?

Arun: It was 1993! I became good with my studies and scored decent grades in my higher secondary to join Mechanical and Production Engineering at Annamalai University, near Chennai. This was a large and reputed institute. Moving out of my hometown was a new experience for me. I enjoyed the newfound independence, made new friends, and rubbed shoulders with big-city boys which opened up my worldview.

The first couple of years just flew by. In my third year of college, my dad wanted to help me settle down as soon as I graduated. He set up a hosiery manufacturing plant at Tirupur, an industrial town famous for textiles. The plan was that he will commence the operations, and I will take over from him and build the business. 

While in my final year of college, the more I thought about a manufacturing business as a career choice, the less interested it appeared. So I conveyed this to my father and contemplated between doing an MBA and taking a job. 

I decided to opt for the latter.

@ College pals

YC – What next?

Arun – This was the late 90s, and the Y2K problem was opening up new job opportunities. Especially for non-computer graduates. It was a ticket to the USA. I enrolled in a three-month-long computer programming course that included Mainframe programming, Java, and other languages. It was an intense residential program in Chennai. It was there that I developed a liking for computers and software. It became my base.

YC: How did you start your career?

Arun: I had a great mentor in Mr.V. Ponraj who was a family friend, a scientist, and later became the scientific advisor to the president Dr. A.P.J Abdul Kalam. He helped me get placed in a software company in Bangalore. I worked there for a while, before joining Digital Equipment Corporation in 2000. The company eventually merged with Hewlett Packard where I spent the next 7 years or so.

I got trained in CRM technologies, which was then an emerging field. I was part of teams that built large-scale IT systems for HP. I wrote programs that are still in operation. HP was a great learning experience, I started to lead small teams, travelled, and interacted with people from many parts of the world. I still have friends from those days. It opened up my horizon.

I did well in my career, enjoying the work I did. The entrepreneurial urge, though, stayed with me. I even ideated a few. 

@ First job

YC: What were those, and how did they unfold?

Arun – There were a few, but a couple of them are worth mentioning. 

Idea 1

Arun: – This was the mid-2000s. It started from one of my trips to Europe. I found the coffee culture out there to be interesting and wanted to replicate the same in India. I wanted to start a chain of Coffee stores that offered a lot more personal experience. I did a lot of research, collected data, and wrote business plans. I sat on this project for a couple of years and gave up when the market became “competitive” according to me.

Idea 2

Around the same time, organised retail In India was becoming a thing. I was interested in the rural retailing space. My idea was to set up a chain of stores in major villages that would act as a hub for farmers to sell their produce. The stores were to act as sourcing hubs for organised retailers and offer financial services to consumers. 

While I knew it was going to be quite capital intensive and difficult to execute, I was nowhere close to understanding the scale of the problem that I was trying to solve. And that too without having any industry experience. This project too got relegated. 

In retrospect, all I was doing was designing products without actively thinking about the Go-to-Market.

YC: What after the chucked ideas?

Arun: 2008, I changed jobs and joined Infosys. It was a transformational experience. I still draw a lot from that experience even today. I worked with some great minds. I got to travel around the world and spent a few years in Scandinavia. My roles varied from managing projects, programs, accounts, and customer relationships. To say it was challenging would have been an understatement. But, I enjoyed every bit of it.

YC: How did the startup journey culminate?

Arun – 2014 – I was at a crossroads. My career was taking off. My responsibilities and span of controls were growing. I had an option to continue and work towards climbing the corporate ladder or take the entrepreneurial plunge. I chose the latter.

I knew it had to be then or never. To my advantage, I was financially stable. My family was young. I had no debts or major commitments. 

I began my research. I read a lot, attended startup meets on weekends, and met a lot of people from the startup ecosystem. The more I learned about people and their stories, the more convinced I got.

I decided to pull the plug on my job around August that year. I did not know what this decision meant and what was lying ahead. I was determined to do this as long as it took. 

I and a good friend of mine from college joined hands and formed a company in October. We were yet to get the idea crystallised but were working towards it.

Idea 1 – Restaurant Digitization

Our first attempt was around restaurant digitization. We wanted to offer a mobile-based solution for restaurant owners and their guests. The term contact-less experience was not invented then but that’s what we were going for. We attended many conferences, startup meets to expand on that concept. We ended up dropping the idea rather abruptly when we discovered in one of the events that several startups were working on this idea. 

In hindsight, it wasn’t the best thing to do. Having competition means that there is a market for the product you are building. We thought the opposite and dropped the project.

Learning – Competition is not a bad thing. 

Idea 2 – Artisanal Marketplace 

We pivoted and started to conceptualise a C2C platform for all things artisanal. The plan was to bring together home chefs, grocery, delivery partners, cloud kitchens, dinner hosts, and several other players to a single platform. We called it MarketStreat. It was an ambitious project, and naive at the same time, for we decided to bootstrap the venture. 

MarketStreat

We started to design the platform. The first attempt failed as the outsourcing partner we chose initially did not meet our expectations. We lost a couple of months in the process and had to redo it all over again.

Finally, when we launched, we expanded it to a handcrafted marketplace. We wanted to develop the platform into India’s own Etsy. We onboarded artisans from across India. The value proposition was that sellers can open and operate their own branded store through MarketStreat and not commoditize their unique creations. 

