Business Building Masterclass - Idea to Product ✈️

Today when we are shooting this video, I passed out from college exactly 10 years ago. And in the last 10 years, I have built a lot of startups, or tried to build, made a lot of products, launched a lot of services. A lot of them have failed. Some are still surviving and moving forward. LLA is one of them. In entrepreneurship, you must have often seen That there will be a lot of failures and relatively less success. Despite that, a lot of people like me are constantly trying to build new businesses, or trying to take their

business forward. There is a big reason behind that. That is a thrill. And a lot of learnings to be gained with it. And the testimony to this is the two videos we made earlier on Jagruk Journal, in both those videos, Many of our subscribers wrote so many beautiful comments that by watching these videos, in building their product, in scaling it, in marketing it, in sorting its logistics and operations, it helped a lot. So in today's video, I am going to talk about my last 10 years journey about one of the most challenging and one of

the most difficult Product development. Because all the work I had done till now were related to tech, were related to education, or were related to things and industry in which I had already done some work. But for the first time, out of nowhere, we thought that why not make an FMCG product. And on day 1, when we were making this product, It was clear that we were not doing this for money. But it was still a thrill, it was excitement. and as you know, if we want to make something, or make something, then we try

to do as much work as we can in-house, because learning is the same fun when you do things with your own hands. If you give the product to a person to make it complete, and you will directly get the box from there then what did you learn in that? So it is very important for us that we learn as much as we can to do all the features and touchpoints of the product hands-on. so, that much we can learn And maybe if we make a video like this, we can teach you as much as we

can. So in today's video, I am going to tell you the complete journey with total honesty, that how we evolved a small idea and made a very complex product which was this Jagruk Premix tea. Our previous project, Jagruk Journal, did not have so many complexities, did not have so many compliances in that did not have so much formulation, testing, trial, all this was not there. But in this product, we did all that and there are a lot of number of components in it. As you see Shark Tank, you can see the funding and cost of

the product after it is made. but how did it reach there? I am going to tell you that whole journey. Along with that, I am going to give all the numbers that how much cost did we have to produce and make everything. probably, if you are making such a product, then you will get a lot of help in it. And towards the end, me and our team will share all the mistakes with you that we have made in making this product. And hopefully, You will be saved from those mistakes. So friends, my name is Rishabh

Jain. You are watching Labour Law Advisor. And this video is powered by Hostinger. Everything you need to create a website. [Intro] Every product starts with a problem. It means that to solve any problem, a product is developed. So what was my problem after making Jagru Premix tea? We are Indians and we all like tea. My wife and I also like tea a lot. And whenever we go on a travel, it becomes a little difficult to get tea there. in fact, the hotels in India, even if it is a very good hotel, the tea there is

very strange. There is no spice or ginger in it, Its solution was already in the market that we should take the premix with us. But even after trying that premix, we did not enjoy it much. So the desire for tea that remained with us in the travel, was my personal problem. So I thought that we should check all the players in the market and let's find the best premix for us. and when we tried all the premix, none of them could become the replacement of my regular tea. so then we thought that maybe we can

solve this problem. Although we are not from this industry, but we can try. And we already have that passion inside us so after that, our journey started that if this problem is coming to me, then are some other people also having a similar problem? and we identified that this problem is on other places other than travel, which I have also faced. For example, you work somewhere in the office And you have some vendor who gives you tea during the day. It may happen that he comes once or twice during the day But it may happen

that you need tea in between then from where will you get the tea? Or often when we shoot late in the office or even at home, we are shooting late or doing some work and we have to make tea at night, then it is too much hassle. And after that, there are utensils and we get scolded in the morning that don't do it, if you don't know it So I thought that it should not be so complex. If a guest has come to the house, it should not take 10-15 minutes. It should be super convenient

and it should be super tasty. It should be enjoyable to drink. It should not seem like It is made of powder. So all these problems are not just with the traveller. this problem is also coming in the corporate. Students are also facing this problem. Bachelors are also facing this problem. In whose house there is not even a single clean utensil So we identified all these problems and we saw that yes, there are some people in the market who will relate to this problem like us and maybe they will also like our product. So see, we

find the problem And we saw who can become the audience of this product after this, we had to build a team because I had zero idea of FMCG. Those who are doing startup for the first time or are launching such a product, there is a misconception in them that my idea is a unique idea and if I tell someone, he will steal it and make it himself. No, this does not happen at all. So the idea is not unique in this world. The idea you have will be with many more people. It is all about

your execution and your willpower. So when I share my idea with many people, then most of the people will listen to it and ignore it. Some people will advise me good or bad or they can also say That this will not work at all. After that, some people, limited people will say that they can help in some way in terms of network, in terms of funding, in terms of connect. And even from tham all some minute people will be left who will like your idea so much and will say why don't we make it together.

So in my case, I had a little advantage because we work in LLA and every now and then in LLA, I get an idea in my mind and the team helps in building it. So of course, to bring this idea to reality, I knew that there is one person, who is definitely with me and that is this guy. ANDY: I am always there. I am standing here. RISHABH: So yes, so Andy said that he is with me because Andy leads product at LLA. idea is there, and this is the product, so Andy is there. now

that Andy is here, so first of all, our today's sponsor Hostinger, tell us a little about them. ANDY: So to take business online, we need a domain and a website. Usually, people spend a lot of money on this thing They hire a developer and after that They are not happy because it's looks like a very basic website So we didn't do that at all. We went to Hostinger.com. So after coming to Hostinger, we will see the plans below I am selecting this business website builder as it has inbuilt AI tools due to which our work

will be easy. so I will go with the plan of 48 months because we are getting The max benefit in this. And if you want an additional 10% off, then you can use our code LLA10 and you will get an instant 10% off here. after that, you simply have to make a payment here and click on Hostinger website builder and select the domain which you want to keep. After that, we have to enter basic details here. As I am entering here and we will click on generate and see, it will take 10-15 seconds and in

