Episode 28:How to succeed with a Food Tech Startup in India?
How to succeed with a Food Tech Startup in India?

Being unable to have 3 meals a day to making breakfast for millions

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How to succeed with a Food Tech Startup in India? Food – It is the first element of the trinity of basic needs that is part of Indian folklore – Roti, Kapda, Makaan

A Bollywood film on basic needs
A Bollywood film on basic needs

or at the base need in Maslow’s hierarchy of needs

Hierarchy Of Needs
Hierarchy Of Needs

The Indian Food Tech Market

The Indian Market by any stretch of the imagination has always been a huge market. If one were to consider basic needs such as food, it has been an eternal market. Albeit one with simple models. The Mumbai Underworld traces its origins to the protection that the so-called Udupi Brahmin entrepreneurs who wanted protection for their restaurants and hotels.

From Processed Food to staples to Pickles and Masalas, India is full of household names and brands in Food. Given the size of the Indian market and an exploding middle class, the Indian Food Market has been and still is considered a huge market.

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As a result, since 2011, it has been anything but a simple market having seen thousands of startups.

Almost non-existent a few years ago, the Indian innovation ecosystem now has nearly 4300 startups and 77 food startups to look at very carefully. The Indian middle class is growing, the number of smartphone users is too.

And thanks to the increase in online users, this burgeoning market has serious assets to attract business investment and encourage the development of start-ups. From 2011 to 2018, $10.8B have been invested in the Indian Foodtech economy, compared to $688M in France.

Indian FoodTech Market Players
Indian FoodTech Market Players

How To Succeed with a Food Tech Startup in India?

In spite of the amount of money that has been poured into the Food Tech Market and the Size of India’s market and the sophistication it has acquired, success has not been easy. Food Panda, an online food delivery platform does not almost exist. Burrp – a pioneer in the Indian restaurant rating space no longer exists.

That begs the question – How to Succeed with a Food Tech Startup in India? Perhaps, the answer lies in looking more closely at India’s basic food needs. Going even more down at the hierarchy of needs. The story of PC Musthafa is therefore quite fascinating. It is an unlikely story! But read on and do listen!

PC’s Story

PC Mustafa or PC as he prefers to be called walked miles to go to school. At a certain point, he considered dropping out as he was a below-average student. He continued this streak of being a below-average student into adulthood. Smitten by the IIM Campus in Bangalore and being unable to summon the courage to request the security guard to let him take a peek, he swore he would get in right royally. He eventually got into the hall of fame.

Around the same time, he was throwing around ideas with his cousins in Bangalore to start something. One thing lead to another and they ended up starting a business manufacturing and distribution of Idly batter. But the road was not an easy one. How did PC overcome challenges and make ID Fresh the brand, the largest fresh food distributor in the world? This is the story.

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Here are some excerpts from the episode

Difficult Beginnings

So during those days, education was not of importance. As I mentioned earlier, three time meal was a distant dream and breakfast was actually and we struggled to eat three time meals during those days. My dad was doing a daily wage work in a farm as he was finding it difficult to meet ends of the family.

I ended up doing daily wage work with him at the age of 10 during my summer holidays, and you know weekends and sometimes I used to bunk school and work with him to support at the age of 10, education was not given importance, and I was very poor in my studies. I failed in class 6. And I stopped going to school for a while. I then start to work going into the farm with my dad, you know doing the daily wage work along with him

PC Musthafa 06:23

I happen to see this beautiful campus of IIM Bangalore. You won’t miss it. It is such a beautiful campus in the city. I felt like going to the campus but didn’t know anyone in the campus. And moreover, I didn’t have courage to go and check in with security to get permission to enter the campus. But that day I determined that I will enter this campus one day of my life.

PC Musthafa 18:30

Initial Customers and Retailers

Initial days because customers are not willing to buy such a product. Okay. Retailers, of course didn’t believe in this kind of product. And consumers wouldn’t believe a batter in a pack. So we had given ourselves six months time to prove this concept. And what we told initially to ourselves was we will give it will try for six months. If it doesn’t work out then, we will withdraw funds from the business after six months. 

PC Musthafa 23:23

It ticks every parameter, every checkbox for it to become an attractive product as a business opportunity. Scalability, profitability and sustainability. All ticked. So when we started, right people used to ask us, why idly business. Why is this, is it a rice trading business?

Are you doing rice? Idly rice? Why did you quit your IT job and move to Idly business? My question to them is, why not Idly? Idly is most sustainable business in the word. It’s the most profitable business in the world. It is the highest scalable business is the world. And as we all know, Idly is the most eaten food in the world.

PC Musthafa 35:39

Watch On Youtube:

Check out our episode with Anindita Sampath – another Food Tech entrepreneur who is acing the breakfast industry: Season 1, Episode 22.

Not a fancy business

So Idly business is not a fancy business, there is no money. We only had limited resource. We had only 15 lakhs rupees savings with us. This business is not a fancy business, there is no investor, this business idea is with you, we don’t come from from no business family. So, there is no other way for us to raise the money as well.

PC Musthafa 45:48

ID runs on IT and that’s a fact when we started ID, we were sending hundred packets to markets and 90 used to come back unsold, in a  period of three years we started selling 2000 packets market and 500 used to come back unsold. There was no way for me to make this business profitable and scalable with this kind of wastage that’s when we started using data and technology

PC Musthafa 52:38

Yes and make it scalable, profitable and sustainable. In fact, what I’ve learned is my biggest asset today is my distribution network, see, usually packaging is considered as a container right? That’s a general perception about the packaging, usage of packaging it but packaging has to be looked as the larger picture.

PC Musthafa 58:29

Show Notes

Follow PC Mustafa on

Musthafa PC – LinkedIn India
Musthafa PC (@Musthafa_PC) | Twitter

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Word Cloud for This Episode
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Episode Transcript

(Automated Transcript)


idly, business, batter, vada, product, iim, id, day, market, scale, bangalore, money, packaging, started, technology, pc, called, investors, elephant, krishna


Krishna Jonnakadla, PC Musthafa, Tania Jadhav

Krishna Jonnakadla  00:01

This is Maharajas of Scale. A podcast where we go behind the scenes and talk to founders or demolishing the myths around building and scaling a big business in India. These are the stories that have shattered the assumptions around Indian consumers and are changing the game completely. I am Krishna Jonnakadla, serial entrepreneur, co founder of FLIT the fashion located in town and start mentor bringing you these stories. Hey, listeners, before you listen to this episode, I wanted to share a few updates with you and they're all exciting. The first update is that we have a new producer Tania Jadhav joins us as executive producer Tania brings a wealth of experience and she's organized one of the startup industry's most successful events the elevate which is sponsored by the government of Karnataka in Bangalore. Tania brings more than a decade of experience in production, and she's trying her hand at building something online for the first time, but she is not new to entrepreneurs, we welcome Tania. Nida, who was our previous producer, and has helped us with our initial start until now is going to move on to a different role and be leading a column called the growth column. The next update is that before you listen to this episode, a word of caution PC Mustafa who we interviewed was in a remote village in wayanad, in Kerala, so while his track has come out great, there may be two or three spots where it is a little weak, but the point has not been lost. So we request you to bear with us. Can I request you to leave a review, please leave a review wherever you listen to our podcast, whether it is iTunes or Spotify or cast pod. It helps us when we get excitement from you as to how you liked it. You can also send us suggestions about speakers that you might want to hear from or some questions that have been bugging you. And then we could ask a future entrepreneur. You can also email us at, heythere@maharajaofscale.com which is heythere@maharajaofscale.com Or you can email me krishna@maharajaofscale.com  or tania@maharajaofscale.com . If you haven't discovered the transcript feature, we actually publish transcripts, we have been publishing transcripts for all of our episodes, you'll see a button called download transcript, which I find it very useful. I do that I look for a transcript for any and every podcast that I listen to. And lastly, if you haven't visited our website, come visit the episode page on our website. We have a wealth of information. In fact, starting with the last two episodes, we have a lot of bonus things as well, a new angle that we discussed, there are a lot more updates coming there are a lot more additions that are coming and we can't wait to share those with you all out there. As always, thank you for listening and If you have any suggestions, any comments send it to us atheythere@maharajaofscale.com  or if you want to reach Tania personally Tania is available at tania@maharajaofscale.com . That's Tania or me Krishna@maharajaofscale.com  so talk to you all. Okay, here we are. Hey everyone, this is Krishna from Maharajas of scale. Today we have PC with us before I reveal what PCs full name is and who he is. Imagine yourself you're stuck in a new city like let's say Hyderabad or Chennai, or maybe in some other part of India and you're struggling to get your favorite daily breakfast. It used to happen to me a long time for as long as I was in the United States, but PC came as a knight in shining armor with a product. I'm talking about PC Musthafa of iD fresh foods, who has done a terrific job bringing amazing products to us. He is our speaker for today. PC. Welcome to the show.

