Rahul is the host of the Understanding VC podcast where he talks to Venture Capitalists to learn how they work. The aim of the show is to provide entrepreneurs with experiential and actionable insights to have a collegial working relationship with VCs. He is also a serial entrepreneur who has built multiple startups in the E-commerce and 3D printing industry and has spent time with a Venture Capital fund, Cocoon Capital as an Associate.
Jeremy Au (00:00):
Hey, Rahul. Good to have you on the show.
Rahul Thayyalamkandy (00:03):Hey Jeremy, thank you so much for inviting me to your show. It's a pleasure to be here.
Jeremy Au (00:08):
Well, you know, what's interesting for me is, I think I see this hunger in you that has made it very interesting to have this conversation with you because a lot of folks are going to be like, wait, who is this Raul guy? But I think like adding a lot of people, a lot more people should get to know who you are. So Rahul, for those who don't know you yet, could you describe who you are?
Rahul Thayyalamkandy (00:30):
I host a podcast called understanding VC, where I talked to VCs to learn more how they work. So the reason why I wanted to do this podcast was that I've been an entrepreneur for many years. And in 2020 last year, I spent some time as a summer associate at Cocoon Capital. So I got to see both sides of the table. And then I really feel that there is like a gap between how founders perceive VCs. So I wanted to do something to bridge that gap. So talking to VCs about things that you as a founder would be not very comfortable speaking, when you're interacting with them or pitching with them. So I wanted to do that and then bring it out so that every founder can get some value out of it.
Jeremy Au (01:19):
Great. And you know, you've been an operator as a head of operations as, a co-founder. And even before that, you used to be, an engineer right, in the whole kind of like [Seagate 00:01:33] and in semiconductors, but let's go all the way back to the beginning. It was interesting is that you went to Temasek Polytechnic, right. Which was where you went there and that's not a common path, right. Because you see a lot of people in the founder and the VC world love them are going through junior college and so so forth in Singapore. What was it like studying at Temasek poly?
Rahul Thayyalamkandy (01:54):
Technically the thing is I had already completed, what you call junior college here, back in India, the high school. So I, for some random reason, I applied to most universities and poly techniques in Singapore. And I got admission in Temasek poly first, but I think I also got admission in NUS and NT, but I did not get the scholarship. So at that point, like SIA and NOL had a scholarship where they would bring 100 kids from India every year. So I did not get that. And the fees I thought was like very expensive. So I decided to join Temasek poly.
Singapore is the first country that I've lived outside of India. I was born and brought up in India. So it was a very interesting experience. So I studied electronics. And for the first time, I think when I came here, I had to do like a lot of part-time jobs to sustain myself. So I used to work in a lot of bars and also do the schooling bit effect. It was like, you grow up really fast because you had to take care of yourself. And like before, when you had parents to take care of you, like your personal care plus also finances and studying, and like all those things together. So you, you grew up fast. It's kind of probably like the NS experience for a lot of Singaporeans.
Jeremy Au (03:19):
Right. And so, you chose to go to Temasek poly, which wasn't a university. And then after that, from what I understand, we've talked personally before was that you actually did start university, but you had a dropout, right. So can you tell us a little bit more about what happened after you graduated poly?
Rahul Thayyalamkandy (03:38):
Yes. The plan was always, I mean, this is the same with a lot of my friends who came over from India. The plan was always complete the poly and then immediately joined the university, whether it's NUS, NPU or some other private universities. So I joined UOL for, for some reason I had an interest in banking finance, because at that point I kept hearing that this investment management job, investment banker, that was a very high paying job. So I wanted to be something like that. So, yes, in 2008, I joined... I think I completed first year and my second year I had very, a lot of difficulties paying the fees. So there were 12 credits for the entire course. And I had completed like four at that point. And then the next year I could only do one unit. So, this kept happening for a couple of years and it was like, I had one loan that I was trying to pay off.
