A filmy college encounter between two individuals paves the way to the most zealous adventures as they dive deep into the world to find the perfect “software product “. Our host Sarthak Varshney indulges in deep conversation with the co-founder of ZocoNut – Paras Garg. ZocoNut made its marks in 2017 and since then there was no looking back. It serves as a driving force for the Health & Nutrition / Fitness industries. In this conversation with Paras, he shares the business mindset that sets him apart from the lot.
WHAT IS THE BUSINESS THAT YOU’RE DOING BECAUSE OF WHICH WE ARE GOING TO SAY THAT YOU HAVE BALLS OF STEEL?
I run a company called ZocoNut. It is a vertical B2B Saas company which means we help dietitians, health coaches, nutritionists who either want to start their online businesses or who want to scale their existing online businesses digitally.
We help them from end to end. We digitize them by giving them all the right tools, equipment, by way of mobile application software. Everything from their clerical to reputed task in order to make them more efficient. We’ve been doing this for the past 3 years. We have very good clientele and excellent case studies where we have helped them attain 4 times within a span of 2 years or less.
TAKING THE CONVERSATION AHEAD PARAS HOW DID YOUR JOURNEY BEGIN?
It was an interesting journey. We’ve been through 2 pivots. We started our journey in 2015. I have a fantastic friend and mentor whose name is Maanya and we know each other since the first day of college. Our encounter was pretty filmy. I actually had transferred from a different college where I initially joined. And I saw a lot of entrepreneurial activities there.
From a very young age, I’ve always sought to become an entrepreneur. Even in college, my aim was not to get selected through campus recruitments but to start a business. So on day 1 when I met Maanya, we decided to do a lot of things. We started our college society and we trained ourselves in some skils that would help in our future business careers.
So initially the idea was very different.
This was back in 2013-14. According to us; the one thing that is not sold online at that time were medicines. So we decided to build an e-commerce platform for medicine and this is what we wanted to do. And so we started learning and developing Android development.
We started our college society in which at one point we were teaching 200 students Android development. I started leveraging my father’s business which was around home and kitchen appliances at that time. So I leveraged his business and created cellar accounts on Amazon, Flipkart and different sites. The idea was to learn, to gain knowledge on how e-commerce operates; both frontend and backend.
We spend more than 2 years researching, learning skills and acquiring knowledge on how to start a business. In 2015 when we actually started developing the product, the application, we gathered a team. I think 6 months into the development many med chemical companies popped in online.
The original idea that we had to execute was already in execution in the market. These were deep-pocketed competitors who were offering a 20%-25% discount and that one would receive their delivery in 2-3 days. But our USP is that we are a hyper-local network. We will tell you where your medicine is available within 2 hours of your query. So we got a pilot, which was a very successful one. But we were not making any money from this.
Whatever discount we availed from the buyers, we provide the same raw discounted price to the customers. It went on to be viral and we got a lot of orders from all over Delhi, even in places that we are servicing. We did put a notice or notifications in the app where we would mention the places where we couldn’t provide service.
The mobile applications back then didn’t have many backend options and we received a lot of 1 star or 2-star reviews for those whom we couldn’t provide service due to our reach. But we received 5 stars from those who availed our service. Long story short we did this for nearly 18-21 months, mainly because we didn’t generate any funds and we had to figure out ways to scale monetarily. We thought about ways on how to scale Medcions, which was the name of our company and is still the registered name.
So we thought of building software. We used to meet and tie-up with a lot of pharmacy stores for the product. So we thought of looking into what type of software they were using to manage their inventory and how they go about their sales. They used a couple of software which looked deadly, to say the least. Those were borderline scary. They were very difficult to use and a vendor would have to undergo a course in order to learn how to use this software. We were like okay, there has to be a simple way of building this software.
Manya’s father had a pharmaceutical background, he was a distributor of medicines. We had a lot of knowledge of how the industry works. Even my side of the family also had people who majorly belonged to the medical sector. I have more than 15 doctors in my family. The interest was common and our common goal was to indulge in health care.
