- Misho is a platform that allows anyone in India to start and grow their own social store on platforms like WhatsApp, Facebook, and Instagram.
- Over the past three years, Misho has gained close to half a million monthly active social store owners who are making income by selling various products.
- Misho enables people who previously did not have the capital or opportunity to start a store to become entrepreneurs by providing them with the tools and resources they need to start and run their online store.
- In India, the majority of commerce happens in small mom-and-pop stores, and Misho aims to replicate the trust and relationship-building aspect of these stores in the online space.
- Misho's success has been aided by the rise of WhatsApp and the launch of Jio, a telco that reduced the cost of data in India, allowing more people to come online and access social platforms.
- The platform has also benefited from the increasing comfort of Indian consumers with online shopping, particularly for unbranded products, and the growth of UPI, a payment system that has encouraged more people to transact online.
- Misho targets women in tier 2 and tier 3 cities with low financial incomes who aspire to start their own businesses.
- The platform provides training and support to help users navigate the online selling process.

- Meshow is a platform that provides mentorship and support for entrepreneurs.
- The platform has a community where users can seek advice and guidance from experienced entrepreneurs.
- Meshow aims to empower women and provide them with a professional identity through starting their own businesses.
- The focus is not just on income, but also on the positive impact and personal growth experienced by users.
- Meshow has experienced rapid growth, but also prioritizes maintaining quality and customer support.
- The founder believes that Facebook or Amazon entering the space would not be a threat, as they cannot do everything themselves and partnering with platforms like Meshow is more viable.
- The founders of Meshow initially met in college and decided to start a startup together after working in different companies.

- The founders initially had multiple ideas and were planning to do an MBA, but decided to work together in a startup instead.
- Their first idea was Fashionear, a hyperlocal fashion marketplace, but they learned that selection was more important than fulfillment in fashion.
- They discovered that many small shops in India were already selling on WhatsApp, which inspired them to create a tool for commerce on WhatsApp and Facebook.
- They realized that many housewives were running boutiques on WhatsApp and saw the potential for this market.
- They shut down their previous product and focused solely on the tool for WhatsApp commerce, renaming it Misho.
- The decision to pivot was difficult, but made easier by the trust and belief between the co-founders.
- The team eventually came to understand and support the pivot, and the company continued to grow rapidly.
- The CEO takes steps to stay in touch with users to ensure they understand their needs and remain connected to the business.

- The speaker's business is unique because they are building products for a segment they do not belong to (women and housewives).
- They emphasize the importance of staying close to their users by providing customer support, seeking feedback, and maintaining open communication channels.
- The company has built a culture that is very user-focused, with management regularly listening to user calls and conducting town halls for users.
- The speaker's role has evolved from being hands-on in the early stages to focusing on hiring, ensuring the company's direction is correct, and motivating employees.
- The speaker leverages their network of founders for learning and advice, highlighting the importance of having a strong peer network.
- They caution against making the mistake of solely relying on VCs for guidance and funding, emphasizing the need to believe in one's own ideas and products.
- The best decision the speaker made was starting the company with their co-founder, which allowed them to navigate the challenges and changes in the business.
- One strong opinion the speaker had that has changed is the belief that startups should only solve their own problems.

- The speaker initially believed that startups should solve their own problems, but now recognizes that it is possible to build products for others.
- The Indian startup ecosystem has evolved, with a shift towards building products for tier 2 and tier 3 audiences.
- Startups should focus on solving problems in areas such as housing, education, and healthcare for these audiences.
- It is possible for foreigners to start a startup in India, but it can be difficult due to cultural differences.
- The speaker advises aspiring Indian founders to stay close to users and be user-focused.
- The speaker recommends the book "The Hard Thing About Hard Things" for founders.
- If the speaker hadn't started Misha, they would have focused on building a startup for tier 2 and tier 3 audiences.
- In 100 years, the speaker hopes that Misha will still be user-focused and continue to impact lives in innovative ways.

- Misho is a platform in India that allows people to start and grow their own social stores on platforms like WhatsApp, Facebook, and Instagram.
- Misho has gained close to half a million monthly active social store owners over the past three years.
- The platform enables people who previously did not have the capital or opportunity to start a store to become entrepreneurs.
- Misho aims to replicate the trust and relationship-building aspect of small mom-and-pop stores in the online space.
- The platform targets women in tier 2 and tier 3 cities with low financial incomes.
- Misho provides training, support, mentorship, and a community for users to seek advice and guidance.
- The focus is on empowering women and providing them with a professional identity through starting their own businesses.
- Misho has experienced rapid growth and prioritizes maintaining quality and customer support.
- The founders initially had multiple ideas and pivoted to focus on commerce on WhatsApp and Facebook.
- The CEO emphasizes the importance of staying close to users, seeking feedback, and maintaining open communication channels.
- The speaker advises aspiring founders to stay close to users and recommends the book "The Hard Thing About Hard Things".

