Amrit Acharya On Building A $100 Million Business In 24 Months Out Of India

Amrit Acharya is the cofounder and CEO of Zetwerk which is an online marketplace that connects buyers and suppliers for manufacturing jobs. The company has raised over $60 million from top tier investors such as Accel, Lightspeed Venture Partners, Sequoia Capital India, InnoVen Capital, and Kae Capital to name a few.

In this episode you will learn:

• Armit’s top advice for others considering entrepreneurship
• Mindset
• Intentionally creating and designing your own future
• Dealing with immigration issues

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About Amrit Acharya:

Amrit Acharya is the cofounder and CEO of Zetwerk, a software start-up in Bangalore. He received an M.B.A. from the University of California, Berkeley.

Zetwerk provides global end-to-end manufacturing supply chain solutions. The company works with Original Equipment Manufacturers (OEMs) worldwide fulfilling their manufacturing requirements for customized components and assemblies.

Zetwerk executes these projects through its network of partner suppliers with world-class plants enabling Zetwerk to provide practically unlimited production processes, capacities, materials, part sizes and weights as well as secondary operations, surface finishing, assembly and related services.

Zetwerk is the supplier of record with complete responsibility for high-quality production, on-time delivery and project management without owning manufacturing facilities.

Zetwerk’s strong growth and success in supplying high-quality components worldwide is driven by our ability to reduce companies’ production and tooling costs and shorten their time-to-market.

Connect with Amrit Acharya:

• Linkedin
• Crunchbase
• Twitter
• Facebook

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a very exciting founder. A founder that came from India to the U.S., and then went back to India and is now doing something incredibly remarkable from zero to 100 million in revenue in just two years. I mean, mind-blowing. We’re going to be learning a lot from him. So without further ado, Amrit Acharya, welcome to the show.

Amrit Acharya: Thanks, Alejandro. Thank you for having me.

Alejandro: So originally born in a small town in India. How was life growing up, Amrit?

Amrit Acharya: Yes, I grew up in a small town in India called [1:59]. It’s not that well-known. It’s fairly conservative as a place. In fact, even when I look back, some of the things that were normal for me back then are not really normal. Like boys and girls didn’t speak with each other. I remember growing up not having access to music or the latest trends, which today we take for granted, even things as simple as Lay’s Potato Chips. It was not available where I was growing up. But I always felt that even though I grew up there, I never felt that this is where I’ll spend the rest of my life. At some point, I will move on, which is what I did when I went for my undergrad. I went to this place called [2:57] in China. It’s in the southern part of it. The decision point for me at that time was to go as far away from my hometown as possible. So, I picked the college which accepted me. I also felt like I needed to grow up again from scratch.

Alejandro: Tell us about any influence, perhaps, that your family had in you on having that drive and that ambition. How did you all of a sudden have that drive?

Amrit Acharya: I actually developed a lot of that from my father. Today, he is a professor, but he started off as a career man in the insurance industry at the age of 14. When I got into undergrad was when he decided he wanted to reinvent himself completely. So he quit his job one night and decided to pursue a Ph.D. in international studies from Singapore. He did that, and luckily, we were doing okay financially, but there was a point in time – my mother also works, but at that point in time, we ended up in the [4:16] family. But I always looked up to him that he had a crazy amount of boldness to take that decision to completely reinvent himself. Today, he’s at the top of his academics in his field, and he’s achieved a lot of success, but he started 20 years later than most people would have and people he considers his peers. I think that was very inspirational for me because it taught me two things. One is, we don’t need to pursue traditional careers. We can choose to do what makes sense with us, and the earlier we can figure that out, the better it is for our overall life outcomes. Which is why I’ve had a fairly traditional career before Zetwerk, but it was always at the back of my mind that this is not permanent, that though I worked at McKinsey, I never really saw myself becoming a partner, and I really wanted to do something of my own.