10-15 seconds, a very good website will be prepared for you. now, we have a base ready here after that, we can drag and drop here and customize everything according to our need. on Hostinger, AI text generation and AI image generation will make our work even easier. And the most interesting feature here is AI heat map. With this, you will keep getting to know that how much time your customers are spending on your website, where they are clicking, all the analysis you can do on your website through this. and if you get stuck in this process

anywhere, then you can get help from the 24x7 support team of Hostinger. you will get the link and discount code of the Hostinger in the pinned comment and description. So, after watching this video, you can check it out too. RISHABH: So, we knew some basic things about the website and the other things shipment and all these things Andy will definitely see it. But, where did we get the food guy from? who have the experience of FMCG so, I have a friend and he has a friend. When my friend heard this, he told his friend, That

friend came to meet me and he said, this is a very good idea. let's work together. So, Shikhar joined me in that. apart from that, there were two people in my house who were very excited for this project. first of all, my wife. of course, she also has the same problem because she also loves tea. So, Shilpi said she will help out in all the way possible In tasting and so on. And apart from that, my cousin, who had come to Jaipur to do CA at that time. he is the biggest tea nerd I know.

he said that as long as I am in Jaipur, I will attend all the tasting sessions and give my critical feedback. so, a small team of people was built and we started working. So, after building a team, we had to find out how to make this product. So, first of all, we did a customer survey that if we make this premixed tea, then in which flavors will we make it. in that, we had a small advantage that there are a few people in LLA who follow us and there are some groups where we put this

survey and the results of the survey were very shocking. ANDY: so, the results of the survey were very shocking to us because we thought that most of the people in India drink Masala tea, and strong tea but in the results, We came to know that people were more interested in cardamom tea and were drinking ginger tea. So, on the basis of that survey, we finalized the three flavors Masala, cardamom, and ginger. RISHABH: Now, these three flavors we saw who else are making these in the market So, all the available brands in the market, all that

we checked there are still 2-3 cartoons of tea lying around in my house. Then, we thought that we are tasting so many teas, how will we identify whether we like it or not. I am telling you what we actually did in a very crude way that we have done this. It is possible that an MBA student or an FMCG entrepreneur watching this video they might find these things very childish. But, I am sure the rest of the people will find it very relatable That yes, if there is a problem, we will solve it this way

only. So, we identified three parameters if you are making such a product, then you will have to apply some calculation in it So, our three parameters were taste, consistency, and color. On these basis we gave the numbers and and we combined these three numbers and saw, which brand we like out of all these things. when we were testing with five people, We averaged all our numbers and made a list that this is good and this is bad. when you do all these things, then you will get to know the challenges that comes along with the

product. I will tell you the challenges that we faced in it and you will relate as a product developer or as a startup founder, you will relate that what problems you face. So, the first problem we faced was how to identify 100 ml water? Like, this is exactly 100 ml we have 200-250 ml glasses at our home or a cup may be 150 ml or something else or how many are of different shapes we were not able to know. So, we ordered the chemistry beakers. ANDY: At that time, it felt like we were making some

formulations and it felt like chemistry. RISHABH: 100 ml were to be poured in some cups, 120 in some other or 150 ml in some cups So, we came to know that this is also a problem in this product That if you put more water then it will become thin and if you put less water then the tea will become thick. So, one reason for not making good tea is that, sometimes it might be difficutl to add exact 100 ml water The second problem we faced was, we used to keep a kettle of hot water As

soon as the water in the kettle boils we would pour it. I had identified one more thing that sometimes the tea would burst ANDY: I mean, something different was happening and some particles would come up. RISHABH: we did not understand this problem. ANDY: and this was almost the same with all the brands, right? RISHABH: Yes, it was the same with all the brands. so, all the products related to the tea so, later we came to know that baby foods or even milk powder if you are taking from somewhere, milk solids, it is written on all

of them that add water at 80 degrees Celsius. We are science people, we know that 80 degrees means a little below the boiling point. a little below. It means it is hot, it is drinkable but below the boiling point. But we were pouring boiling water into it And, when you add boiling water then there is a chemical reaction occurs in which milk solids get attached to each other or something happens and here we will tell you whatever happens ANDY: they just get separated RISHABH: So we thought that we also have to make the audience understand

that, add water just below the boiling point. how did you understand this? 80 degrees is not very obvious. ANDY: it is not like put your finger and measure it. it is not like that. So, we thought something. RISHABH: thisi is what Andy is doing ROHAN: To address the right water temperature point, we designed these cards. Whenever you open the box, you will first get this card And it will be written in the card exactly how to pour water, at what temperature now, because people can not measure that it reaches to 80 degree or not so,

we put a note below let the water cool slightly if it is boiling for best tea experience. On the other side, I gave a postcard field. I had an idea that we will put Rishabh, Mandeep and Andy's handwritten notes and also their signatures. So, the first 1000 people will get this. And then also, I made a secret playlist which will be available to the buyers of Jagruk Chai by scanning this QR code. RISHABH: Then we have brought small cups from outside we brought a 100 ml cups And we solved this problem in it This is

the cup, and now we have to fill this cup completely. But if you dip a spoon in that cup, some tea will come out. and there will be no space to mix it. so, we needed stirrers as well. and almost all of these, most of these brands don't have any stirrers. ANDY: No, only sashes come. RISHABH: so, Shikhar has also brought stirrers from somewhere and then we started doing proper testing. so, our product evolved slowly while doing this testing. so, we identified more problems The first is, our tea should have better taste. why don't we

add paper cups along with that So people get the ease that they have to pour only 100 ml of water. And where there is a mark in the cup, your 100 ml of water there. Along with that, we will also give the sterols in this box. And, because we were going to give cups in one box, most of the pre-mixed tea packaging comes with sashes Along with sashes, maybe in a plastic or paper packing all that material comes with it. but when cups will come in it, so, in the shipment, when the goods will go

