Zetwerk: Digitizing India’s Manufacturing Supply Chain
Episode 15Visit Moonshot Series Page
- Introduction (00:37)
- Fall in love with unsolved problems (5:40)
- “We built exactly what you wanted.”: The challenges of selling software in India (9:40)
- The answer to how you pivot your startup lies in user behavior (11:15)
- Taking on a centuries-old industry (16:28)
- Finding opportunity in adversity (20:24)
- Taking a software approach to building hardware (among other things) (23:39)
- Running an international business without an overseas footprint (27:30)
- “Done is better than perfect.” (29:30)
- Showcasing India’s manufacturing potential (33:28)
- Paying it forward with Zetwerk Build (34:34)
Dewi: Hello and welcome to Moonshot. A show by Sequoia India and Southeast Asia that profiles innovative startups and inspiring founders who are dreaming big, making an impact and driving change across the region. I’m your host, Dewi Fabbri and throughout this podcast, we’ll be introducing you to founders and thought leaders who are helping shape the region’s startup ecosystem. We hope this podcast will give you fresh ideas on how to start and scale an enduring company.
India’s manufacturing sector contributes close to 18% of the country’s GDP. It’s an industry that’s on the cusp of change as workers upskill and companies digitize processes to improve their capabilities. In 2018, Amrit Acharya, together with three co-founders, launched Zetwerk, a B2B manufacturing network that offers companies manufacturing solutions across a wide range of products. On this episode of Moonshot, we chat with Amrit Acharya, co-founder and CEO of Zetwerk and Shailesh Lakhani, Managing Director at Sequoia India, about how the startup is taking a bold bet to bring a centuries old industry into the digital age.
Amrit, Shailesh, thank you both so much for joining us today. First of all Amrit, in the simplest terms, what does Zetwerk do? I know you do a variety of things, can you take us through that and maybe give our listeners some examples?
Amrit: So, Zetwerk is a manufacturing platform. We work with companies who want to get products made. We partner with these companies at the design phase when these products exist on a piece of paper, like just a hand drawn sketch or more complex CAD files in software. And, what we’ve built is an infrastructure that can convert that digital design into a product they can touch and feel. And, we don’t do the manufacturing ourselves. We rely on a lot of third party, small manufacturing vendors. We rely on the depth of the manufacturing ecosystem that exists in India. But essentially, we solve for matchmaking, we solve for fulfillment, we solve for pricing, but the core idea is – you take a design and convert it into a physical product.
Dewi: What are some examples? What has Zetwerk manufactured?
Amrit: Yeah, so we do a broad range of things. So, the simplest item could be like a steel pipe, to something more complex like an aircraft engine component that goes into a Boeing or an Airbus. And we can service that whole spectrum. 50% of what we do is industrial products. So, it’ll be some version of a product going into an oil and gas refinery, aerospace and defense component, transmission and distribution infrastructure, automobile components, medical devices, you know. So I’ll give you another example. One of our customers in the US is a belt buckle manufacturer. So, they make these fancy belt buckles and we do all the manufacturing for them in India. Another customer in the US is a nail clipper manufacturer. So, we build and assemble all these nail clippers in India. So, it’s a wide range of items in certain industrials. We also do a lot of consumer products. We do bluetooth headsets, speakers, t-shirts, denims. So yeah, it’s a big reach.
Fall in love with unsolved problems
Dewi: So for example, if I wanted to, I guess, make a super fancy belt buckle, I would go on Zetwerk’s website. I would contact you or like you have a list of manufacturers there? Do I go on there? Do I source for the manufacturer? Or do I upload my design, I guess, and then you do the matchmaking between me and the manufacturer? How does that work?
Amrit: Yeah, so we do all of the heavy lifting ourselves. So as a customer, you just give us the design and then we figure out, firstly, what are the steps involved to get it made? So, what material is it? Is it steel, is it aluminum, is it plastic, is it fabric? Within that, what kind of manufacturing process do we employ? There’s a big list of manufacturing processes. So, there’s something called ‘machining’ where you take a big block of metal and you chip [at it] until you reach the desired shape. Then there’s 3D printing, which is the opposite of that, where you essentially print a product into life, like you print a physical paper. So, there are various ranges of manufacturing steps that are involved. So, the first step is, we identify, to get this product, what are the steps that are involved. And then we find the right set of suppliers and then we build a whole set of software which tracks that entire execution journey, from design as an input to the physical product. So there is quality, there is tracking, there is shipping. Lot of things go behind the scenes to bring these products to life. So, when we wear a t-shirt, we don’t think about it sometimes… How did this t-shirt make it to the retail outlet where I bought it from? But there is a very complex supply chain that exists behind the scenes. So, we make it come to life in some way.