PC Musthafa  03:58

Thanks, Krishna

Krishna Jonnakadla  03:59

So any opening comments from you PC?

PC Musthafa  04:01

Thank you for this wonderful opportunity. In the name of God, Peace be on to you

Krishna Jonnakadla  04:06

Awesome. so PC so what you have done to Indian Breakfast Industry is path breaking our all time favorites, at least for the South Indians and maybe the Keralaites as well Malabar parotta and vada then filter coffee and then dosa and Idly batter. You cannot tremendous job with it. How does it feel to be able to, you know, fulfill the breakfast needs of so many people in some it's it's basic, I'm making it feel like you're fulfilling somebody's dream. But you know, when you get your food, you know, that's where you get your energy. How does it feel?

PC Musthafa  04:42

So Krishna, it's not by chance, it's by choice. So look at our background. We had a very tough childhood me and my cousin's went through a very tough time during the childhood days during childhood. So we had a dream, and the dream was to eat breakfast everyday. Am lucky to be part of a team today, feeding world's best food idly to million Indians every single day. This is not by chance. It's by choice.

Krishna Jonnakadla  05:10

Interesting, dream to have breakfast every day. That must have been some really tough beginnings. I'm sure you shared that in a childhood story of yours a few times but let's let's dig deeper. I'm actually I have a couple of questions of a different kind. So how was that child childhood like? What was it growing up? Before we got on to the before we hit the record button you told us you are out there in Wayanad and did you grow up in Wayanad?

PC Musthafa  05:39

Yes, I was born and brought up in Wayanad in my in a very remote village in Wayanad. My village was so remote during those days that we had no electricity in my village , we had no roads to my village. I had to walk miles to my school.

Krishna Jonnakadla  05:55

How is it Scene now?

PC Musthafa  05:56

So the situation has improved these days we have roads we have still don't have a School from a good school in village yet. We still have a preschool a lot of preschool. But then citizens into a lot. We have roads. We have roads and electricity these days.

Krishna Jonnakadla  06:09

So you gone a little bit of an up and down with your own educational career, right? So initially you were helping your father out. And then the teacher took interest in your education or talk about that a little bit.

PC Musthafa  06:23

So during those days, education was not an importance. As I mentioned earlier, three time meal was a distant dream and breakfast was actually and we struggled to eat three time meals during those days. My dad was doing a daily which will create a farm as he was finding it difficult to meet both sides of the family. I ended up doing daily wage work with him at the age of 10 during my summer holidays, and you know weekends and sometimes I used to bunk school and work with him to support at the age of 10 education was not given importance, and I was very poor in my studies. I failed in class 6. And I stopped going to school for a while. I then start to work going into the farm with my dad, you know doing the daily wage work along with him. That's when you know one of my teacher Mathew Sir came down to the farm. Mathew Sir was teaching maths and I was reasonably good in maths during, you know, my early school days, Mathew Sir tried to take me back to school and I didn't want to go back to school. Even my dad tried. I said, No, I'm not going back to school. But then he asked me one question, which was sort of, you know, difficult situation for me to handle. He asked me this question, right? Do you want to be struggling like your dad, when you grow up, or do you want to be a teacher like me? I thought about it for a while and then I told him sir, I want to be a maths teacher like you. And I think that day was a turning point in my life. I decided to go back to school. I became a school topper less than one year with support of My parents and my teachers, I then ended up doing engineering computer science from NIT Calicut. I got a campus offer from NIT calicut. And, you know, the salary offered was actually more than an a one year salary of my dad. My dad couldn't believe it. I handed over my first month salary to my dad. He literally cried seeing that money, because it was actually more than his lifetime savings.

Krishna Jonnakadla  08:28

Wow, So your dad and Matthew sir tried to interest you. So that was that was pretty interesting. How did you go from being a person who was reluctant to go back to school to becoming a school topper, college topper? And getting into an NIT National Institute of Technology? You know, that's that stuff is made of many engineer grad Dreams, right? How did that transition happen?

PC Musthafa  08:54

So Krishna, I would say probably a couple of points who are not mentioned about this one. By the way, just It's not just my dad, it's my mom as well, my parents as I said, coming back? I think what really helped me was I was a below average student. So trying to learn something for the second time really helped me to grab it better. Second, I think I got support from my teachers, because Mathew Sir had pulled me back to school. And then it was you know it was in his KRA sort of, to make me a good boy. Right beyond that. And after that, and the last one, which probably is probably the most probably the most important thing is success gives you confidence, right? And confidence give you more success.

Krishna Jonnakadla  09:37

It's a virtuous cycle.

PC Musthafa  09:39

In my case. Yeah, in my case, I know ended up topping in one subject. I think it was maths If I remember correctly during those days. That was good enough for me to give confidence. And that gave me confidence to become a School topper for less than one year.

Krishna Jonnakadla  09:53

Okay. And then how did the NIT thing happen and that's a that's a big timeframe. Right. Sixth grade to nit six standard to nit, is a big timeframe coming from that kind of a background what I meant scraping for fees. And then eventually, did you face any challenges affording your engineering education as well?

PC Musthafa  10:15

Yeah, so I finished my terk from college for the Farook college in calicut. And during those days of No, my sir, Mohammed Sir used to conduct engineering coaching classes and enterance coaching classes, okay. And of course, he used to collect a fee for the same. And I was an average student in the school in the college, and he asked me to join the classes. Then I said, Sir, I don't have money. I won't be able to pay. And he said, Don't worry, you know, I will give you free free tuition, come and join. So I went for the free coaching offered by him. And that's how I got into NIT Calicut.

Krishna Jonnakadla  10:53

Interesting. You must be one of the few rare people you know with this kind of success to say You were average and to also even recall the contributions that some of these teachers have made to your life It takes a certain amount of humility to actually do that kudos to you.

PC Musthafa  11:12

Krishna, this is a point I want to make here. Not all of us would be lucky enough to have the tough childhood that I personally faced in my early days. But then we can all play the role of Mathew Sir, or Mohammed Sir or my dad or my mom played in my life.

Krishna Jonnakadla  11:30

Let's dig that thing a little deeper bc I've always held the notion that you know, parents play a very strong role, Mom and Dad and depends on who is a greater influence influence on you, especially when you have those kinds of beginnings where making three square meals a day is hard. What sort of message do you get out of it? Do you do you grow up to say, hey, the world is out there to get me and therefore I'm going to do anything and everything but looks like you took the other route of what sort of value system did your parents give you? What sort of a role did they play in you? Because see, all of that value of bringing is what's gone into all the philosophy and the thought you put into your venture right? Talk about the roles that both of them have played.

PC Musthafa  12:16

So Krishna, whatever I have learned so far, and whatever I have earned so far, is all because of my parents, I am a zero without support my parents, they compromised their one meal to educate me, whatever I've learned so far, is mostly from them, including ethics, including a no way of doing business, including, you know, spirituality, all of them. If I look back, I'm indebted to my parents. In fact, not just my case. We are here because the sacrifice of our parents coming back on the kind of values that have learned from them a lot, you know, My dad used to take me to Masjid every day, five times a day I've learned to do my prayers. And with his help, the he used also used to teach me or share a lot of stories with me interesting stories, or, interesting anecdotes, which, you know, probably wouldn't understand during those days. But then when you reflect back today, I am able to understand the meaning of those stories. And the Morel behind the stories coming to my mom. She was one the toughest women I faced my life. When I encountered my life, she had the courage to face elephants. And that actually meant she had courage to face elephants. So let me share a story of my mom with when early days. My dad of course was finding it difficult to meet both into the family. So we decided to support dad by finding some kind of part time income. So during weekends, my mom used to take us to a forest, nearby forest, to pluck the wood and bring back and sell it to the market. So that, you know, we can use that money to support partner support my dad. During those days, there are many days where you know she had to encounter the elephants head to head. Right. But she had the courage. She had the courage to face those tough challenges and then instill those courage courage in us. Never give up attitude is something which I've done when my dad my mom.