on top of each other, then the cups and everything will break and then it won't be enjoyable we also thought that it should be something like this. a hard box. And this learning came to us from Jagruk Journal. Because when we sent the first edition of Jagruk Journal, we sent it in a very thin cardboard box. So, a lot of Jagruk Journal was damaged in it. So our previous learning came in handy we said that we will also see this, in this type of packaging. so, you can see all these things in it, like cups,

sashes, stirrers, all these things are in the same box because of that learning that when you say convenience, the convenience should be actually convenience even if you don't have a washed cup, everything is in it. ANDY: Plus, our USP was made. there is only one box. You just have to carry this box. RISHABH: You can carry everything in it. ANDY: Take a hot water from somewhere, bring it from somewhere and just make tea and enjoy it. RISHABH: there will be a box like this in which, if we have to go out for 3-4 days, pick

up a box and that's it. the tea for our whole trip is sorted. So, when we made a big idea of our product, that there will be a box in it, there will be cups in it, there will be stirrers in it, there will be 3 flavors of Jagruk premixed tea in it. and we had already decided the name 'Jagruk'. of course, you will have to think of the name as well. we had already decided it. In fact, we have also trademarked Jagruk. so, that was sorted. Now, we thought of finding vendors. When you want

to build FMCG or any brand like this, which we have learned from the learning of Jagruk Journal, so, find a vendor who is not a middleman first of all. If he has his own machinery and product, then he can give you his product at the best rate. so, we tried that, that the one with which we make the cups should be the manufacturer of the actual cup. Stirrers should also come ANDY: Which actually came directly from wholesalers which means, there should not be retailers in between because, otherwise our cost will keep increasing. RISHABH: Right. Even

the sachets or even the actual tea that is being made in it, all these things we tried to procure that all directly from the manufacturer. but, In this mess, we made a very big mistake. I will share that mistake with you at the end of the video. so, we talked to many people. For every thing, we searched different vendors. first of all, we searched a formulator because it is a food product. What should go in it? Milk should go in it in a solide form tea leaves will go in it. different spices, Cardamom extracts Its

powder will go in it. sugar will go in it. All these things will be formulated in one place. so, we had to find its formulator and through some Google search and some networks, we found different vendors not the middlemen but the one, who has actual factories, which make it. and after that, in a similar way, we searched the manufacturer of cups, stirrer and all other things Till this point, we have started two things simultaneously. if someone has seen the first video of Jagrut Journal, There is a waterfall model in it. the things which are not

dependent on each other, you can run them simultaneously. for example, the formulation will run on one side of tea And on the other side our design work will continue So, when both the things are completed, then we can directly reach the production phase at the end. so, Shikhar finalized a formulator With which we started testing the product we paid him in advance I will clear all the numbers with you at the end We made an advance and they agreed to do multiple product formulation. So, how did it start? first of all, they sent us a

benchmark of their own product. We had no idea and at least, I had no idea and Shikhar is from FMCG but he never made tea. So, we sent him the number as an engineer sends typically that reduce sugar by 30% in this and add ginger by this much of percentage and this and that. ANDY: we were taking it as a maths problem which should not have been done RISHABH: So, after the first batch, the second batch that they made and sent that was worst. So, we asked what they made and it was not good. So,

he said, sir, whatever you said I made it and sent so, for the third time, what he did? he sent us all the ingredients in powdered form and he said, you can mix it yourself and give it to me. Again, it was beyond us because we don't know ANDY: Measure 15 grams, do this, do that RISHABH: even not 15 grams, he said you must measure it in mgs this and that and all we couldn't even do that We thought let's find some chafe, So that we can get it done but again we could not find

anyone who can design premix for us like this. so, we were disappointed for once. then, we cracked an idea that maybe this could work. So, when we did computer analysis and made tables this is our sample and there are many other samples. then, we saw which brand's ginger is best for us which brand's cardamom is best and which brand's spice is best. That became our benchmark and rather than quantitative feedback We gave a qualitative feedback that we like this almost but it should have more thickness or it should have less sweetness or it should have

stronger ginger and so on. we gave quantitative feedback of every flavor And the product that came after that we liked it almost in the first time after that minor feedback were happened we are happy today Because after so many days of iteration today all three samples are final Cardamom, Spice and Ginger There is nothing better than spice(Masala) taste nothing is more better than Cardamom And ginger is subjective. so, till 1,2,3 trials nothing was made The 4th batch that came was a very good batch. and final 5th batch that came was the killer And we did

trials at 2 places A friend of ours has a start-up IT company 100-200 people are there we tried there We got a lot of feedback from people and then we did blind tasting. The best tea in our computer analysis was, we made it in one place and next to it, we made our Jagruk premixed tea. Of the same flavour. And then, in our office, we invited about 20 people. And there is an office above us as well we invited the people there and tried that tea. And the overwhelming majority, the Jagruk tea won. I will

prefer the first one. Okay. Because in the second one, at the end, it feels a bit spicy. I will also prefer the first one because I like its colour as well. This looks like dark chocolate, I don't know why. And its smell and taste is also better. Its taste is also better and its sweetness is balanced. I take less sweet and less milk. According to that, the flavour of milk is also very strong in this. It is balanced. And obviously, there is a difference in the flavour of both. One is better. Then we knew that

we have created a product. ANDY: We have made something good. RISHABH: The product formulation is done. Now, let's come to the design. If you want to build a brand, then your brand identity depends on how you show your product. Look, feel and design in today's age has become very important. We make good videos, but our design is not our expertise. So, my friend Nivedan suggested that why not let's work with The Minimalist. So, the founders of The Minimalist are my college juniors. But they are like the biggest agency out there. ANDY: But if you want

to work, then you will do it with the best. Oh, I can't live without it. Right? RISHABH: Again, we have done a work in design with the Minimalist from the beginning. There were meetings. First of all, we decided the design guidelines. After that, we decided the logo. Multiple meetings for the logo. And you will see that so many variations were made in the logo. So many details. In fact, I am not a design nerd. But I read a book of design by the founders of The Minimalist. When I read this book, Think like The Minimalist

