Rohit Paranjpe is the co-founder and CEO of SugarBox which enables consumers to access relevant content at super-fast speeds. The company has raised so far $80 million from investors like Zee Entertainment Enterprises.

In this episode you will learn:

  • Pitching big customers first
  • Finding product-market fit
  • What SugarBox is doing that is so hot 
  • How to embrace failure

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About Rohit Paranjpe:

Rohit Paranjpe is the co-founder and CEO of SugarBox Networks, India, which is a platform that enables a user to use mobile apps in areas with bad or no network and empowers users without an active internet connection to use Apps.

One of the youngest CEO’s in India, the brand under his leadership is consistently reaching impressive heights. With first-of-its-kind ventures across the digital content and media ecosystem in India. Rohit Paranjpe is now focused on disrupting the internet services space, making them available, affordable, reliable and contextual for everyone.

Rohit Paranjpe has successfully handled wide-ranging responsibilities in an illustrious career spanning over a decade. An innovator at heart, with a passion for building ecosystems that can potentially impact billions of users, Rohit Paranjpe also co-founded Digitainment (a company that revolutionized retail distribution of content and ran the first B2B2C OTT service in India) and Mobie Infotainment (an interactive, connected in-transport infotainment and media platform, which was years ahead of its time).

Rohit Paranjpe has been awarded as one of the Top 50 Tech Innovators by Intercon Dubai and was featured in the TechTors to watch out for in 2020 by BW Disrupt. In addition to being an avid reader, Rohit Paranjpe particularly enjoys listening to live music, playing football and table tennis. Being an enthusiastic footballer, Rohit Paranjpe takes time out to practice his game with dedication, on a regular basis and forces others from office to play twice a week. Rohit Paranjpe is a wine aficionado, enjoys travelling and is a dog parent.

Connect with Rohit Paranjpe:

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a very interesting founder, a founder from India, and I think we’re going to be learning quite a bit about pivoting, about turning things around and creating something interesting at the end of the day. So without further ado, I’d like to welcome our guest today. Rohit Paranjpe, welcome to the show.

Rohit Paranjpe: Thanks, Alejandro. It’s a pleasure to be here.

Alejandro: You’re originally born and raised in Mumbai. How was life growing up in Mumbai?

Rohit Paranjpe: Life, actually, was very different from what it is today. I was born in a middle-class Indian family. The major focus at all times was dedication. That’s what we were really focused on most while growing up. mainly spending in Mumbai in the localities being rigid — the typically Indian story that everyone learns. It’s more towards college. I did my engineering from Mumbai itself. While I was doing engineering, I started venturing out quite a bit. I traveled a bunch across India and outside. My dad is a petroleum guy, so my dad was based out all across the world. He was based in the Middle East for a long time. He was in Canada and in Alaska, as well. I got to travel a bunch, and that’s when I started looking at things differently and broadened my horizon in terms of what really happens outside of India. I got a lot of technology exposure while at it. I think that led to the foundations in terms of how I started thinking.

Alejandro: Very cool. As you were mentioning, you went and studied engineering. Why is it that every single person, every single entrepreneur that I speak with from India, does engineering? What’s going on with engineering?

Rohit Paranjpe: As I said, most middle-class traditional families in India — and it’s likely changing now, but 10 to 15 years back when we were studying, there were only three acceptable professions. Those three professions were either you’re a doctor, lawyer, or an engineer. I wasn’t good at biology. Neither did I have too much interest in law, so the only option that I was left with was pursuing engineering.

Alejandro: Got it, and you really had the entrepreneurial bug, and you had that in you. Is there anyone in your family that was an entrepreneur, as well, or how did you come across the idea of maybe building and scaling companies could be your thing?