Krishna Jonnakadla  14:38

Wow. A couple of years ago in Sakleshpur, which is a part of Karnataka, we had gone for a vacation and this homestay was nestled among those Western ghats. And there was a single elephant, right so talking of elephants, we all know in kannada, there is a word called onti Salaga which is a single elephant is supposed to be dangerous than a elephant that is part of a herd. And we were supposed to climb this mountain at 4am in the morning so that we could catch the Sunrise at around the 5. The funny thing is we reached at five we saw the sunrise and it was breathtaking. As we were coming down there was elephant dung. I asked the guide who came with a saying that How come there is elephant dung here. He said, he said there is a lone elephant on the prowl on the loose here. And be careful. You know, and and that and that was fresh. It looked like maybe the elephant was just about an hour ago or something. I said, Dude, can't you Warn us? Because facing an elephant is not something that any. I mean, it's not like raw courage, right? You also need a certain amount of tactic and thinking about how elephants function. So interesting. They say God couldn't be everywhere. Therefore, he made mothers right. So Amazing. So then from from your engineering degree then then what what did you embark on?

PC Musthafa  16:07

I then worked with few MCs in India Middle East and and Europe, I you can earned some money and cleared all the depths for for my parents after that I then built a home for my parents. Okay, I then arranged wedding for my sisters and it's the money. And by the way before my marriage and then I made some savings. So I was very lucky for me to get money at the right time in my life, it doesn't mean whose money to meet basic right to build up home for my parents to create availability and to arrange wedding for my sisters. Right was really important for me to get money at those times. I managed to do that there was something which was missing. After my engineering, I had a good Gate score. But I couldn't pursue my MTech or MS during those days because of the financial situation that we were in at that time. So I decided to take up a job. After work, few years in India, Europe and Middle East, I decided to come back to India with an opportunity of creating employment for smart kids from my village. Not just that I also had the dream of spending more time with my parents and pursue my higher studies, which I couldn't do after my engineering. And that's when I decided to come back to India 30 almost 16 years ago, and during those days, you know, once I came back to India, I was able to spend more time with my parents, especially during weekends and holidays. I stay in Bangalore and Wayanad today is just five hour drive, right? So it became closer to them Wayanadand you know,  even they ended up visiting me in Bangalore, so started spending more time with my parents. I had this dream of doing higher studies one trip to Bangergatta national park in Bangalore, triggered the determination in me to enter IIM campus and that was good enough for me to be determined and prepare hard. And get into IIM campus one day .

Krishna Jonnakadla  18:25

What exactly happened at that national park that drove you to say I'll do an MBA and getting into IIM B.

PC Musthafa  18:30

So this was in 2003, four time so two three times. I had come back to India, and then we went for a picnic and to this Bangergatta National Park which is around 35 to 40 kilometers away from the city. On the way I happen to see this beautiful campus of IIM Bangalore you won't miss it is such a beautiful campus in the city,  I felt like going to the campus but didnt know anyone in the campus. And moreover, I didn't have courage to go and check in security to get permission to enter the campus. But that day I determined that I will enter this campus One day, my life. I came back. I told myself that yes, I can get to this place. If I am able a sixth grade drop out the guy can get it in a NIT if I work hard, I will be able to get to this campus. I came back I worked hard for two years, two hours every day after my morning prayer, and if you look at my academics, I was a below average student. It was not easy for a person like me to get into IIM campus I needed a very high analytical skills. So I worked mostly self practice. That was good enough for me to get into IIMcampus. Not just that, I not just that I just got into IIM campus. Last year, I was recognized as the youngest distribution allumini in the history ofIIM Bangalore. My dad was proud. My parents was proud to see my name engraved on the wall of fame at IIM Bangalore. That is power of determination that I would summarize. To determine something, you can achieve it.

Krishna Jonnakadla  20:12

You were passing by, you didn't have the courage to check with the security guard to give you a tour of the campus. And you said, right royally, I'm going to be a student here. I'm going to do my MBA. And then now you are in the Hall of Fame. Awesome. So let's now switch chapters a little bit and then talk about what it what is it that you did to get you into the Hall of Fame. So your adventure your business, which you've scaled phenomenally well. Talk about the beginnings of iD. I'm intrigued talk about that beginning a little bit. I have a question. couple of questions on that.

PC Musthafa  20:44

So when I came back to India, as I mentioned, there were three objectives. So for me to come back to India. One, I wanted to spend more time with my parents. Second, I want to pursue my higher studies. Third, I want to do something to get a break for smart kids for my village. I was lucky enough to come out to the village and get a good career break my life. But there are a lot of smarter people in my village, they were not able to get a break in their career. And that's one of the reason for me to come back to India and join with Intel during those days. Now, when I go to IIM Bangalore , I used to chat with my cousins, who used to be my childhood friends as well. My cousins were running a small tech Khirana store in a place called Indiranagar in Bangalore. We chat on different ideas, different different business ideas, right on what to do, what not to do, and stuff like that, with this objective of creating employment for smart kids from my village. So one day, you know, of course we discuss many ideas. I'm not actually you know, recapping those ideas with you know, one day one of the cousin mentioned about, you know, an idly dosa batter supplier there was this idly dosa batter supplier supplying idly batter in a plain poach with a rubber band on top. It didnt have a brand it had a sticker with MRP and date, sticker sometimes will be inside and sometimes will be outside. This batter had all sorts of quality issues, service complaints and hygiene issues. My cousin's tried to fix the issue with the vendor multiple times it didn't work out. And that's when we thought why don't we try to fix ourselves my cousin suggested that can we try to create our own batter? So, we tried. We tried in a very small setup that them all what we had was from 50,000 rupees. And a 50sq feet of kitchen. At 50,000 rupees, we bought one grinder, one mixer, one sealing machine, one way in scale and a second TVS scooty. Our job was to go to market every day. Buy rice and dal then come back, clean it, wash it, soak, grind, mix ferment it then pack it, Next day morning, load onto second hand tvs scooty and go to the market ourselves and sell it ourselves. It was a back breaking work, our shirt  would be covered in sweat. It took us nine months to get to new customers. It took us nine months to sell hundred packets a day.When we were sending 100 packets initially, 90 used to come back unsold. But we didn't give up.

Krishna Jonnakadla  23:23

Why was that?

PC Musthafa  23:23

Initial days because customers are not willing willing to buy such a product. Okay. Retailers, of course didn't believe in this kind of product. And consumers wouldn't believe a batter in a pack. So we had given ourselves six months time to prove this concept. And what we're told initially, ourseves was we will give it will try for six months. If it doesn't work out. We will withdraw funds from the business after six months.  We were not there. After six months, we were not there. We didn't succeed ourself. right. We were doing our 30-40 packets that time. Then we said we were pretty confident about his business, but we were not able to do it. Then we said, Can we do three more months before we quit, So we gave three more months. So when in ninth month, we were able to sell 100 packets a day. That gave us a confidence. Then we did some maths in terms of market size and stuff like that. And that gave us more confidence. Then we started selling more batter. And as I mentioned earlier, what I've learned is success Consumes more confidence and confidence gives you more success. even hear it every every month, we started doubling our revenue during the early days. That is a past. Today we are present in 47th with this. We are team of 2000 people. We touch 30,000 outlets every day in three countries. We touch life of a million people that worlds best that is idly every day. It is not by chance.

Krishna Jonnakadla  24:55

So it is India UAE what are the country?