I posted a post on LinkedIn at that time as well. because I loved, absolutely loved this book. And I read the whole book in one sitting. ANDY: Do you remember their first form? RISHABH: Mind is equal to blown, man. First, they asked us for a lot of feedback and forms. And the first presentation that they made, I mean, ANDY: We thought that we have got the right design agency. Now, our design work is sorted. We don't have to think about it. RISHABH: It was handled very quickly. And since they had a lot of experience in

working with FMCG brands, So, they knew what things should come at the back. Because there are a lot of FSSAI guidelines. According to which you have to design the box. So, you will see that there are a lot of things at the back. All these things, A lot of these things should be according to the guidelines of the government. Even the date of manufacturing, The expiry date, Everything should be there. They already knew this. So, that also helped us a lot. So, Sahil told me a lot of concepts. When you build a brand's design, What

should be the design principles? And I am sure, It will be very helpful for you too. So, I am requesting him to share those with you as well. SAHIL: Hi, my name is Sahil Vaidya. I am the co-founder of The Minimalist. And we work with some of the biggest brands To create a lot of inventive work Across branding, marketing, Product design and technology. RISHABH: Thank you, Sahil. I want to ask, Whenever you have a brand To design the packaging of your product, How do you approach that problem? SAHIL: Right. So, actually, It is a very

detailed process. And I would take it one step back And talk about the brand process itself. Like, How do you build a brand? And there are at least two parts to it. One is the strategy part. Which is the entire brand philosophy. What is the thinking behind the brand? And after that comes the design part. So, I will break it down into two parts. And what a lot of people do is, They don't think much about the strategy. But I think that is the most critical piece That you need to crack. Because that becomes the

foundation of the brand. There is a very long-term thinking behind it. Which demonstrates itself in every aspect. So, And one very important part, Which I would like to say, Advice on building a brand logo Or a brand identity, Is that, Whenever you build a logo, You have to keep in mind one thing, That it should be scalable. It has to have some elements Which can turn into a design language. And that language can extend across all touchpoints. So, what will happen is, As you keep on using that thing, Over time, Customers won't even need to

see your logo On any piece of communication. They will understand by looking at your design style or language, That I know this is from this brand. Because they always use the same language. So, it's very, I can identify it. Right? So, we have used the sun elements in Jagaroop. And we have made a base out of it. Which you can see in the packaging. That is the foundation of the packaging. And we have used the Iconography of 4-5 tea ingredients, To make it a very scalable property. So, in every packaging, We have reflected that. So,

that is the overall process. We started the discussion with, How do we do packaging? But actually, we went back many steps, First, how do we bring the foundation? After that, how do we do the design process? And then, how do you come to packaging? And many other touch points. So, if I have to summarize, What is the process on arriving at these things? There is a very simple design thinking process, Which is also written in our book. On the, If I have to give you a simple abbreviation, You can consider it as the Budweiser process.

B U D V. So, what does the business want? What does the user need? Then design and then validate. B U D V. So, if you are a business owner, What is it that you want to achieve or showcase? That becomes the brief for the process. Then, what is the need of the user? So, there are many user interviews, Listening to the voices of the customers, Trying to understand, What is the gap in the market? And what is the unmet need that my product is trying to fulfill? There also, positioning is defined. Because, if all

the people are focusing on the premium category, But you realize that a mass market brand is very much needed here. So, then you can design your brand according to that particular thing. In fact, in Jagruk also, What we have done is, The fonts and all that you see, Either you can make a very niche brand, Or if you want to target lakhs of people, You can create a more, A brand which has more of a mass appeal. Which everyone understands, which is not too complex. So, this kind of thinking is very important. That is where

you listen to the users, You understand the user's mental model, Their unmet needs, And take that into consideration. And in the design process, You create an idea by marrying the business and the user. And then you validate. So, validation is simply user testing. The feedback that we get from the user testing, It is very important for us to incorporate that. Because, Users give their opinion by looking at a packaging or an identity. What is it that it is looking like? Right? and from there, we get to know, What is the perception of our brand? And

that is a very important process. In fact, when you design a product, Like a digital product, Apps, In that too, this constant tinkering and incorporation of user insight is very important. So, that's how this four-step process comes up. RISHABH: We are adding a small part of this whole discussion in our video. But if you want to listen to this whole discussion, Which is about 30 minutes long, Then you can go to the link below, And listen to the entire conversation of me and Sahil. Thank you so much. So, till this point, Our formulation and design,

Was completed. And in the next step, We were going to go to production. Shikhar helped me a lot in production. But it wasn't as easy as it sounds. There were a lot of problems in this whole phase. Let's understand all those problems with Shikhar. So, our first mistake was price optimization. So, let's understand how we optimized the price first. And how did Shikhar found all those vendors? SHIKHAR: So, I am from FMCG. The benefit of that was that, I was able to get the best vendors from everywhere to optimize the cost We were getting the

lowest cost everywhere. Cups, Stirrers, Sashes, Which go into a laminate roll, Which is called laminate foil. All the vendors were different. The best cost was there. But the issue was that, It was spread all over the place. not a single vendor was local. RISHABH: So, what was the problem in this? You will say, It's a good thing that you optimized the price. But we faced a lot of challenges, Especially when we were launching this product. Let me tell you the reason for that. Look, first of all, there were multiple vendors. This meant that, Shikhar had

to coordinate in every different city Whether our cups are working properly or not. Whether our rolls are working properly or not. Whether our packaging is working properly or not. But apart from that, There was one more major challenge. If you have ever worked with someone in your life, Then you understand that, In India, There will be delays everywhere. So, what is the reason for the delay? You can point it out. For example, You have given someone to edit your video. So, you will say, Why didn't the video get edited? Then he will say, Sir, sorry,

it got delayed. I will give it till tomorrow. It's my fault. But in our case, Do you know what was happening? we used to ask, Why hasn't our production started yet? so, he used to say, Sir, I haven't got the rolls yet. Sir, we haven't got the sachets for the boxes yet. So that we can pack it and so on. Because there were multiple vendors, Ball was always in our court. And we couldn't make time pressure on any vendor. So, because of that, there was a lot of delay. apart from that, Because our vendors were

different. In fact, Our production vendor was in the south. and from where the laminate rolls were made, It was in North Delhi. so, due to this, a lot of our transportation got delayed. the second problem which we faced is, Quality control. What does quality control mean? Because, You are not sitting on your own factory. And of course, You can't even install it. In the beginning, You will have to work with vendors. and those vendors will make different components of your product and give it to you. We thought that, We gave an order to a vendor.

