This blog has been reproduced from an interview hosted by Videoform Co-founder Abhishek Ekbote. Thrive and Videoform are Upekkha alumni start-ups.

Thrive, earlier Hashtag Loyalty, has seen tremendous growth since their pivot in August 2020. Prior to that, they saw their revenue stall during Covid, went back to the drawing board and eventually pivoted to Thrive that is effectively disrupting a category with established brands buoyed by billions in funding.

Thrive is positioned as a lucrative, cost-efficient alternative for restaurants to competitors that charge exorbitant commissions and retain customer data. Today, more than 6,000 restaurants across India use Thrive's direct-ordering platform.

Stalled subscriptions during Covid: ‘Assuring business of our top 20 customers pushed us’

In 2015, the previous avatar, Hashtag Loyalty, was a CRM platform for offline food retail businesses, created by Krishi Fagwani, Dhruv Dewan and Karan Chechani.

The team joined Upekkha in 2019 and soon after, the pandemic hit. Food businesses began to fail and subscriptions came to a standstill.

“That was a dark phase. I still remember 22 March 2020 when we moved out of our office. As a first step, we decided we'll go speak to our customers and tell them that we're pausing their subscription before they tell us, and show them that empathy. By the first week of April, we were able to understand that this is not a one week or a one-month phenomenon; things were escalating globally at that point,” Dhruv recalls.

While they had to let go of team members, the founders went back to the drawing board to figure out how to survive as a company, ensure the team got paid and they continue on this entrepreneurial journey.

The three of us were talking for 60-90 minutes everyday, throwing ideas, talking. We felt we had the pedigree to turn things around. What pushed us to work harder was ensuring that the business of our top 20 customers was assured,” says Dhruv.

Focus amid chaos: The genesis of Thrive

“At an Upekkha session in March, we were asked what problem we were solving for our customers and where does it rank?’ At that point, we were trying to fit the problem we were solving, which may be on #2-#4, a little higher in the chain. This question gave us the opportunity to say ‘let's solve the biggest problem’, which for our customers was revenue generation,” says Dhruv.

Upekkha’s Value SaaS frameworks pushed the team to delve deeper into problems faced by their customers. They initiated long conversations with their customers and organised casual catch-ups with industry experts. “The conversations helped us frame what we're doing better,” he says.

As footfall fell, online ordering seemed the only way forward for restaurants as food aggregators like Zomato and Swiggy continued to charge exorbitant commissions.

At the time, the team discovered that the maximum utilization of their CRM was for online delivery. “We started thinking that we have the CRM; why not try and solve the biggest problem for our industry, which is low margins on food delivery. And while we felt that was very ambitious, we had the headstart and industry know-how. We decided we had nothing to lose at this moment, we will go all in and try to solve this problem. That's when things started to move,” says Dhruv.

‘We found product-market fit fast & kept scaling’

A lesser known fact is that Thrive had a precursor that was instrumental in the founders taking the ambitious bet with Thrive.

“We had launched an online gifting platform called SaveLocal for restaurants to raise money by selling gift cards. We did that for a short 60-day period between April and May. We were able to raise funds north of about Rs.20 lakhs in a span of two months. This gave us a lot of confidence in running a transactional business. We felt that we have the ability, the tech, the team, the interest to solve the problem at hand. That's how things sort of started and we've been lucky. It's been the right product at the right time, with a lot of support from the industry. We were able to start piloting Thrive by about July.” says Dhruv.

“The idea was to create a product which is liked and used by customers and is different from Zomato, Swiggy. We ignored what they were doing and created a new model because that's the only way we could differentiate ourselves. The industry played a great role in terms of the ‘order-direct’ movement,” he says.

During Covid, restaurants understood the value of Thrive as a formidable partner. “Thrive started getting a lot of inbound interest and early adopters who were vocal about the benefits. So, what we call product-market fit, we were able to get that a little early with this product, then just kept scaling,” he says.