PC Musthafa  25:00


Krishna Jonnakadla  25:01

Okay, so let's

PC Musthafa  25:03

Oman. Oman.

Krishna Jonnakadla  25:04

Oman. Okay, so so let's go to that starting a little bit. What about the recipe for the It is one thing to make Idly, idly batter for home consumption and I'm assuming assuming Idly was a staple food for you as well as one of the breakfast items.

PC Musthafa  25:21

Yeah. If you're able to if you're able to afford.

Krishna Jonnakadla  25:23

If you're able to afford, so well I guess back then by the time you were, you hadcome back so I suppose idly affordability was not an issue back then. So it is one thing to actually make batter for home consumption, but something to do for commercial grade. What about all the recipe, getting a grinder all of that is great, but getting the fineness, getting a certain amount of shelf life? All of those things? How did you overcome that initial part?

PC Musthafa  25:52

So we worked on a couple of things. One, we tried with our moms Their own recipe, and then try to scale it up ofcourse that had its own challenges, especially when we go for a commercial production. And then we also worked with a few people, you know, in restaurants, who are doing it at a larger scale, right, who does maybe 100 - 200 kg a day kind of volume. So we worked with them to get us some support. And then we also worked to CFTRI a, in Mysore.

Krishna Jonnakadla  26:27

You try try the recipes with your moms.

PC Musthafa  26:30

Tried with moms to try with some restaurants and also tried with CFTRI Mysore.

Krishna Jonnakadla  26:36

Ah CFTRI Yes. Okay. So the CFTRI Guys, did they play some sort of role because this product has been tried by many people, at what point did it occur to you that you had a recipe because without getting the quality right without additives and all of that meant that you had some amount of a lot of innovation rather going to this product, right.

PC Musthafa  26:59

So Krishna, if you look at this product, there is no rocket science, right? There's no entry barrier anybody can make batter if you have a lakh rupee investment, you could go ahead and start batter yourself tomorrow. We worked with CFTRI for us to get some real scientific data in place to bring some science into this business, not for the recipe part recipe part. We work with moms and restaurants. now, coming to, you know, your second part of the question about innovation. Innovation plays an extremely important role in any business, idly business is not rocket science. It was extremely important for us to innovate continuously, to build a strong brand and to stay out of competition. Now coming to innovation. We all believe we all think that innovation is born out of Excel sheets, right? That is not the fact. I think common sense is the most important ingredient for innovation. Common sense is the most uncommon word in the world these days. We end up complicating things unnecessarily What I've learned is all what you need is common sense to build a business and to continually innovate as well. ID successes actually later to this simple word called common sense.

Krishna Jonnakadla  28:13

Dig a little deeper PC there. You know, growing up, you know, because I am South Indian and then Idly is a staple food for us in Bangalore. I'm sure there are famous restaurants, for example, Veena stores and then Brahmins all of these places. A lot of these places are known for their idlys right and they also have a certain type of Idly. There is the Mallige idly, which is the jasmine idly because it's so soft to do so succulent. And you know, growing up when I used to ask my mom, why can't home idlys be like that? My mom would say hey, the recipe is so tightly held. It is sort of a secret like cokes, Coca Cola recipe, but you know, we started using ID batter at home three years ago and then I was like blown away at what you could achieve. So when you Initially work with those restaurants and with with your moms, was there any reluctance for them to share what would go into making a great batter, because that is that is a common sense part of it right to sit down with them understand what they do. So talk about that part a little bit.

PC Musthafa  29:15

So we didn't have any reluctance as it is, in fact, we got great support. In fact, many of our recipes were actually, you know, inspired by know, grandmothers, okay. In fact, the way we have develop and fine tune the batter to get the right proportion of rice and dal and the process to be followed in terms of fermentation, you'll have the right to learn. We've learned from our moms, but how to scale it up, because maybe make it home. not scalable. Right,

Krishna Jonnakadla  29:45

Right. That's right.

PC Musthafa  29:47

We learned from you know, the surgeons and the science behind this, we learn from cftri, right.

Krishna Jonnakadla  29:54

So the recipe from moms the scale aspect from the restaurants and then the science. So science as in how to get a, you know, good shelf life product without adding harmful elements into it, that sort of stuff, I'm assuming .

PC Musthafa  30:09

No. So, for example, you know, what should the right viscosity of the product, okay, what should the right pH value of the product, right? And what kind of packaging can use so that it has a control fermentation in place? All of them were learnt CFTRI.

Krishna Jonnakadla  30:25

Right, That place is a goldmine, isn't it for the amount of research they do on food?

PC Musthafa  30:30

Yeah, anything, you know, most of those research not scaled up.

Krishna Jonnakadla  30:35

Yeah. Well, it needs a great minds like yours to dig in and say, I'll scale this thing.

PC Musthafa  30:41

If you can use those platforms to really scale up and build. You can actually do wonders in the world,

Krishna Jonnakadla  30:47

Right. So this was still in 2005 or 2000. A little later, all of this ...

PC Musthafa  30:53


Krishna Jonnakadla  30:53

2006, okay, so you had grown beyond the 50 square foot kitchen, and you had to scale your operation. Then ...

PC Musthafa  31:01

2006 we still had the 50sq ft kitchen. We moved to around 2007 times we moved to a larger kitchen around a 600 square foot kitchen in a place called CV raman nagar in Bangalore And out of the visit of the we invested around six lakhs rupees from my savings I had from my opposite jobs, I use that money to set up a 600 square foot kitchen and then start doing larger volume. So then we started with 1000 thousand Kg 2000 kg per day kind of volume, In 2008-9 time we moved  to have, you know, KSIDC  which is another small state industry development corporation area in a place called hoskote Bangalore, to set up a reasonably large factory. I would say larger kitchen, not a factory, larger kitchen around 2500 square feet area, that place we used to scale up this business, btw we still use that factory

Krishna Jonnakadla  31:59

so you were doing hundred hundred packets by the end of 2005. And that gave you the confidence to say let's scale this up. And that's when the CV Raman Nagar operation happened. Right. So let's talk about the economics of the idly market somewhere the I know you said common sense, but at some point in time did the MBA in you to kick in and say, Hey, this, you know, lots of people eat idly, this is big market, talk about the economics of the market a lit bit.

PC Musthafa  32:26

See, for any business to be profitable or any business to be attractive for investor, there has to be three parts for this business, right? I'm just simplifying it. It has to be scalable. It has to be sustainable, it has to be profitable. So we just have to break it for the idly business. If you look at the size of the idly business in Bangalore, let me do a quick math with you. Maybe we can do a role play. What's the bangalore population today?

Krishna Jonnakadla  32:49

I think 1.4 crores 1.5

PC Musthafa  32:51

1.4, 1.5 crores Right. And as per our study, more than 90 percentage of the bangaloreans eat idly dosa uttapaam set dosa that combination right, and you I'm sure you would agree to that is that in some cases it's 100% but for the bulk of the decision on giving only 80%

Krishna Jonnakadla  33:11

yeah I think 80% if you take out all the maybe a lot of the North Indians and people who did not grow up with that sort of stuff but yeah go on

PC Musthafa  33:19

its more than 80 percentages case but for this purpose I'm just take 80 percentage . So what people eat Idly dosa regularly in Bangalore now of as per our study, I know we eat 21 meals in a week, 3 meals a day. Out of 21 meals, three to four meals would be idly dosa uttapam set dosa paniaaram and those  combination which is made out of batter right, per meal you end up taking three four Idly is about 200 grams 180 to 200 grams is what we take and if  you take now you know, look at the number of idlys we consume, on average per person we consume 15-20 idlys per week, just before we leave in a week, you have a seven you have to currently in a day to call in a day, if you cannot imagine the size of this easily better business better for this to grow rapidly, will be the size of the weight of this battle could be as high as 100 Asian elephants in a day. That's what we tuck in every day. That is a multi billion dollar business opportunity in bangalore.

Krishna Jonnakadla  34:26

That's just bangalore.