And he will make a perfect product for us. And deliver it on our doorstep. This does not happen at all. That's why, You have to meet your vendor on a regular interval. When the production is going on, You still have to be available there. So that, the image in your mind, Is actually made. if you don't do it, Then there are blunders. Let me tell you an example of a blunder. We told our vendor that, We need a cup of 100 ml. And in the industry, There is a specification of 100 ml. According to that,

He designed the cup and gave it to us. He sent us photos and other things. That yes, This is a cup of 100 ml. It will look like this, and so on. we said, It is already going on delay make it fast and send it to us. When we got this cup, We added our Jagruk premix tea in it. And after that, We tried to add water. So even after filling the brim, 80 ml of water was coming in it. And after that, There was no space to mix it. Whereas, We needed a minimum of

100 ml of water. so, it was a big mistake of ours. And he said that, Sir, We had sent the photos. We had approved everything. And so on. Now, I can't do anything. so, A whole batch, which costed us But, It was not usable for us. Then, Shikhar actually went to their factory he chose this cup. Which in the industry standard, Is a cup of 130 ml. We got a mark done in one place. And we got this mark done in such a way that, When you add premix in it, After that, 100 ml of

water will come. Then, How far will it reach? we got a mark done there. So that, this is 100 ml. and it still has some space. Through which, You can easily stir it. So, his is quality control. SHIKHARY: the thing doesn't stop here in the QC when the goods are delivered further, It goes there too. That, All the cups you have ordered, Are they all like this or not? So, It is very important to put this term in the bill. So, Further, In terms of conduct, That whatever the goods are, I will do a simple

random sampling in it. If let's say, I am getting 100 things. If 10 of them are bad, Then I will assume that, In the entire lot, I have 10% of the goods that are bad. Either you give me its return. Otherwise, You make it again for me. Yes. So, You must also put in your contract, That whatever the terms of QC are, You add them in your contract. And after that, Give it permission for the production third thing, What happened to us, Was the transportation losses. So, as we said, In the beginning, we tried to

optimise the cost in a terrible way. later on it bited us I will show you the costing in a while, then you will come to know. so, Shikhar said that, Their laminate foils of the sachets, We will make them from such a vendor, Which will make it available in the best pricing. And along with that, Shikhar also said that, I keep the MOQ very high. Because later, For the next batches, it will be useful to us So, we made the production somewhere else. And in the volume also, For example, We had to make 60,000 sachets

only. But the laminate rolls that we made, we pre-ordered for 2,00,000 sachets. Now, after that what happen? First of all, there was a delay I have already told you, We should not have done that. The goods that arrived after the delay We came to know that, 30-40% of the goods got spoiled in the transportation. And it was such a delicate process, if there is a slight deviation in the rolls, then it is not useful for the production. So, Try that, All your vendors, be it in the close proximity, or if you are working with the

same vendor, and he is subletting his work to the other vendors, So that it is his headache. And if there are losses or delays in the transportation, then you can call only one vendor. In our case, we were also taking responsibility for the transportation. And we were coordinating individually with each vendor. Which was a big hassle. SHIKHAR: So, the fourth is, Format of deliverables. As Rishabh explained, There is a waterfall model. Two things are going on in the process. One is the design, One is the ops, One is the development. So, when all things are

coming the conduction should be overlapping. It should not be deviated. RISHABH: I will explain this in simple language. Look, our formulation is going on one side, Design is going on the other side. When all the things will be together, Then only we will be able to go to the production. But what problem did we face this time? Nowadays, all the new age designers, they work on the latest tools. But when you go to the printing processes, I am just giving an example of one design. This will happen in other industries as well. When you go

to the printing processes, Then you will know that, Coral draw is still being worked on there. Then you tell your designer, Convert it to CDR. When he converts it to CDR, then sometimes the colors will change, the printing format will change and so on. So, in all these things, you will have to be very aware from the beginning of your vendors, if you are working with multiple vendors. For example, your design agency is different. and whatever your printing vendor is Get them to do the meeting beforehand. So that they get to know, That I will

print this box, Through the design of this format. The format of my colors is CMYK or RGB. And according to that, Your designer should give the file in the right format, at the right time. otherwise, In the last time, It will happen that, I don't have the right file because of this, I haven't started the production yet. then you are coordinating with the design and so on. So, because of this, We had some delays. Now, I will tell you one thing on the crux. our final production guy, in Bangalore, he told me one thing, That