So the idea of building software was on. We did not pivot Medicions, it was still ongoing. But we started building software which we named ‘Pharmbooks’ which then gradually became a pivot. We gradually started selling this software all over Delhi to a lot of pharmacy stores. This software had been cheaper, it had necessary features and none of that additional jazz to it. But it did the job right. We managed to close a lot of pharmacies selling the other software.
But our value advisors told us to focus on something that was making you money. They told us not to burn ourselves in building a company where there were competitors and upcoming competitors. So we decided to focus on our Pharmbooks. This was 2017, which was also the year that we were graduating. Thus the pressure of doing something, paying back our team members, all was at stake. So in that effort, we were selling heavily; at least we were trying.
So in that effort, we came across our competitor who had been in the business of software making for nearly 17 years in this market. So in the market, we have two types of customers. The one used software and the one who didn’t use any software. The ones who had software were pretty happy with their existing software and they didn’t want to acquaint to anything new. Our effort went to vain, we lost a lot of deals than we closed.
We tried out best but that wasn’t enough. It was not like we were burnt out but we thought that this is going to take a lot of time to scale and establish itself. In this process, a lot of team members were lost. There were people who were working with us since the 2nd year and 3rd year of college, but they had pressures from their family. They got other excellent offers from reputed companies. They all quit their jobs. And soon there were only three members; me, Manya and our co-founder, Balkeerat . There were a lot of ups and downs.
In that pressure, is where ZocoNut story starts. We were trying to figure out how we are going to solve the money matters in Pharmbooks. So I tried reaching out to distributors who could help resell our software.
In this period I get a call from one of my relatives who is a Dietician. She is my sister-in-law by relation. She called me up asked me if I could help her built software. But instantly recertified her by telling her that I don’t offer services like this, even though I was an engineer. But I did give her a reference; which were 2 of my juniors who were trying to build a services company. So thus I pawned off her case to them and they started building what became the first version of ZocoNut .
The juniors who were building this had a company called ‘ Graphfia Store’ at that time. They did a very shabby job, very informal kind of a deal, no paper book, no MOU. My sister-in-law called me up and asked me ” who the hell have you given this job to? I haven’t received the product in 8 months “. So I had to intervene. I intervened in the product, in the project. I told my brother and sister-in-law to just pay these juniors off and I assured the rest of the project/ product would be completed by me and my team.
This is when we started to see what these guys were building for which she requires custom software. I, coming from a health care background and Manya being from a pharmacy background, we were never introduced to the preventive healthcare space. We were in the mainstream health care space. This is how I was introduced to preventive health care. When we were looking deeper into it we immediately understood that it’s going to be a huge opportunity.
We also realised that when someone is calling you to build software as a product for them; it should be understood that there is no such software in the market which they could buy and install. So we had our concept in hand and we were stretched to our limits and we’ve got to make money in the second pivot. We decide to do it right by using the top-down approach, where we approach one of the best names in the industry. Chances are low but we’ll try our best. We thought, if we could deal with one of the best names and we make a product out of it then we’ll go ahead with different hustle service just to make enough money to survive.
We were trying to scale money for Pharmbooks but parallelly we got a couple of offers which we declined. It’s not that we were really struggling. It’s just that we were not making money. The business was there but as founders, we were not paying anything to ourselves.
So we started this and reached out to 10 biggest names in the country. We did receive a reply from 4 of them and we managed to strike a deal with one of them. So this was a very competitive deal and a big deal for both of us. We made a very healthy amount of money which would have covered our company for an entire year. So, we shamelessly asked for a ridiculous amount of money, thinking what is the worst that is going to happen. But to our utter surprise, we were not asking enough. It happens because when you are building your own company when you’ve not seen more than a few thousand maybe even a couple of lakhs. What is the highest that you are going to see?