Alejandro: It’s interesting because there in India, there’s a lot of pressure around education. I guess that’s why you end up having so many people going and becoming engineers. In this case, you also became an engineer, and not only the pressure of society, but then your father was already, as well, in academia. So I’m sure that gave you a push toward studying electrical engineering.

Amrit Acharya: It was a combination of both. My parents did prioritize education over other things, but luckily, they were slightly hands-off parents. It had both pros and cons, so I had to figure out life on my own to a large extent, but it definitely gave me the freedom to explore things. Yeah, I studied electrical engineering, which is a clique in India, but I also played sports a lot growing up. I represented the state where I grew up in national-level cricket. I was able to do all of the extra-curricular activities, and largely, I had a free hand in terms of deciding what I wanted to do. I even got into business school, post graduating from undergrad, but I realized I didn’t want to pursue it at that point in time, and my family largely supported, which is not something you would expect from a traditional Indian parent. They would really push you to study as much as possible and figure out all those things later. That being said, when I started my entrepreneurial journey, that part was challenging with my parents. They didn’t completely understand why I quit my job at McKinsey, which was, by all means, a great job and started something which had a very uncertain outcome. But apart from that, I’ve been lucky to have very supportive parents.

Alejandro: Then, fast-forward a little bit. After you graduated, then you went to work for ITC, and there you ended up reporting directly to the Chief Executive. I’m sure that, for you, it was a mind-blowing opportunity and full of lessons learned on how you were able to do things at the top. So tell us about this.

Amrit Acharya: I graduated and joined ITC, as you mentioned. It’s a large consumer-based company in India. It’s like the [7:59] of India. I was thrown into the deep end almost immediately, which today, in hindsight, I feel it was a very entrepreneurial experience. My first job there with ITC was to build a new factory for ITC. I was just this 21-year-old kid that had graduated from college. I was part of a five-member team, and we were overseeing almost 500 people who were building the factory. I was the youngest person on the team. Literally, everyone else was in their 30s, 40s. Some people were in their 50s, and some of them were directly reporting to me. None of this was experienced at college. We had to grow up very quickly in that environment. Luckily, I did well. The first two years, I remember, because you’re always behind that line when you’re building a new factory, and we were hiring people. We were developing software for the factory. Everything was focused toward one kind of work. I remember I was working seven days a week for two years, pretty much. It’s 14 to 16-hour days. So I was literally just going home to sleep. I think that stood out for the Chief Executive, which is why I got that opportunity after two years to report directly to him as his assistant. I didn’t have a fancy title back then, but I think the title is called Chief of Staff today. I was busy handling that role. Whatever was his strategic priority, I was helping to execute on that, which involved getting out new products that we want to launch, new markets we want to enter, and driving some strategic investments that were important for the company. It was an amazing road because I got to see this individual perform at the highest level, and I was basically getting paid to do that. This person’s name is Sanjiv Rangrass. He’s been an amazing mentor to me. He’s an angel investor in our company, as well, and he’s a person who I’ve stayed in touch with over the years. In every major decision, he’s largely been somebody I can just call, and pick up, and just talk to him. It was a large company. That certain division was doing a billion dollars in revenue every year. I will say that was also very important, helping understand how large companies work and thinking scale from a very early age.

Alejandro: Got it. After this, you decide to pack up the bags. You come here to the U.S. You study in Berkeley, and I’m sure that gave you the exposure to the whole hyper-growth venture world. What was that experience for you like?