Rohit Paranjpe: It’s very interesting and weird at the same time. I’m the first entrepreneur in my family, and we actually speak about this quite a bit. Everyone in my family is extremely risk-averse. But the interesting part was I never saw this as a risk. After engineering, I think the biggest thing that I wanted to do was solve a problem, and I know it’s quite cliché when I say this, but in all reality, probably during my whole venture, I never considered myself an entrepreneur. I was just trying to solve a problem and do the best that I could do at it. It went from one thing to another. I started my first company. I didn’t really enjoy it. But a random life experience led me to my second one, and then from thereon, that was when I started looking at it as, “Okay. I’m an entrepreneur, and I need to build a business, scale it, so on, and so forth.” So, it’s quite accidental.

Alejandro: So, quite accidental, and we’re also going to be talking about all the accidents involved because the journey of an entrepreneur is full of accidents and is quite bumpy. In your case, it was very bumpy with some of your businesses and how you had to do the pivot to get to product/market fit, which you’ve done with your latest one. But with your first one, there was something off. You helped on building up the business, and then you walked away. How did this happen?

Rohit Paranjpe: Yeah. The first company that I started was completely out of my [5:49]. It was an organization that [5:52] and training company. Literally, I started it because of engineering. The only thing that I was sure of was I did not want to be an engineer, and I wasn’t sure about anything else about what I wanted to do. And here comes along a bunch of friends who had been working, been trainers, one of them was a training with McKenzie. A couple of others were well-known psychologists in India, and they come along saying, “Hey, you know what? We’re going to start a training business, and we need someone who’s young, who can speak, who will essentially do the business and the client management. We can’t seem to find anyone. We want you to partner with us and start this.” Literally, as I said, it was quite accidental. From there, I had nothing to do. I said, “Okay. Let’s do this instead.” That’s the journey that I started on. But both from buying into the product that you sell, and secondly from an interest standpoint, it’s not something that really excited me, and that made me wake up in the morning. Then, by chance, I was coming back from the office one day, this was late in the night. I was taking an auto rickshaw to go to the railway station and take a train back home. This auto guy, in the night about 11:30, looks at me. I look tired, and he’s like, “Do you want to listen to music?” I’m like, “Sure. Just play whatever you have.” The guy passes me a deck of CDs, which is quite rare for an auto rickshaw in India. I selected one DVD out of it, and it actually had really good music. When I got down at the end of the journey, I tipped him 10% over, which again, is a very strange thing to do for an auto rickshaw in India. On the way back, I’m thinking, “If I, who has barely started out on this career can tip 10% of the transport for entertainment, maybe there’s an opportunity here. That’s what made me wake up the next morning. Call my partners and say, “Hey, you know what? My heart’s not in this anymore. I’ve found something that I’m really excited about, and I think that’s what I’m going to pursue.”

Alejandro: What happened next?

Rohit Paranjpe: I am a chemical engineer by education, so I had no idea what a technology company is. The next day, I started with opening up a computer to see what exists inside a computer. The process early on was, I wanted to start this entertainment system in a cab. The first question that popped in my head was, “How do I make a computer that fits inside a cab? I opened up the computer. I looked at every component, and I said, “How do I miniaturize every single one of these?” I’m still talking 2010 when tablets hadn’t hit the mainstream, at least in India. I was trying to figure out how do you miniaturize a desktop to fit inside a car? That’s the journey that I set on for the first year or so and literally reinventing the wheel, miniaturizing the computer. I worked with some local companies, including Whitlow. I finally found an effective solution from HP, which was a mini-PC at that point. Then we had the first running prototype inside a car in [2013], which is based on Linux. In [2014], in May, is when the Android tablets hit India, and I looked at them and said, “Hey. This is a far better platform to build something on. So we scraped a year and a half of work. We started on an Android tablet, built our software stake on top of it, and had our first solution ready in about September, October of [2011].

Alejandro: Got it. The journey is quite interesting with Mobie Infotainment because it took a little bit of time to get it up and running. I know that you guys had quite a nerve-racking moment where all of a sudden, you realized that you’re running out of money because you could not monetize. Why were you not able to monetize?