We were a very small team and worked hard. Really hard. The initial responses were decent, orders were flowing in, customers were coming back. However, the revenues we earned by charging a small commission from the sales were not going to sustain the operation. 

So we decided to monetize the software we built while continuing the marketplace model. We learned many of the sellers we worked with wanted to have their branded eCommerce stores. So we offered them a way to create a Shopify-like website via MarketStreat. The idea was pretty novel. It still is. The seller had the option to sell their products in the marketplace as well through their website. 

We called the product Stōr-ea place where craftspeople can tell their brand stories and sell their products too. It was a subscription-based solution where the seller paid a monthly fee and had their store managed by us. 

Around the same time, we also launched our own D2C brand Little Spells, a personal and home accessory brand. We even talked about launching our own physical shops but thankfully we did not go ahead with the plan. 

We were throwing everything we had at the wall hoping it sticks. It did not! It was almost three years, and I grew impatient. 

After a lot of contemplation, we scaled down the operations through 2018 and eventually pulled the plug on it. 

@ Team MarketStreat

Learnings – 

  1. We identified our customer niche. But with the giants like Flipkart and Amazon dominating the industry, a tiny bootstrapped company was not going to make it. B2C is a very capital-intensive business. It needs deep pockets to make it sustainable. 

2. We had committed the classical mistakes of choosing an inexperienced niche (B2C, eCommerce), taking more time to launch the product, and expanding before getting profitable. We just did not know how to market our product(s) well. 

YC: Talk about your current startup Recotap?

Arun – Recotap is an Account-Based Marketing platform. ABM helps B2B businesses to grow revenue, shorten sales cycles, and lower customer acquisition costs. We help our customers do better ABM.

We are a 4-year-old startup. Ganesh, my current co-founder, started the company in 2018. And I joined him a year later. We have built a solid product and talented team. We also have the Covid induced tailwind where most B2B companies are switching to ABM. We are growing at a fast clip.

We have been part of multiple accelerator programs during this period including Techstars, Axilor, and Upekkha. The learning from these programs and the experiences from our previous startups has helped us to avoid common mistakes and set ourselves for success.

@ Team Recotap

YC: Can you share some thoughts on sales and marketing?

Arun – Startups become or die depending on how effectively they market and sell their products. There are playbooks and best practices that one can refer to. At the end of the day, no two startups are the same. And no amount of theory will help. You have to test constantly and see what works. There is no winning formula that one can lift, shift and execute. 

Learn from failures and learn to live with them. 

Marketing is experimentation. And by nature, most experiments will fail. This is a fundamental understanding that anyone should have before undertaking it. There is no single right way to do this, and you have to find out yours. Marketing and Sales are also about the understanding of human psychology, people’s biases, and playing with it.

YC: Any community you think will help a founder?

ArunUpekkha & SaaSBhoomi are two communities platforms that we have been part of and have found immense value in. There are also communities such as Supermorpheus, that one could join. These communities provide you with valuable peer learnings and experience sharing. 

@ Upekkha community

Bear in mind, no community will offer a readymade solution on a platter. It is mostly pull-based. You (and you alone) as a founder can identify and solve a high-value problem that people are willing to pay for. It’s like swimming where you need to teach yourself how to float. No amount of watching someone float or lessons can make you a swimmer. 

@ with Girish Mathrubootham

YC: What would you like to say to the upcoming founders in general?

Conceive, Deliver, Adapt!

Arun: Entrepreneurial journey is long, lonely, and treacherous. It is not for everyone. It’s for people who have enormous grit, an extraordinary level of patience, and passion to turn an idea into a sustainable business against all odds. 

1. First and foremost select an industry of your expertise – it is called a founder market fit. Finding that ‘Founder market fit‘ is a must before finding the Product-Market Fit.

If you are in your twenties, you have the time at your disposal to learn and do things at a leisure pace. But, if you plan to start late in life (around the late thirties), always go for finding solutions to a high-value problem in an area where you have hands-on experience and have a strong conviction that Customers are willing to pay for the solution. 

Communication with customers/prospects/users is everything! 

To talk to a potential customer, you don’t even need a product, only a demonstrable idea of the product. You could thus identify the pain points of customers, and then figure out the high-value problem that is worth solving. This helps to find the product-market fit, and build the product accordingly.

2. Founders tend to go on a loop in which they keep on building products. They would build a product, but would not find the marketing fit. Eventually, they would go back to building another product. Seek advice from people with experience who could figure out the product gap. 

It is natural for engineers to over-focus on products and their features. It gives a false sense of completeness and accomplishment. But a viable business is a combination of product + marketing. 

3. Regarding the team – Find co-founders and core team members who possess complementary skills; personality-wise and skill-wise. 

4. Nail it and then scale it – Choose the problem wisely. It is advisable, to begin with, a small problem, solve it, and then move forward. 

5. Develop an appetite for taking risks. Startups are all about high risks and high rewards. 

Risk management after a certain level becomes counter-productive. It will lead one to constraint thinking. Figure out the affordable risks you can take, and exploit every possibility available.

6. Frugality doesn’t mean not spending. Spend on areas where it can contribute to growth. Find resources. Be scrappy. 

Arun, It was wonderful talking to you and learning about your entrepreneurial journey. Yellow Chapter wishes you the very best in the future.

Thank You!

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