An evening with Ms Midhula Devabhaktuni
Introduction
On Friday, December 20, we had an insightful session by Ms Midhula Devabhaktuni, the Chief Marketing Officer and Co-Founder of Mivi, the third largest audio brand in India. Nivi’s vision is to make Mivi a household name. The company’s mission is to make premium electronics products at an affordable price curated for the taste of Indians.
About Ms Midhula Devabhaktuni
Ms Midhula Devabhaktuni completed her graduation from Jawaharlal Nehru Technical University, in 2008. She then moved to the US to pursue her master’s in computer science from Florida State University. She later did her MBA from the same university.
Creative, pragmatic and a proactive problem solver, Ms Midhula started her career as a software engineer with Xerox in the year 2011. After working in the U.S for 5 years, she decided to quit her job and come back to India to embark on her dream of becoming an entrepreneur.
About Mivi
In 2016, Ms Midhula along with her husband and partner Mr Viswanadh established Mivi with the mission of making premium quality electronics for the needs and preferences of Indians.
The Hyderabad based Mivi is the first brand to start audio manufacturing in India. Breaking the stereotype, 80% of Nivi’s employees 1500+ team are women, who are supported in various ways. Ms Midhula is the only woman entrepreneur amongst the top 5 brands in this industry in India.
Mivi has sold more than 10 million units since its inception and built products that surpass international brands. Ms Midhula believes that no one can promote a product better than a happy customer. Hence focusing on giving the customer the right product and providing great service is the key to a successful business. Ms Midhula is confident that Nivi’s products will change the face of Indian electronics in the coming few years.
The idea phase
Many youngsters are fascinated by someone else’s business. These businesses look rosy from outside. But the key to a successful business is not to imitate others. It is to identify a pain point or need. Once the pain point is identified along with the white space, the vision and mission will become clear. Ms Midhula and her partner found that there were no Indian electronics brands available. Indians were paying a premium for global brands. It is this need which Mivi has tried to fulfil.
The Market research phase
A great idea will remain in the idea stage unless there is a market. Fortunately, ecommerce enables us to size the market quickly and easily.
In every category, many research reports are available. We should buy these reports. Only after sizing the market and analysing the competition, the idea can move to the next phase.
Nivi found an opportunity in chargers. The founders knew each smartphone owner needed one charger and probably more (at home, office, etc). By visiting Reliance and Chroma stores, they were able to find out what the daily sales were and gauge how big the market was. (When we are trying to understand the market, it is important to build rapport with the channels to get the required information.) The competition came from Sony and other international brands. Mivi felt it could offer quality products at value prices. Only premium international brands and poor-quality Indian products were on offer.
During the Q&A, Ms Midhula added that she and her partner realized that it was easier to get into chargers than audio systems. With a 6 feet braided cable, Indian plug pins and resistance to voltage fluctuations, they realized that they had a good value proposition and could fill in a missing gap in the charger market. (They also received a BIS certification in 2016.) There was no other quality domestic brand with value pricing. (In general, the engineers should be able to answer the fundamental question: Why should we launch the product? If the answer is not convincing, there is a problem.)
During the Q&A, Ms Midhula also explained that Nivi does not have an elaborate market research organization. The key elements of market research are handled by the partners directly. They keep up to date with market trends. They know what products are being launched in the US and might trickle down to India. They keep track of what competitors are doing. They attend conferences. They also take inputs from various stakeholders. Based on the chipsets that are being designed, they try figure out what software they should be developing.
The Prototype phase
When they came back from the US, Ms Midhula and her husband found that there were no technicians or engineers or electronics manufacturing units in India. So, they went to China. They also noticed that in India, the sockets were typically away from the bed. So, they designed chargers with 6 feet length of cable. They also noticed that the wires tended to break at the centre. The chargers were designed accordingly. They made a protype and began testing the product from May 2015. Only in April 2016 they decided to launch the product.
The lesson here is that before going to market, we must figure out the customer requirements carefully, make the prototype, give it for free to customers, test the product, get feedback and keep tweaking the product.
Go to market
For a new company, it is advisable to take an ecommerce first approach. Brick and mortar stores like Chroma are unlikely to give shelf space. Or the terms may be unfavourable. Ecommerce marketplaces are available to anyone.
It is also difficult to build a product for everyone. So, we must identify a target group. it is not advisable to go too broad. Focus helps. Then we should tailor the design/creative and packaging for the chosen niche. For Nivi, the average age of the target segment is 24.
Launch
It is important to understand and adapt to the partner ecosystem. It is not the job of the marketplace to figure out what will work. It is our job. We should understand how Amazon/Flipkart work and what they are expecting from merchants. Nivi positioned itself as a value for money quality electronics product. It promised to attract large volumes of customers with less returns. The brand had the capability to gain customer trust. For the marketplaces, this was an excellent value proposition.
Differentiator
For Nivi, the differentiators were quality and service. Ms Midhula and Mr Viswanadh found that customer service in India was poor even for luxury cars. They realized that great customer service would build lifetime customer loyalty.
Marketing
Nivi decided to embrace ROI based marketing. It did not believe in buying growth. It was ok for an FMCG company to sell at a loss initially and recoup the losses through repeat purchases. But not so for an electronics product company like Nivi. Nivi also did not splurge money on advertising. It began sponsoring cricket matches only after establishing itself and achieving a certain scale. Nivi chose marketplaces for advertising. Later it moved to social media marketing, influencer marketing and 360 marketing.