Dewi: That’s amazing. You obviously solve the problems at each point within that supply chain. So, how did you come up with this idea, and why the manufacturing industry specifically?
Amrit: My first job was at this company called ITC, which is a large consumer goods conglomerate in India. When I joined, I was 22, 23 and they put me in charge of building a new factory for them. And, I was literally a kid out of college. I had no business building a factory. But I fell in love with manufacturing through those two years, where I did pretty much everything – starting with building the buildings, to buying all the machines, to designing software for that factory. I took some detours in my career. I went to business school. I went with McKinsey. But when I came back… And I was in the US for a bit – but when I came back to India, I realized that the way I was doing this myself, as a user, 10 years back, nothing had changed. And, I felt like there’s so much opportunity to a) digitize [and] b) make things more efficient. And, it felt like a big unsolved problem at that point in time.
Dewi: Right. Shailesh, I’d like to bring you in on the conversation here. What are your thoughts on Amrit taking on what is a largely untouched industry? I mean, it’s huge.
Shailesh: Yeah. It was very unconventional. I remember when Amrit and Srinath came in and talked to us about Zetwerk in the early days, we realized they were exceptionally smart guys, who were taking on something that in the past, very few startups ventured into. And so, it was a little bit shocking. It was like, “Why are people this smart working on something that is this far out there?” And, as we spent time with them and we had three or four meetings, I remember, in the early days, we just realized that look, they had some unique insights, they were doing something that was quite different than what other people had tried before and they were just very smart. And, when people this smart are taking on this big an industry, that’s a great sign for us. We were very excited to partner in the initial round that Zetwerk was raising.
“We built exactly what you wanted.”: The challenges of selling software in India
Dewi: You said you fell in love with manufacturing, right? The entire process. And when you came up with this… I guess you’ve already answered the whole ‘aha’ moment behind Zetwerk – what was the first thing you wanted to take on?
Amrit: When we started the business and when we met Shailesh, it was a very different business than what we’re doing today. We wanted to build software for people like me to manage hundreds of vendors in a way that is better than using a Google sheet. I remember I was handling close to $50 [million], $60 million dollars of procurement at my first job, and I didn’t have any good process. It was just keeping track of things. When I came back to India from the US and we were exploring this idea, we spoke to a lot of customers, and I remember one vice president at L&T, which is a large construction company in India, showed me his inbox at 9:00 am and there were 100 unread emails, and he said, “I know exactly what you guys are trying to solve.” And it was a big, again, ‘aha’ moment for us. So we thought we’ll build software to digitize this industry. We took an investment from Shailesh and Kae [Capital] and we started building the product. And, then we went back to these same customers and said, “Look, we built exactly what you wanted.” And they said two things – “I love the product, but I’m not a decision maker. I can introduce you to my IT department or somebody else.” And, that’s when we realized that selling software in India is very tough. It’s a long sales cycle. There are too many decision makers. It’s not a very clean process. But at the same time, all these customers were asking us, “Can I use your software to discover new suppliers?.” And, nobody was saying this in a very active way, but if you listened enough, that was what they were asking. That’s when we pivoted the business. In fact, we did the pivot before we had received funding.
Shailesh: Before the funding closed.
Amrit: Before the funding closed. And I remember it was a tense meeting. Like, “We have not even closed our round, and we are going to do something very different”. But, I remember it went as something along the lines of, “Yeah, we trust you guys”. I’m curious what was going on in your mind [Shailesh].
Shailesh: Yeah, it was one of those things that; we always felt selling software in India was going to be tough. And, we’ve seen this across a number of companies that were trying to sell to Indian manufacturers or Indian enterprises overall. And, we were really excited that what you were doing now was going to actually make money. So it was like, “Okay, we’re going to earn some revenue very quickly out of this”. So, it was a very easy thing to be supportive of.
Dewi: You both have spoken about how difficult it is to sell software in India. Why is that? And, if your software was answering a question, or an issue that so many people working in construction had, why was it so difficult to get it off the ground?
