<b>Tea with BS:</b> Ashish Goel

One block at a time

Ashish Goel apologises profusely for being late. We are meeting him at the The Leela Palace hotel on the old airport road in Bengaluru. Goel, who had been stuck in traffic for the last 20 minutes, says that the most frustrating bit was he was right opposite the hotel, but could not drive in.

The traffic mess at this junction is legendary. Over a decade ago, when the old airport in the city was still functional, former Karnataka chief minister S M Krishna had to direct traffic police to escort Wipro Chairman Azim Premji to the hotel, as he was getting late for a meeting. On another occasion, Premji got out of his car on the other side of the road and walked in. 

Since then, Bengaluru has got a bigger airport 40 kilometres north, but the traffic mess on the old airport road — as also across the city — has perhaps got worse. The population and the vehicles on roads have exploded. Indeed, over time, Bengaluru’s traffic has become a great conversation starter. Our guest starts off saying he preferred to take the route 335-E bus on this road as recently as six months ago. Now, that is impossible because of the sheer noise and slow movement of vehicles. 

There are days, he argues, when walking to his office — a little over three kilometres from his home — is more predictable than taking a car. We concur. Negotiating creaky footpaths is better than dealing with traffic roadblocks, and we order masala chai, sandwich and orange juice as we settle down at Citrus, the coffee shop at the hotel. Goel had a late lunch — he carries home-cooked food to office — so he wants only a juice.

Leela and a Starbucks coffee shop close by in Indira Nagar are two places where entrepreneurs meet with potential investors. Goel’s first pitch to Vani Kola, founder of Kalaari Capital, was made here at Leela, and she eventually invested in Urban Ladder, the online furniture company Goel co-founded with his friend Rajiv Srivatsa in 2012. 

Ratan Tata, who was scouting for investment opportunities, was introduced to Urban Ladder by Kola. Tata, who trained with iconic American architects and furniture designers Charles and Ray Eames, has designed a sofa for Urban Ladder, which will be sold online soon. 

Goel says Urban Ladder is the largest online furniture company in India. But it is still a minnow compared to Ikea, the Swedish furniture maker that is setting up stores across the country. Goel is gearing up to take on Ikea but is miffed with concessions granted by the government to the Swedish firm. “Why is Ikea being given more than the red carpet it deserves? A lot of norms have been relaxed. They do a good job of lobbying (with the government),” he says, pointing to the concessions Ikea got in terms of local sourcing. In the same breath, he admits that local companies have not come together and lobbied with the government for the same incentives given to foreign companies.

“Indian companies don’t do a good job of lobbying. We are conditioned to think that we do our job, the government will do its thing for us,” he says grudgingly.

It is not just Goel, several technology entrepreneurs, mostly in Bengaluru, have also raised their voices against the government for allegedly “favouring” multinationals — be it Uber, Amazon or Ikea — over local companies such as Flipkart, Urban Ladder and Ola. 

Goel says the government favours strategic foreign capital — where more than the red carpet is rolled out — over financial capital, where investors bet money on Indian entrepreneurs and local businesses. “Actually it should be ulta (opposite),” says Goel. “You (government) should support your own people. In effect, financial capital will support Indian businesses more than strategic capital.”

“If I were to make a comparison, even when US hedge fund Tiger (Global) comes and invests in Flipkart, Flipkart is and will continue to be an India business. Sure, it has foreign shareholders, but it is a local business. The fact remains that it is being built by Bengaluru-based guys against all odds,” says Goel, who has started selling his products on Amazon. 

Has he lost the battle against Ikea even before it began, we ask, referring to Urban Ladder’s decision to become a vendor on Amazon rather than being the standalone store that it was. 

Goel retorts that the company is expanding the frontier of retail, while retaining the product and service offered by the brand. The move will help it get new customers, who have not shopped on the platform before.

Goel, who counts Infosys co-founder Nandan Nilekani as a mentor, recalls asking Bengaluru’s most famous entrepreneur, “What do you think about competition?” Nilekani had replied, “Your biggest defence is if you have half a million or a million super satisfied, happy Urban Ladder fans and customers.” The firm has nearly a third of its customers coming back and shopping on its platform. That’s enough proof of growing customer loyalty.

Before starting Urban Ladder, Goel was the chief operating officer of Amar Chitra Katha Media, which publishes children’s comics and magazines that many Indians devoured in their younger days. The publishing house was sold to the Future Group by its investors and Goel — who was looking to buy furniture for his home at that time and couldn’t find anything that measured up to his yardstick of quality and price — spotted a business opportunity. He teamed up with Srivatsa, who had faced similar problems, and the two launched Urban Ladder. 

Goel describes himself as a voracious reader, who likes reading William Dalrymple and Bill Bryson. He keeps himself fit by playing squash and badminton and by taking off for treks. He hopes to go on an expedition to the Everest base camp next summer.

For now, his focus is on growing the business. The company designs its own furniture and gets them made in more than 55 factories across the country. Urban Ladder products are pricey, and Goel defends this by saying that customers pay for quality and reliability. He rues the fact that India’s e-commerce ecosystem has not got over the idea of deep discounts. He has also observed that some investors don’t follow financial prudence. “Sometimes I am a little surprised that many of these investors are not driving home the basic principles of financial prudence,” he says.

“I don’t know whether there is a race to the bottom, but I definitely think there is a lot of intellectual ground for e-ecommerce companies to cover on what it takes to build a really sustainable business,” he says. “Outsiders were asking this question earlier, I am hoping that people are asking it internally also. I don’t think there is enough reflection as an ecosystem. On our part, we are pushing hard to build a sustainable business.”

India’s e-commerce sector has witnessed a funds crunch for some time, forcing many firms to shut shop or change their business models. With India retaining its crown of the world’s fastest-growing large economy, money is slowly coming back to support start-ups that promise to break new ground.

“I think the money flow is back again,” says Goel. “When the dust starts to settle, how much money these investors will make will be a function of how many of these companies are run.”