PC Musthafa  34:27

That just bangalore batter. If I now take the same calculation for Chennai, you can do the math yourself Chennai increaeses by 5 times a day. Right? So I'll leave the maths to you after this. So I think the Idly business is highly scalable. I'm just coming back to those three points. Idly business is highly scalable, it is profitable. From day one, we focused on profitability of the business. And we proved that this business can be made profitable. So inability was not a confirm profitability is proven. Now coming to the sustainability is it's really sustainable. I'll give you my logic behind it. Whenever my grandfather could afford to eat a breakfast, he would prefer to eat Idly dosa uttapamam that combination. I had dosa this morning. And My favorite is by the way idly in future, I want my grandson to eat idly as a breakfast. According to me, Idly business is the most sustainable business in the world

Krishna Jonnakadla  35:37

food, especially the staple,

PC Musthafa  35:39

it ticks every parameter, every checkbox for it to become an attractive product as a business opportunity. scalability, profitability and sustainability. all ticked. So when we started, right people used to ask us, why idly business. Why is this Right, is it a rice trading business this scenario? Are you doing rice? Idly rice? Why do you know? Why did you quit your IT job and move to Idly business? My question to them is, why not Idly? Idly is most sustainable business on the word. It's the most profitable business in the world. It is the highest scaleable business is the world. And as we all know, Idly is the most eaten food in the world.

Krishna Jonnakadla  36:25

A lot of people don't understand the nuances, right? They think working in these large corporations because millions of people dream of that. They think that's the end game and therefore, you know, people like you make these sort of decisions to change other's lives and then bring amazing product. You know, they that link is not made at all.

PC Musthafa  36:45

Yeah, that leaves me with one point in here, one of the point here is about the addiction. You'll know about different kind of addiction, right? Can you just recap, or can come up few addictions that you could think of?

Krishna Jonnakadla  36:57

Let's say cigarettes,

PC Musthafa  36:58


Krishna Jonnakadla  36:59


PC Musthafa  37:00


Krishna Jonnakadla  37:01

food itself is an addiction in some form. maybe watching films, I'm talking about the bottom line slightly good ones so, and alcohol,

PC Musthafa  37:11

Alcohol, what's the most dangerous addition according to you?

Krishna Jonnakadla  37:14

Well, all of them beyond the point are dangerous, right?

PC Musthafa  37:17

But let me tell you my way of looking at it, I think the most dangerous addiction in the world is a salary. it can add to some extent, it instills fear of failure in you. So many of us who want to make this world a better place. We think somebody else will do it for us. That's not gonna happen. If you want to make this world a better place. If you want to live your dream. you have to do it yourself. Don't expect somebody else to do it for you. Don't get addicted to salary. You need to earn money, you need to earn salary I agree, but never get addicted to salary. Thereby. Your passion and creativity is lost. It is extremely important to strike a balance.

Krishna Jonnakadla  38:01

So PC, let me ask you a question here for anybody that had the kind of childhood or the challenges that you had expecting the degree of financial stability and trying to have a secured life good. In some sense be of you know, some paramount importance. But yet here you are actually preaching the very opposite thing, which is about not getting addicted to that in a financial stream that comes from a salary. Was this something that was hidden in you all the while or was this a switch that happened somewhere,

PC Musthafa  38:36

so this is my fourth or fifth venture? ID is my fifth venture maybe it can just be kept by other venture quickly for you, please. I have my first venture at the age of 10. I used have  sweetshop in my village. It was a makeshift kirana store that was built using my mom's saree and my dad's bench due to summer holiday. I used to borrow money for my uncle, walk kilometers miles to the nearest town, and then bring back chocolates, at a wholesale price, bring it back and sell it at a bill printed price. I used to make profit out of it, except when my sisters steal the chocolates for me. But I was the kind enough elder brother for them to give them at least one chocolate every day. That was my first profitable venture. My second business was again, you know,at home with the money that I've earned with this,  kirana business during summer holidays. I wanted to do some other business. So I then bought a goat with the money. It became two three goats, and then I decided to sell those. And with that, I bought a cow. That became a reqular income for my family. That was my second So called business successful again. My third business was while, during my teenage days, after immediately after engineering and not  teenage immedialy after engineering, I started a online used car showrrom based out of middle east. It was very successful initially, we had a buyout offer, but then .com bubble happened in 2010. And we are trying to shut down the business with this business. I lost my hard earned money, my hard work, and most importantly, I lost my confidence. So that was my third third business. I had a fourth business idea which did not find the light during my base in Middle East. The ISD calls were very expensive,  I'm I concieved a product idea to make in order to share messages, audio messages for, you know, sorry pictures, videos with my parents and friends back in India at a cost effective way at creating a prototype for same, not the point. But I created a product idea in place. But then my failure with the used car business will be back. I didn't have courage to put more money and more of a bandwidth in such a product. I think around six or seven years ago, I happen to download a green colored app, which had all the features that I had envisaged during my teenage days. And I think there are five or six years ago, I happen to read an article that a blue color app has taken over this blue coloured app, a whopping million dollar business with a multi multi billion evaluation rate is my cost of not doing the right thing at the right time. That's my opportunity. So those are my four businesses three of them were success. And one was meant two the success. One was a failure. One was about opportunity. ID is my fifth business.

Krishna Jonnakadla  42:08

Interesting. So initially when you started off you began small was that because of what happened with the car business or it was just a way to prove the market understand how it works and all of that.

PC Musthafa  42:20

I think both we don't want to lose more money. I had around 15 lakhs rupees of savings for my office's job when I returned to India. I didn't want to lose that money. So one is we had to prove the concept. And second thing is the fear of failure again. So we thought we'll put a small money evaluate and then take a decision.

Krishna Jonnakadla  42:38

So let's now jump a little bit and then talk about a couple of things.

PC Musthafa  42:44

one more point here. I know some of the some of the listeners would be wondering how did I get this courage to quit a well paid job and move into ID business? I donno if its part of your question.

Krishna Jonnakadla  42:55

Sure. Go ahead.

PC Musthafa  42:56

I think I have an important message here. Like most of your Here, I always had the fear of failure. I had no courage to quit my well paid job and no to this startup as a full time job. But even out the common sense played an important role for us. I partnered with my cousins, and I supported my cousins financially, and stratergically  as well, in terms of planning reviews, and all of them during the weekends and holidays. And my savings, I used to test this business along with my cousins they tried it for two years, or two years, when it was doing good. That gave me confidence. Thereby I decided to quit my job and became a full time entrepreneur.

Krishna Jonnakadla  43:40

So till then you were moonlighting with your cousin's?

PC Musthafa  43:42

Yeah, my message out here is, if you do not have courage, with a job, to Live Your Passion, find the right cousins, who will do it for you.

Krishna Jonnakadla  43:52

Right? When did the MBA happen all around this time?

PC Musthafa  43:56

Yeah. 2004 to 7.

Krishna Jonnakadla  43:58

So you were doing your MBA. And then doing your job and also still working alongside with your cousins for the

PC Musthafa  44:07

that was the most toughest time in my life.

Krishna Jonnakadla  44:10

But do you look back today and relish the time because it pushed you to the limits and made you do so many interesting things?

PC Musthafa  44:17

Yeah. I also use that opportunity to build a tight network with my Prof.

Krishna Jonnakadla  44:22

Okay, was this a goal based decision? Where in 2007, you decided to take a plunge or it's all sort of happened organically.

PC Musthafa  44:30

So I think it's a mix of both. We have learned throughout this journey, and many things were unplanned. But no, we had we had a strong dimension that we want to make a difference in this world by helping people in our village at least, and even today, we are determined. today of course, we have expanded beyond a village but we are still determined.

Krishna Jonnakadla  44:56

let's talk about the scale journey a little bit PC by 2005 and 2007 is when the first factory that the larger 2500 square feet facility was set up. How was initial distribution, you obviously outgrew Indira Nagar and then we'll talk about the scale journey a little bit, and you didn't raise funding up until 2014. And then after that premji invest came in, right so that's a that's a lot lot of time it requires patience, it requires staying power, because hearing you talk about scale obviously means that you had scaling on your mind the size of the market was very attractive, or rather, you know, you know, to just paraphrase Bernoulli principle here, it is a wind beneath your wings and your ambitions, right. So talk about the scale and the funding journey a little bit go into those two peaks.