Vidit Aatrey is cofounder and CEO of Meesho. Meesho is a platform in India that allows people to resell products using their social networks. They were in the Summer 2016 batch of YC and you can check them out at Meesho.com.

https://twitter.com/viditaatrey
https://meesho.com/

Adora Cheung is a Partner at YC. Before working at YC she cofounded Homejoy.

https://twitter.com/nolimits

Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year. 

Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/

***

Topics

00:00 - Intro

00:45 - What is Meesho?

2:45 - Why not just sell directly to consumers?

4:30 - What are the macro trends in Meesho's favor in India?

6:55 - A trust deficit market

8:20 - How does Meesho help users get online and start selling?

11:10 - Most impactful user stories

13:15 - Growth drivers

15:15 - Balancing growth and quality

16:50 - What if Facebook copies Meesho?

18:15 - When did Vidit and his cofounder know they wanted to start a startup?

20:45 - Their first startup idea and the inspiration for Meesho

25:05 - When did they know Meesho was working?

26:45 - How hard was it to pivot the business and how did they manage it?

29:30 - As a CEO how does he stay in touch with users?

34:15 - How has Vidit's role changed over time?

36:20 - How has he learned to be a CEO?

37:55 - What mistakes have they made?

39:00 - What was his best decision?

39:40 - What's a strong opinion he had about running a startup that he's changed since running Meesho?

41:10 - How has the Indian startup ecosystem evolved?

42:45 - Big problems worth solving in India

42:30 - Can foreigners come to India and start a startup?

44:35 - Best advice for aspiring Indian founders

45:45 - After Meesho, what's the most exciting startup in India?

46:45 - Why is Delhi the best IIT?

47:40 - What's a must read book and why?

48:35 - What's a startup idea he'd be working on if Meesho didn't happen?

48:50 - In 100 years, what does he hope Meesho is?

I'm excited to have Adit Atre, CEO and co-founder of Misho, which was founded in 2015, and you went through YC in 2016.

So today, Misho is probably 1 of the hottest startups in India, if not the hottest startups.

And I'm super excited to hear about, for everyone to hear about your entrepreneurial journey, your thoughts and opinions on not just MeeShow, but the startup ecosystem here in India.

So let's start off with, I love the name Misho, which I believe is short for Mary's Shop, which means my shop.

And it obviously alludes to what Misho is today.

Maybe you can start off with giving us a quick background of what exactly is Misho, and give us an idea of how big you are today.

So Misho is essentially a way for anyone, literally anyone in India, to come and start as well as grow your social store.

And it could be on any social platform, WhatsApp, Facebook, Instagram.

Tomorrow it could be something else that comes up.

And what has happened over the last 3 years is now we have close to half a million monthly active such social store owners who are making some income per month.

And these people are selling across all possible categories.

We started with fashion, moved to non-fashion lifestyle, now it's food, some travel packages, cosmetics, like almost everything out there.

If you want to start a store and you do not have money to start that store offline, you come and start that store on WhatsApp, Instagram or Facebook.

And we give everything that you need in the ecosystem to do so.

So most of those people before Misho existed, what were they even have a business or most of them, you've enabled them to even have a business in the first place?

Yeah, so I'll just set some context here, right.

Like 90% of total commerce happens in these small mom-and-pop stores.

And for every small shop that you see, there are 99 other people who always wanted to start a store but just never could get capital.

Most people do not have access to capital.

So these people who never had the opportunity to start a store came onto a platform and became entrepreneurs for the first time because we do not need them to invest any money in working capital or setting up an offline shop.

You can come here, start your shop on WhatsApp, access anything from our supply marketplace, and only when you get an order, you purchase that from the marketplace.

So just taking away those barriers of entry, I would say.

So almost everyone who is using our app today has become an entrepreneur because of us.

They were not doing this offline, like almost everyone.

So when you think about then the end consumer, the people buying the goods from the resellers and the new entrepreneurs, Were they buying it from other people like them before?

Or what do you think about, you know, like, why not just, I guess, sell directly to the people themselves?

Why not the middleman in the middle, I guess?

Yeah, so 90% of total commerce, this is 2019, right?

And today also 90% of total commerce happens in these small mom-and-pop stores.