Rohit Paranjpe: I think in 2012, is when we got our first client, a local cab company that was based out of Mumbai. These guys had 1,000-odd cabs and planned to launch 1,000 cabs in Mumbai. That would make them the largest fleet in Mumbai. Those were the first guys we pitched to, and they were really happy with the solution. The problem that we ran into was the commercial market because there was an asset. The asset is expensive. The cab company that they don’t invest in the asset because that’s not their core business. We said, “It’s okay. We will invest in the asset.” We monetized using advertising as a monetization mechanism. Obviously, bought advertising, especially in India. It was too early. People were confused in terms of, do we categorize this platform as an online platform. Do we categorize it as a digital platform? How does it work? The connectivity in India at that time wasn’t good enough for demand-side platforms to deliver [11:23] adds to this platform directly. So, we had a buffer mechanism that did not go well with the digital advertiser. So we were in-between stuck in industry limbo, and although we managed to get the scale in terms of consumption numbers. I think even out of all the statistics that have happened in India today, I think this system is still boasts one of the best in its state. On average, we had closed about 72% engagement of the people that travel. This was largely because content was a big strength that my team got to the people, and we had some really good content on it. Out of a 44, 45-minute average journey, the average consumption that we had was 32 minutes. So, from a consumption angle, it was fantastic. We got a lot of advertisers, including Microsoft, Blackberry, at that point at a local [12:20] guys to test this platform. But we really couldn’t become a part of their sustained campaigns or national campaigns. Then we ran out of money, and we didn’t have enough money to supply more hardware. There’s a point in time where you have to make the call, are we going to invest more of our own money, or pull the plug. We decided to pull the plug.

Alejandro: What was that moment like? Pulling the plug is a tough one. Pulling a plug on your baby where you poured all of the tears and sweat. How is that process until you realize that this is real and that there’s no other way than to just let it go?

Rohit Paranjpe: It was extremely difficult. And in all reality, neither my co-founder nor I wanted to pull the plug. We only kept it running by investing all of the money that we had in it. But finally, it came down to — we’d raised a bunch of capital from family and friends, and we said, “Guys, we don’t want to shut this down. We believe in it too much. Can you please invest more money?” They could see it without bias, and so they refused to invest more money because they said, “There’s no sustainable revenue generation opportunity available. You’re not going to be able to do more from a consumption standpoint because the consumption stats are already through the roof. So from a capital standpoint, it doesn’t make sense. We’re not going to invest more money. You guys figure it out on your own.” And we just did not have cash. So, we were forced to do it, but yeah, one of the toughest days that I’ve had to deal with.

Alejandro: I’ve heard many times the quote that people don’t really learn much from their successes. They really learn from the failures. I think that with the failures, there are always great lessons for us to learn. What was your lesson that you had to learn from this experience?

Rohit Paranjpe: You’re absolutely right. I honestly do believe that failures teach us far, far more than success ever can. I think the two key lessons that I took away from that experience were, first, don’t make advertising. Sorry, it’s just my learning. It’s not something that applies across the industry. But an asset-based model, do not ever use advertising as your only source of revenue because it’s too fluid a revenue stream for it to be consistent, and you’re risking too much. The second major important part was uneconomic is something that’s wide built for the health of a business. How much all the other metrics might say otherwise, if you don’t have your uneconomic in place, the business doesn’t make it.

Alejandro: Got it. That’s very powerful, by the way. I think being able to build organic distribution channels is something that entrepreneurs typically overlook, and definitely something that investors really appreciate. I’m glad that you touched on that. For you, then, once you got back up, and you were able to reflect, you started again. What was the next business?

Rohit Paranjpe: The next business, as most things in my life are, was an accident. What happened was, when we shut down the company, and we started figuring out, “What do we do now, and how do you liquidate the assets?” We realized that the biggest asset that we were sitting on was we had acquired content rights for one year, and we still have close to seven months on that year to go. So, we said, “We’re sitting on about $300,000 to $400,000 worth of content rights at that point, and we have no distribution channel for this anymore. So, what can we do?” It was on a whim, where my co-founder said, “Why don’t we build something like Netflix, and we can distribute this content out there?” That’s the one core process where we built it into Digitainment. Obviously, neither my co-founder or me came from a technology background, so we collaborated with another two people who came from a tech background who had experience building platforms, and we essentially started Digitainment with the four of us as co-founders. 