Amrit Acharya: The decision to leave my job was a combination of multiple things. One is after four years of graduating that I had pretty much spent my young adult life in really small towns in India. First of all, I grew up in a very small town. I was building this small factory, again in a small town in India. Even when I was reporting to the Chief Executive, it happened to be in a small town. As all my friends at that time were living in Bombay, they were living in the large cities in India. I felt that I needed to see the world a little bit, which is why I decided to go back to business school. Then I landed in Berkeley, which I didn’t realize was also a small town. But I again felt like I grew up quickly in a short span of time in the three years that I spend in the Bay Area. Just the entrepreneurial energy that is there I would say is unparalleled to anything that I had ever seen. Even though I was in the business school at Berkeley, I spent almost 50% of my time hanging out with engineers and Ph.D. students because Berkeley allowed you to do that. San Francisco was like 45 minutes away. Being a student, one thing I did was it was very easy to cold-email people and have coffee with them. I leveraged that a lot. I had a lot of success, almost 90% of my cold-email experience. I would say, “I’m a new student from Berkeley. I don’t know anything. Can I talk to you for 30 minutes?” The beauty of the bait is, most people said, “Yes. Here’s my calendar. Find a slot that works.” Just doing that over a period of time, I think helped me get a massive amount of exposure. Being my second year at business school, also, I was fortunate to get this opportunity to join a venture capital fund as their campus scout, which was Foundation Capital. I met Reed Hastings. He hosted [13:26]. We met Paul Holland; he hosted us for dinner at his house. He shared his story about how he was involved in the investments at [13:42] and later NetFlix. You can’t not get inspired when you are a part of these conversations on a day-to-day basis. So I’m very fortunate that I spent three years there.

Alejandro: At that point, you really were able to see that it was possible, but one thing that it was possible to build something and scale something into something that could be a meaningful success. One thing that stands out is typically people who come to the U.S. and do a Master’s Degree and take a look around and see the venture world, see the space, see that ecosystem, they get influenced and inspired by it. They stay here, and then they launch their business here. In your case, you decide to pack up the bags and go back to India. Why did you do that? What happened?

Amrit Acharya: It’s a very interesting story. I would say after spending a couple of years in the Bay Area, the conviction to start a company at some point in my life was getting stronger and stronger. What happened was, as an immigrant to the U.S., there were certain logistical challenges with starting a company in the U.S., which was primarily around immigration. The U.S. Immigration system is largely set up for people who want jobs versus people who are wanting to create their own ventures. So I thought at that time after graduating from business school, I almost started up then with one of my friends from business school. We even got a term sheet to do it full-time. But then I realized that just because of immigration and other reasons, it’s better for me to take a job at that point in time. So I let that go. I took a job at McKinsey in their Bay Area office in Palo Alto, where I spent a year there. I liked McKinsey. It was a great place, but it was still in the back of my mind that I’m doing something which I don’t see myself doing it forever. I don’t see myself becoming a partner. So I then applied for my H-1b visa, which is what it’s called, and it’s a lottery. Every year, 200,000 people apply, and there are 16,000 spots. I, unfortunately, didn’t get through the lottery, which meant that I had to leave the U.S. 

Alejandro: Wow.

Amrit Acharya: McKinzie, at that point in time, was kind enough to say, “Why don’t you spend a year abroad and maybe apply the next year.” So I started doing that. I spent four months in Australia through McKenzie. Then once I finished that project, I got my next assignment in Europe. At that point in time is when my then girlfriend, and now my wife, and I paused and said, “Is this really what we want to do with our life? Do we want to optimize our lives around a visa? Do we want to not do things for not the right reasons? Then, [16:55] long-term professionally, personally. Do we want to be closer to family? Once we set aside time to think about that intention, things became ultra-clear, and we overnight decided that we’d come back to India. We didn’t have a plan beyond that. We just knew that we had to come back to India. Once we did, I started reaching out to folks who I knew from my prior network, and luckily Srinath, who is my co-founder today, was one of the first people I called. Fortunately, both of us were in the same head-space that we wanted to do something together, and we had known each other for a really long time. One thing led to another, and luckily, here we are two years later. 

Alejandro: Tell us about Zetwerk because that is what really came about from those discussions. How did you guys come across the idea, and then what did you do in order to bring it to life?

