Whats up with Refillable?

In a world of success stories, here’s one which didn’t make it (yet). We are reversing the usual startup journey?—?Usually, people get intrigued by the space, start side hustles, grow it to a certain point before jumping into it full time. After running the startup for 6 years, we are scaling it down and finding our new pot of gold?

We realised it long ago that our startup can’t pay us, we will only harm our balance sheet, reduce our runway & stop any chance of growing in the future.

The entire point of this article is to share our journey, what we went through and show the underbellys the startup ecosystem. TLDR?—?Nobody cares about sustainability & climate change (yet). Our market for reuse and refill was much smaller than we had imagined and co-dependent on a lot of variables which dont seem to go in our favour

Before we begin, Let me be honest with you?—?through this longish article, I hope to find some closure and make peace with the decisions we've made.

For everyone?—?this article will have two journey’s?—?1. Bootstrapped, 2. Venture Backed.

So what happened to us?

I still remember so clearly?—?It was 2018?—?Like other 20 year olds, I was trying to figure life out. Understanding and learning import and exports with my dad, when I get a call from Purav?—?Ek accha product Mila hain, baat karte hain.

He had come across unbreakable products (polycarbonate) which could be used at bars, hotels etc. His idea of getting Batra and me was there would be someone with experience for marketing and I could look at exports?—?All this as a side hustle alone. Batra had a job at this point and Purav was dabbling between his previous solar startup and working with his dad (which he was quite successful at).

Anyway, we met the manufacturer, and he introduced us to “Eco Cups”. A range which would potentially change our lives. So back in 2018, India had banned single use plastic for the first time?—?while there was a lot of grey area, The takeaway food industry was massively affected, especially the beverage market

Boom & we were off. We used to meet everyday at each others house and make calls to restaurants, visit them onground and understand their requirements.

We were naive young kids who were not thinking about the future and growth opportunities. The journey was very organic for us. One thing always led to another.

The turning point for us was Burger King. I still remember the day we made the first call?—?It was at Puravs house. I connected with the supply chain head on LinkedIn but was very afraid to message her. Luckily, her contact number was public for everyone (yes, if you press on contact info, you might get their numbers). I thought we have only shot to this, so gave the contact to Rahul as he was the best of us + had closed deals previously with his previous employers. Conversation went well?—?we gave in the samples, they didn’t like it and we moved forward until we get a call 2 weeks later that they are interested. Much later we found out that she had forgotten the samples in the conference room where her fellow marketing manager really liked it and pushed her to get this.

Our biggest client was the biggest stroke of luck! We underplay luck a lot in an entrepreneurial journey. Though I believe we make our own luck and put ourselves in positions to get lucky.

Though we needed one more factor along with Luck, Timing. Call it beginners luck but time was on our side. The recent ban and poor performances of alternatives had built the foundation for our argument.

So in the first 6 months, as unemployed young kids, we were generating revenues of over 50,00,000/- ($65,000). We were only commission agents back then, no company, no identity, just the fact that we need to solve this problem for the restaurants and sell this product.

I remember, it was December 22nd, 2018 when Purav researched and found about Globelet?—?An Australian Reusable Cup Company. It absolutely fascinated us. They were using similar cups for an entire different use case which we had no idea about. This was our first step towards circular economy and reuse. Anyway, I randomly reached out to 2 events happening a couple of weeks later (because we had a lead time of 2 weeks! Imagine being entirely booked out for 2 weeks consistently).

Luck + Timing again paid off?—?We were called for meetings and voila, our cups were now going to be used at events too! Through Globelet we need about reusing the cups but never thought Indian customers would adopt it.

On January 12th, 2019 at Spoken Fest, Jio Garden we decided to officially startup and form Cupable. We saw customers absolutely loving our product, they were reusing without any communication, segregating it and throwing it in the bin on their own. We even managed to get a count of the cups at the end of the festival through a waste management company.

As Nishith (Our contract manufacturer) was equally involved, all of us became equal shareholders and invested additional 5L each in the business (I had to take a loan as had no money). Tbh, the first year was an absolute blur?—?we never got the time to look up and think about the future?—?No market sizing, competitive analysis, future of the market, growth potential. In a way, it was good because we were busy spending time with the customers.

In the next 3 months, we ended up conquering Burger King for Dine In + Takeaway, cracked our first reuse event?—?each cup was used for atleast 3 times within the span of 8 hours! And ended the year with 1.5 CR in revenue (technically in 8 months) with all the profit pool being deployed back in the business.

Unlike most of the usual startup journey, we saw recurring revenues pretty quickly. What was working for us that time was most of our clients were compelled to use our products and services as they had no other option. Glass existed but Keventers had really exhausted the glass bottle experience.