You will see in societies people will just put a board outside their house and start selling products and most of these products are long tail unbranded products where there is no like pull of the product people don't know about it what value these people add is these unbranded products through their trust relationships through this trust selling they go out and push these products they highlight what is special about it and then people start buying then people start recognizing this emerging brand.

So, selling unbranded categories through a mall has never worked out in India.

It has always worked through these mom and pop stores.

So, when these unbranded products have to sell online, if you see all big destination marketplaces in India today mostly sell brands across all categories.

None of them have figured out how to sell a lot of unbranded products.

But now with these guys doing similar thing but not offline but on these social channels you have started to sell these unbranded products and across all categories.

So we're just taking the same value add that these guys were doing offline to the social platform and giving them all the tools that they need in this new digital world.

Most of these users, consumers I mean, have been buying the same kind of products from these small shops offline, right?

They've not been going to malls, or they've not been going to the Amazon of the world to buy these products.

Meaning, you know, a lot of startups who grow really, really fast, some of the founders say it's due to luck, but luck is also due to good timing.

So what are the macro trends in your favor in India that allows you to grow so fast today?

So, WhatsApp started to become very, very popular about 5 years ago in India.

So, and WhatsApp was generally the first app most people use.

So, a lot of these people were coming online.

Because of Jio, a lot of these people have come online for the first time, like record number of people in India, like hundreds of millions of people in India have come online just the last 2, 3 years.

Jio is the new telco that has come and has drastically reduced the cost of data in India.

So most people, a lot of people in India had phones, but they never accessed data because it was so expensive.

But 2 years ago, Reliance launched Jio and now people can go online for almost no cost.

And now these people have started to come using Facebook, WhatsApp, Google, now other apps.

So these people are coming online for the first time.

They have been on internet for just like a year or so.

And Because of that and a lot of these guys in smaller cities like tier 2, tier 3 or lower parts of the country, these are the people who are coming online because of Jio and these people were buying mostly unbranded products because their monthly income is generally much lower than metros.

They tend to buy more and more unbranded products.

So, us starting this business exactly at the time when Jio was coming big was definitely very lucky.

UPI has become very big recently, which has enabled, which has taught a lot of people to start transacting online for the first time.

Which means people are now getting comfortable by buying products.

Like about 10 years ago, everyone in India thought that no 1 could buy a fashion online.

Which is not the case anymore because everyone has tried it, people are okay with easy returns and they're buying again and again with a lot of trust, especially with people you know very well.

So a lot of these things have come together for us and fortunately we started this business at the same time.

We started seeing this behavior about 3 years ago and we just kept building on it.

And a lot of people say in India it's a trust deficit market.

Maybe you can explain for the audience who's not from here what that means and how do you solve that problem in particular?

So trust deficit is because of hundreds of reasons.

So in India, most people do not believe in corporate companies.

They don't believe in their own government.

So most people believe that, hey, only I'm looking out for myself.

You believe in your community, you believe in your friends and you believe in like someone that everyone believes in.

Right, so it's very very difficult for a new merchant to come and build trust with consumers out there.

What we end up using is we leverage trust of people in your own community who come and start these social stores and then start selling to people around them.

Especially in unbranded products where you have no idea what will happen to this product after a month right.

So you buy for example some apparel and after a month all the color goes away.

And I have a lot of these doubts and this is no brand.

But when you're buying from someone in your community who you know very well, that trust deficit goes away.

And this is exactly the reason why unbranded products in the offline world about a decade ago was getting sold to these small offline shops but still in your community.

So retaining that just solves for that problem.

And so when you talk about who your average user is in terms of the reseller, entrepreneur, what was their life before and after MeShow?

And kind of how do you help them get online, essentially?

How do you help them get used to selling goods online?

Whereas before, if they were even doing it, it was totally offline and

So our average user, like 90% of our users are women and more than 80% of our users are tier 2 and tier 3 and below cities, right.

So most of these are people with low financial incomes a lot of these are aspirational entrepreneurs people who want to start a business but for a very long time I can tell you anecdotes right when we started this business we spoke to a lot of people who were doing this like without us with which was a big pain by the way but when you speak to them it mattered to them so much.

This lady who is saying that for the last 20 years I go to my husband every year and asked him that please give me money so I can start my boutique or I can start my store selling products but she never got money.

And when she came on to a platform and we gave her everything that she needed without needing any investment on day 1 she was super happy because she could fulfill that dream that aspiration of starting that store.

Most of these users are people with low financial incomes in smaller cities who are looking to start a business, who are looking to do something of their own.

And Most of these people, what we have seen over time and just to give you some sense of our product, most of these people because they have not done this business before they come on to a platform, we spend a lot in terms of how do we train these guys.