The learning is that we should not spend money indiscriminately on marketing. Growth should be stable. We should not buy growth at any cost.
Category diversification
There are many ancillary opportunities for Nivi like packaging and logistics. But Nivi has always focused on the core business.
The lesson here is that we should not spread ourselves too thin. We should think of diversification only after establishing ourselves and having gained strength.
Venturing beyond the norm
When Nivi had established a decent brand, it decided to get into manufacturing. Many cautioned her that the company had no manufacturing experience and would go bankrupt. But Nivi had been building capabilities slowly and steadily, with a step-by-step approach from 2015 onwards. These teams had developed considerable expertise. So, it was not all that difficult to move into manufacturing.
Ms Midhula believes that by controlling the entire supply chain/ecosystem, Nivi can deliver high quality at a low price. Today, many global brands want Nivi to manufacture their products. A 200,000 square feet R&D facility has been set up. Mivi is the only electronics company to do design, development and manufacturing in India.
A longer and harder path
Nivi has always aspired to be a product company. For this, it has believed in the vison and taken a longer and harder path.
Q&A
Both husband and wife have been enthusiastic about building the business. But their strengths are different and complementary. Viswanath is very knowledgeable about electronics products. Ms Midhula understands the business very well and is very logical and creative. She can come up with marketing strategies in minutes.
With mutual respect, the partners have built upon their strengths. They have been for each other during the difficult times. They have put the business over their ego. They have always been aligned on what the company should do. Their professional differences have never had an impact on their personal life.
The 24x7 responsibilities can at times been stressful. But going through the journey together makes a difference. There is complete understanding between husband and wife. So, there is no need to explain to each other what happened during the day.
Ms Midhula and Mr Viswanadh were clear about the priorities and made key trade-offs while designing the audio product. They invested heavily in Dolby which provides an immersive sound experience. The Dolby effect was a major pull factor. They made the product in limited colours to reduce inventory. They gave more importance to battery capacity than premium finish. They spent less on packaging and the manual. In short, they focused on sound quality, battery capacity and durability and downplayed other frill/ancillary items.
In 2018, influencer marketing was a new concept in India. That was when Nivi tried out influencers. The strategy was successful. There were days when sales crossed Rs 1 crore per day. The ROI was very high. When appointing influencers, Nivi did not look at the subscriber base. Nivi looked more at engagement. How many people were getting influenced? Another key question was whether the influencer really liked the product and used it.
Today, Nivi does not use influencers much. The ROI is low. Influencers do not have any loyalty to the brand. They endorse many brands. Nivi uses more of platform marketing today.
Nivi started off as a value-based brand. Now Nivi is moving up the value chain competing with the likes of OnepPlus and Redmi and one day hopes to compete with the likes of OASIS. It wants to be recognized as the electronics brand from India that is purchased in western countries. Last year, Nivi released its first patented technology.
Nivi is still a bootstrapped company with limited external investments. So, the company does not have any pressure from investors.
Ms Midhula and Mr Viswanadh are not particularly worried about anything. They love building the company and are not overstressed. They are generally happy about the way things are moving.
The focus of the founders is on improving and advancing the company, i.e. value creation. The question they ask every year is: have we improved with respect to quality, technology, design, service, compared to last year? Are we getting better at customer delight? It is not about external pressure but about being self-critical, setting targets and chasing the targets.
Nivi is an open organization. Even the security guard can walk up to the founders and share his thoughts. Nivi has recruited people from great organizations. The founders take inputs from the team members seriously.
Many brands in the country are not focusing on the value proposition. They are more busy building awareness. The great brands be it Hero Honda or Enfield have a great value proposition. Positioning and value proposition are the hallmarks of a great brand.
Initially, Nivi outsourced many activities. But as it grew, many of the activities were brought inhouse. It takes time to build the ecosystem. Even today, some activities are outsourced. When it comes to marketing, 85% of the activities are handled inhouse. About 15% are outsourced to various agencies on a need basis.
Ms Midhula gets invitations for many panel discussions. The panellists sometimes do not know much about Mivi but the target segment, i.e. the younger generation is aware. That is what matters as it is Nivi’s target segment. It is difficult and also not advisable to target all customers. Nivi is more focused on a clear value proposition for its target segment rather than individual personalization.
Nivi wants to be the best, not necessarily the first. It is ok for things to get a little delayed, but Nivi wants to offer something which is not being offered in the market.
Nivi believes in respect for everyone. It is ok to talk freely and express opinions. Nivi has an open office space. All the rooms have glass doors.
80% of Nivi’s employees are women even though there are no gender-based quotas. Women are given special allowances. Additional leave is given to women with kids. Nivi realizes that children are closer to their mother. They want their mother to be around especially when they are ill.
Positions in Nivi are filled on the basis of merit. For certain positions (like working in night shifts), women are not considered by recruiters, with good intentions. But Ms Midhula tells her recruiters that the choice should be left to women and decisions should not be taken on their behalf.
Nivi is focused on being an end-to-end product company with a brand that will be sustainable in the long run. Trading alone will not generate a sustainable advantage.