Dosa Plaza: How Prem Ganapathy built Rs 30 crore empire with seed capital of just Rs 1000(one of best Entrepreneurship Story. Must read )

A class X passout with no particular skill set, I was lured to Mumbai, only to be robbed. It was an inauspicious start to my entrepreneurial journey, but it turned out for the best.

I belonged to a poor family from Nagalapuram in Tamil Nadu's Tuticorin district and had to abandon my dreams of higher studies to support my parents and seven siblings. I headed for Chennai, but only managed odd jobs, which fetched around Rs 250 a month that I'd send back home.

One day, an acquaintance offered me a job promising a salary of Rs 1,200 per month in Mumbai. I knew my parents would never approve of my decision to shift base, so I left for Mumbai without informing them. It was 1990 and I was just 17 years old. The acquaintance robbed me off the Rs 200 I had, leaving me stranded at Bandra.

I hardly understood the language and did not know anyone in the city, but returning wasn't an option since I was penniless. So I did the only thing I could: I decided to stay on and try my luck.

The very next day I got a job washing dishes at a local bakery at Mahim for a salary of Rs 150 a month. The good bit was that I could sleep at the bakery itself. In the next two years, I picked up odd jobs at various restaurants and tried to save as much as possible.

In 1992, I managed to save up enough to start my own food business, selling idlis and dosas. I rented a handcart for about Rs 150 and ploughed in another Rs 1,000 to buy utensils, a stove and basic ingredients, and set up shop on the street opposite the Vashi train station.

The same year, I brought in two of my brothers, Murugan and Paramashivan, who were younger than me by two and four years, respectively, to help with the business. We were very particular about quality and cleanliness, and unlike the people running other roadside eateries, we were very well-dressed and wore caps.

I got the recipes for dosas and the sambhar from my native place, which attracted a lot of customers. Soon enough, the business was booming and we were generating a net profit of around Rs 20,000 every month.

We even managed to rent out a small space at Vashi, which doubled as our living quarters and a makeshift kitchen, where we would prepare all the ingredients and masala every day.

However, it wasn't smooth sailing. We faced the risk of the cart being seized by the municipal authorities as handcart foodstalls do not get licences to ply their trade.

In fact, our cart was seized several times and I had to pay a fine to have it released. Thankfully, the harassment ended when we saved enough to open a restaurant.

In 1997, we leased a small space in the same locality by paying a deposit of Rs 50,000 and named it Prem Sagar Dosa Plaza. We paid a monthly rental of Rs 5,000 and also hired two people.

The restaurant was frequented by college-goers, some of whom became good friends. They taught me how to use the Internet, which helped me get new recipes from across the world. Soon, I began to experiment with dosas, rolling out offerings, such as the schezwan dosa, paneer chilly, and spring roll dosa. In the first year, we introduced 26 innovative dosas.

By 2002, we had managed to create more than 105 dosa varieties and our outlet had become very popular. However, I dreamt of opening a shop in a mall and even tried to get a place in some of the suburban malls. I was repeatedly turned down as the space was reserved for branded eateries like McDonald's and Pizza Hut.

My luck turned the day Centre One mall decided to open up in our vicinity. Its management team and staffers had often dined at our restaurant and enjoyed our fare. They suggested that we set up an outlet in the mall and we happily complied.

Our dosas won us publicity and people began approaching us with franchise requests. We agreed, with the stipulation that we would supply the dosa batter and other ingredients. The first franchise outlet opened at Wonder Mall in Thane, in 2003. Around 4-5 years ago, we got a new brand logo, Dr D.

We've been getting several requests from people who want to set up Dosa Plaza outlets in other countries. We have three outlets in New Zealand, two in Dubai and are looking at opening some in Muscat this year, along with 10-15 more restaurants in India.

These will add to our current tally of 43 (including franchisees) across 11 states. The business I started with a seed capital of Rs 1,000 has grown into a Rs 30 crore company and we are aiming for a Rs 40 crore revenue for this year.

Marketing must be perceived as an investment, rather than an expense

It is possible to have a brand without a business, it is almost impossible to have an enduring and profitable business without a brand. Two recent events that occurred within days of each other exemplify this rather vividly: the first was the declaration of bankruptcy by Kodak, an iconic brand not just in the US but also around the world (who can miss the 'branded' Kodak moments at virtually every potential photo spot).

The second was that Apple overtook Exxon Mobil as the world's most valuable company in terms of market capitalisation at around $421 billion. What makes a great brand and how do great brands contribute to great business? The experience of directly handling iconic brands like Cadbury and Coke globally, and now Britannia in India leads me to assert that 'the brand is the business'.

In 2003, the market capitalisation of both Apple and Kodak was the same at around $10 billion (the decline of the Kodak business model and the eroding relevance of the Kodak brand offering was well under way by then). The Kodak business started in 1889 with a simple promise to consumers, "You press the button and we do the rest," and for decades, that is exactly what happened.