So if you come on to our platform on day 1, you will see a lot of content telling you what should you do on day 1, day 2, day 3.

Even if you don't do well after that, when we put you in a mentorship program, where we connect you with some top trainers for a month, and these guys will tell you how to start a business.

all the entrepreneurs in your system too as well.

Yes, these are like our top 5% of the users who want to do this because they get recognition.

So it's like you started your own startup ecosystem within Meshow.

So these people are helping each other out.

We have a Reddit type community in our app which is called Misho community and people come and say hey I'm a new user and I'm based out of this place in India and I don't know what to do to get started with this but I really want to do this.

And then you see like hundreds of other users coming forward and telling them what should you do on day 1.

Like how should you get your first set of 50 customers?

How should you curate and bring that value out so people start getting interested?

I love the stories in which you've changed.

You obviously changed some people's lives.

Who is the best user in terms of whether they're just doing a lot of, they've increased their income a lot, or you just changed their lives so much?

So it's it's just never been I'll give you some understanding about how these women are right so a lot of our users are women a lot of them are housewives like 70% of our users are housewives a lot of these women have been looking to start a business not just to make money right but to also get some sort of professional identity right no 1 it's very common in India these women feel that no 1 gives them any respect like my husband doesn't feel that I'm adding enough my family doesn't feel that I'm important enough but now when I am known as a business 1 in a community people start recognizing me I have a professional identity I can also go out and say I run my business this is what I did last year so that feeling is very very important empowering right so most like our most impactful stories are not just about how much money this person makes.

It's a lot about what were they doing before.

So, we have widows who are not able to sustain like their family, feed their kids, etc.

There are women who are like handicapped.

So, these are educated women, but handicapped so no 1 ever gave them jobs.

And this is the impact which tells us that hey people are finding value.

In terms of income, like our typical average user makes about 150 to 200 dollars per month as income.

But I don't think that number matters to us so much.

It's about wherever you before and how his life has changed.

Most of these people are anyways not doing this as the primary income for the family.

Most of this is secondary income for the family, which is if it is 15, 20, 30% of your primary income, it's significant.

It's getting like a raise 1 year earlier for the family.

But a lot about how you empower me, what identity do you give me, people start giving me more respect is much, much more important.

So in terms of what's driven growth so far, obviously there's a timing piece, you're enabling e-commerce, you're enabling entrepreneurs to start their businesses.

Is there anything else specific to what you're doing internally to help you drive this growth?

So I think we keep solving some very hard problem every 6 months.

When we started off, we were just enabling existing guys who were doing this because we saw this behavior a lot of people in Gujarat and Karnataka were running these WhatsApp stores even before us.

They had gone out, met suppliers, figured out how to do courier, they figured out how to use tools on whatsapp etc.

So in like 6 7 months we onboarded a lot of them and then we did not know what to do and then we changed our product completely because we had to create users like we have to create our resellers none of them are doing themselves.

So we changed that and suddenly so many people like every tier 2, tier 3 women out there became our target customer.

And then the second thing that we did was how can and which is still the North Star of the company, how do we grow income per reseller every month, which meant growing number of categories.

So, we started with only ethnic fashion, over time we just now do everything.

Now, we have even set up a supply chain from China.

So, you can not just access supply which exist in India, but even cross-border.

So, now you can offer better variety, you can sell even more unique things, you make more money.

Then we said, hey, can we enable not just housewives, but other people?

Then we started going out, we onboarded students, we onboarded retired folks who are trying to make pensions.

We have a lot of men who are unemployed, who do not have jobs, and they are running these shops to sell these products.

You're basically going to eventually employ all of India.

So the trap that some startups get into, a lot of startups get into when they grow too fast is a quality issue.

And I heard you say something very interesting, I

don't know where, but in another interview, and you said you don't really want to scale customer support because it's unsustainable.

So I'm really curious how you balance growth and quality as you continue to grow really fast.

So you grow very fast and then you realize you've carried so much debt around, a lot of ops, a lot of manual things, and then you start focusing on how do you improve quality.

And I think we see that cycle almost every 6 months but both are important.

Right, the last year was crazy growth for us like we started with a number and number we ended with.

Most people can't imagine how that has happened but during that path if we started optimizing for quality we would have broken down as a system.

And as soon as that year ended, like last 2 months post Diwali is generally a lean season here.

We just spent all our time in fixing whatever debt we had carried.

So you have to do both because if you keep, for example, if you keep scaling customer support, if you need customer support, that means there's something wrong with the product.

So you have to go back to the drawing board and understand why are people calling me?

