Mr Musthafa P C was born in a remote village in Kerala to a poor illiterate family. His father worked as a coolie who struggled to make both ends meet. 3 days meal a day in his house was a luxury to them which rarely occurred. At the age of 10, he followed his father and started working as a coolie after school, to support his family. Coming from a poor family, he had no expectations from life. He walked miles to go to school only for the food he got there under the government’s mid-day meal scheme. In 6th grade, he was made to quit school due to very low grades. This was the turning point when he realized that if he did not study, he would have to live the sad and struggling life that his father did, as a coolie all his life. He went back to school with a purpose and determination, and within a year’s time, he was the school topper. He then went on to do Engineering from NIIT Calicut and got placed with Motorola in Bangalore. He recalls…”When my dad saw my placement offer, he thought the monthly package mentioned was the annual package. When I got my first month’s salary, my dad cried. It was more than his lifetime’s full of savings.” He then worked with few MNCs in India, Europe, and the Middle East but later came back to India with a vision to get into Entrepreneurship and create employment.
Mustafa, at that time, had no idea of what business he wanted to do. He joined IIM Bangalore to do an MBA. At that time, his cousins owned a Kirana Shop in Bangalore, where he used to spend time after his classes. He noticed idli dosa batters flying off the shelf despite the poor quality. This is how the idea of getting into the packaged food business struck him. Mustafa says, even when juggling with household chores and job, Indian women still want to be seen as taking care of her family providing fresh food. Hence, instead of getting into the ready-to-eat segment and competing with them, he decided to help them by providing the best quality packaged batter. That is how IDFresh was started in 2005, making idli dosa batter from a 50 sq ft kitchen with an investment of just 25,000Rs. From there, through ups and downs, ID fresh today is a 200 crore company with factories in 5 cities, selling 55,000 kg of batter each day.
So how did they build a brand without spending much money? How did they build a billion dollar business with a simple product – Idli? Here are 5 of their real-life stories with solid business lessons, that will give you an insight into how they did it.
1. LEARN ON YOUR JOURNEY
When Musthafa and team started selling batter, none of them had any knowledge of food technology or any science behind it. During the initial days, when he was distributing his batter to kirana stores, he gets a call from a shop saying his batter had BOMB in it that blasted. His salesman and a helper rushed to the store where the owner asked them to clean their shop and take back all the products. The salesman took his product and started explaining how they make only quality products, right when the package in his and exploded with batter all over his face. That’s the first time Mustafa and his team even heard of the word “Fermentation” and what it means and what it does to the batter. You will never be 100% ready. You will never have 100% knowledge. Take action, make mistakes, learn from the experiences.
2. NEVER TAKE SHORTCUTS / COMPROMISE ON VALUES.
In 2009, seeing the growth in Business in Bangalore, the team decided to expand to Chennai, set up operations there, hired employees and started sales. A few months later they couldn’t sustain their business in Chennai as many local producers were procuring rice from public distribution system for just 1 Re, and making a batter out of it by adding soda to the rice. Hence they were able to sell it for just 10Rs per kg whereas ID batter was priced at 50Rs per kg. Sales didn’t happen, business went down. They ran out of money to pay salaries. They had 2 options – do what the competitors are doing to match up with the price / shut the factory and leave. He strongly believed that shortcuts never take you long. He was strictly against the idea of making such unhealthy and unethical compromises to grow or even sustain business.. He shut the factory, sold all assets and paid off the debts. Had he done that at that time, he believes he wouldn’t be where he is, now
3. TAKE THE RIGHT DECISION. NOT THE EASY ONE.
In 2015, when floods struck in South India, his entire stockpile of rice and dal was under water. Machinery under water, factory buildings had damage, the team had to be relocated. The company suffered huge financial losses. And at that time though there were a lot of charitable organizations providing food support, south Indians were missing their favorite breakfast. Amidst severe financial losses, PC Musthafa took the risk and sent truckloads of idlis dosas chapathis from Bangalore. Their team took to Facebook for help and they got a massive response. They shut down the Bangalore operations. Young boys and girls were volunteering at the factory to manufacture the batter and load the trucks. However, they noticed that these products were getting looted from the truck on the way and wasn’t reaching the needy. They again took to Facebook to reach out to NGOs for help in protecting the food trucks. With the help of NGOs, they got biker clubs to volunteer and escort these trucks all the way and make sure they reached safely. In a situation like this, when their customers were missing their favorite staple food – Idlis and dosas, they had a golden opportunity to actually sell their products at a super premium price and make massive profits. But they did exactly the opposite and gave it for free. This is a classic conflict between profitability and responsibility and is a very tough decision to make. As an entrepreneur, you need to have the courage to take the right decisions, no matter how tough it is to.
4. BUILDING BRAND TRUST:
Though ID fresh used 100% natural ingredients without any preservatives, anything that came in packets was considered unhealthy by the public. Regardless of the constant communication, ID Fresh found it difficult to gain trust. That is when they came up with a very creative campaign called – ID TRUST SHOPS. The concept? Trust is always a mutual feeling – I trust you. You trust me. ID Fresh encouraged the public to trust them by showing blind trust in them. They set up several coolers named “Trust shops” in multiple cities. The idea was…you pick your product from the cooler and drop the money in a box inside. No salesmen, no security, no technology, no cameras, nobody watching you. Blind trust. There were many customers cheating the system initially but this didn’t make them give up. Eventually, the same customers started paying up for the products they picked out of the cooler as they finally built a sense of trust for the brand. The campaign ended up being a profitable one for them in the long term. These coolers started making better profits than the products at retail stores. This idea was rated as THE BEST marketing idea of that year. With this campaign, ID fresh became a product that touches a customer’s heart and not just tummy.
5. IDENTIFY GAPS. INNOVATE TO BRIDGE GAPS.
When PC Musthafa wanted to expand its product line from idli dosas to vadas, which is a favorite snack in the south loved by kids too. But he realized that unlike idli dosa, people find it very difficult to make vada at home because of its shape and that vada that didn’t match the expected size, shape and the perfect whole in the center was not preferable. Hence he knew that even if he sold the batter, nobody would buy it because of the complication In making it. He took this up as a challenge and spent 3 years and several lakhs in creating the iconic product – Squeeze and fry Vada batter. The product went on to become a worldwide hit that international MNCs started approaching him to create the same product to make doughnuts abroad. Look around. Identify issues and solve it. INNOVATE. Innovation leads to differentiation. That is what causes disruption. That’s the best way to build a brand and stay ahead of the competition.
It is not a coincidence that a coolie kid for whom having breakfast was a luxury today runs a 200 crore company. It was his courage & determination to make a bright future of his own, that got him here. I hope these stories inspire you and help you dream big and be better entrepreneurs, be better leaders, be better human beings.