M Shankar Prasad had a life-changing experience four years ago when he was the president for broadband and retail at Tata Communications. He lost a close friend due to heart attack at the age of 40. It was then that Prasad decided to quit his 25-year corporate life and work on ideas that would help professionals focus on their health needs amid hectic schedules and unhealthy eating habits.
While he was still in the process of finalising an idea, Prasad spent a few years working with startups to gain insights into setting up one’s own business and making it work efficiently. The former senior leader of Motorola and Airtel, worked at RedBus as its chief operating officer for close to a year. He also served as the chief executive officer of city-based startup Medybiz Pharma, before setting up Snaxsmart, a startup that provides health-food vending machines, in 2013.
Snaxsmart has received a roaring acceptance from corporates in Bengaluru. The company’s clients now include General Electric (GE), Myntra, OnMobile, Manhattan Associates, Juniper and ITC.
“Typically we find various reasons for not working out and on top of that we don't watch what we eat. Junk food access is very simple, but the same is not true for healthy food,” says Prasad. “That's when I came up with the idea of a vending machine that would make healthy food accessible to employees in an easier way. I met a few corporates and everyone that I met said they want this. October 2013 is when I put my first machine.”
Snaxsmart now has around 25 machines across offices and hospitals in Bengaluru, and Prasad has a slew of orders in the pipeline, including from e-commerce major Flipkart. As against a majority of food vending machines, that offer wafers and colas, Snaxsmart vends products like muesli, cornflakes, cookies, popcorn, dark chocolates, juices, dry fruits, and puffed rice, among other things. Just like in other vending machines, these are packaged foods of different brands, including some local Bengaluru brands.
Prasad started out all by himself with just one employee, who was an office boy in one of Prasad’s earlier offices. For months, the two-member team of Snaxsmart started at 4 am each day to travel across the city and replenish stock and currency at each vending machine.
“If I had started my company right after my corporate experience, I would have spent money on setting up a swanky office and recruiting lots of people, and within six months we would have been out of business,” says Prasad. “But working with startups made me realise that I need to keep the overheads low because no one's going to visit my office. I realised that I need to first make sure that the concept is accepted and it makes money.”
Snaxsmart now has five employees, other than Prasad. The founder believes he needs to recruit one personnel per 15 machines that the company installs. “I don’t do refilling any more, but I go to check the machines. I focus on sales now,” Prasad says.
Another lesson that Prasad says he learnt during his startup experience was to not be in the mad rush for raising funds. Instead of reaching out to venture capitalists, Prasad has taken a bank loan to support Snaxsmart’s near-term growth.
“One of the things I learnt from my experience at RedBus was not to dilute equity too soon,” says Prasad. “So I will raise money, but not now because the valuation I will get now is far smaller than when I have a 100 or a 200 machines on the ground. That is why I want to bootstrap for some time even though several people have talked to me and they are keen to invest.”
As per sources, the founding team of RedBus had sold as much as 30% of their stake to raise just Rs 1 crore during their early days. Years later, in 2013, RedBus was sold to the ibiboGroup for a whopping Rs 800 crore. However, it is said that the founding team did not benefit much from the acquisition of the company since they did not have much equity left in their hands after several funding rounds.
While Prasad is currently focused on expanding Snaxsmart’s network in Bengaluru itself, several of his existing clients have asked for getting the vending machines at their offices in other cities. Prasad plans to have about 100 machines in Bengaluru over the next few months, and then expand to other cities. While the long term plan is to have presence in the top 10 cities of India, Prasad is targeting to take Snaxsmart to at least three cities with around 200 machines by the end of 2015.
“I have never worked so many hours ever, but I love every minute of it. The results are there to see, so I am more than happy. I have never been more at so peace with myself than now. My only regret is that I didn't start any time earlier,” concludes Prasad.