Throughout 2019, we went deeper in reuse models to understand how can we turn this packaging trading company into a circular economy startup. We started believing in the cause, went back to the drawing board and started adding more services. We used to sit with event companies and brainstorm what more can we add and help them become Zero Waste.

Water came out as the biggest polluter. We started providing free refills of water. Changed the way lot of events looked at us and it was another feather in our cap. I remember coming back after an event with literal bags of cash?—?things what dreams are made of!

Believe me, we never saw a dull day in the first 16 months. It led to my father believing that over the next 5 years, we will be going public and change things.

First Near Death Experience

It had been 16 months out of college and we hadn’t withdrawn a single penny from the firm. While we thought the company was doing really well only to look closely

• We became a trading business with no leverage
• While our revenues were skyrocketing, just like a manufacturing business, our GM was below 10% and Net Margin was 3–4%
• It required us to constantly invest in moulds to grow our market share
• We had a very high risk of bad debts, all of our earnings could go for a toss if any client decides to not pay us
• 75% of our revenues came from client alone whereas our profitability came in only from the balance 25%.
• Events Industry contributed to 8% of our revenues but 70% of our margins
• You will never be able to realise profits until you shut shop as its always rolling in the business
• Internal dispute on cash flow management and usage of funds
• Mismanagement

We were heartbroken to realise that all of our profits were saturated in bad debts, quality and raw material fluctuations.

The only way to solve the issue was to grow the business so these issues might look minuscule. We finally started drawing 30,000 as salary but unfortunately, COVID had other plans.

During the lockdown, I remember having 3–4 hour calls daily to figure what can we do. We use to jam on ideas, and discuss how we can diversify our portfolio and create reuse systems.

Call it impatience, or naivety?—?We launched Refillable on June 5th, 2020 with no plan of action. We used to deliver home care products in reusable bottles and collect them for washing. It took us nearly 11 months to launch our first refill truck but we will get there.

We literally just posted on Instagram, made content, filled the bottles ourselves, delivered and collected it back. It was extremely tough and we had no idea about what we were doing. We just knew reuse made us happy. Thankfully Cupable restarted in September, and the consumption came back with a vengeance. We restarted taking salaries but not for long

This was our first startup like experience?—?What is the market size? What are we trying to achieve? Who is the customer? What can it become in 5 years? We never answered these questions. We thought truck will solve everything.

The first truck costed us 10L?—?Luckily Cupable saw a big order coming and we managed through. Between the launch and Refillable, there were literally 300+ days.

Refillable was originally crafted as a platform to help brands become circular. We saw there was a gap in the market during COVID?—?most of these brands wanted to market inside the societies and our truck could have been the solution.

Our theory was that this will be a revenue generating model which creates impact for the brands. What we did not anticipate was their priorities. During that period, we have met Unilever’s, P&G, Godrej, Reckitt and many more. I am talking about Global and national heads?—?the whose who of the FMCG sector. We went through close to 13 meetings to finally get the Vim National head on the call. (Supply Chain, Quality Assurance, Packaging Expert, Sustainability, Marketing, Sales Head)

I vividly remember, It was during our testing phase in April and the call ended in 20 mins. We knew we screwed our biggest opportunity to work the team. Leading upto this meeting, everyone was very excited but we didn’t say the things he wanted to hear. Our pitch was towards reusing and sustainability whereas he wanted to hear about growth, quality assurance and marketing. While everybody says you should understand what people want but that’s a craft which you build over time. As a 20 something year old, you are still trying to learn the craft.?—?First Big Indicator

We pulled through. In May 2021, when refill truck was launched, we tasted traction for the first time. We saw over a million views, bloggers wanted to do stories, PR articles etc.

Though those didn’t convert into sales?—?we had to keep engaging with our audiences with multiple campaigns?—?#PayWithPlastic, #PayAsYouWish.

While we were growing 15% MoM, but were still trying to understand how big the market could essentially become. We had people who loved us but yet were not purchasing from us. This was our second big indicator but we neglected it and went forward.

Throughout COVID, we applied to 50+ accelerators, got in more than 25+ across the 2 years. We were literally scouring for help or direction all throughout.

One time in November, we just said to ourselves that we can’t survive like this?—?we have to raise funds for survival. Believe me 30 more days and we would have shut shop.?—?Second Near Death Experience

Luckily for us, OnDeck and Third Derivative Accelerators were are angels and invested $225K in us. At the same time, Gaston Bilder, a lawyer from Qatar followed up with us for 2 months just to be on our cap table. This literally changed the morale?—?we literally told ourselves that how are these guys valuing us more than ourselves? Why can’t we take the bet?