Amrit: We faced two, three operational challenges. Like some part of it was just educating the market itself. A lot of questions we got initially were, “Is your software cloud-based or on-prem”, which, if you ask an American customer, they don’t ask these questions, because they’re very comfortable with cloud as a concept. And we knew that we didn’t want to build an on-prem, services-based business because that would be unscalable. The second thing we got from the companies is, “Oh, I don’t make any software decisions in India. I am happy to introduce you to my CIO in Switzerland, and good luck!” And then there’s a third set of companies, which are like, “Oh, I have an in-house IT team. If you see, a lot of Indian companies, everybody has an IT services business. And they said, “Oh, I’ll build it myself.” So, these are some of the things we faced.
Shailesh: Yeah, I think it’s a cultural thing. First, people are just not used to doing it. It’s typically been that you throw people at the problem – that spending money on software is that you’re not buying a tangible thing. So what are you really buying? And if you really need it, you can build it yourself. People have not seen their productivity gains from buying software in a big way.
Amrit: Yeah, but at the same time, when we pivoted the business to being more transaction-led, the customers could still benefit from that software without actually having to pay for it.
The answer to how you pivot your startup lies in user behavior
Dewi: Like you said earlier Amrit, people were using it to look through the database, right? And that’s when you realized, “Actually there’s an opportunity here that I hadn’t thought about before”.
Amrit: Yeah. It came up through that and the way people used it. It also came up with the questions they asked us, “Can you do X, Y, and Z?” And sometimes it was very explicit. Sometimes it was not so explicit. But if you listened enough, that was essentially what they were asking.
Shailesh: I think another key insight that Zetwerk had in the early days was that they are the best users of their software themselves. That a customer wouldn’t be able to get the most out of it because the organizational mindset, the systems and the processes, and the motivation to use it well, is something that they have much more in-house than they can imbibe on a customer. And with that, the real business benefits of being able to make something better, faster, cheaper with more predictability is something that they can give to all their customers in a transaction-oriented way.
Amrit: Ultimately, if you look at why customers come to us today, they want a product made. They want it made faster. They want it made with the right quality, and ideally as cheap as possible. And, these are things which by themselves are big enough problems. How do you make them faster? How do you make it with the right quality? And, that’s what we’ve been able to kind of solve for these customers in a way that, to them, it feels like the click of a button in some way, where they outsource their problem to us. We are completely technology-first in all our approaches and those benefits get perceived in terms of these additional metrics versus being users of software themselves.
Shailesh: Yeah – like many software implications fail inside customers and they fail for mostly cultural reasons. And then you don’t have that when they are their own user.
Dewi: Yeah… So, you went through not necessarily the software approach, but “This is like actual manufacturing. I’ll just put you in touch with the manufacturers and provide a solution end-to-end.”
Amrit: We went through a journey there as well. The first time we pivoted, we actually built what we call a pure marketplace where essentially, a customer said, “I want this product made”, and we gave them a list of five suppliers and you pick whoever you want to work with. And, they picked supplier X and they gave them an order. And then three months later they came back to us saying, “Hey, this supplier is a bad supplier. He’s not delivering on his promise”, or “There are so many issues”. And then we can’t do anything because we are not part of the transaction. We can say, “Okay, we can find you a different supplier”, but by then already three months have gone. They’re unhappy and they’re not unhappy with the supplier. They’re unhappy with us saying, “We are behind schedule.” And then we went back to the supplier, saying, “Hey, why did you do this? Why did you take an order you can’t service?” And they gave, again, a list of operational reasons. They are very India-specific reasons.
Some of them were very genuine, “Oh, I had a labor problem in my factory”, or “I was not able to arrange a truck to ship products”, or, “I was not able to buy raw material on time”. And that’s when we realized, if you truly want to make a difference in this industry, you actually need to go one level deeper. And, that’s when we made the second pivot, which is finally where we are as a business where we take the order, so to the customer we are the supplier of record. And, we’ll get it done for you in whatever way possible. And, we run this marketplace internally. And one of the models which we innovated, and it’s kind of interesting to call it real innovation, is that we introduced this concept of parallel manufacturing. Like, when a customer gives us an order, we distribute it to five suppliers, 10 suppliers, whereas previously, they used to do it one to one.
