• Inspiration

When he joined the software industry in 1998 as a fresh engineering graduate from Mysore University, Nikhil Ranjan knew he was doing the ‘cool’ thing. Working for MNCs, such as IBM, was anyone’s bet to success. However, after a brief stint, Ranjan changed his chosen path. In 2002, he ventured out with William Penn, a multi-brand specialty store selling high-end writing instruments and accessories, the first of its kind in India. It has now grown to 15 outlets and still counting.

Family business background
“Coming from a business family, I have been exposed to it all my life,” says the 33 years old Founder and CEO, William Penn. Ranjan opted to be part of the family business—manufacturing stationery items—and did so for six months. In 2002, he launched his company William Penn.

The idea & opportunity
Learning from his family’s B2B business, Ranjan knew he wanted to explore the B2C market. “We realized there was no store for stationery as a specialty in India, so we decided to make an attempt at it,” he says. William Penn started its first outlet in Koramangala, Bengaluru, stocking everything from artists’ material, office supplies, specialty desktop products, etc. Barring five to 10 percent products that were manufactured, rest were sourced from vendors. “We noticed people had interest in writing instruments and sensed a possibility of having a specialty store,” he recalls. Not too long in the game, the firm’s focus went niche in 2004. The economic environment, too, was quite conducive to his plans. It was the beginning of economic prosperity in India which meant people had higher spending powers, were more aware and buying products that were ‘nice to have’, as he describes. “We also had a bit of luck,” he quips.

Early blots
Contrary to his perceptions, opening William Penn’s second outlet gave him a reality check. “We had no clue about the supply chain, never knew what customers wanted,” he mentions. Everything, from merchandising to software system, was a case of hit and miss. Going on, he made efforts to talk to people who knew these things.

A major challenge he faced as an entrepreneur was figuring out the right software required for inventory and billing systems. The firm initially used a Fox Pro-based system and went wrong. “It handled one store well, but couldn’t handle stock transfers across two stores,” explains Ranjan, who recalls spending six months to clean up the mess. Plus, organized retail was a nascent phenomenon which meant there was no authentic source of information. He had to speak to traditional retail shop owners or standalone modern format stores to understand how they tackled similar issues. “Every challenge is a learning for the future.”

Write choices
One of his best business decisions was spending time on the shop floor, taking constant feedback from customers and offering brands they desired. In 2004, the firm started with 10 brands, making it the only store stocking genuine, reliable writing instruments and accessories. Getting the first set of brands on shelves was a mammoth task. Import duties were 50-60 percent and manufacturers weren’t enthusiastic about India.

Order values weren’t large and that didn’t excite suppliers. Convincing suppliers meant a lot of cajoling, frequent visits abroad and presentations galore. Many times, this meant being rejected by manufacturers who were immediately put off by the thought of dealing with India, because it wasn’t a big enough market. Ranjan couldn’t risk bare shelves either. “Even if a single brand wasn’t there it was magnified. It meant our potential for sale was limited,” he explains. Determined, he approached stationery stores in Singapore and Malaysia which were ready for small orders. This meant paying import duties on retail prices but he took on the cost.

Concurrently, he didn’t have depth in each brand, and importing each took months. “We didn’t know what to order, we had to wait for all SKUs to sell before we could re-order,” he says. Lead times were long, and with no prior sales experience he didn’t know how to forecast demand. “20 percent products were sold, but we had to wait for the rest to be sold before we had a sizeable order to place.”

Life started to pick up. Import duties reduced to 30 percent of in-voice value, lessening barriers to import. End-customer costs were reduced. “This helped us stabilize. We also had a first mover advantage,” he says. With an influx of global business, the firm gained credibility. In FY6, William Penn began clocking in order values of about Rs.20,000-Rs.25,000 per day.

Filling a talent pool
“It was difficult to attract talent. We didn’t have a specific job description to pitch and were a team of seven only,” he says. The most logical approach was to poach staff. In due course he realized it wasn’t the best strategy as these employees weren’t trained and had little know-how on William Penn’s portfolio of brands. “Here we were selling brands, customers expected us to speak their language and know more,” he notes. Language was a problem; store-attendants weren’t well-versed with English.

Good insights for Ranjan again, because when he hired the next set of employees, English and basic customer care skills were a pre-requisite. This time he opted for staff with experience in organized retail stores. Unfortunately, they too needed thorough training. Who could do it better than an entrepreneur on the shop floor? One-hour training sessions every morning followed suit, which included discussing product categories, nuances of dealing with customers, standards of service and brand know-how. “I knew what we needed to do; so made this an interactive process with quizzes and gifts and lots of fun,” he says. However, in the enthusiasm to sell, attendants went a bit far. At one time, he had to make it clear that customers were told the truth. “You can’t say a pen is unbreakable, or won’t get scratched,” he explains.

Growth years
By the time William Penn had reached its third store, Ranjan had a better sense of running the business. “In India we were the only one buying writing instruments, so push and pull factors worked in our favor,” he says. Now that survival wasn’t a primary objective, Ranjan could devote his time to other factors that make a store successful. “Every entrepreneur needs to ensure that his bread and butter is secure, only then he has the freedom to look at more.” . With that in mind Ranjan and team approached professionals with experience in retail stores to include architects. “Initially we went wrong with our furniture so we shifted to a modular format made in factories and fitted at stores,” he recalls. With a blueprint in place, stores could easily be replicated now.

The market today
William Penn operates in a large, aspirational market with an eclectic canvas of customers ranging from politicians, lawyers, businessmen, celebrities, with an average age of 30 years, not leaving out the occasional teenager who wants to buy a Lamy for an exam. But, his customer base is still confined to evolved societies in A-class cities and metros.

Future fills
The company has 15 stores across India and three shop-in-shops in Hyderabad, Delhi and Bengaluru. It is slated to open two stores later this year in Cochin and Kolkata. “We aren’t running after a number, but will carefully choose the markets we address,” states Ranjan.

The company’s online store that launched two years ago, and was revamped six months back, is due for some serious attention by the CEO. Currently it handles about 100-150 transactions a month and goods are delivered free of cost on purchases of above Rs.1,000.

Learning with the flow
“Dealing with people has been a big learning, it’s easy to do a job but not as easy to get it done,” quips Ranjan. From a team of seven to over 200 people, at every level, Ranjan felt the need to ask his employees why they were excited about working at William Penn and their impact on business. The best ideas come from people on the floor is this entrepreneur’s belief. “The moment we stop listening to people there lays a danger of being irrelevant,” he says.

©Entrepreneur October 2011

Tags:
business, CEO, nikhil ranjan, Shonali advani, william penn