The birth of a Unicorn
The Moglix journey deconstructed
Moglix, India’s 13th unicorn, is the country’s largest B2B marketplace for industrial goods. The company has grown on the back of a flawless digital customer experience that has reimagined how business is done in one of India’s most low-tech industries.
Rahul Garg, Founder of Moglix, has not just defined a category, he has done it on his own terms, never compromising on his vision or his principles. Rahul has been an amazing partner to Jungle since the start of the Moglix journey 6 years ago.
Moglix is a business where purpose is as important as profits and they have never shied from giving back to the society whenever they can. Rahul estimates between the first and second wave of the pandemic, Moglix touched 100 million lives with PPE & 500,000 with oxygen. An achievement every bit as impressive as that of unicorn status.
Alice Besomi, VP Investments at Jungle, interviewed Rahul Garg to understand his secrets as he built his Seed to Unicorn empire.
Find a massive problem that you can’t wait to solve
Like many founders, Rahul is passionate about large problems that drive a large impact over a period of time. Coming from a family of engineers, he is never happier than tackling a stubborn challenge head on.
Rahul worked with Google for over 5 years across different industries and sectors across Asia- and he recalls the unsuccessful endeavour of launching Google for business, trying to disrupt B2b supplier ecosystem. He soon realised that the B2B space was plagued with the endemic bias of ‘How things have always been done’!
This meant that roughly 20–30% of India’s GDP was operating in a stubbornly old fashioned manner for the last 5–6 decades. This was ripe for disruption.
Rahul found his problem to solve…How could the selling of industrial goods be reimagined for the digital age and drive the Indian manufacturing sector to a Trillion $ economy?
Build an unbeatable value proposition
Understanding consumer and category dynamics was critical, as was understanding the competition. The only competition to Moglix when it started was a classifieds platform- which resulted in broken journeys, poor customer experience. Moglix set out to change that.
Almost every consumer category had transitioned from a classifieds to a marketplace model, but when businesses transact with other businesses the process often remained stuck in the past.
Moglix focussed its efforts on studying the end to end customer experience journey of industrial buying goods, because operating a marketplace in this most complex of categories would be incredibly challenging. The stakes are high. If the transaction were to go wrong, the production line could be impacted resulting in millions of dollars in lost production.
Before launching the business formally, Rahul spent almost 12 months on the road, visiting different cities, countries and supplier bases to get a deep understanding of the challenges baked into the category. Being a category defining company, you need to build an unmatched understanding of the business- there is no playbook, no cheat sheet.
This in-depth understanding led Moglix to develop a full stack solution with Software, warehousing & commerce capabilities to work together seamlessly and create a one stop solution able to break decades of muscle memory in the category.
While a unicorn today, Moglix still less penetrated ~1% of the market with a potential to grow 50–100x from where it is positioned today.
Hire an early team of experts
Journey as a solo founder is never easy. There is no one always by your side to bounce ideas off, to seek advice from or simply to share the emotional burden. Luckily, after 15 years in corporate roles that touched many markets, categories & disciplines, Rahul was able to lean on a broad network of supportive friends, advisors & investors who bought into his vision & believed in him.
The first 12 months were spent in purely understanding the business and building the value proposition. But once Rahul understood the customer problems , supplier problems, tech to be built, infrastructure needed, he put together an early multidisciplinary team of technologists, manufacturing veterans & supply chain experts who focused on diff facets of problems and enabled building a relevant and differentiated product.
Patiently build your customer base
This category was always going to be a tough nut to crack. The decision makers Moglix needed to bring on board were most resistant to change- they had been doing what they do for decades.
But Rahul was confident in his hypothesis that the younger generation would gradually rise to decision makers & demand, rather than resist, digital transformation. They built a hypothesis on the industry growth and stuck to it and they realised for every naysayer there were always as many customers willing to try based on their product, credibility and innovation.
It was a matter of patience. Moglix gradually built a quality customer base, generated compelling case studies & slowly, albeit steadily on-boarded businesses who were committed to a new way to do business.
Build for the long term
Moglix bet on the right economics at the right speed. Moglix resisted the temptation to artificially induce irreversible demand in the market. Rahul was convinced that in his category, where decision makers demand predictability, reliability & stability, price promotions were not the path to growth. If the cost fluctuated up & down, Moglix would become a tough sell internally & earning a permanent place in their supply chain would be almost impossible.
One maverick can create a market, but they can also kill the market, not only for them but for others too.
So though the funding was available to bank-roll promotions & offers, he knew this would attract the wrong sort of customer. It could even kill the market as has happened many times on the consumer side where tech companies have forced growth & established a price-led relationship they couldn’t take back.