It feels like a very simple thing, but it completely transformed our business because one supplier may fail, two may fail but all 10 won’t fail. And hence dramatically, the results we saw were faster productivity, and faster time to market. But then there’s an operational complexity that you’re managing hundreds of suppliers, whereas instead, you could manage one. And that’s not possible unless you have great software. So, that’s when the whole business flywheel started clicking for us – can we build a large, operationally complex business servicing these customer requirements at scale and across different categories now that we are present? So, our earliest categories were these categories. They were customized but not complex. You can’t go to a shop and buy a door. You have to get it made. But if your door is off by a millimeter here and there, do you really care? You don’t. So that really allowed us to pick and work with customers who could give us that additional revenue, allow us to build that software, allow us to build that operational footprint through which over a period of time, we have started doing more complex things. When we build an aircraft engine component that’s ultimately going into an aircraft, even a millimeter off here and there is big because the stakes are very high. But still, we are able to service that because we have gotten there over a period of time and we have strong building blocks, strong foundations to allow us to do these things.
Taking on a centuries-old industry
Dewi: What’s an example of a challenge that you face, like, a customer gave in an order, and… Can you tell us a story about that?
Amrit: Yeah, I mean, see, these are very operational challenges. At the supplier level, you get to hear all kinds of things because you’re interacting with people. I’ll give you an example of these folks… So my co-founder, Srinath’s father ran a small manufacturing unit. He was an engineer his entire life, he worked at this company called BHEL. And then when he quit, he set up a shop and BHEL was his only customer. So for 10 years he had a single customer, and his fortunes ebbed and flowed with the luck of his customer. So, this company was extremely customer-concentrated – and they were all hard-core engineers. They don’t like going [out] doing sales. They don’t like doing anything else except working on the shop floor. So when you go and talk to these folks and say, “Why don’t you work with another customer? I’ll introduce you to a new customer.” And the first thing they say is, “A new customer is equal to risk. New customers are not equal to opportunity. Like, I’m based out of South India. This new customer is based out of North India. I can’t talk to them in the same language”. Sometimes the reasons are as cultural as that, sometimes it is, “Oh, if this customer has not paid me on time, if it’s a local customer, I can go to their office and sit in their office for five hours and get my payment out. But if it’s somebody in a different part of the country, how do I do that?” So there’s a big trust deficit in India. It goes the other way also, like when you ask customers, “Why did your supplier delay?” And, you’ll hear all kinds of reasons, a mix of professional and personal. “I went to my friend’s wedding. I was not available”. And that, of course, you can understand to a certain point. So part of the reason why I feel we succeeded in some way is that we solve for that trust deficit that exists in the market. And some of it is cultural, some of them are real issues that need to be solved at the last mile.
Dewi: And how have you solved it? Is it mostly word of mouth, manufacturers talking about Zetwerk?
Amrit: Yeah, so if you look at the NPS (net promoter score) of the industry. How many suppliers would recommend a customer and vice versa? It’s a negative NPS industry. Most customers don’t like the suppliers they work with, and vice versa. And, it’s been there for decades now. So the bar is low. That was the first point. Sometimes it is as simple as when the customer expects an answer, you answer back in 24 hours. That itself was a big improvement from the status quo. But then we looked at data also. Manufacturing has many steps. Step one is you have to buy the raw material. Step two is you have to do the manufacturing and then you ultimately ship it. 80% of the delays happen in step one because they don’t have the capital to buy the raw material on time or various reasons. They’re very sensitive to price. They want to buy it at the best possible price. They’re okay to wait another extra week if they feel they’ll get a better price. But all of it comes with the cost of delays and things. And, India is a country where, at the end of the day, people have more time than money. They don’t assign a monetary cost to time. And we didn’t look at the problem that way. For us, time was the most important thing. So if the expectation is 30 days, how can we create the entire infrastructure to make sure that things happen in 30 days? And some of that went like, “Yeah, we have to help our supplies buy raw material faster.” So, we had to set up that whole… Again, we are solving problems, which our suppliers face, so we are going one level deeper even today, at the beginning. I think as a company, we’ve never shied away from those real issues. If you understand what the problem is, then the solution becomes evident and then you [decide] if you want to solve it or not.
Finding opportunity in adversity
Dewi: That’s amazing. So, you’ve really taken on a lot of challenges head-on. You know, one of those challenges – the manufacturing industry was really impacted by COVID – how did you take on those challenges and how did you overcome them?