Alejandro: How was that journey with Digitainment?

Rohit Paranjpe: It was quite interesting. This was just a part of at the back of which we started Digitainment. We really had no clue about the video business. We didn’t know how it was going to function. We didn’t know how we were going to manage distribution, get the people, make them utilize this. The internet video in India was still far, far what it is today. The simple process that we came from is, we said, “Google has Google Play store and movies as a base for people to discover content on. Apple has the App Store and iTunes store to discover content on. Microsoft doesn’t seem to have a video store. We have video content. Can we go and set up a video store for Microsoft? That’s how we went to Microsoft and said, “We have a tech platform that can act as a video platform. Why don’t you set up a Windows store?” Microsoft said, “You might not notice, but we don’t have a video store in India, but we have something called an Xbox video [18:20] across the world. But Nokia is trying to set up a video store, and they’re looking for partners to do this. So, why don’t you go and approach Nokia instead.” That’s how we went to Nokia. Nokia, at that time, had a music service called Lumia that used to run. They were looking for someone to set up the video service for them, and it worked out at the appropriate time. We launched Your Movies, which was the default services that coincided with the Nokia Lumia’s launch in India. So, Your Movies became the default video service across all Lumia devices, starting in India.

Alejandro: Here, again, you experience catastrophe, meaning that you need to pull the plug once again. What happened?

Rohit Paranjpe: It’s actually true. The more difficult part I would say was, with Mobie, we never made money, so it wasn’t a problem. But Digitainment, what happened was we made money in 2014 and 2015 and started bleeding badly in 2016. What happened was, Your Movies was not like a service that you see today wherein it’s a B2C service. The way we set up Your Movies was the B2C service. We sold the value prop to Nokia, and Nokia subsidized it into the cost of the hands of the users. When a user got a Nokia handset, based on the value of the handset, the user would get anywhere between a 3 to 12-month subscription of the service free. Nokia used to pay us on a per device basis. That’s how we made a bunch of money in 2014 and 2015. The model for us was our content acquisition cost versus what does that feature as a broadcasting device cost, which Nokia can absorb as a marketing project? This model fell flat on its face after 2015 when Netflix and Prime came into India. They started acquiring exclusive entrepreneurial rights. They drove the acquisition costs probably 5 to 6x of what they were in 2014. Even the local broadcasters started investing in the space in India. Literally, over one year of entrepreneurial rights, what happened is, our total content acquisition cost went up by 540%, and obviously, our revenue could not scale at that base, so the model fell flat on its face. We still ran it for close to about six months — bled all those six months. Based on the learnings I’d had earlier, we said, “This model is not going to make sense anymore. Let’s just pull the plug while we’re still positive and call it a day.” That’s what happened with Digitainment.

Alejandro: Then, after this, you started your biggest success to date, SugarBox. How did you come up with the idea of SugarBox, and how did you bring it to life?

Rohit Paranjpe: SugarBox, in many ways, I say this a lot to people that I think I started Digitainment only because I needed to stumble upon SugarBox. Literally, what happened is, while we were running Digitainment in 2014, 2015, when we ran a sports channel, close to 9 out of 10 calls that we brought on the sports channel would fit into two buckets. The first bucket, which is about 4 out of 10 calls, where a person used to call in and say, “The service is not working.” We discovered that the service wasn’t working because the guy did not have mobile data, or stable enough mobile data for him to stream video. The stranger part of it was the largest chunk, which 5 out of 10 calls. A person would call and say, “You or Nokia has advertised that the service is free, but I’m being charged for it.” We had to explain to him, saying, “The content subscription is free, but we can never give you data for free.” But if you look at it from the consumer standpoint, the consumer is coming from a TV background. He was collating how it worked on TV in India, and the way it works with TV is, you pay one cost, and after that, you consume as much as you want, and you don’t get charged anymore. So, that was the way people perceived it. So, SugarBox was born out of one single broadcasting — consumers in India shifting over from broadcast to digital. But the experience of broadcast versus the experience of digital is extremely different. Can you replicate the experience from broadcast, which typically is an experience guarantee on the service, unlimited consumption, and the single cost of the service onto the digital ecosystem, wherein, that’s not how it worked? And that’s how SugarBox was born.