Then came Canon and said, "You click the button and you do the rest." The digital era had arrived; Kodak was too entrenched in its position to change and ultimately lost its relevance and relative differentiation altogether. The failure of Kodak was the inability to contemporise its product offering in line with technology changes and the changing needs of the consumer. Once again, the incumbent was trumped by the insurgent!

Apple, on the other hand, started out as an insurgent in 1976 and changed everything in the rule book: from the combination of design, aesthetics and technology to the way it went to market. Its business delivered $109 billion in revenues in 2011. Both brands, Kodak and Apple, iconic in their own way, followed different trajectories and looked at consumers and markets very differently.

One was arrogant enough to not recognise the need to change. The other was arrogant enough to not do anything that was conventional. One went out of business and the other became the most valuable company.

So, what can incumbents learn from insurgents? What insurgents do really well is represent choice and change. They set an example of bold initiative. The big innovation of shampoo in a sachet came from a small company based in Chennai called Cavincare, not the many MNCs selling shampoo in India for years. The introduction of tea bags in the Indian market didn't come from Lipton or Brooke Bond, it came from Tata Tea when it entered the market.

Insurgent brands constantly break the rules, oftentimes rendering the brand and business models of incumbents redundant. In today's marketplace and advertising world, unless incumbents start thinking like insurgents, it is going to be really hard to be relevant and differentiated. 

Insurgents target the opportunity; they don't cover the entire spectrum. They take control of the dialogue and create a solid bias for action. Whether you look at political leaders or brands or businesses, those who challenge/question the status quo are the ones that actually create something new and different. So, the leadership challenge relating to brands, branding and advertising is to determine how to create value on a sustainable basis, in a competitive landscape.

In the late 1970s, we had marketing stalwarts like Ayaz Peerbhoy, Subhas Ghoshal and Mani Iyer who believed in distilling the 'idea' behind every brand. That idea is what creates the brand, and distinguishes it from all others, that idea is what brands live by and it's that idea that the company must reinforce in every action it takes. Today, we see a lot more of 'lazy marketing and lazy advertising' that simply means, "let me get a celebrity to endorse my brand".

The advertising fraternity, the marketing fraternity, brand managers and businesspeople really have to think long and hard about the value that they are creating for the business. Equally, how we are creating that value through the totality of our actions across the value chain. The culmination of this effort is consumer preference converted to sale. We have to win the hearts, minds and wallets of consumers. This is as true in B2B businesses as it is in B2C businesses - only the levers are different.

Interestingly, some businesses are a result of advertising campaigns. Absolut vodka had ads before they had any vodka and went on to create one of the most successful print campaigns that any liquor brand has ever done. On the other hand, there's Starbucks or CafA© Coffee Day closer home for which we have never seen any advertising on television, and yet, both these brands have created enduring and sustainable businesses.

Irrespective of the business you are in, what really gets the sale is what consumers think and feel about your brand and whether they care enough to be willing to pay for it in preference to other alternatives.

The other thing to remember is that everything communicates. What you do, what you don't do, what you say and what you don't say. Products, politicians, film stars, athletes, etc, are all 'brands'; each of these 'brands' have a perception and imagery associated with them and people decide whether they want to buy into that imagery or not. You, therefore, have to position yourself, your brand, your company, etc, because if you don't, somebody else will. That somebody else in the case of a company will most likely be your competitor, in which case you lose the dialogue and once you lose the dialogue, it is very difficult to get back into the game.  

Marketing must continually reinvent itself to create relevant and differentiated brands and business models that are embedded in the business. And, since marketing is too important to be left to the marketing people alone, every other function in the company becomes a collaborator in the creation of that value. It is the brands and how they go to market that ultimately determines value for the enterprise, and every function in the company must contribute to that: from formulation, design and logistics to sales, distribution and advertising, and everything in between.

But, even today, marketing is perceived as an art and intuition. And the results of marketing efforts are hard to predict, quantify and replicate. Unless we can figure out a way to demonstrate empirically the impact of various elements of the marketing mix (e.g., if advertising budgets are cut, sales will suffer), marketing will never win the dialogue. In a world where competition is getting more intense, where return on investment is looked at from every angle, where opportunity and returns dictate how resources get allocated, marketing has to reinvent itself. And that change begins with the marketing mindset, which, in turn, influences the business mindset, when marketing activities are not viewed as an expense but an investment that must yield measurable returns.

So, it is not only about building brand equity, but ensuring that equity converts into profitable sale and growth that, in turn, create differentiated advantage for the business. For, if we believe in brands, if we are convinced that brands are what make a business, then we must be convinced about how we measure the return on investment we get from those brands. The challenge for marketing and business people is getting the right metrics to give answers that fundamentally enable us to understand 'what is working and why' and 'what isn't working and why not', and have the courage to change it.  

Source ET