We know that we were a group of a few people. But the idea was that if we get a deal we would hire more people. So we portrayed ourselves as a very big company and it was deliberate. Our advisor my Mr Ashish T. had given us a fantastic outlet. We understood that verticality is what that sells. If I know that you have a speciality in that sense, then I would trust you more. Suppose if you have a heart problem you would go to a cardiologist and not a general physician Similarly, our pitch was that if you go to an XYZ company, they do many things but in my company, we only do diet and nutrition.
Remember this is happening that we are doing this when we have no business whatsoever. We leveraged the name Medicions. It turns that our quotation that we had given was only 35% of the rate that the other 6 companies had quoted. Even if our quote was double the price we would have still closed the deal. We discovered this only after 18 months after we closed the deal. That deal shaped the entire journey in going forward, it became our licence.
We managed to close a lot of deals with their name. We did this for almost 2 years from 2017-2019. Also, we were doing custom projects for these big names because you cannot build a standard project immediately. So we had to learn a lot by diving deep into the industry. We had to acquaint to everything about our clients because you’re building a solution for them.
At this point, we were an expensive solution. To work with us would be 5-6 lakhs. After every single deal, we had more things to show to the next client. They would know that we won’t have to do anything from scratch. We would try to portray ourselves as a product company. But that wasn’t the reality because we didn’t have a standardized frontend or backend. Since the value proposition was very strong and there was no one else that they could go to. A lot of companies had already burnt their hands in entrusting these work to other companies who did not understand their problems.
It was all downhill from there, where we extracted a smaller version of the product; cheaper version like a subscription model. We started selling this to smaller dietitians in the last 10-11 months. Now there are more than 500 dietitians who are using our product every single day. During this lockdown, we launched very interesting features that were in the pipeline for next year because everything was work from home.
We joined a community called Upika which is kind of like a B2B saas of India. Where noticeable companies of India come together and we get one on one mentoring, which was actually to scale the business globally. Now because of India, we decided to focus on India for a year or so.
HOW HAS YOUR CHILDHOOD ENTREPRENEURIAL MINDSET SHAPED YOU IN THE CURRENT SCENARIO?
My influence has definitely been my father. In my generation, everyone else except me is a doctor while I’m an engineer. And if you see my father’s generation everyone one was into business. My father would also include me in his day to day business activities. My father also had a number of businesses like construction work, a rolling mill in J and K where it was a large factory of salts. I’ve seen all of this in action. When I was in 9th or 10th standard I used to literally manage construction sites where labourers are working and I’m actually handling the accounts there. So I’ve always been actively involved in these things because of my father.
But on my own the first thing that I did was in 10th or 11th standard, I used to go to this place called Tonk Road in Delhi, where you would get these duplicate shirts brands. They would print the name of brands on local shirts; like a first copy. I found this because I noticed that the market next to my house sold these same shirts. The actual price of these shirts were ₹300 but was sold in the market for ₹3000-5000. I was completely shocked by how they are selling this at such a cost.
So my dad decided to buy 100 shirts from one of those vendors for the factory workers for which he took my father to the place he acquired this from. After this deal had closed I went back to the market on my own to that market and I discovered that the shirt only cost ₹120 whereas my father bought it for ₹350. So I started gathering orders from street vendors and I used to acquire them from Tonk Road and used to resell them to these sellers. So I did not do retail.
Even at that time, B2B attracted me, where I bought the product (s) from one and sold product (s) to another in quantities not less than 50. So that was the first meaningful entrepreneurial thing that I did. No doubt I did make quite a handful amount of money as well.
Then in college, another motivation for me was that I made sellar accounts on Amazon and Flipkart. There were 2 reasons behind it. The first reason being that I wanted to see how an e-commerce industry operates and how it would help my own business. The second reason was that my parents’ 25th wedding anniversary and I wanted to do something with my own money for them. I wanted to throw a good celebration. I did that and I sold nearly about ₹ 80lakh worth of product in that year. That was huge and all credit goes to Flipkart. I was also doing a lot of freelance projects parallelly.