Rishabh, You have made a very big mistake. and I started to understand, that we have made a big mistake. Whenever you are making the first version of your product, Then, don't focus on price optimization. you focus on this thing, that in the shortest time, how can you bring a good product in the market? after that, this is the exercise, That slowly, You optimize your prices. It is possible that your first or second batch is also going in loss. when we will discuss the pricing further, We will tell you. With time, You will optimize your entire

supply chain. You will see that, Okay, I had made the box through that only for the first time and he told me that, your box will cost Rs 25. one box printing. But now, I have found a vendor for Rs 16. And I will tell him, Brother, I will make the box for you. Rolls I will make it for you. I will deliver tea powder to you, and so on This will be the optimization gradually. But for the first batch, You should try, Work with the minimum number of vendors. Or if possible, You can hire

a consultant too. Who will be the only point of contact with all these vendors. And you just have to coordinate with that person. So that you can focus on everything else. There will be a lot of other things, it is not only to make the product, after that, As an entrepreneur, You have to do a lot of other things. You can focus on that. Let's move on to the next point. and now, let's talk about compliances. Because it is an FMCG product, there are some additional compliances with it. In the non-FMCG product, there are some

compliances like GST etc. You already know that. There are some specific compliances for this, let me tell you in a nutshell. And you must do more research about it. So first of all, Because it is a food product, You have to take an FSSAI license with it. And this license has to be taken by two entities. Where this product is being made and who is also marketing it. Where this product is made, Of course, it is FSSAI is certified. And second, for marketing too, our entity is FSSAI certified. Along with that, I have told you

that, there are a lot of things behind it. Like there will be a nutrition value in it. If it is veg, then there will be a green mark. what date is it made on? When will it expire? All these things, According to the FSSAI guidelines, You have to print it. So you must also check that too. And apart from that, The trademarks and other things, They are the same for every product. So focus on that as well. Come on, as promised, Let me tell you how much it costs to make Jagruk tea. So that if

you are thinking about such a product idea, Then you will at least know that, Okay, I am going to need this much capital In product development. For convenience, I have broken this cost into three parts. First is my fixed cost, that I have to pay before the product is developed. Second is my production cost. And third is my ongoing cost. So first, our cost came of formulation and testing. what will be the recipe of the tea we made? How many components will go in it? In what quantity will it go? our recipe is finalized for

that its costing plus its testing, So that the nutritional value and everything can be known in it. For this, We had hired an agency, From which our costing came. Second was our computer research Shikhar ordered tea from many brands. So today, We have a lot of tea here. Palette is being cleaned in between. I have also told you, How we had analyzed it. In that, this costing came. And pay attention, in all these costings, I am not adding my time, Shikhar's time, team's time. Apart from that, Even later, our team has done a lot of

work together. I am not adding all those costings in it. When you make a product, Then please, Take the costing of your time, and your team's time, in it. because, In many cases, The salary cost, that is huge. In our case, we haven't attributed it yet. Third, is our design cost. and I have shown you this variable, Because, If you work with different design agencies, then your cost can be very low to very high. It's a range. I am showing you the range here. Depending upon, how complex your product is, It is possible, That your

design cost can be much higher than this. The forth thing, that is in our list is, Sheets, Dye, moulds, What are all these? Let me explain it to you, What are these? SHIKHAR: So, to make our product, in a kit, for every product, some mould have been used. for example, if we talk about the cups, for that also, the mould has been used. Which looks like this to you, but it is not like that. Instead of this, there is a sheet like this, Which we cut a thin paper is placed on one side of it.

Here, you have to keep in mind, That the colours are food grade. and, it's also something, that it can hold your hot tea. Similarly, our box also comes in simple plain form it is also folded, there is also dye used in that. Later it is cut to that exact dimension. Every component has different things, Which costs one time. Which you can recycle for that time, Which is the product cycle time. If you can use that mould for as long as it has, and from that, your item can be made. RISHABH: So, Shikhar has explained it,

in a complex language. I will try to explain it in an easy language. as you can see, This box. Now, In this box, You can see, a particular shape or design. Now, when it goes for printing, A film will be made for that first which will be placed in that printing machine. then all these things will be printed on cardboard. Or if it is a paper, then, it will be printed on paper, and the paper will be pasted. Similarly, the exact shape of the cardboard box, a frame is made for that shape also And according

to that, all the edges are cut. You see, why are these edges of this shape? This box does not come packed like this, It's a big cardboard sheet. In this you will be able to see that there are cuts at different places. So, according to your specification, Exactly, A frame will be made. First, it will be made for printing then, it will be made for cutting. and for all your productions, All the time, that particular piece of machinery that you have made, that will be used again and again. This is also a kind of IP

for you. whatever is your vendor The mould Or the film, that he has made You can ask it back from them. So that, In the future, if you want to go to another vendor To do the same thing maybe, you have got another vendor at a better rate. So you can take your moulds, your dyes and films to him. This is also in the case of cups, this is also in the case of our rolls. Whatever product You will make, for that, you will have to make a particular mould In some cases, For example, If

you are making a metallic product, Or a plastic product, In those cases, the mould costing can be very high. Now let me explain how this costing impacts your overall costing. For example, this is my cup, the cost of its mould is, 10,000 rupees. because it will print in three colours Mould, Film, whatever you call it. whatever is the fixed cost for this, Is 10,000 rupees. Of although machinery parts suppose, I have invested 10,000 rupees, I have given it to the vendor. Now I tell the vendor that I want to make only one cup. Only one

cup. So, what he will say? Sir, the amount of paper that is used in one cup, its cost is 1 rupee. And the amount spent on molds etc. is Rs 10,000. Meaning, one cup cost me Rs 10,001. Now, what I am saying? Sir, I want to make 10,000 cups so, In that case, The cost of my mould is fixed, is 10,000 rupees. and to make 10,000 cups, the cost of paper is also 1 rupee per cup. So, the cost of paper is 10,000 rupees. That is, my 10,000 cups, In this case, are made in 20,000

rupees. Means, the cost of my per cup is 2 rupees, when I am making 10,000 cups. If I make 1 lakh cups, Then, the cost of mould will be distributed in 1 lakh means, 10 paise per cup. And in that case the cost of my each cup will be 1 rupee and 10 paisa. So, some are fixed charges, The more you make them in volume, the overall will be reduced per unit. But, the paper charged of per unit In this case, the cardboard, Will not be reduced. That will be added. And initially which was the