Though, now we knew we have a death certificate in our hands. We knew the moment monies will hit our account, the timer will begin. As bootstrapped companies, you always have option of extending runway as its based on how many hits can you take. Venture backed companies are like moonshots and fast paced, looking to hack the growth and invest in talent upfront.

Cupable and Refillable were separated and started their independent journeys at the start of 2022 with hopefully a more positive outcome. As any startup, we started building our foundation?—?got our team, user experience started getting better and we started expanding. Our partnership with Hasiru Dala started in March where Purav and Shekar joked about a partnership together and 10 days later Shekar was in Mumbai to sign the dots. It was that quick.

We launched Bangalore in July, Surat in August & Pune in October.

Around the same time, we realised that the model is not woking.

• Our retention was high (>70% customers were repeat)
• Our customers were growing 10–15% MoM
• We could not add more categories of products in a “refill” manner
• We were facing issues of assortment and branded products
• We finally started understanding what our TAM could look like (Affluent Consumers + Eco Conscious + Organic Cleaners)

We needed to figure out something else but at the same time we got the opportunity to work with GIZ and 3 State Govts. We brushed our apprehensions aside and secured a work order worth $100K to expand in 3 new states altogether.

The State Govts really appreciated what we were trying to build. Tbh, till date I have never met anyone who wasn’t proud of what we were trying to build. As founders, we need to not fall in the trap of what people say but rather read between the lines. Well, safe to say we fell for it and made the decision to survive.

November 2022, we really felt we were getting external momentum. We got selected by 100+ Accelerator (Unilever selected us to do a paid pilot worth $100K) and Transform (Unilever pilot worth $80,000 to implement our solution in lower income groups) but it was momentarily.

Third Near Death Experience

Even with all of the good things happening, our internal metrics didnt show it. We didnt feel it. We decided the company needed an open heart surgery. Everything looked like a push from ourside?—?Absolutely no pull from the market. We finally stopped dictating our terms and went back on the drawing board.?

Additionally, a couple of clients of Cupable, absconded and our entire margin for the year was at stake!

Purav, Rahul and I literally dread Decembers. For others, it usually the jolly festive period, an end of a year, for us it had become a question?—?Do we survive or shut shop??

We spent 20 odd days redesigning the org and understanding what was important for us?—?Impact and Revenue.

Now let me be honest and explain what went wrong:

• Sustainability is not a personal problem. It doesnt really affect the individual so its tougher to convince
• It cant be your only value proposition?—?No one is going to pay for your product if its makes your more sustainable
• While the global narrative is towards Sustainability, ESG, Climate Change, there has been little to no interest by the bigger corporates to change?—?If planning is a 1 year process, execution 3 year process. Most of our partner brands set out a commitment in 2019?—?Are they actually close to making their packaging 100% recyclable, reusable etc? Pseudo Yes!
• Reuse is just not convenient?—?There are no companies globally who have cracked the model yet. Brands would rather invest in recycling technologies to get a direct result?
• With every refill?—?we were saving 85 grams of plastic, our refills in 2022 stood at 10,000. That meant our total impact was only 850KGs of plastic diverted in the entire year. Our recycling friends do more in a day!
• For B2C customers, we’ve literally been a part of organic markets, beach clean up, corporate drives and tried everything?—?We observed a common theme?—?Its just not convenient. Imagine using a service to only get your home cleaners refilled? Nothing else. In the world of quick commerce, how are we solving this?

So what next? We obviously gave it another shot. Luckily for us, Extended Producer Responsibility (EPR) recognised reuse for the first time in India.

For the ones who know what EPR is can skip this paragraph. EPR makes each brand owner, producer and importer of plastic accountable. It is one single law which changed the course of recycling industry. Very Material Recovery Facilities could break even before this law. Currently there are 10,000+ Recyclers, Waste Management Startups who are thriving, all thanks to this law introduced in 2016. To break it down, If X was using 1000 tonnes of plastic in a month, I have now been asked to offset the same 1000 tonnes by recycling. X pays a company working in this sector to offset their footprint and help them comply. This extra income for recyclers have helped them boost their revenues. Recykal and Nepra boasted 100+ CR in revenues!

EPR finally took the same step towards Reuse. The law was supposed to come in effect in 2023 but got pushed to 2025 but might get further pushed ahead. It essentially states that 10% of any packaging above 0.9KGS/LTRs needs to be reused and 70% of any packaging above 4.9LTRs.KGs.