And then I also had this like, no way to like finance the new year. I mean, the next subsequent years of my education. So yeah. And then my father also got sick due to diabetes complication. He had a long struggle for five years before he passed away in 2016. So, a number of reasons I could not really complete that, but then, out of that necessity, I thought, okay, there's no way out. The only way out for me is to probably again, maybe try building a business and making some money. So that's why in 2012, me and a friend of mine, we started a small business, which is like a graphic team brand. We called it Loqui in Latin, I think. It means to communicate. So all the designs of the t-shirt would have this symbols or graphics, which would communicate a message.
So it was like unique in that sense. Again, the inspiration at that point of time for me, was to do something similar to what Threadless did in the US, where they had a community of designers, creative designs, and then, they would sell it back to the community and are interested people. So I want to do something similar. So, and again, one other thing was that I just wanted to prove to myself that I can do build something from scratch. So we started with a $10,000 budget. We actually got so called investments from couple of friends, and we did all the mistakes that you could possibly think of and including manufacturing a shitload, like we manufactured 2000 pieces instead of like a small batch. And then we were clueless as to like how to market. So when you initially build a business, you focus too much on product. You think that, okay, this is because you build it. You think that it's a great product and then people would buy but quickly realized that's not how it works.
So one, we didn't set aside a lot of budget for marketing. And the second thing is that we did not know much about marketing at all. So it was really hard. But then we did couple of interesting things. We did sell art t-shirts in store, in Haji lane, in Arab street on a consignment basis. So, that was one. And then we also did sell in a store in Temasek poly. So Temasek poly business school as a store where students run the store. So we sold a couple of pieces there, but these were all very small numbers. The biggest mistake that we made was that we overproduced. So, I mean, if you're an entrepreneur and you've not read the lean framework, you'll eventually learn because that's the only way to like sustainably try out anything, like, do a bunch of experiments, very small experiments with as little resources as possible.
And then you see whether something happens again. So, again, I remember like this was heading towards a failure. And the one thing that I did not want to be was like a failure because the only two people who did business in my family, they were like incredible failures. So they bunched a lot of... they made a loss, a huge loss and lost a lot of family property and whatnot in India. So I did not want to be like them. So the drive to not fail was one key factor where I kept on trying to make somehow make this work. So moving forward, what I did with designs was that I produced in very small quantities. And then I also took advantage of certain events. So there's this cricketer Sachin Tendulkar. So he was retiring back in 2013. So I kind of knew that he would retire in November.
So in September I came up with the design and there are a lot of people in India crazy about this person. And so, and I had also read a news that some guy in US, when Osama Bin Laden died, he sold 10,000 t-shirts for $12 each. And he made like 120 K on the week, Osama Bin Laden died. So I thought, okay, maybe this is a good way to sell. So I came up with the design early. I did not make like thousands or something. I just made few hundreds. I knew that I could sell. And then yeah, that I eventually ended up selling all of it. This way you learn that, okay, you produce what you, manage with what you can. And then you slowly build from there. I kept doing these kind of things for a bunch of a few months.
And then I was making like two-three hundred dollars every month. So after a while I was doing this on top of the job that I had. So it was really tiring. And there were a couple of my friends who said that I looked like a cancer patient. I was too stressed and tired. So after a while I thought, okay, this is not worth my effort. And then, I just stopped working on that, but I really like the experience of this, creating something on my own and then adding some value. So I was discussing a bunch of things with a long time friend of mine from Temasek poly and in 2014... So he's a really good engineer and he built a toy 3D printer. So it was like, this was a time of the whole 3D printing hype, I don't know whether you remember in 2012, there was this pirate 3D from Singapore, which raised like millions of dollars on Kickstarter.