And then you start optimizing for, hey, my product is broken in these places and I have to solve them out.

So Not just in terms of cost operations about what overhead you have but just giving a great experience You need to solve for these things and at this stage we focus on it We have a dedicated team within the company focusing on this but in the early stages we had to compromise Sometimes we just focus on growth sometime in this quality.

Yeah, that's great It's just taking a step back and looking at how, there's a certain point, there's a certain bar in which if you dip below it, then you kind of have to pause and then go fix this stuff.

And then just keep going to the next level.

All right, So you probably get this question a lot.

Or what if Amazon like, like, why wouldn't just Amazon or Flipkart or anyone just win this space?

Yeah, about Facebook, I, I just think this is 1 of the so many things that gonna happen on Facebook ecosystem because people are spending so much time there.

If Facebook starts doing everything I'm sure they'll not do what they're doing right now.

Right if you look at for example China like Tencent invest in so many use cases that are happening on WeChat because they can't do everything themselves.

So you build a platform which does something.

You do not want to go out and onboard 2 lakh suppliers and make sure their quality is right.

You start a new business because you want to capture all use cases.

We share what our users are telling us, what can improve, How can these platforms become better in terms of enabling commerce for these people in smaller cities?

But I don't think it's viable even if they start doing it.

It'll have to stop at some time because this is 1 of the few things that are going to happen on WhatsApp.

In fact, it makes their product more sticky.

Like, we are creating new merchants for them.

So I want to take a step back and go all the way back to your college years, in which I'm guessing you were starting to think about, I want to do a startup.

So you and your co-founder met in college, you were classmates.

Tell me a little bit about, when do you guys know you wanted to start a startup together, and what were your initial ideas?

Yeah, so in college, practically, we did not think about doing a startup.

And in college we were set, hey, we're going to go out, get a job somewhere, chill out, like have fun, whatever.

And, but we used to work on a lot of projects together.

I still remember we worked on our like college project that we do in the last year.

We worked on certain things that we went out for competition.

We worked together so we knew each other very well but that time we're not thinking about doing startups.

Starting startups was not a cool thing to do.

That started after Flipkart became bigger about 2014-15 and after that IIT is like hey everyone wants to do a startup.

But what happened back in 2015, like 3 years out of college, I was working with Inmobi here, Sanjeev was working with Sony in Japan.

Yeah, so he was working there and 1 day he randomly calls me and saying, hey, I'm looking to join a company in Bombay because I want to come back to India and can you rest check that company for me?

And I said, why do you want to work with them?

If you want to work in a startup, let's do something ourselves first.

And just on that call with no idea, nothing in mind, we agreed that, hey, we will do a startup.

And from next day, we started focusing on what problems can we focus on.

We created a Google spreadsheet listing all the ideas we had, talking to people around us.

It's all unpredictable, uncertain, no plan around it.

At that time, I was planning to do an MBA.

Yeah, it's because I just felt like a very good friend of mine.

I know I can work with Sanjeev for 100 years of my life, right?

And when he's saying that he wants to work in a startup, like there was no better opportunity for me.

In some sense, the best teams are, they knew they wanted to work together regardless of the idea, and then they just came up with the idea along the way.

Alright, so you guys decided to start working together.

I know, I think the first idea you had was Fashionear, is that true?

The first 1 you actually started working on.

So tell me a little bit about that, you know, how do you come up with the idea?

How did you figure out it didn't work and then pivot into what is, I guess, the first version of Misho that is today?

So back in 2015, doing O2O, Hyperlocal was very popular in India.

Everyone thought that, hey, almost everything will be sold on demand hyper locally and we thought everyone is working on problems but no 1 is looking at fashion.

So we said let's build hyper local for fashion and we built Fashionair.

Think of it very similar to what Swiggy is for food but just for fashion.

We did that for 4 5 months we learned a hard lesson it doesn't work because in fashion fulfillment is like the third thing that is most important.

The first thing is selection which you can never have around you but that was like the lesson that we learned but the good thing was right it became a starting point.

So when we built out that marketplace we used to go to these small shops in Bangalore and we used to onboard them as suppliers and these small shops are everywhere like in Kormangala where we are right now in HSR everywhere and my pitch used to be that hey I'm gonna take you online and these guys will say we are already online What do you mean by that?

And then you understand 1 level deeper what does that mean.

They're saying, I have created a WhatsApp group of all my existing customers who have ever bought from me.

And every time new stock comes into my store, I take photographs of all of them and post in that group saying, hey, these are the few products left.

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Vidit Aatrey on Building Meesho, India's Top Reselling Platform, with Adora Cheung