With this in mind, we devised a strategy to only focus on things which are high impact, in this case?—?B2B was fulfilling the criteria. We designed our organisation in a manner that our entire team would be working on B2C and fulfilling whatever has been committed to the State Govts, Unilever team and founders will be only focusing on B2B.?—?Mistake #4.

Cupable in the meantime over the last 2 years was on autopilot but the same issues persisted. While our revenues were over 4CR every year, Our profitability was always 4–5% and receivable books over 50L at any given time. Not healthy. We decided to solve this and hire a person to grow and give it the full time attention werent able to.?

We ended up partnering with Lollapalooza and created massive impact for BookmyShow. Our cups were a hit, they were literally being chased down and we were sold out. On an average, each customer resued their cup 8 times for water and 3 for alcohol. There were 40,000 people over 2 days translating into saving over 400,000 disposables in event while making money!!!

At Refillable, By mid February, we moved to a newer office and increased our team size to 17 people and had a clear motive to just fulfill our commitments.?

We’d even got in Marico Innovation Foundation and were a part of their plastics pact. Harsh Mariwala told us directly, B2C will not work out.?—?We could have listened to him

By April, We had launched in 2 new cities?—?Chennai and Lucknow and still 20 hours per week per founder was only going in B2C. Our transform project went live though through initial survey, we realised that it might not work too but we pestered and tried to find a solution. The lower income group had far bigger problems than returning and earning 5/- by returning packaging to us.?

We took our stand and told the entire team, we will be shutting B2C down barring Transform and phasing it out as per our commitment with each partner. In hindsight, our decisions looked so stupid.

We barely had runway of 5 months and had an entire pivot planned out for us. We shifted gears, aligned our team for B2B and aimed for a miracle to happen.?

Nothing worked. We needed the legislation to come into affect today but we couldnt make it happen

• The brands while they are excited but they treat packaging as a cost centre which doesnt take more than 3% of their overall sales.
• There is no standard for reuse, so before getting the clients we need to get all the certifications for even the big guys to say yes
• ESG Impact for the end clients (Eg?—?PVR, IIFL, Facility Management companies) is really low. While we are reducing their Scope 3 emissions, in larger scheme of things we were one of 100 things they are supposed to do
• There are too many layers?—?Manufacturer (Who is our client), His client, His clients facility management account lead, his actual onground staff. For all of them to be on the same page was extremely tough. While we got the go ahead from the senior management, actually returns was really slow.?
• There is no need for this, it doesnt solve any of procurement managers core problem today
• How big can we become? Top 5 players in the country account for 2000CR of sales?—?3% of that is 60CR. Is that the TAM for us to build for?

By late last year, it was clear that we would be laying off. Each City was shut down one by one.?

The toughest part of our job was being ethical and transparent to all the stakeholders.?

The last 6 years have been exhilarating, probably the most happiest and saddest I’ve ever been. To everyone who we have worked with?—?I am sorry that we couldnt make it happen. We tried. We really did try. To all our partners and employees who trusted us?—?I wish the outcome was different, I wish I could do something and change a few pivots. Unfortunately, even If i go back in time, i still dont know what could I have changed to make reuse work. To all our customers, thank you and sorry?—?we were not the best option, rather we were the worst. But y’all stuck through.?

Why couldnt it work out?

• Different priorities of all stakeholders
• Timing?—?We were building something which was 10 years ahead and not something which would work now
• Who cares about reuse and refill anyway? No core motivation for anyone to do so

So what next now?

• Startups die. Entreprenuers dont. I live by this. These 2 things dont define who we are. We made tonnes of mistakes but had to things to survive. When you cant pay a bill at the end of the month, you need to try new things, keep things running for stability
• We genuinely believe there is value to be unlocked. Dont most successful entrepreneurs say just surviving is the main goal of a startup? We are at a time in the history of the world and India where the next decade will be very different than the previous one. This will be the new way of consumption
• We will keep dabbling, pivoting, growing and falling till a point when we cant. How can we leave an industry which might change thanks to a policy? India’s consumption is only going to grow, Demands are not slowing down anytime soon and ESG is the newest buzzword everyones looking a solution for. Can we pivot and create value at the intersection of this? Only time will tell.?
• Cupable has the opportunity to grow exponentially with the Entertainment and Live Events industry blowing up. As the consumption increases, there is always going to be a need for sustainable solutions. What if we can take some successful elements of Refillable and merge them with Cupable?

If you stayed till here, I hope you found what you were looking for and can learn from the mistakes we made. We’re onto bigger, better and groundbreaking things. If you want to have any conversation around climate?—?feel free to hit us up.

In the coming few weeks?—?We’ll be sharing whats the old + new opportunity which we are working on and how has our thesis essentially evolved but more on that later!