So this was around that time. And then, so he had built a toy 3D printer, and I said, okay, let's turn this into a business because this toy 3D printer, if you think about Lego, the reason why Lego is such a great toy is because you can make any toy. So what if you have a printer which can make any toy, that would be like a great story. So Lego was kind of our inspiration. So we decided to do this full time. And we had a small angel backer who invested like 25K into the business. So we built this prototype, but that was also the time when you look at the hype cycle of 3D printing technology, that the hype was going into the trial of dissolution meant, and we could not get anybody to even like consider investing in the business to take it to from prototype to production.
But we were looking at all these toys and stories and all these things. So we found an opportunity in the independent storyteller. So if you look at the long tale of storytellers, like there's only toy lines for Disney Marvel and all these big storytellers, right? There's no to storyline like toys for all the stalls, independent or small storytellers. So, and with 3D printing, there's no need for economics of scale. That was, at least our hypothesis at that point that you can even make like 10 pieces of a toy. If 10 people is interested. So we kind of worked on this hypothesis. So we worked with a bunch of online storytellers, including a storyteller from Singapore called Eva comics. So we came up with five toy line and the thing with 3D printing was that the quality was really poor. And the margin for the business was really small and it was high cost for the end consumer.
So everything possibly wrong with a product that was three different toys. So, we did this full time for one, one and a half years. And then during the process, this whole process, I was like networking a lot and talking to a lot of investors in Singapore. So we knew a couple of investors and who had invested in a startup called Fresh Monk in India. And the founders of the company were not keen enough of like continuing with the business and they wanted to exit the business. So two investors, one Michael Blakey from Cocoon Capital and Samir Narula from August one, they asked us whether me and my business partner would be interested in taking up that business. So we thought that, okay, I mean, during the whole fundraising process, we noticed like a commonality that if you had already exited a business, then you are likelihood of raising funding is pretty high. So I thought, okay, this is an opportunity to probably say this business and make a name for ourselves.
Should probably never do that without if you're not, if it's not your way, don't take care of other things. Don't take, yeah someone else's. So this Fresh Monk, the business was a customer apparel platform, very similar to, what was that, Teespring in the US. So it's like a platform where like anybody could, like with an audience could come and design, and then if like 10, 20 people buy, they would just manufacture and ship it to all those customers individually. So even a business team could just come and design their corporate t-shirts and then we can just manufacture and send it to them. So again, at that point, when we took up that business, Teespring had evaluation of like 600 million or something. And then within few months, just the, at the time when we actually signed all the agreements, the valuation went to like 15 million or something.
Yeah. So that whole model kind of really collapsed because all these big like influencers who had audience realized that they could do this with Shopify and also other fulfillment services in the US. And they don't need like a marketplace or something like this to do this. So the whole thing collapsed, but we just wanted to somehow build a sustainable business in India with fresh Monk, the market conditions in India, it made it really difficult because these were customer apparels. And then most of the sales in India, like in Southeast Asia is in cash is on cash and delivery. So, and these were all, a lot of people ordering our products were first time internet buyers, they did not know anything about buying online. So, and especially when you don't have to pay for stuff, they will just order.
And then when the product is delivered, they would say, no, I changed my mind. I don't need it anymore. So the infrastructure and the customer behavior was not really apt for something to be really successful, especially custom products. And it still is getting better, but it's still not there. This whole cash and delivery has to go away. It's an interesting thing with logistics, especially with cash and delivery, the logistics company earn two times the money if they don't do their job. So if a logistics company don't deliver a product and they return it back to us, they earn two times more money than they would if they did deliver the product. So the incentives are not aligned for them to do their job. So it made it really hard. And there were a bunch of other things like the month we were supposed to go profitable country, demonetize the currency, a lot of bad luck on the way, but we put in our own money, we tried our level best.
I think the investors really appreciated that, the grit that we showed. After that, I took up a job as a head of operations for a company FinTech company based in Singapore. But then they had an engineering team in India. I managed like recruitment, branding, employer branding, like high level strategy, people operations and stuff. And then since then I've been back in Singapore, I did a small internship at Cocoon Capital. I had audited always asked Michael that I wanted to learn how VCs work. And then after that, now I've started a podcast called understanding. We see, so entrepreneurship is my thing. This has been like a really long introduction from me.