PC Musthafa  45:48

So Idly business is not a fancy business, there is no money. We are only limited resource. We are only 15 lakhs rupees savings with us. And know this business, Not a fancy business there is no investor no one this business idea with you, we don't come from from a no business family. So, there is no other way for us to raise the money as well. We had the option of raising money or borrowing money from the bank using interest base transaction as interest based transactions are completely against my ethical values, we decided not to take that road. So, the only way for us to make this business profit business sustainable was to focus on two important aspects from day one, one is profitability, second is positive cash flow, you focus on these two aspects from day one, we focused on profitable business and cash on delivery model from day one, we do not do credit, we only do it on cash basis, because that is only a way for us to you know, manage your cash flow. beyound a point it has a limitation. So until 2001, 11 12, we were a single city single product company. I think we're doing close to probably around 9 cores per year revenue at that time and a profitable business. So, whatever profits we generated, we brought back to the organization for the growth. So one seed capital around 15 lakhs that we had, we put that into the company. And then I had a I had a small property that I had invested again from an overseas job, I sold the property and invested in ID, and whatever the profit we generated? We brought back into the into the company for the growth. In 2012, I reached out to my friends and colleagues, my roommates and other people who used to work whom I thought will be able to help me to take this to the next level. So for example, you know, my engineering classmates Sujith joined me, invested some money and join me to set up the operation in Mumbai. And you know Asif my family friend, join me to start to the operation in Dubai. Rajesh and Banu again, friends joined me to set the Operation in Hyderabad. That's how we expanded. And later on. I know, when we were doing well there were many, you know, venture capital fund funds running behind us saying that we want to help you to scale it up,at the right time took the money and then use that money for scale up. Now, let me talk about scaling up because this is an important area that many of us fail in scaling up such businesses right. So what scale up according to according to my principles or my checklist one, the product itself and  technology. and we also need money and network. Let me take you through each one of them idly batter itself is a highly scalable business. So scalability was not a constraint and our meeting was acceptable in other markets, whether  it was Mumbai, Hydrebad Dubai, by the pattern was acceptable. So that solved one of the key problems, which is same product was scalable in other markets coming to the technology. I think technology played an extremely important role for ID scale up. And this is what we what we think technology is all about internet and websites, right. And mobile apps, no, for a manufacturing company like us, technology is also to do with back end. But let me again, share a story with you about what technology that we use for scale, we all know about idly batter, you know, to make right idly, right quality idly batter, right? to get the right quality idly batter that Again, two important aspects you need to get the right raw material and the right process. Now let me talk about the process involved. process, as I mentioned earlier involves soaking grinding all of them one of the one of the toughest work, while makin idly dosa batter is the wet grinding. If you don't follow wet grinding process, the traditional stone grinding modern wet grinding process, you would not get the right batter. If you don't get the right batter, you wont get the right idly, you had to follow traditional wetgrinding technology followed by our grandmothers was at home. Now the best grinders available the largest grinders available for stone grinding the traditional way of stone grinding, grinds around 2kgs of dal per hour so you can imagine, in iD, I grind close to around close to around 30,000 kg of rice and dal per day 25,000 to 30,000 kg of rice and dal per day. You can now imagine the size of the number of factory required number of people required and moreover, the complication that comes along with this. That's where that's where we decided to focus on the back end technology, which is you would wet gridning technology machines. Now, as we all know, most of the food processing machinaery is evident Germany. Unfortunately, Germans don't use Idly Dosa. So there's no wet grinding batter making technology for me to copy from. But we didn't give up. We still went to Germany, identified a mustard paste making machine, a large scale making machine. We got the machine customized to make idly dosa batter. Today, it's a process pattern, I'm able to grind 5000 kg of batter per hour with a traditional wet grinding technology, not 2 kg of dal per day, per hour. So that kind of scale up you're talking about so investing on the back end machinery was extremely important. That's what I mean by technology, there are lot of aspect when comes to technology, in the interest of time I am skipping other technological innovations that we have done.

Krishna Jonnakadla  52:00

Talk about another three or four this is this is fascinating.

PC Musthafa  52:03

There are a lot for example, you know, to get the batter in the right packaging, right, we had to innovate our own packaging, you know, setup, which takes parota machine, right parottas you from ID  today we make around six, seven lakhs parotas per day. Right? And this parotas, if it is handmade, only it gets the right texture right quality right layers. We had to create our own parota making machinery. We innovated ourselves,

Krishna Jonnakadla  52:37

you parotas were delicious, by the way

PC Musthafa  52:38

there are a lot of such things that we have done in terms of, you know, bringing technology in the backend, in the manufacturing backend to bring in, you know, consistent innovative products. Okay, so coming back on the front end technology, which is IT, ID runs on IT and that's a fact when we started iD, we will getting, we were sending hundred packets to markets and 90 used to come back unsold, in a  period of three years we start selling 2000 packets market and 500 used to come back unsold. There was no way for me to make this business profitable and scalable with this kind of wastage that's when we started using data and technology. We started capturing store wise item wise sales and wastage data, we now use  this data to predict the right demand for the right store on the right day. Today, in a mature city mature product, we run at a wastage of less than one percentage, that is the power of technology. That is power of data. We use IT or analytics to sell idly.

Krishna Jonnakadla  53:46

So you're doing demand projections, ensuring that you're placing the right quantity of product. Well, I'm oversimplifying it, for sure. Are you doing anything in the sourcing side? peel that a litle bit

PC Musthafa  53:58

And they're focusing all this based on data right. So, for example, my production planning is done based on data. My procurement is done again based on data. My material request planning is done based on data. One last piece of scaling up right, we talked about the product. We talked about technology, Other things that we need is the team. We were a family run business, but we were smart enough to identify our own limitation and decide that we need to bring in professionals from market to scale up this business to the next level. So we we build the right mix of people, people I know who are experts in running such large businesses and scaling up into into multi multi billion dollar businesses, with entrepreneurs, so that makes really good for us. And of course, the next one is about money or investor I would say, investors again, we were very lucky that we got the right set of investors. So all of them put together really helped us to reach where we are today.

Krishna Jonnakadla  55:06

Let's dwell on a couple of aspects, the investor angle. Obviously, you were there in the market, you had achieved a certain degree of scale on your own. And even now, we've done the back of the envelope calculation on the size of the idly market in Bangalore alone, despite all the scale you've achieved till now, you still haven't made a big sizable dent in the market yet, so there is miles to go. So because you were in that position, were you in a position to choose your investors because usually startups or businesses have not had that kind of a luxury right. So Is that why you ended up with a set of investors that aligned well with what you were looking for?

PC Musthafa  55:44

Yeah, I was really lucky to get the right investors on the board. So while selecting an investor, you have to be extremely careful again, for my experience, don't just look for investors based on valuation. If we look at the case of IDs, I know investor selection. We had Investors who were willing to pay is almost 10-15 percentage better valuation than the valuation offered by the conservative investors, we felt we should look for investors who can add value to a business and who can help us only in the places where that is required. We don't need investors in our business to run the business. We know how to run the business, but we need investors to, you know, help us and know boat level we can boucing back. So, it is extremely important to choose the right investors. I usually draw an analogy here. Getting investor is like getting married, but never ended up choosing, choosing no spouse for the dowry.

Krishna Jonnakadla  56:41

Right. Very interesting. So let's talk about the distribution side a little bit. So it is one thing to I live in the states for a very long time. And obviously the backer we will talk about the US market in about a minute's time batter in translucent containers was sold widely at what point in time if you're serving hundreds and thousands of stores across the city meant that you obviously had to get your branding you had to get your packaging because one without that to have extensive distribution is not something easy because you need branding you need a certain degree of quality standardization and which your products are great. By the way. Did that happen? even prior to the investors coming on board or was that some something that you perfected after?

PC Musthafa  57:30

No, I think this is an area that we had perfected even before an investor comes in,or investor came in, we started this business as a self owned distribution model from day one. Today, iD is not a batter company. We are probably world's best fresh food distribution company. We know how to distribute fresh products, replenish every day, control the wastage and make it profitable.