Amrit Acharya: Let me tell you a little bit about what Zetwerk is. We are fundamentally building a marketplace solution for manufacturing. We work with design companies who can work their digital designs into physical products. These can be industrial designs, or they can be consumer designs. We are fairly agnostic, so our customers are companies like General Electric, Siemens, which are large industrial houses in India, and we also serve a few consumer companies, as well. We started off with our roots in software like, as I mentioned, my first job in ITC was to build a new factory for them. So, I understood the manufacturing world from that lens because some of the problems that we wanted to solve were problems that I had faced. When I was building this factory, I was working with hundreds of suppliers across different life cycles. All of them I was managing through a Google spreadsheet or Excel. It was very inefficient. We really felt that while there are certain software tools like Ariba and Hooper, which can solve the workload requirements for buying standard products, then you go to buy something customer, there’s really no software in the market. That’s what we started wanting to build, and raised our seed round with that pitch as well. The first three months, we did build this. But then when we went to market, and we got a lot of meetings, everyone wanted to talk to us. We met GE and all these companies. We discovered two things quickly. One is, a decent Indian market, people don’t value software as much because generally, the cost of labor is low, and problems can be solved by hiring more people. Even when we spoke to some of these large companies, GE liked our product, but we realized that companies like GE don’t make any software decisions in India. They outsource it to headquarters in the U.S. or Europe. In fact, GE wanted us to meet their CIO in Switzerland. For us, as an early-stage company, we realized that yes, we can definitely pursue this spot. We can go to this meeting. We can go travel around the world and talk to as many companies as possible and at the same time sell our software. But, ultimately, these are going to be year-long seed cycles, and we felt that a company of our ventage, we were not equipped to handle such large seed cycles. Luckily, what happened for us is all of our customers were also asking us, “Can I use your software to discover new suppliers?” We realized [20:50] pain point that companies are facing a challenge with today. And to our credit, we made that pivot in the first three months. We made this pivot even before our seed term sheet had converted, and we had received the money in the bank. Luckily, our investors did support us when we made that change. That, we were feeling, worked for us. Once we made that pivot, we started acquiring customers left, right, and center, and things have gone fairly quickly today.

Alejandro: It’s interesting because listening to your customers is absolutely everything. What was the process like, especially for the people that are listening, of being able to get that feedback, those datapoints from your customers, and to use that in order to guide you in the execution to turn the business around and the model?

Amrit Acharya: I think we did a couple of things well. Even when we were designing the software, we had people from the industry as co-creators, and we credited them as such that these are people from GE, from [21:13], large industry companies who are co-designing the software with us. So they were always involved throughout the process. Hence, they were championing our success. I would say that’s one thing we did well. The other thing we did well was we were not rigid. Like if we had a certain idea, first, we wanted to build software, and we still preferred that. But, ultimately, as entrepreneurs, my view is that we are in someway servants of the market. And if the market wants a certain product, sometimes the market knows it and is vocal about it. Sometimes, the market does not know it yet. We have to recognize where we are in that scheme of things. If the market has already figured it out and it is telling you, then as an entrepreneur, our job is to listen. Sometimes, the market does not know, and then as entrepreneurs, our job is to innovate and move things forward. At that point of time, the right answer was to listen, and we were getting this feedback from every customer meeting. Like, “Can we have supplies in the northern part of India? Do you have supplies of product x? Do you have supplies in the southern part of India?” We were at the point where it was too hard to ignore. It was a combination of those things.

Alejandro: Understood. What a year because you raised your seed and your Series A within the same year. Typically, people wait 18 to 24 months between financing cycle to financing cycle. So why did you do both financing cycles within the same span of a 12-month period? 