Amrit: Us, as a company were heavily impacted by COVID. The impact was largely around the fact that the entire country was shut for a period of almost six months, which meant that, physically, the suppliers’ factories were not operational. And we had this downtime for three to four months. Before COVID, we were a single-category business. So we had only one category in which we had built a sales team. We had to build an operations team, etc. And then when we were having so much downtime, we started brainstorming, “Okay, how do we…” not diversify the business, but like, “How do we solve for these things the next time something like this happens?” So, one of the ideas that came up from the company is that, “Look, we have looked at the company as horizontal”. So, we were solving for this category called steel fabrication, but there were a lot of specific use cases in various industries; like oil and gas had a different language, aerospace had a different language, etc. So, we split the company into five in some way, and we ran it in a completely decentralized manner. That there were different people who were experts in these categories, and you built out your own sales team. There was a little bit of flap that got built in that journey, but the benefit we got was speed. Like, nobody was interdependent on each other, and that really worked well for us. Today, we have many lines of businesses, and they each contribute to revenue at scale.
Dewi: Yeah, because I remember you said, your revenue dropped by 90% during COVID and that’s when you had to also take up manufacturing of healthcare products. Can you tell us a little bit about that?
Amrit: Yeah, I mean, it started off purely philanthropically. We had a lot of time, in all honesty. So we thought, how can we help the country? So, this was a point where finding a mask was difficult. And a lot of core demand had fallen. In April, May 2020, if you looked at the news headlines, a lot of the headlines were, “Oh, we don’t have PPE kits for doctors and they’re going into hospitals; it’s unsafe.” And we found that a lot of apparel companies had that capability and expertise. They couldn’t solve for demand. They didn’t know how to sell to hospitals. So we thought, “Okay, let’s solve that problem for them”, but purely as a philanthropic initiative. It started with that, and sometimes, you know, the best way to do philanthropy is actually to do business. So, we did that for six months, but again, after some time, we realized that, “No, it’s not something we want to do for the long run”.
But during that process, that’s how our apparel business started actually, because we were interacting with so many garment manufacturers who became PPE kit (personal protective equipment) manufacturers that we talked to them, “Okay. What next?” And they said, “Oh, we have these same challenges”, which sounded very similar to the challenges we were hearing from our industrial suppliers. And so, we felt that this is a very natural pivot or an extension for us.
Taking a software approach to building hardware (among other things)
Dewi: Right, and this was one of the five different pillars that you then ended up building out.
Shailesh: I think one of the key things Zetwerk has done is, they found a new operating model for making things. What they’ve really innovated in this is project management using technology. They’re able to deliver things with more predictability, with better performance, and use suppliers in a greater way. I think they’re able to increase utilization at their suppliers, which lowers costs and stuff that they can pass on to their end customers.
Amrit: I’ll give you an example of this. So, when we get an order from a customer, it starts with getting a bunch of drawings, which are essentially design files. An order which is worth, let’s say, a crore (US$125,000), will have almost a hundred drawings. And you get all these drawings in email and then you have to assign it to different suppliers.
A lot of mistakes get made in step one itself. You sometimes give the same drawings to many suppliers, so they over manufacture it. You give the set of drawings to a wrong set of suppliers. So the first product we built was something as simple as a Dropbox for drawings, where all these drawings were digitized in one format and they could be assigned to them equally, whoever ultimately ended up working with them. We built various recipes for manufacturing.
For every product that we get, we can say, “Okay, this is a fabrication plus machining. This requires painting. This requires galvanization.” And when you tag a drawing with a recipe, everything else is automated – that, “Okay, for this recipe, there are 10 steps to manufacture”. Step one is buying raw materials. Step two is cutting, finishing, etc. Ultimately it gets dispatched. And more importantly for each step, you [can] say, this is how much time we think it should take. Step one should take five days. Step two should take 10 days. And then when it does not happen – because you keep track of that information on the ground – then automatically a lot of flags get generated within the whole system that, “Okay, something has gone different from plan” and that’s when you step in.
So if you didn’t have the software, you would apply a hammer to a nail approach. You would have to just do everything, you know, in a very high-touch way. But now we’re able to step in only when required. If things are going as per plan, we don’t have anything to do. We just quietly monitor and move on. But when things don’t go as per plan, there’s a whole set of initiatives that we can deploy, and it’s all done in a very automated manner.
Shailesh: And I think like just the business of making things is something that has been around the world and really every category that stuff is made in, whether it’s construction, manufacturing, apparel manufacturing, whatever it is, is something that has very little digitization and results on heroics by someone to pull off making anything.
