In this edition of ‘In Conversation’, meet Neeraj Kakkar, CEO and co-founder of Hector Beverages, the man who infused new life into the staid Indian beverages market with his category-defining range of traditional Indian drinks under the Paper Boat umbrella.
With an initial seed capital of Rs 2.5 crore, former Coca-Cola manager Neeraj along with Suhas Misra, James Nuttall and Neeraj Biyani founded Hector Beverages in 2010 with the flagship product Tzinga, an energy drink. Today Paper boat is expanding says Neeraj. “We have started out our new manufacturing unit at Mysore, just launched a TV campaign and soon to launch few more variants of Paper boat. The whole company is trying to expand its horizons to promote paperboat as a leading brand,” he adds.
In a candid interview, Neeraj talks about the mentors who influenced the decision and played a significant role in making it all happen.
After ten years of corporate experience, Neeraj, a double MBA from MDI Gurgaon and the Wharton School of Business, decided to take the road less travelled.
When asked who could have played a significant role in helping make this decision, Neeraj mentioned that, “Role Models and mentors have existed even before I took on the entrepreneurial plunge of Hector beverages. During my time at Coke, there were people I looked up to, who kind of taught me a lot of things. Later during my MBA at Wharton also, it wasn’t about one specific mentor, it was more about people you see around yourself. There were some very smart people doing some very interesting work, who were my classmates at that point of time. But if I have to put a finger on someone then, it would be my co-founder Suhas Misra who was my junior at Coke. He was an inspiration because, although much younger than me, he had taken the entrepreneurial plunge three years prior to me thinking about it.”
Ask Neeraj about a road map to success and he has a few people to name. While Hector Beverages is backed by Sequoia Capital, Footprint Ventures and N.R. Narayana Murthy’s Catamaran Ventures, Neeraj says he owes his success to three people who not only provided funding but also actively mentored and supported him from day zero, when there was no product, only paper.
“First, Kanwaljit Singh, co-founder at Helion ventures, exposed me to the world of entrepreneurship during my internship period there. Kanwal encouraged me to work with a few startups in Bangalore who were doing interesting jobs. He also recommended food to be the best sector to start and suggested that if I need any kind of help – monetary or non-monetary – he would be there. Later, when Hector Beverages came into existence, he became our first angel investor who committed funds without even listening to the business plan. He has been the support, helping shape the organization to what it is today,” he says.
“While Kanwaljeet contributed to understanding different aspects of the startup world, our second investor and also a former colleague, Shripad Nadkarni, Head of Marketing at Coca-Cola, immensely helped us with the marketing and branding of the company. Whenever we were stuck anywhere on how to put ourselves out in the market, Shripad has always been the helping hand in understanding the market better,” adds Neeraj.
Other than these two, Narayana Murthy (NRN) has been extremely important to Paper boat, Neeraj says, as he has been the guiding force behind Hector. Neeraj continues, “I would say the value system of our organization in some ways is a reflection of his personality. He has also been with us from day zero. He doesn’t interfere with our day to day work – he doesn’t tell us about what to do with our strategy, however on the value system, he has always had strong viewpoints and he kind of makes sure that we do not deviate from the right path.”
Influencing and Handholding
According to Neeraj, all three investors have not only contributed through capital but have also played an important role as visionaries and strategic advisors for the firm at different stages. “They have handheld us through the path we never imagined to walk. For instance, NRN would always ask if we dreamt of becoming bigger than the largest of companies in this space, and frankly speaking, we did not. In our initial stages, our market strategy was only to become a niche player; it was his persistence that made us dream of becoming bigger than the biggest and look at the broader canvas. Similarly, when we went to Shripad with the idea of Paper boat, he helped us define the personality of the brand. He advised us to look at our product beyond being just a traditional Indian drinks brand, he said it should play a role in the contemporary world by being a retreat – a drink that makes people fall in love with life again”
Neeraj believes in honesty to be the best policy when it comes to nurturing the relationship with your mentors or investors. He recommends that no matter what crisis or ups and downs the business is facing, an entrepreneur must be upfront and keep investors and mentors informed about the whole ride. Sharing from his personal experience, he says, “We did not always have good news to share, there were lows too, and every single time we went and told our investors about the issues, they told us that such things happen and such statements, I believe, make life much easier. When setting up our new manufacturing plant, NRN wrote us a very touching letter. He wrote that when he started Infosys, it took him around 33 years to create the first billion dollars and after that the next billion came in 18 months. Similarly, it took us about four years to come up with our next big step, but the subsequent wins would come much quicker. One to two takes time, two to three should come faster because that thing has happened to him and such messages really inspire you.”
Identifying Mentors – Words of Wisdom
While identifying mentors, Neeraj says that rather than taking mentoring on technology or know-how, one should pick someone who can add to the value system of the company. “As entrepreneurs, a lot of times we defy the norms, we do things that people would not generally think of, which involve great risks and sometimes potential mentors may have different opinions about it. Instead I think, one should take mentoring on the value system. An organization is much bigger than an individual, ergo, you need to be very careful about not creating a mirror image. You need to be asking questions about what kind of an organization am I building and what are its values. Of course this doesn’t happen overnight, it kind of adapts and evolves over time. And that is where a mentor can help”.
The next thing Neeraj feels is important is identifying a mentor who can help you avoid common mistakes. He says, “Every startup ends up making similar kinds of mistakes, like similar macro mistakes about the way you define your business and the way you go about doing it. If somebody can guide you to navigate that path, you will save precious time and energy. ”
Neeraj concludes, “When you are starting up, there will be times when things don’t go your way and if at that time you have a mentor you can talk to, then it becomes easier for you to stay strong and bounce right back.”