Alejandro: SugarBox is quite an amazing success. You guys have gotten, I think it’s a little of 80 million U.S. dollars. Eighty million U.S. dollars to kick it into high-gear scale — great people that you’ve brought on. What do you think gave you guys product/market fit?

Rohit Paranjpe: I think the two key aspects that gave us the product/market fit — really at a technology level, what we were able to build is, we’re able to take traditional content distribution technology, [24:18], Amazon Web Services, a Cloud [24:22]. And we were able to miniaturize it. We were able to hyper localize it so that we actually put it inside of a consumer device. What this does is, it takes away the dependence on the existing internet networks because the moment I have a CDN server sitting inside a consumer device, I can now expose this or locally-run it to the consumer. The local network is free. It’s unlicensed. It’s as reliable as it can get. So, the experience for a consumer is seamless. We’re actually able to make existing apps, so that’s not a fragmented experience for the consumer while using our CDN. The net result of this ends up being, I can utilize an existing internet app in a place where connectivity is patchy, or connectivity does not exist consistently, which includes most of transport, remote areas, which is where the growth in India and across the world is happening. These are the markets that are in all of the existing internet, so it’s just one big expanding group. That was the twofold start of product/market fit here for the consumers. We were catering to a very core need that they have in a certain user context. And for the businesses and the apps, we were catering to the focus that they had in terms of growth over the next three to five years. I think these are the two key aspects that gave us the product/market fit.

Alejandro: Very cool. What’s next for SugarBox? What do you think the future holds for you guys?

Rohit Paranjpe: I think the future for SugarBox is very simple. In the short run, and this is literally over the next two years, instead of focusing on 300-odd-million people that travel every month in India, and this is between a bunch of public transport networks. They spend an aggregate of close to 2.5 billion hours a month inside these transport networks where connectivity and the existing Telco networks are patchy, unreliable, and so people are unable to consume internet services while they’re traveling in a captive state. We want to revolutionize the experience with these guys for the next two years. The next five-year target is after this deal happened, we’ve had companies reach out to us from Indonesia, Philippines, Nigeria, and Brazil telling us that the problems with connectivity and internet networks in these countries are even worse than the problems that we face in India. So, over the next five years, it’s literally taking the digital growth down to the next billion, two billion people across these geographies across the world.

Alejandro: The experience that you guys had, and you, especially, personally in your entrepreneurial journey is quite remarkable. One of the questions that I typically ask the guests that come on the show is, if you had the opportunity to go back in time and give that younger self, that younger Rohit, maybe that younger Rohit that was thinking about launching the first business, one piece of advice before launching a business, what would that be and why knowing what you know now? What would you tell yourself?

Rohit Paranjpe: I think I would tell myself just one thing that I tell all of my guys, and that is, the day you feel like you’re an expert on something, cherish that day and forget about it the next day. Because if you really feel like you’re an expert, you’re losing the curiosity that not being an expert brings to the table. I think in many ways, that curiosity is what fuels the innovation, which has been consistent in everything that I’ve done.

Alejandro: Very cool. For the folks that are listening, Rohit, what is the best way for them to reach out and say hi?

Rohit Paranjpe: The best way is email. We’re available on SugarBoxNetworks.com. My email is rohit@sugarboxnetworks.com. Feel free to drop a line, and I’ll apply back within 24 hours.

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

Rohit Paranjpe: Thank you so much, Alejandro. It was a pleasure.

 

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