THROUGH THIS CONVERSATION PARAS PLEASE TELL WHAT WAS YOUR MINDSET WHEN YOU STARTED MEDICIONS IN 2015?
It was shocking but never a disappointment. We knew better than that. If you see, competition is a validation of the industry, validation of the market, that yes, an opportunity does exist. If anything, our resolution or our thinking became stronger. We now have a stronger USP. If they are delivering medicines within 2-3 days. But we are delivering those medicines in about a few hours after their order, so that was our USP.
If, suppose certain companies are spending money on advertisement people are getting awareness, that you can buy medicines online. People are learning that you can buy medicines online without that the burden or the task of educating, the consumers would have been on our shoulders.
Everyone knew now that they can order medicines online. And when people do their research my company pops in because there were only 4-5 companies indulged in this business. The deep-pocketed competitors were offering a 20%-25% discount and that one would receive their delivery in 2-3 days. It went on to be viral and we got a lot of orders from all over Delhi, even in places that we are servicing. But we were unable to expand our services due to lack of money.
HOW DOES FAMILY HELP IN CREATING A BUSINESS MINDSET AND GOING ABOUT WITH A BUSINESS?
I feel everyone is a product of their experiences, upbringing and every moment that they have witnessed in their lives. Fortunately for us, I met someone who tangentially belonged to the same background. But yes when you start your business you try to count your chickens and try to find out your advantages or disadvantages.
Family backgrounds played an important role because we understood the industry better, we decided to start our connections there. For anyone, I would say that a family’s support, background and existence matter a lot especially if someone is a first-time entrepreneur. Especially when you start at a young age where you have no experience nor any job; your family plays a vital role as a support system.
WHAT WAS THE MINDSET WHILE SETTING UP YOUR PRODUCT- ZOCONUT AS YOUR FINAL PIVOT?
There are different kinds of pivots. Let’s say if I’m into preventive diet and preventive nutrition industry, say hypothetically if we decide to pivot from B2B to B2C. Then that is very critical pivot business-wise where I’m still in the same business. Whereas in our previous 2 pivots we have entirely changed our businesses in completely different industries. Those pivots are completely different as to when I’m pivoting in the same business; where I’m pivoting my target audience, pivoting my model in the same industry.
So at that point, the struggle or mindset was just to make money. Our ability to continue in the entrepreneurial path was on the line. Even though our parents were very supportive. We continued on our entrepreneurial journey for a year without making any money. We only started to make money at the end of 2017. So for the first 3 years of our entrepreneurial journey, we managed to meet a lot of people, enhance our networking for ourselves but we weren’t making money. The mindset was to only do something which will make us money and something that we could continue to do for a long time. The mindset was clear since day 1 ie we didn’t want to do jobs (this could be done at any time) and the second thing was that we didn’t want to build a services software we wanted to build a product.
As a team, we always decided that we would go deep into matters. We wouldn’t go horizontal, we won’t keep doing one thing over and over again. We’ll select our niche, we’ll select our industry and we’ll select our product and we’ll take a deep dive into it. So this thought was critical clear from the very start of our business journey. I would also like to say that in our case, none of the pivots was abrupt. All the pivots were gradual. The difference between Pharmbooks and ZocoNut is that we were selling Pharmbooks at a ticket size of ₹12,000 per annum but for ZocoNut it was ₹10,000- 15,000 a month.
So ZocoNut and the diet and nutrition industry very clearly is a heavily underserved industry. India is not even the biggest market for the product that we are building and we are curious to build a global market around it; something that we wanted to do since day one of college.
CAN YOU PLEASE SHARE IN THIS CONVERSATION THAT HOW DID YOU MANAGE TO KEEP YOUR TEAMMATES TOGETHER, PARAS?
As an entrepreneur, you need to be good at storytelling. You need to keep your teammates motivated. I’m smiling when I’m saying this because I vividly remember telling my teammates that ” we are going to make money soon “. I used to watch and read all sorts of videos and books wherein I would grasp those motivational quotes and in turn, compounded them on my teammates as a way of encouraging them. I being a ” product person” would stand in front of a whiteboard and visually showcase how much we could earn if we sell these many products (s) to these many vendors.