Jeremy Au (17:03):
Yeah. So, you've been out of necessity, you've been working as an engineer in the semiconductor side as well as being an entrepreneur, right. To make money, to sustain yourself and your family. So why the interest now in VC?
Rahul Thayyalamkandy (17:26):
What I've realized is that, in the last few years, that my expertise is possibly in e-commerce or building consumer brands or things like that. But then there are also other markets, like healthcare is something that I really like where I would like to do something, but then I don't have the expertise to do that. Then you kind of, when you are investor in the company, it's like, you are seeing what you want to do, realize through someone else, at least you get the feel that I see. I notice this a lot with other investors VCs as well, that when they talk about the portfolio companies, they mention them as we. Technically, they are just investors, but they also feel really part of that journey. So I would like... I mean, that's one of the reason I'm interested. So the perfect life would be to continue to be an investor and also invest in like maybe one or two start ups every month. That would be the perfect life.
Jeremy Au (18:25):So why the podcast? Is it because it's a way for you to you show what you're learning in public? How
does the podcast fit into it? Because it feels like it's part of your learning journey as well. Right?
Rahul Thayyalamkandy (18:36):
Exactly. The couple of reasons, one reason to get good investment deals is when you provide, I mean, the one way of doing it is when you do provide genuine value to other founders in the region. So as an individual with limited resources, I thought the one thing that I could do was like create content. And podcast seemed like a very good media type and also the style, because I have to talk less, I can let the guest talk, share as much of join. And so that way I'm creating quality content and we are providing value to founders. And the way I look at it, the more I keep doing it over a period of time, the more successful I can get as possibly as a VC.
Jeremy Au (19:26):
Do you ever feel frustrated or how do you feel about the fact, because life has been hard for you, right. You know, you had to take care of family, you had to drop off, undergrad and, not in a cool splashy, Mark Zuckerberg way, right. But, I think much more common way of taking care of family way and, you've made your way to become a founder and as a business person and to break even, or to fund your way through life, right. So how do you feel about that?
Rahul Thayyalamkandy (19:58):
Yeah, it's really really frustrating. There are times like, even as an entrepreneur, when I started out, I remember like when we were doing the 3D print startup, we used to apply for Y Combinator and all these accelerators. And the first time I get rejected, it was very difficult to deal with setbacks. But then when this keeps happening repeatedly, you get better at it to deal with setbacks. So it's like a rubber band, the more you stretch, it gets easier over time, when you keep dealing with setbacks. It becomes a norm. So, I felt that I was becoming a stronger and stronger person and becoming more determined over a period of time. That was really positive things, positive thing that happened, although it's like really crap feeling, but I kind of felt that I was getting better that way, personally.
That was one. And then, I went from Singapore to do business in India and we had a very limited amount of runway. And the things in India never run. Nothing ever happens on time. It's incredibly frustrating. So our bank was the DBS bank, but the DBS bank in India, that does not work like the DBS bank in Singapore. So there was a time that I had to shout at the, our banker in front of all their customers. My emotions were not in like, check that initial few months, but I feel that now, it's a lot better. I'm a lot more in control. I can like, I deal with things a lot better, both emotionally and also dealing with all the setbacks. And you need to have that capability because a lot of times it's going to be like really frustrating and things will never happen, or a lot of things could go wrong. And, but you can't get like really upset and waste a lot of time. You still need to remain calm and collected as much as possible. So those personally, those two things have like really improved over the time for me.
Jeremy Au (22:14):
So what's interesting to me is that, you're a person who understands both walls, right. You've been grew up in India, you've been an immigrant to Singapore with I don't the scholarship, right. That lets you get through the education. And then vice versa. You've gone back to India to work. And now you're back in Singapore to work. So you kind of like straddling both of these worlds. How do you feel about that? Do you... Are you leaning towards one way or the other? How do you feel about it?