overall fixed cost, will be distributed in maximum volume. That is why, many times You must have heard in Shark Tank, Sir, we are getting this much cost, but, when we work on volume, Then, our costing will be reduced. That is why, costing comes less than the overall volume Yes, in some cases, it can happen that, the paper you are taking for the cup, Instead of taking it from the local vendor, you directly taking it from the manufacturer. Because, for small orders, the manufacturer will not entertain you. But if you are printing in large quantities, The

manufacturer will give it directly to you. So, You can save some cost there as well. SHIKHAR: Economy of scale. RISHABH: Shikhar is right. This is called, Economy of scale. and our last fixed cost, The product has not even started to be made, That was, Travel cost. Because we took different vendors from different cities. That is why, Shikhar used to go to Bangalore, Delhi So we spent a lot on flights and car. Now Let's come to the costing of different components in our product and recently we have Produced 5000 boxes. In every box, there are 12

such sachets. If it is assorted, Then, there are 3 different flavor's sachets in it. And if it is just the cardamom box, Then, there are only 12 sachets of cardamom in it. The cost of this came in the range of Rs 118-126 When we have produced, 60,000 sachets. Why is this coming in the range, Shikhar? SHIKHAR: The reason for this is, that we have 3 flavors, and, the costing of all 3 is different. the cost of cardamom is different, The cost of masala is different, and, the cost of ginger is different. RISHABH: The second costing

that we have, is of this cardboard box. So, this is the assorted box, and this is the cardamom box. It looks exactly the same. There is a small difference in this. Here, we have put an assorted sticker, and here, we have put a cardamom sticker. we did this, because, you have understood the concept. If I had made its entire design and color different, Then for this also, My fixed cost would have been additional. So, We thought, let's use the same box, For all the components. Because, all the orders that will come, of assorted, cardamom or

spices We just have to change a sticker here, Which will cost 10 rupees. And our box will be reused. The cost of this box, is 16.5 rupees. As I told you, this box it doesn't come folded like this. it comes like a whole sheet. and, the box is folded by a labor. SHIKHAR: In this box, we have put a lamination, And, We have given a UV coating, For all the design elements. Which are the ingredients of tea. RISHABH: See, Shikhar has done marketing here. The third thing is, our cups In each box, again, there are

12 cups. There are 12 cups. Because, there are 12 sachets And, The costing of this is, SHIKHAR: 13.2 rupees. RISHABH: Right now it is 13.2 rupees, because we got a whole batch wasted so, we had to add that costing in this Otherwise, if we produce this next time, then, our costing will be a little less. SHIKHAR: By the way, you can help. If I take it in the corporate, It comes with 2 cups together, in a single Sachet RISHABH: Cut. The next component is, stirrers. Again, These are 12 stirrers. And the costing of this is,

3.5 rupees. Next, We have added a small greeting card In this. And secondly, With this, We thought that, We give some additional value to our first 1000 customers. So, what can we give along with tea? So, everyone likes Parle G along with tea. So, we have added a small cute Parle G box. And, if someone is taking two boxes, then, we have added a heating rod along with it. This is free with getting two or more boxes. But again, this will not be added in our long-term cost. You can also consider this as a promo

offer or marketing. Our cost will be reduced in the long-term. This is costing us, Right now, Around 30 rupees. for one box, If we divide it. So, this is around 55 rupees. 2 rupees, 4 rupees, So, I have written 30 rupees average per box. Then, the next cost that comes is that of packaging material, the cost of labour. The cost of labour is because, First of all, he assembles the box. after that, the sashes that are coming, they come to us in packs of 150. they assort them, and, pack them in a pack of 12

Whatever cups are there are coming stacked. They also divide the cups into 12 each and put them in this box. And, after that, Stirrers, Parle G And, among our orders, if someone has ordered a combo or more with that, they also add the heating rod. After that, there are payment gateway charges, Which will be around 2-2.5%. And, Lastly, our shipping cost. So, if we are sending in local Rajasthan, and, our package is below half kg, so, it has a certain cost. And, If we are sending this packet out of Rajasthan, then, there will be a

different cost. And, if we are sending it to further states, For example, If we are sending it to Andaman or North-East, then, our costing goes up to 100 rupees. But, I have seen that, 90% of our orders, their rates fall between Rs 55-80. I have added that costing. SHIKHAR: And, that was exactly one of the major reasons, That we have 12 cups in this. Otherwise, We had thought that we will get 15 cups. Because, as soon as it reaches 15 cups, It goes above 500 grams. From 500 grams to 1 kg, It takes a different

shipping charge. and from 500 grams and below, It takes a different shipping charge. RISHABH: So, just by increasing 3 sachets, Our shipping increased a lot. Because, it goes above half kg. that's why, This is very important. If you are making any product, then, try to keep the range between 500, 1kg or 2 kg So keep in mind that your product should not be of 550 grams. Try to make it up to 490-500 grams. 990 grams. As soon as it reaches 1 kg and 10 grams, then, you will have to pay a cost of 1 kg

plus. which is significantly higher, Than the cost of less than 1 kg. So, after adding all this, The cost for our first 1000 boxes, because, we have added 2 components with it. that is, 257 to 287 rupees. And after that, our cost will be, around 224 to 254 rupees. Currently, we are selling this in the market, as a launch offer At 249. We have an investment of 35 lakhs. So, how did the loss of 36 lakhs happen? Why we are selling it at a loss? I will tell you that too. And, by the way, This

loss is much more than this. Because, the fixed cost, Which I had told you The fixed cost we will have to distribute all the boxes. we have not done that. We have not added any cost of salary in this. We have not added any cost of our time. Generally, When you build a D2C brand, so, your costing should be Anywhere between 30 to 50% Of your selling price. For example, If you are selling something for 100 rupees, So, The cost of your product, The actual cost you are getting, It should be from 30 rupees to