To be very honest, I wasn’t bluffing. I genuinely meant what I said. I still maintain a good rapport with all my teammates, even those who had left for better opportunities. When we found out that my teammates had family pressures, Manya and I had really good connections. And so through our networks, we managed to place our teammates in the top companies with good perks. We even helped one of our CMO’s start his own company, which is still doing great. Our teammates are still grateful towards us.
Even today, we have 16 employees at ZocoNut to whom we pay more than the industry standard. Even if they come up and tell us that they want to do something of there own, we try to help them. We value their contribution as a person and try to help them out in the best possible manner to keep them within the community. We share an aura of openness, something that many companies don’t have.
ONE OF THE MOST INTERESTING PARTS OF THE CONVERSATION IS ASKING THAT ARE YOU A MONEY MINDED PERSON PARAS?
Yes of course! I am a money-minded person. You have to be. See if I break the term down for you, ‘Money’ is a tool /a resource which helps us grow. Being ‘money-minded’ is a necessity and that is why you have co-founders. I have 2 fantastic co-founders on my team. Manya and I built the company and we added another co-founder. His name is Balkeerat. So all of us know what our job in the company. If you ask Manya and Balkeerat if they are money-minded, their answer is ‘no’ because we’ve assigned roles to each other. It is my role/duty to be money-minded. Money is a derivation of value. A general aspect is that “it is not money that you want, it is the things that money can get”
So money is not more than a resource. I guess a lot of people make a wrong turn here as they decide everything for money. I can make a lot of money by saying ‘yes’ to a lot of project/product proposals that come our way. These are short term money and we say ‘no’ to it because we look into the larger or longer vision. In this sense, we are not money-minded at all. We do not say yes to everything that involves money which comes in our way. There is of course a vision and all of them should align well together. We have trained ourselves not to think in terms of money but in terms of ‘value’.
MOVING TOWARDS THE END OF THE CONVERSATION PARAS, ARE THERE ANY BUSINESS TIPS OR MANTRA THAT YOU WOULD LIKE TO SHARE?
If someone wants to start their business, just do it. Don’t wait for the right time. The soon you start the better it is. It is because of the ‘opportunity cost’. As for me, I wanted to start a business during my college days because I didn’t want a job. I understood that something called opportunity cost is very low in a student. It is low at a young age.
As you incur expenses and attain more responsibilities and you have to handle a lot of stuff, then your opportunity cost keeps on getting higher. What I mean by this is that during my college days no one expected me to earn anything. You aren’t expected to earn money.
If you do that’s great, but the normal sequence in that you are expected to complete your graduation, post-graduation, settle in a job and then earn money, I did my business in college and I failed. What did I have to lose? If from that experience it would only help me get a better job. Your opportunity cost is the least Today.
Another thing is that don’t glamourise investment. Don’t think about raising investments. I was a victim of that. I used to think that the only way to grow my business is through outside investment. You should have a business in the first place and you should know how to sustain your business for the next 10 years without any investment. Investment is just a tool for you to grow your business better. It’s not your their job to help you build their business.
Also, start your business for the right reasons. If you are doubtful then don’t do it. You should know what you are signing up for. So the mantra is to make a decision, take a stand, do your preparation. Manya and I had done 2 years of homework. We tried to attain all possible skills, we started college society so that we could hire the right talent. And we decided that I will do online business of supplying the product (s) so that we know how e-commerce works.
‘Your motivations, your mind and heart should align with the value for your clients, your team members and yourself and everything else will follow ‘are the closing words of Paras Garg. With this, we wrap up yet another insightful episode of The BOSS. In this conversation, Paras told us that he and his team are one of many who are ready to take their business to the next level with their intensive level of persistence. From all of us at BOSS we wish you and ZocoNut, great luck in the journey ahead.