Amrit Acharya: Yeah, it’s mostly what the company lifecycle – when we raised our seed round, the intent was to find product/market fit, largely at that point. When we had raised our initial dollar investment, we had this idea that the software product would work. Over the next few months, we tested it, and we realized it does work but in a different format where it has to be more of a marketplace solution, at least in the Indian context. Once we made that pivot, we raised our seed round in May, and we made this pivot in June. By July, we were onboarding customers like one to two customers every month. From a marketplace point of view, we were also growing 300% to 400% month-on-month. We saw that growth around six months. That’s when we realized that this is not a fluke. What we’re experiencing is a very real pain point that we have worked intentionally, and by listening to our customers have come across this. At that point in time, we realized we had to double-down because we had product/market fit. That’s why we decided to go for our Series  A just six months after we had done our seed. Because we knew that we have to take this offering to as many customers as possible in a shorter span of time. For that, our additional amount of growth capital would help with that vision. Luckily, we had a good set of investors who really appreciated and saw our journey for what it was. Hence, by raising our seed round was fairly tough. But raising our Series A was not that difficult. We were able to do it fairly easily. The only story there is, we got our term sheet two weeks before I got married, so it was a challenge to manage both those mega-events in my life. My wife was not too thrilled, like, “We can do this after we come back from our wedding.” But luckily, we were able to make things work.

Alejandro: A business like this is not very intuitive, so how were you able to explain it to investors so that they were able to get it?

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Amrit Acharya: Yeah. It’s a combination of things. Of course, we were fortunate that we got product/market fit, and the numbers spoke a certain story because when you’re growing 300% month-on-month, it’s not a fluke. But what was becoming clear to us, again, some of it was intentional. Some of it we discovered as we explored the market was that we were also at the right place at the right time. If you look at the manufacturing as an industry, it’s fairly mature in the most advanced economies in the world, including the U.S., China, etc. India also has a fairly large manufacturing base. We do the double-click, and when we go deeper, we realized that manufacturing is a very inefficient industry in India, largely because India didn’t do justice to the manufacturing opportunity over the last many decades because of [27:29] and multiple other reasons and even access to capital. We felt that, especially in light of what’s happening today with the pandemic and other things, global supply chains are starting to move toward countries like India. A lot of companies historically wanted to work with Indian manufacturers, but they never really had a partner like us who can take care of all the hard work and find the right suppliers, find the right price point, and provide complete transparency and reliability of the manufacturing job at any given point of time. We feel strongly about that mission. I think we started off by wanting to build a software tool to help manufacturers but evolved as a company to solving while making India a global manufacturing hub. That narrative has worked well when pitching our company to other customers, and we pitch our company to potential colleagues who may want to join us. Lastly, when we pitch our company to investors who can participate in the story that they’re building, as an example. So it again required, I would say, zooming in and zooming out. I think that’s a skill which is very important for most entrepreneurs. When we are doing the work on a day-to-day basis, we get very involved. But having the ability to zoom out and connect the dots and create a narrative around what it is exactly that we’re doing. I think that has helped us really well in explaining what the work is to other people.

Alejandro: How much capital have you guys raised to date?

Amrit Acharya: We have raised a total of 62 million of capital from multiple investors. Our investors include Kae Capital and Sequoia, who did our seed round. We did our Series A by Accel and Sequoia, again both Indian entities. We did our Series B by Lightspeed India and Greenoaks Capital. Greenoaks is a San Francisco-based fund. Recently, during the pandemic, we did an additional 20 million dollars [30:12].

Alejandro: Wow. What an incredible ride with some of the best investors in the world. Going from zero to 100 million in revenue in literally 24 months. How do you go about scaling up because growth at this speed, it’s insane? How were you able to accommodate this growth and figuring out the kinks?