Krishna Jonnakadla  57:59

So what you Saying use in a particular city, where the consumer actually picks up your products from a retailer, it is directly distributed to the retailer by you. Okay, obviously given the perishable nature and the fresh nature of the food, that that would mean a pretty big logistical operation behind the scenes correct.

PC Musthafa  58:20

As I told you, right, we are the world's best fresh food distribution company, we are actually building a platform for fresh food distribution

Krishna Jonnakadla  58:27

and this is a in all the cities your present,

PC Musthafa  58:29

yes and make it scalable, profitable and sustainable. In fact, what I've learned is my biggest asset today is my distribution network, see, usually packaging is considered as a container right? That's a general perception about the packaging, usage of packaging it but packaging has to looked at the larger picture. According according to me, packaging is the easiest, cheapest way of marketing the product, One.  Second thing packaging can be an experience by itself. And third thing, packaging can be used to deliver functionality. If you look at the case of VADA, that's what we did to do with the packaging, we used, or we identified, what are some opportunities, and we identified, VADA making is a cumbersome job, especially the hole for the VADA is the most difficult part to get right. a VADA without a hole is called bonda.

Krishna Jonnakadla  59:28

Interesting. Yeah, well, anybody with a proprietary distribution network, whether it's online or offline, obviously that is that is because you are able to introduce new products and read the pulse of the market More importantly, get a sense of what the market wants. Let's talk about the packaging a little bit. Over the last three, four years. I've noticed, let's take the vada product for example. Everybody can VADA not just that title, the packaging, the amount of thought that must have gone into it is incredible. Because As the product is fantastic, it hits the messaging right on the spot. And the quality is, you know, bang on. I've never seen two separate packets have different quality at all. In fact, last year, I had to spend some time in Andhra Pradesh. And the funny thing is for all the reference to coffee in Telugu films and in Telugu folklore, the coffee that you get is really crappy. And most of them actually drink tea. So I'm a fan of filter coffee. And in 2016, a couple of years after coming back from the US, I joke used to joke with my wife saying, Hey, we out we ought to start a sachet of decoction kind of a product because the instant coffee sucks, and then my wife talked me out of it. And a year later I find iD decoction, filter coffee decoction. So an incredible amount of thought must have gone into it. What's the thought process like to get the packaging right the messaging right up What is that process?

PC Musthafa  1:01:01

We identified this as an opportunity, we then used common sense to put a hole for the VADA using our packaging. It was not an easy journey. It took us three years to build the hole for the VADA, we would have failed 100 times. If we never gave up gave up, coming back, we used VADA pack, a little bit of technology with an umbrella shape, VADA batter dispenser along with a cutter so that when you squeeze the VADA batter from the VADA pack, it comes out the right shape. When you cut it, it becomes a proper data untouched by hands, you can make vada at home. We are done this product. And you know, it also created this small video for my talk at Harvad, that we video got leaked that everybody can read our video that you're talking about was not an ad campaign. It was meant for my talk at harvard and this video got leaked. It was viral across the world in 2017 2018. Actually, this is one of the most viral video on WhatsApp. Today am getting requests from different parts of the world to make the same packaging for donuts. So what I've learned is you're looking at packaging at a slightly  different ways. One, for a startup like mine, we can't afford to spend money on marketing. I think packaging is the best way to you know, share your message or convey a message that we work from day one. Second thing, packaging can be given a packaging and used to deliver functionality and to deliver a special experience to consumers. So in the case of VADA Packing, I didn't sell VADA I sold. VADA batter,  a homemaker picks up a pack of Vada batter, makes their own water. And for most of them, this was the first VADA in their life. They will remember before the lifetime kids started making vada using my vada pack and shared it on different social media platforms, what a better way to get brand visibility and build a strong brand. Innovation helps.

Krishna Jonnakadla  1:03:08

Yes and a perfect looking VADA are that right.

PC Musthafa  1:03:11

So let me just also tell you one more story on it, which is about the next product that we have done two months two to three months ago. So what do you need for innovation, common sense, if your common sense you will look around, identify customer problems and then try to solve it using common sense. That's what we did with VADA pack. Sometimes when you look up, you may not be able to identify opportunity in that time. Or in that case, you look up when you look up. You'll find the humble coconut try to innovate on the coconut. And that could be again multi billion dollar business opportunity. We just launched this you know protocol, ID smart sip tender coconut, and we call it KYC coconuts KYC is not know your customer.

Krishna Jonnakadla  1:03:56

Yes. Awesome. Awesome.

PC Musthafa  1:03:59


Krishna Jonnakadla  1:04:00


PC Musthafa  1:04:01

What is predicted what is inside the coconut, which is the amount of water the weight of the pulp as well as the sweetness level of the coconut water with the help of simple science and common sense and we call it KYC that became a super hit in the market again. So innovation should not be just limited to another back end technology should not be just limited to the frontend technology should not be just limited to the to the packaging. It should be all also about marketing.

Krishna Jonnakadla  1:04:40

Awesome coconut I'm sure that's a so again, relating back to my us days certain Mexican farmers markets or farmers produce markets, as they used to call them or they call them have these skin coconuts. Yeah, and they are refrigerated. The unfortunate part of it is if you haven't ever tasted Sort of fresh tender coconut anytime in your life, you relish the taste. But once you have a memory of fresh tender coconut, most of those coconuts actually smell or rather taste stale, so to speak. The other alternative is to have these heavily preservative driven drinks. I've never liked any of them. But seeing what you've done with the other products, I haven't seen this product yet anywhere in Bangalore, I'm certain it is going to be awesome. Especially because I'm a big fan of sweet coconuts. We will have to check it out. And it is available year round.

PC Musthafa  1:05:30


Krishna Jonnakadla  1:05:31

Terrific. So PC, I wanted to ask you this some time ago. Did your education ever become a hindrance or your thinking is a perfect blend of what you learned in your education plus, in all the ventures that you did?

PC Musthafa  1:05:45

It's a tough question. I think no my education gave me and all the necessary supports to support my family the most difficult times so majoring engineer will be will be helped me during those days. my MBA degree to take a toughest decision in my life, which is to quit a well paid job and to venture into an idly business that gave me gave me the courage. And moreover, it also helped me in terms of, you know, understanding the larger picture of the business and, and importance of brand building, the financial modeling all of them. But I would say one of the most interesting thing that I've benefited from the IIM journey is the is the brand milage. I got a lot of free PR. There was a story about a IIM boy selling idly in the street. That became an a news in the market that got a lot of brand mileage.

Krishna Jonnakadla  1:06:39

It's now part of folklore. Yeah. So let's talk about the US market for a moment. Western markets, not just the US market. There's a large Indian diaspora living there. While I think lunch and dinner are slowly starting to get addressed in their own ups and downs. For example, the Texas market The Texas geo region has a huge Indian diaspora now. So it can sustainably have a lot of Indian restaurants that can provide lunch and dinner but breakfast is still a challenge. And you have absolutely bang on nailed the breakfast challenge with these many products and production distribution given all the hacks that you've done in your distribution given that there is a wide variety of you know, Indian grocery stores. Do you see the US as becoming a plausible market any time at all for your own expansion? How do you see that?

PC Musthafa  1:07:34

Yes, answer is yes, we are looking at US market. In fact, we started the UAE operation six years ago and today in the UAE only contributing around 30% of our revenue coming to the US market. We are looking at right partners to take this business to the US market. We have two variety of poduct one is a fresh range of products which is the IDLY dosa Parota and isn't all of them, which we are looking at Right partners, we are already in discussion with a couple of partners on taking this product to the next level. Our coffee decoction, we just got a longer shelf life will be available in Amazon platforms from this week.

Krishna Jonnakadla  1:08:11

Congratulations. So one of the downsides of running a restaurant is that getting the consistency and quality of the food right is a problem. Right? So if we if we see the likes of McDonald's Domino's, all of these are built on the back of consistent supply chains where food quality food grade, the input quality, everything is standardized. So from that perspective, you've achieved all of them right and you are looking at the whole market. Would it be a stretch to say that you are considering some sort of restaurant for in some profitable markets at some point in time,

PC Musthafa  1:08:54

we don't have any immediate plans. But we are in discussion with a couple of restaurants to bring build something intel inside kind of a model for ID inside would provide them a quality assurance to consumer.