What Zetwerk tries to do is automate a lot of the steps. Their project managers still probably do very heroic things, but a lot less. And a lot of the basics are being accounted for. Also, there’s a lot of paralyzation you can do while you’re waiting for something to happen. Some other process can come in that typically requires someone to be thinking about that. But if you can implement all those processes and software, you could save a lot of time, and you’d just be much more predictable.
Dewi: It’s a lot of mental load as well for your team members to take on and for you. How do you work through that?
Amrit: You know, we have a very engineering-first approach. A lot of time it’s software engineering, but, you know, if I look at the people that are there in the company, 70% of them would be engineers in some form or the other. Even our sales people are former engineers.
So the approach, which comes because of that, is every time we find a problem, there is a process which takes care of that so that it never happens again. So some of it is a little bit of naivety, also. We didn’t really know how big the challenge was when we started. But the good thing is we continuously fall in love with what we are trying to do, but at the same time, when you combine it with systems thinking, problems that happen once they don’t happen again. And that gives us peace of mind.
Shailesh: They’re also fortunate that the core technology and processes they built could just be applied to other places. They found that the same methods worked in many more spaces than I think we had all dreamed of in the early days.
Running an international business without an overseas footprint
Dewi: That’s amazing and easily replicable across industries. So before COVID, all your revenue came from India. Now, at least 20% comes from international markets, but nearly your entire team is in India, right? Can you tell us a little bit about that? How did you manage to figure out having an international business without an overseas footprint?
Amrit: It kind of happened accidentally, to be honest. I think we had our hands full with our Indian customers, but last year, a lot of changes happened globally. The number one change was, you know, China, which is the bedrock of manufacturing for most countries… There was a lot of volatility with that supply chain, and that impact was felt in markets like the US.
And a lot of companies started thinking, “Should we diversify our supply chains outside of a single country?” So they called it China Plus One as a strategy; which means that they were looking for newer countries where they can contract manufacturing to. And India is one of those countries which benefited from that trend. We have 200-plus customers in the US. We have not met a single one of these customers yet because we haven’t traveled. And a lot of that came inbound – that customers came to us saying, “Hey, we are looking for alternatives. Can you help us out?” And like any good startup, [with] any new thing, we said, “Yes”.
And said, “Okay, let’s see where this leads.” Over a period of time, we realized that there are good models already in existence. And we looked at Freshworks as an example, where you know, they’ve really solved the sales challenge through marketing campaigns, email campaigns, lead generation through LinkedIn, through websites, have a different process at the beginning of the funnel, have a separate process at the end of the funnel.
So, we have people in the US. We have four or five people, but they get involved only to close the deal. All the prospecting, all the onboarding, all the educating of these customers, all those solving of basic FAQs, all of it happens from India. And, there are good parallels in the ecosystem already. And, we looked at what already existed, and we adapted it to our context.
“Done is better than perfect.”
Dewi: That’s amazing. If you had to give an aspiring founder just one piece of critical advice that made a difference to your company, what would it be?
Amrit: It’s difficult to say just one, but I think the number one thing that has helped us is that we have this attitude of, “Done is better than perfect”. I think speed gives a lot of energy to any early-stage company. And for us, the first critical test of that was when we were solving for enterprise sales. It’s still a good business, but it would have just taken longer. The feedback loops would’ve been longer. And, we felt that we would not have been able to achieve as much, in the time period that we had, if we stuck to that model. We could have just said, “This is how we are”, and just gone [ahead] with it. But sometimes, it is important to listen to the feedback from the market, and decide whether you want to adopt [it] or not. And that’s where beyond product-market fit, there is also founder-market fit, you know – is this a business you want to be in? And I think just being honest about that is important. Sometimes, these things unravel over a period of time, but if you can shortcut that time process and say that, “I’m being true to myself and true to the business that I’m building”, these things that would ordinarily take you 12 months; you can get to that answer in a month. And, I think that’s something we have done well and I hope we continue to do well, even at scale as it gets harder.
Dewi: And that was clearly something that was very clear to you from the beginning, right? Like, it’s not often you meet someone who says, “I fell in love with manufacturing.”
Amrit: We fell in love with the industry; but within the industry, we are flexible in terms of the problem, [and] the solution that we had. We knew the problem, but the solution can be A, B, or C. And if you’re flexible about that, then you can create a large business.