Yet, despite the product-market fit and the funds to kickstart, the team faced an uphill task. They were up against large established players with millions of dollars in funding. Further, in the preliminary stages of Thrive, three of the biggest market players backed out from investing in the idea.

Dhruv recalls, “At the start, a lot of people said, we're making a big mistake. That we should try and solve another problem or in another market. However, the fact that all three of us knew each other and have been doing business with each other through the previous product, gave us a lot of faith and confidence. All three founders had a common vision. The idea was to take a single problem in the industry, create a tool around it and take it to our customers.”

Delivering value to all stakeholders as core differentiator

Elaborating on how Thrive is distinct from other food aggregators, Dhruv says, “The ecosystem created by the big players is exploitative. End customers increasingly pay premiums, restaurants lose money and though the transaction volumes are high, it is not reflected in the wages that delivery agents get. We discovered that the money is lost in developing new markets and acquiring customers. Hence, we set out to create a more transparent model where we transition from a zero-sum ecosystem to a positive-sum ecosystem. This was to ensure that all stakeholders stand to benefit from the distinct revenue model.”

Dhruv says they call end-customers that order from Thrive, Superheroes, because they ensure a 20% extra revenue for a local business. There is complete data transparency in terms of who the customer data is shared with. Restaurants can understand who their users are so they can market directly to them and create a personal relationship with the end consumer.

From an industry standpoint, the customers benefit financially by cutting out inflation due to third-party aggregators. This ensures that the product turns out to be 10% cheaper while still allowing the industry to achieve sustainable growth. A transparent ecosystem develops where the customers become the key players.

“Additionally,” he says, “Thrive strives to power the restaurant’s online ordering infrastructure rather than trying to convince the customers (restaurants) to choose Thrive over others. Restaurants listed on Zomato and Swiggy struggle to get noticed as the big players have a huge marketplace. Thrive comes in handy in this department and adds value to its listed restaurants by helping them get noticed easily.”

Value SaaS: Sustainable growth in focus & the Jubilant deal

The Thrive team has consistently incorporated the Value SaaS way to resolve customer problems and give Thrive 2.0 a head-start. “The Value SaaS concept stuck with us. We are already seeing the benefits in terms of how we are operating right now.”

Thrive 2.0’s focus will be on creating a sustainable value business. “This is different from the conventional model of creating a new application, spending millions in acquiring customers and giving cash incentives to users to shift,” Dhruv says. Thrive is following a partnership model where big players come on as champions of the order-direct model, a partnership that marries expertise, with tech and funds.

Getting a food industry giant like Domino’s to partner with Thrive was a huge win, says Dhruv. “We realized very early that we were in a tailwind when investors approached us left, right and centre. We put ourselves out there and we were clear that we have to reach a certain valuation for raising up to a larger field. During this time one of our clients connected to the CEO of Jubilant Foodworks Ltd. Jubilant, who along with a few other partners made a huge difference in our journey.”  

The other aspect is sustainable value creation for customers who were spending lakhs on ads and on platforms without creating value for themselves. At the heart of Thrive’s success is an empathetic attitude towards the restaurants, countless customer calls, creating a product that hit a strong pain-point and ultimately harnessing a loyal community to grow.

Takeaways for new SaaS founders

One of the most vital and arduous tasks for an aspiring entrepreneur is to figure out the viability of a business model.

Dhruv says that testing the feasibility of a business model was what they learned at the Upekkha accelerator program, and the learnings helped when pivoting to Thrive. “Since it happened just before COVID, a lot of Upekkha frameworks came in super handy. We were able to understand our mistakes. It would have been sinful to keep repeating the same mistakes with our new product.”

His advice for new SaaS entrepreneurs: “Innovators should first determine if somebody is willing to pay for the value they are creating, even if it is in the research stage and no product exists. Are there any takers who can prepay before the product is even developed? Will there be more such takers in the market? If you are able to generate any revenue in a recurrent way then you are working in the right direction. Having such a thought process rather than just focusing on the revenue model is imperative,” he says.

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