Rahul Thayyalamkandy (22:45):
Yeah. So in Singapore it's very high quality life, the infrastructure. And even with the startup infrastructure from the government, the policies and setting up a business in Singapore is like signing up for Gmail, an email account. It's that simple, straightforward. And even if I've been to IRAS, inland revenue authority many times, and for filing of your accounts or anything, very helpful, incredibly helpful people. You find none of those in India. It's like the complete opposite the government is trying the level best not to let you succeed. It's that kind of feeling. But I think there's also a plus point for all those obstacles, because then you try even harder. In Singapore, I think it's like a bubble. I feel that I've become a lot street smart ever since I've lived in India. I don't take no. The one example is that, so like after living in India for a while, I came back and I went to DBS bank to get a bank statement or something.
They, said that it would take few days and then they would charge like $20 or something like that. And I've tried like arguing with them, see, this is just a piece of paper. And then why can't you give to me right then? And there, I got it done for free. So the previous me who had lived in Singapore before would never question like why things are a certain way. But ever since living in India, I tend to like question a lot more. Like, why is it like this? Why is it, why can't we better? So that, you become more street smart. You think of more. And in Singapore it's like a bubble where everything is like straightforward and taken care of you. So you don't think outside the box, like what people say or something like that. I'm not leaning towards ball. Anything. I like both, Singapore is like a second home to me.
Jeremy Au (24:49):Amazing. And, last question I have here that wrap things up here is, could you share us a time when you
Rahul Thayyalamkandy (24:55):
Okay. So I did this head of operations role with this [propaganda 00:25:02] FinTech group. I think back in 2019, the company was not doing well. So in 2018 December, we had set a budget for the year. And then we gave everybody the raise and we finished their whole performance review session. So, when you are a leader, when you sell a story for the next year, right? So these are going to be our role. And you tell your team that when you are having individual sessions, that we are giving you this raise and we expect this and that. And so we had already set aside a story, but for whatever reason in February, my boss asked me to like cut our operating expense by half. So we had to file like 75 people. So I had to do that. So I was the ops guy, and this was really hard because then you're changing your story.
It's a hard thing for you to do because a lot of people just ask me, like you told me something and then you gave me good raise also. And then now you are asking me to go within just two months. So it was honestly very hard. I felt like really hard waking up in the morning because I knew that I'm going to office, I had to fire people and this happened for like several weeks. So, that was really tough time. But then, I try to be as empathetic and then explain that, yeah, this is neither your fault or the company's fault. The business is really not doing well. And then what I kept telling people is that you would realize that, okay, this might be like a really hard thing to go through right now.
But I mean, I've seen people from this company itself, like within a few months, get a job. And most of them have got a better job in a better brand, like maybe an Adobe or something like that. So, this is what I've kept telling them. That was a hard thing to do. But then now I can comfortably say that I'm really really good at fire people. And I think at least 90% of the people would say that 90% of people who are fired wouldn't really hate me. I believe. I totally believe that because I've tried it to make it as easy as possible to each one of them and also not create any sort of like damage to their future as much as possible and really helped. And this includes even the office support staff. So before they left, so in India support stuff people who like take care of office maintenance and stuff like that. So I made sure that all of them were like sent to a course, either like a small computer course or like tailoring or driving or something like that before they left. So, this is one brave story probably.
Jeremy Au (28:07):
Yeah. Rahul, thank you so much for sharing the story. I really appreciate you just taking the time to obviously share a little bit about your educational journey and the tough times that, cause you to start becoming a founder. And I think it was also interesting to hear some of your, the ups and downs, right, of being an operator in the world across both India and Singapore. So thanks for that. And lastly, thanks for sharing a little bit about how you're building in the open, right around your interest and curiosity for VC VR podcast. So thank you so much Rahul for sharing all of that.
Rahul Thayyalamkandy (28:47):Yeah. Thank you once again for writing me to your show and, I feel that this has been a really good conversation. Thank you.