Showcasing India’s manufacturing potential
Shailesh: I think one of the really interesting things that Zetwerk has done is showing the potential of manufacturing from markets like India. That there were lots of suppliers with good skill sets that didn’t know how to market themselves. They didn’t know their skill sets were applicable for other industries. And they couldn’t access international demand. And so Zetwerk is showing that, actually, Indian manufacturing can be very competitive. It can be something that certainly employs a lot of people and something that can contribute a lot to overall development of the country.
Dewi: What are three things, Shailesh, that Zetwerk did really well that aspiring founders should consider implementing in their startups?
Shailesh: One, that they very much listen to their customers. And they listen to [what] someone said very closely. Customers don’t know exactly what they want, but they can give you clues and hints that can lead you to figure out what is the real opportunity that is in front of them.
Second, they really retain their culture. Their focus on performance, on delivery, on actually beating their numbers every time. I can’t remember very many months where Zetwerk doesn’t exceed their forecasting plans. They’re trying to be something that is very predictable.
And lastly, that they increased their ambition as they saw success. They weren’t content with where they were, and as they saw more opportunities, they were able to just paint on a much wider canvas than earlier.
Dewi: Wow. Amazing. Amrit, what are your thoughts on India’s manufacturing industry? How is it changing?
Amrit: Yeah, I mean, there’s a lot of depth to manufacturing in India. I think some of it has taken us by surprise as well. I think what India historically lacked was that ecosystem, which enabled one plus one to be 10. If you look at China, the thing they do really well is that, for a specific ecosystem, everything is available within, let’s say, a 100 km radius. Things are very predictable. If you say 30 days, it takes 30 days. There are no negative surprises by and large. India’s not there yet. If you want to get products made, there are still a lot of barriers you need to cross, and mostly things break at the last mile – but, there are pockets where the manufacturing is world-class. And, if you take a long enough time horizon, those pockets are just expanding incrementally and exponentially. So, what we see as our role, as a business is, how can we catalyze that even further? If something will take five years on a normal course, can we make it a year? And, we are very excited about it.
I think the fact that 20 – 25% of our revenue comes from outside India – these are customers who had never bought from India before, and they would’ve found it very difficult to navigate India as a market if they hadn’t found us. And, we see our role, over a period of time, in just shaping the manufacturing ecosystem within the country, and really elevating India to where it deserves to be over a period of time.
Shailesh: I think one of the other things – maybe a bit more tongue in cheek – is that no one had really tried in a lot of different categories. People just felt it was too hard, it wasn’t possible, that these skill sets weren’t available… And it took a little bit of naivety. It took a little bit of luck. It took a little bit of good fortune with the way the world was developing for people to be forced to do stuff. And Zetwerk was able to uncover that, [that] look, you can actually be very competitive and be world-class in manufacturing in India.
Paying it forward with Zetwerk Build
Amrit: And today we’re trying to do that. So, most of our customers are enterprise scaled customers. Companies like GE or Siemens or within India, Tata Steel or L&T. What we have launched recently is this program called ‘Zetwerk Build’, through which we want to give back to the ecosystem in some way. If you’re an early-stage company, you’re trying to design and build a new product; manufacturing is the last thing you should be worried about. And it’s because you want to spend all your creative energies, whether you’re an industrial designer or an apparel designer, you want to spend your energies on the front end. What is the best possible product that I can bring to market?
And for these companies, we’ve launched this program where manufacturing will be like a click of a button. You just focus your energies, we will take care of finding the right suppliers. We will handle that entire journey, and we have done it for almost 10 companies right now. These are all early-stage companies across robotics, medical devices, warehouse automation industries. And, the idea is to give more creative space to the next generation of hardware entrepreneurs so that this is one problem that is somewhat solved for, and you can spend your energy on new problems.
Dewi: Right, so you’re giving that creative space, allowing them to focus on the creative aspects, while taking away the pains of manufacturing.
Amrit: For most entrepreneurs, those are the reasons they started their business in the first place. They identified a gap on the product side, but when they actually started building the business, they realized, “Oh, there’s this whole complex layer of manufacturing involved”. And it’s not everyone’s cup of tea, but it is our cup of tea. We would love to have that.
Dewi: And that’s exactly why you’ve started Zetwerk! Thank you so much Amrit and Shailesh for taking the time to speak to us today and talking about how Zetwerk is digitizing the manufacturing industry in India. I’ve been speaking to Amrit Acharya and Shailesh Lakhani on this episode of Moonshot. For more interesting startup stories, visit our website, sequoiacap.com, or follow us on your favorite podcast channel.