Krishna Jonnakadla  1:09:07

Right, well all the US chains to that don't have any morning customers and have to struggle because of the lack of labor, I think we'll find this hugely appealing effect. So PC we've had a very long chat, you've been very forthcoming, and very, very humble. It will, we can see it, but at the same time, you know, I should possibly characterize this as fierce humility, because you've been through the rough and tumble. And through all of that has come one steely determination, and it can be seen in what you've molded ID into today. That's fantastic. So looking back, if we were to summarize four or five things that actually worked, help you what would those mantras are those sort of philosophy speak?

PC Musthafa  1:09:58

I would say right team, right product selection, branding and packaging, innovation and technology. And probably the most important thing which we didn't discuss today is ethics. uncompromised to  approach to ethics is the way we build his business. It is not difficult to make money, but then making money without compromising values is not easy. It's a holy war, and we need to be prepared for it. I'll be happy to narrate this story to my grandchildren one day in future, that I am part of a team who built a multi billion dollar business without taking shortcuts without taking compromise ID business is built on values, very strong on values. And even today, that's where we are. We believe in building business with values. And that is the best way to build a strong brand and to stay ahead of competition.  Focus on the values.

Krishna Jonnakadla  1:10:52

Is that because you take a very long range perspective, because people who are usually short term oriented end up getting messed up even if they are value driven. Sometimes they say, Okay, I need to make this quarter work or this year work. Does that stem from the fact that you know what I'm going to give this a long road? And I know in the end, I will come out on top? Is that what drives that thinking?

PC Musthafa  1:11:13

Yeah, so I think it has to be driven with the purpose of life as well, right? I believe I am a servant of God. And my role is to serve the needy, and while serving the needy, I cannot take shortcuts. I don't want to have a situation wherein I will compromise and then achieve the purpose of my life. So driven with with that purpose, you cannot build a business by taking shortcuts.

Krishna Jonnakadla  1:11:39

 So you end up endangering the whole operation then, at some point in time. So I guess,

PC Musthafa  1:11:45

Last message from my side is, you need to be innovative in in your business thinking, even the way to run the business. For example, no at ID, we have we build this ID, the brand based on will strong principles of ethics and a different approach on the trust. Trust is an important factor for ID. We trust our employees, we trust our customers with trust and our ecosystem. Let me just leave this message with one to one story. During this lockdown period, we were getting a lot of demand from Mumbai residents. They have this Resident Wellfare Associations, as a community as a community of residence. And they contacted us for supply of batter directly to them supply of ID products directly to them. And then they hand over the cash to they collect the cash from all the apartments and then hand over the cash to us. It had, of course, no safety issues, since you're handling cash. And then another issue is cash collection reconciliation. This is where we brought in trust as the concept. We told our customers that you Tell us where to deliver, we will deliver at your security gate, you could collect it. And then after after collection, you can transfer money to our account. We don't know who was ordered. In fact, we actually get the consolidated order, right? For example from Apartment Association, if there say 20 apartments, ordering for, you know, five packets of parota and say 10 packets are batter. We don't know who was ordered what Apartment Association gives us a consolidated order. We leave the pack products at the security gate, they collect and transfer the money to us. It's purely based on trust. So trust is an extremely important part for the business. Interestingly, a trust based business approach is more profitable than highly micromanaging business. In this case, what I learned is cost of verification is actually more than cost of trust. So it's better to trust our customers and employees blindly rather than verifying.

Krishna Jonnakadla  1:13:59

I agree with you please complete your thought.

PC Musthafa  1:14:01

Again, what I've learned is Be the change you wish to see in this world, I repeat, Be the change you wish to see this world. If you want someone to trust you, you trust them, so that they'll trust you back.

Krishna Jonnakadla  1:14:13

 Terrific. So on the trust part, I should share a story with you. In fact, this whole distribution thing that you did with the residents Welfare Association or the apartment Residents Association in the US, there is a term for it. It's called the honors system. When I used to live in Chicago near my home, they used to be a supermarket there is a supermarket chain called mayor. And the way that chain used to run their break breakfast counter towards they would call it the honor system. And I've seen that apply in a wide variety of places. So for example, in newspaper stands in New York in railway stations. So the honor system works like this. They leave out a table of food, donuts, coffee, whatever, whatever it might be, and they just put a hundy for a you know, piggy bank, kind of a thing there and then there is a tag which says honor system, and there is no, there is no cashier, there is no billing, there is nobody to monitor it. So what happens is if you borrow a doughnut, if you take a doughnut and coffee, and if the cost of that is $2, they trust you to leave $2 there, if you if you take a doughnut at a coffee, and if you leave $1, nobody's actually standing over your shoulder and say, saying, hey, you left the dollar there. And it intrigued me. So I spoke to the store manager once and I asked him if you do something of this or don't you lose money, and he told me just like what you did that there hasn't been a single day that they've lost money. Yep. So and I've seen that in a variety of places, newspaper counters ...

PC Musthafa  1:15:45

If I share numbers with you. When we started doing this business in Mumbai, the last two three months. And for example, if my product MRP is 100 rupees, I usually give around 20 rupees margin to retailer and the based on I know four to five percentage of wastage On average, right, so my collection for 100 per month will be close to around 76-77 rupees. In this case, my customers pay me on MRP and the last three months when I looked at the data my collection is at 96 percentage for every 100 rupee that no they're supposed to pay they already pay me 96rupee right? So instead of 76-77 rupees my collection is at 97 - 96rupees Indian are trustworthy, if you trust them they trust you back.

Krishna Jonnakadla  1:16:32

yeah like like you said you have to start the virtuous cycle yourself. awesome for entrepreneurs who are considering starting up and I love what you've done because this is it's it's tech businesses take up so much of our bandwidth and then mind share these days. What you're doing in you know, age old business or in a very primal need is phenomenal. So for those entrepreneurs that are considering by Your story itself has got a lot of nuggets. If there is anybody considering let's say, like me that I wanted to start a decoction product or anything of that sort, or any other founder, what would your advice be?

PC Musthafa  1:17:12

I would say toward this one, look at the right product. Use common sense look around, identify customer problems and try to solve it using common sense as every sense. Identify the right product, don't over engineer, right get the right product so that you make life easy for the customer. That is sort of an entrepreneur. role of an entrepreneur is to look around, identify customer problems and solving for the customer. Do not over engineer that is one part. Second, if you're passionate about doing something, don't wait for tomorrow. Do it today.

Krishna Jonnakadla  1:17:45

Terrific. Keep it simple. Make sure it's something what the customer needs and then get started. Awesome. PC you couldn't have said it better.

PC Musthafa  1:17:52

In indian indian homemaker is a gatekeeper for the kitchen. She won't let idly inside the kitchen. She's okay to buy. We better Make steaming ugly, fluffy idly, and add her love and serve to the family. Idly comfort Well, she gets a credit note ID and if for some reason if dosa is not crispy enough, she can blame it on me brand ID never try to work with your customers, help your customers do their job better again, never try to sell idly to Indian consumer. Give her idly batter so that she can make it herself

Krishna Jonnakadla  1:18:30

PC. We had a fantastic time chatting. You have this amazing style of conversing making it all seem seem so easy and simple. I know our listeners will have a terrific time. Thanks for sharing your story with us. We know this is just the beginning for it fresh and there'll be many more tweaks and commits to scale we'll be there with you. Again talking to you when you take the US market by storm. I'm sure it's there, written in your DNA. Have a wonderful day ahead.

PC Musthafa  1:18:58

Thank you. Continue eating idly every day, God bless you all. Jai Hind

Tania Jadhav  1:19:02 We hope you enjoyed the story. If this story made a difference to you, tell us by leaving a comment on the website or our social media channels. Help us Spread the Love by subscribing, liking and sharing our show. We welcome speaker suggestions and collaboration. Write to me at heythere@maharajasofscale.com