Seamless Confidence

Of Sharks and Minnows

Mohit (25) and Priya (23) Gadhiya had a baby boy a couple of months ago. While this was great news on the personal front, it caused a major disruption at work. The young couple runs Raja Rani Coaching, a Surat-based tailoring academy. Mohit handles the business side of things and Priya is the chief (and currently, only) instructor.

Small business, routine occurrence, why are we discussing this?

Two reasons, one minor and one major.

The minor reason is that the couple made a pitch on Season 3 of Shark Tank India, the reality show where small businesses pitch seasoned entrepreneurs (“sharks”) for venture funding and mentoring. Incidentally, that’s how I heard about them.

The major reason is that Mohit and Priya could just as easily open a coaching institute to teach “sharks” how to build a business.

If this sounds like hyperbole, let’s look at some numbers first. As on the time of filming – September 2023 – the couple has done business of ₹2 crores in the previous 6 months. Their projection is that they’ll do ₹6 crores in the current financial year, on which their net profit should be ₹2.64 crores. There’s no burn rate, no complicated cap table- they are bootstrapped and profitable.

Phenomenal numbers, no investor pressure and a real profit – more than most sharks can claim. And yet, the beauty of the business is not its profitability, but its culture.

Mohit refers to Priya as “ma’am” – a habit he acquired while working with his sister-in-law on a previous venture. This may sound like a minor quirk, but it’s indicative of a culture of respect. And respect always cascades from the top down. Not the other way.

He also refers to their students as “bachche” (kids), even though they range in age from 18 – 45. Lines are neatly drawn – we are a place of learning, and our students are our wards.

Raja Rani is in the business of upskilling existing tailors and training new ones- they have had 70000+ students till date, both offline in their Surat institute and online on their app. Oh, did I mention they have an app? Where they offer online vocational training? Where the cheapest course is ₹99? Classic shampoo sachet strategy.

They rely on their social media channels – Youtube and Instagram, where they put up snippets of the coaching conducted by Priya ma’am. This is a content-led customer acquisition funnel, and leads to a CAC (Customer Acquisition Cost) of just 7%.

The last two months, and the break Priya took due to her pregnancy, introduced Mohit to the concept of Key Person Risk, realizing how much of their venture was centered on one person and how risky that was.

So now they’re planning to introduce a Boutique Management course, to be run by Mohit. It sounds like an express MBA focused on starting and operating your own fashion boutique – the top of the tailoring food chain, where you design and develop custom apparel under your own name, a mini-maison.

Courses in fashion photography and other related skills are also planned, probably with outside instructors.

We’re not done yet. Tailoring is a craft, and not all students may be able to reach the same skill level. So Priya ma’am has developed stencils for blouses- usually the toughest garment to get right. And these are for sale in a variety of sizes. Yup, they do merchandise too.

All this, without selling customer data, mis-selling courses or burning money to acquire customers.

So what was the best offer they got from the sharks? A pre-money valuation of ₹5 crores – roughly 2x annual net profit at current rates. Not sales, not EBITDA. Net profit. Thankfully, they refused.

Raja Rani Coaching are doing vocational training, which has historically been monopolised by out of touch government institutes. They are profitable, which many sharks and VC’s have found elusive. They have found their customer, established their distribution and set their eyes firmly on the future. Not to mention, they’re generating employment and enabling a whole new set of entrepreneurs.

May a thousand Raja Rani’s bloom!

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The video in question:

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This post is for information purposes only, and should not be interpreted as investing advice. The author may hold positions in the securities discussed.