Amrit Acharya: Honestly, we’re still figuring it out, but what has helped us is, luckily, capital has not been a constraint. As and when the company has reached a certain scale, we have luckily been able to shore up the balance sheet either internally or by bringing on other like-minded partners to support the company’s requirements. Internally, I would say the biggest challenge, the things with which I didn’t anticipate as much as managing the people side of the business. We are today, a 200-person company. While we grew from zero to 100 million in revenue, we’ve also grown from zero to 200 people in a very short span of time. At any point in time, if we look at a six-month window, half the company’s new people and people we have integrated into the company’s culture a certain way of working, sharing the values that we have while doing it at crazy scale, and at crazy speed. I would say that was the part which I was not as prepared for. Fortunately, we have done a good job. Otherwise, luckily, our business model worked in a very well growth, which happened largely by our existing customers. At any given month, 80% of our business comes from our existing customers, and maybe 10% to 20% comes from new customers. We’ve really not had to spend a lot of time in acquiring growth. A lot of the constraints we face as a company today [32:23] we have the right operational bandwidth, we have the right technology that can support a certain skill, and of course, the team that can take us not just to where we are today but over the next decade in terms of the company that we intend to.

Alejandro: Wow. You were alluding to over the next decade, so imagine that you go to sleep tonight, and you wake up in, let’s say, ten years like you were saying, over the next decade. You wake up in a world where the mission and the vision of Zetwerk are completely realized. What does that world look like?

Amrit Acharya: It’s a very interesting world. We feel our company’s success is very tied to India’s success overall. The average Indian person today is 30 to 32 years old, which is how old I am. In ten years of time, the probably average Indian will be 40 years old. We feel that, at least within the company, a lot of the work we’re doing is very fundamental toward India’s growth story. We are building assets. We are creating employment opportunities for a section of people, which is not possible to create through, let’s say, a software or the Uber for India or any of those kinds of companies. We feel that the work we are doing is definitely contributing toward building India, and all the time we do, we strongly feel that India has a lot of depth in manufacturing, which has not been tapped yet to the fullest extent in a global world. We are slowly seeing that change. We are seeing Apples at a large manufacturing unit in India to build iPhones. We need more and more companies to set up shop in India. As companies are exploring these decisions, they can rest assured that the work is there to take care of all the top steps so that they can focus on what is cool to them, which is building amazing products and designing these products, and leaving all the difficult part of bringing them to life to a company like us, which is what we do on a day-to-day business. That’s broadly our vision. We want India to become a large global manufacturing hub. We want to capitalize that change and, through that process, transform India.

Alejandro: Very cool. One of the questions that I typically ask the guests that come on the show is – you’ve been at this for quite a bit now. The growth is remarkable; the journey is unbelievable. If you had an opportunity to have a chat with your younger self that was coming out of Berkeley thinking about this world where you could create something and launch a business – if you could go back in time and have the ear of that younger Amrit and be able to share with that younger self one piece of business advice before launching a business, what would that be and why knowing what you know now?

Amrit Acharya: I would say the summary of all of the things that I’ve learned so far is that intent matters a lot. I think when I was younger, and this is seen a lot with young people, in general is, we have a very go-with-the-flow kind of attitude – let’s see what happens, and broadly checking all the right boxes – having a great job, or going to a great college, or business school, or whatever. Largely, we feel our life is on track. I would want to challenge that view. Like, where do you really see yourself in five years, ten years? Is the path that you’re on aligned toward meeting those goals? And then work backward from there. Oftentimes, we realize, and then we think about the next decade from that lens. We should feel that we’re running out of time, and that’s the advice I would give to my younger self. Why couldn’t we have started Zetwerk maybe five years before I did? What was holding me back toward thinking about my life in that way? So that’s what I try and do a lot now is thinking about the future with a certain degree of intent. What is the world that we want to create? The best way to invent the future is to create.

Alejandro: Absolutely, just like Peter Drucker said. Amrit, for the folks that are listening, what is the best way for them to reach out and say hi?

Amrit Acharya: I’m available on LinkedIn. That’s probably the easiest way. I try and respond to most messages. Or I’m available at [email protected].

Alejandro: Amazing. Well, Amrit, thank you so much for being on the DealMakers show today.

Amrit Acharya: Thank you so much for having me, Alejandro.

 

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If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at [email protected].

 

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