50 rupees maximum Because after this, you will have a lot of expenses. First of all, Your team's cost will come, your fixed charges will come, after that, Your marketing, means, we call it customer acquisition, Those charges will come. You will run ads on social media, all those charges will be added, logistics and Operations will be added, supply chain charges will come. In this, a lot of your product is wasted or comes return After adding all these things, If you are more than this range, Then you will not be able to make, 5 or 10% of

the margin, Which you can ultimately make In an FMCG brand. Right now, we are far from that target. we are far behind. But, it's okay because, our learning is that, Don't think about cost optimization, in the product you are launching first. But ,if nothing else is made from our learning, Then this video is made, And you are learning something from our learning. By the way, those who are watching this video till now, Please write in the comments, That it was fun, So that we understand, That you are able to relate our journey, Because we are

sharing it with you, With full honesty. Now, let's come to the third component which is, the ongoing cost. So, What do you think here? our work is done. No. The journey has just begun here, after that, the costing will start. First of all, Whenever you order your product from the vendor, then your transportation charges Will be added every time, then your marketing charges, You will run ads on Facebook, Google, or you will make content, All those charges will be added. Warehouse, where you will store, one of its charges will come. Labour, What is happening now,

because, It is assembled on Shikhar's warehouse, So when Shikhar's laborers are doing other work, in his warehouse They are taking some time out of it and working for us. But, if you are making your brand stand alone, then, you have to hire one or two guys, To help you with assembly. And, whether you get an order or not, You have to give them salary so, labour charges will accumulate. Team charges, Which you have hired anyone for other operations, for marketing, this becomes very very significant. In all startups, there is a huge expense on the team.

which will continue to run regularly. Sampling and tasting. So, the 5000 boxes that we have made now, We are estimating that, In this, approximately 1000 boxes, we have to give it for free. For example, There was an event of creators, there, we gave 250 boxes to creators. Now, we didn't get any price for it and after that, maybe, pone or two people put a story or reel We didn't even get its ROI. But, we have to do all these exercises. So, in the beginning assume that, You may have to give your 20,30 or 40% products

for free. That will add to the cost. Wastage and returns. So, whenever you send this, many times It can happen that 5 or 10% of your parcels are not delivered. And, in food products, it often happens that, like, I got an order from Varanasi, the product went to the Varanasi and the product came back. It may happen that, Till then, that product may not be usable. Something may happen with that. In food products, it often happens that, It is not usable at all, after that. SHIKHAR: In our case, In fact, This box is the most

damaged. Whatever the return comes, the whole thing inside Is still safe, but, this box is damaged from both sides. Because, handling in transportation will be like this. RISHABH: Right. So, again, we made these boxes only for this reason, it can bear the inside damage. The outer one is getting lost. So, the cost of our box is Rs. 16.5 Lastly, We have made some ads for this. We have made content for social media. We have made our page, jagruk.shop to put regular content on all of them, a cost is added to it. So, all these costs,

Fixed cost and Ongoing cost, Will be added to our product cost. After that, you have to try, If you are making a D2C brand, then at least, you must have 10-12% margin Right now, in our case Probably, we are 50-70% down. we are going in negative. If we are selling in Rs. 249, If we add the cost of the product, after sampling, Marketing, Then, it will be Rs. 500. But, in long term, this should be the goal. Now, You will ask me a question, Rishabh, why don't you sell it for 700 rupees? Then, I will

tell you one very important thing the difference between, A brand, And a commodity. The thing, that we use in our daily life, For example, we drink tea, or bring vegetables at home, Or, if we buy water bottle, all these are commodities. In which, making a brand, Is not impossible, But, it is very difficult. For example, You go to a vegetable vendor, and he says, I have a different bottle gourd. and, Your normal bottle gourd is Rs. 50 per kg. but, This bottle gourd is Rs. 5000 per kg. It is possible that you buy it as

a novelty once but, you will not buy it regularly. SHIKHAR: It is only applied in some things. Like mangos, though it is of Rs 1 lakh per kg. RISHABH: But, will you buy mango every day for Rs. 1 lakh? SHIKHAR: It happens. RISHABH: It happens. SHIKHAR: There are niche market for that. RISHABH: It has a niche market. You will not be able to build a business with it. So, If you see in the market, That there are already premixed brands. If we have made a better tea from a premixed brand, Which I think we have

made, Despite that, I cannot charge it as a luxury item. If all the other players in the market, Are giving their 12 sachets, In the range of Rs. 200, 250,300 So, I cannot sell my 12 sachets in Rs. 750. SHIKHAR: Our purpose from the starting was, We want a good tea, Hassle free, At home, Without any hassle, And we made that. Close to, homemade tea. Because, it cannot be made that way. RISHABH: Before leaving, would like to say something from heart Look, I don't know, Whether we have taken a good decision, by making this tea,

or not As a LLA, Don't think of it as a LLA's product. This is sort of our personal project. we will definitely reach you this through LLA. But, don't link it with, finance brand etc. We just wanted to do it. It was a, great journey. We learned a lot of things in this whole journey. And I am sure, Either, we won't be able to make money from this or even if we can, We won't be able to make more. very less. But, the learnings are very valuable. and, Hopefully, By using this learning, we will do

some more things in the future, In which, We will make something good. And, all in all, We couldn't set all the other things. Our price is not optimized, we have done blunders in some things. But, we have a satisfication for sure, about, In the whole summers, after drinking so much tea, finally, we feel that, whatever other tea is available in the industry, we have tried to make tea better than that. and, we have succeeded in that at somewhere. before we go, Thank you very much, To our sponsor, Hostinger. Who has sponsored this video. You can

check out, Hostinger, From the link below, In the description. You will also get a special promo code, with the help of Hostinger, You can make your website very easily. Apart from that, They have many more things that you need, to grow your business. [Music] Still you are watching this video? this is not a Marvel movie, where there is any post credit scene Okay, if you have come, then watch this video. Which I and my team created for Jagruk Tea. And, in the comments, write it in a capital "BALD" so that, I know, that you have

watch this video. Make some tea for me, please. [Sound] [Sound] [Sound] [Sound] Jagurk Tea! [Music] [Music] Mom, your tea.