2022 has been a crazy year for Sidharth Rao. Dentsu Creative Bengaluru, which he ran, won Cannes Lions Agency of the Year, but Sidharth quit to start something new. It’s all part of a long and exciting entrepreneurial journey that started when I was 20 years old.
July 2016: ‘Make us famous.’ This was the precise instruction Sidharth Rao had received from his new boss, Ashish Bhasin, who had just taken over as head of Dentsu Aegis in India. The international advertising network had acquired Webchutney Studio, the online agency co-founded by Sidharth (with Sudesh Samaria), in 2013.
Cut to July 2022: Dentsu Creative Bengaluru (formerly Dentsu Webchutney) has become the first Indian agency to win the Cannes Lions Agency of the Year award, arguably the highest accolade an agency can hope to win. This victory is the result of a campaign created by the team of Sidharth: The Unfiltered History Tour for Vice (a news site based in the United States). Created during the worst of Covid, it focused on items stolen from around the world and now residing in the British Museum.
Sidharth – ‘Sid’ to everyone – receives a message from Bhasin shortly after the victory. It’s as concise as the original directive: “You have complied with the record.”
Ironically, Sid had left Dentsu a month before this great triumph. Does he regret not having gone on the international scene?
“Oh, not at all! I can’t take credit for the Unfiltered History campaign other than greenlighting the project. Webchutney has won major awards for years but I’ve never been on stage,” he says. He had already decided to quit and it didn’t seem fair that he only stayed for Cannes and quit a few months later. It would make Dentsu look bad – and he owed the network a lot.
Pause. “Actually, I don’t even see myself as an adman. I consider myself an Internet entrepreneur.
It’s been a wild ride for this college dropout, the son of an Army major general, over the past 23 years. “I almost gave up several times along the way,” he admits.
His story is very funny in the way he tells it. It involves minimizing hard work while simultaneously pointing out one’s own mistakes. It’s just Sid’s style. Maybe it’s because he suffers from “impostor syndrome”, which he admits? This condition is defined as “a feeling of inadequacy despite clear signs of success”.
After school, Sid got permission from his parents to take a year off while he explored the possibilities. He joined DDB Mudra at 19, then moved briefly to Gray where he was fired. I met him around the year 2000 when we launched agencyfaqs! (now faqs!) and he was setting up Gutterspace, a site in the same space. Sounded cool – “better than agencyfaqs!” he makes fun of me nicely – and it got him assignments to build websites for businesses. This is how Webchutney was born.
Cash-strapped, he raised Rs 11 lakh when he was 20 years old. He doesn’t care how much money now, but I find it remarkable that someone so young could raise any money in India at that time. The entire country had less than half a million Internet connections.
The internet was still a baby, and Webchutney was just one of a handful of creative agencies. He had won his first Golden Abby for a MakeMyTrip campaign that went viral before “viral” was even a thing. But finding the money to grow was a constant headache.
When in 2005 he decided that Webchutney should be part of an ad network, there were many suitors – “hamare swayamvar main sab aaye”, he recalls with satisfaction. Although there was no big problem, he recruited an individual investor for Rs 60 lakh.
This fixed the immediate money issues, but that particular dark cloud continued to hover: he didn’t have enough money to expand. “And that’s where I dug a nice deep hole for myself,” Sid reveals.
The hole was dug when Webchutney, a creative agency, ventured into buying media for MakeMyTrip in 2007. She bought media worth Rs 1.5 crore per month for which she was paid upfront, but managed to secure a 120-day line of credit from Google for advertising. . This gave the agency strong positive short-term cash flow that it could use to grow.
But Sid, only 28, didn’t have much financial discipline. When MakeMyTrip decided to move the media buy to one of the ad networks and therefore cancel the arrangement with Webchutney, the agency didn’t have the money to settle the score. Sid had 21 days to find the money. Or close shop.
In a dramatic move, Sid vowed to his despondent team that “I’ll find the money – and until that happens I won’t change my shirt”. That’s how he wore the same shirt for 21 days straight — “even though I washed it every night,” he clarifies hastily when I wrinkle my nose.
He worked the phone tirelessly like a man with days to live. Sid is grateful to Rediff’s Ajit Balakrishnan for quickly coming up with an investment. Looking for a better option, he called Haresh Chawla, then Group CEO at Viacom18. Time was running out and the two quickly signed a deal: Capital18, the group’s investment arm, would invest Rs 8 crore for a majority stake.
Webchutney Studio had survived.
Sid can’t help but praise Haresh whom he now describes as a close friend and mentor as well as Sarbvir Singh, then boss of Capital18. “They were like new-age parents. They trusted me and allowed me to fly. This is how my self-confidence as an entrepreneur and angel investor grew. (Sid has made about 20 angel investments so far.)
It was an informal relationship, based on trust. And when things went wrong, it got Sid a bang on the knuckles, most often at Toto’s Garage, a pub in Bandra.
Overall it seems to have worked. When Capital18 left Webchutney in 2013, it had earned 3x on its investment, according to an official statement at the time. According to Sid, this does not include the 12x return Webchutney got on a Rs 2.5 crore investment he made in Network Play, an ad network that was later acquired by German media giant Bertelsmann. .
Webchutney Studios’ new partner was Dentsu which was then managed by Rohit Ohri. How has the change of ownership changed his life?
The answer is not what I expected.
“Dentsu has hired a CFO, Benny Augustine. To be honest, I was suspicious at first. But over time, I realized that instilling financial discipline in a freak like me was a game-changer. Profitability has started to increase year by year: last year, Dentsu Webchutney/DentsuMB had reached a turnover of almost Rs.80 crore with an EBIDTA of around Rs.32 crore: things cannot not get much better than a 40% margin.
His approach to running the business has also changed. “For the first 14 years, I worked hard. But gradually, I started to embrace the concept of ‘lazy entrepreneurship’, which is hiring the best people possible and out of the way. I saw myself as the primary human resources person at Webchutney.”
And on his angel investments. Many of them were ahead of their time. A few examples: Crude Area, an online platform for selling graphic art; Bombay Bitch, inspired by the American gossip site Gawker; JuxtConsult, an online market research company that wanted to be the ComScore for India. The old adage that “timing is everything” is not wrong.
“The thing I learned about investing is this: only bet money if you know the founders really well. Or, stick with the big guys and invest where they do,” Sid thinks. While most investments fell, his big hits were Pepper Content and ScoopWhoop, each of which he says earned him a 20x return.
He’s also extremely bullish on two other companies he’s invested in – Invideo, an online video editing platform, and Lio, an app that helps small and medium-sized businesses organize their information. “You’re going to hear a lot about them both,” he promises.
What attracts him to angel investing? Is it the money? Or what? “It’s the excitement of creating something new. Frankly, I also feel privileged to work with such talented entrepreneurs.
Sid is already creating what he thinks will be his next big thing. Because, as I realized, he can never resist a punt. So it’s no surprise that his new venture is called Punt Partners, which he co-founded with Bengaluru-based serial entrepreneur Madhu Sudhan.
The duo’s basic premise for Punt is that advertising agencies have, over the past century, helped businesses acquire customers through the use of advertising. In contrast, marketers don’t have an ad agency equivalent to help them build customer loyalty in an age of choice rotation. All marketers have at their disposal is an assortment of tech companies offering a bewildering variety of retention tools. If Punt could succeed, it would be the leading customer loyalty agency for marketers.
It’s an interesting company that I expect to hear a lot about in the years to come.
#mad #dash #dropout #turned #internet #entrepreneur