2022 has been a crazy year for Siddharth Rao. Dentsu Creative Bengaluru, which he ran, won the Cannes Lions Agency of the Year, but Siddharth left to start something new. It’s all part of a long, heart-stopping entrepreneurial journey that began 20 years ago.
July 2016: “Make Us Famous”. These were the exact instructions Siddharth Rao received from his new boss, Ashish Bhasin, who had just taken over as head of Dentsu Aegis in India. In 2013, the international ad network acquired Webchutney Studio, an online agency Sidharth co-founded (with Sudesh Samaria).
By July 2022: Dentsu Creative Bengaluru (formerly Dentsu Webchutney) has become the first agency from India to win Cannes Lions Agency of the Year, possibly the highest accolade an agency can hope to win. This win is thanks to a campaign created by Siddharth’s team: The Unfiltered History Tour for Vice (a US-based news site). Created during the worst of Covid, it focused on items stolen from around the world and now in the British Museum.
Sidharth – “Sid” to everyone – gets a message from Bhasin soon after winning. It’s as succinct as the original directive: “You’ve met the brief.”
Ironically, Sid had left Dents a month before this grand triumph. Does he regret not going on the international stage?
“Oh, not at all! I can’t take any credit for the Unfiltered History campaign other than to have appointed the project. Webchutney has been winning big awards for years, but I have never been on stage,” he declares. He had already decided to quit and it didn’t seem right that he should stick to Cannes and leave a few months later. It would make Dents look bad and he owed the network a lot.
Pause. “Actually, I don’t even consider myself an adman. I consider myself an internet entrepreneur.
It’s been a wild ride for this college dropout, son of an Army Major General, for the past 23 years. “I almost gave up a few times,” he admits.
His story is very amusing the way he tells it. It involves downplaying the hard work while highlighting your mistakes. That’s just Sid’s style. Maybe it’s because he suffers from what he admits is “impostor syndrome”? This condition is defined as “feelings of inadequacy despite apparent signs of success”.
After school, Sid got permission from his parents to take a year off while he explored options. He joined DDB Mudra at the age of 19, later briefly moved to Gray where he was fired. I met him around 2000 when we started agencyfaqs! (now FAQ!) and he was building Gutterspace in the same room. Looked cool – “better than agency faqs!” he teases me gently – and it got him assignments to build websites for companies. Thus, Webchutney was born.
When he was 20 years old, he collected Rs.11 lakh. He scoffs at that amount now, but I find it amazing that someone so young could raise any money at all in India at that time. There were less than half a million internet connections across the country.
The Internet was still a baby, and Webchutney was only among a couple of creative agencies. It had won its first Golden Abby for the MakeMyTrip campaign that went viral before it went viral. But finding money to grow was a constant headache.
When he decided in 2005 that Webchutney should go on the ad network, there were many admirers— “hamare swayamvar main sab aaye”, he recalls with satisfaction. Although a big deal didn’t happen, he brought in an individual investor for Rs 60 lakh.
That solved the immediate money problems, but this particular dark cloud continued to hover: he didn’t have enough money to expand. “And then I dug myself a nice, deep hole,” Syd reveals.
The hole was dug in 2007 when creative agency Webchutney entered media buying MakeMyTrip. It bought media to the tune of 1.5 billion a month, paid for in advance, but managed to secure a 120-day line of credit from Google for advertising. . This provided the agency with a stable short-term positive cash flow that it could use for growth.
But Sid, only 28 years old, didn’t have much financial discipline. When MakeMyTrip decided to shift its media buying to one of the ad networks and therefore end its deal with Webchutney, the agency didn’t have the money to settle the accounts. Sid had 21 days to find the money. Or close up shop.
In a dramatic gesture, Sid vowed to his desperate team: “I will find the money, and until I do, I will not change my shirt.” So he wore the same shirt for 21 days – “even though I wash it every night,” he hastily clarifies when I scrunch up my nose.
He worked tirelessly on the phone like a man with days left. Sid is grateful that Ajith Balakrishnan of Rediff was quick to offer input. Looking for a better opportunity, he called Haresh Chawla, then Group CEO of Viacom18. Time ran out and the two quickly struck a deal: Capital18, the group’s investment arm, would invest 8 billion to acquire a majority stake.
Webchutney Studio had survived.
Sid can’t stop praising Haresh, who he now describes as a close friend and mentor, as well as Sarbvir Singh, the then head of Capital18. “They were like parents of a new age. They trusted me and let me fly. That’s how my confidence in myself as an entrepreneur and angel investor grew.” (Sid has made about 20 angel investments to date.)
It was an informal relationship based on trust. And when something went wrong, it attracted Sid’s sharp edge, most often at Toto’s Garage, a pub in Bandra.
Overall, it seems to have worked. When Capital18 exited Webchutney in 2013, it had made 3 times its investment, as announced in an official statement at the time. According to Sid, this does not include the 12 times return that Webchutney got on the Rs 2.5 crore investment it made in Network Play, an ad network that was later acquired by German media giant Bertelsmann.
Webchutney Studios’ new partner was Dentsu, then headed by Rohit Ohri. How did the change of ownership change his life?
The answer is not what I expected.
“Dentsu hired Benny Augustin as CFO. To be honest, I was suspicious at first. But over time, I realized that instilling financial discipline was a game-changer for a freak like me. Profitability started to increase year after year: last year, Dentsu Webchutney/DentsuMB had reached almost 80 billion Rs and EBIDTA around 32 billion: things can’t get much better than 40 percent profit.
His approach to managing the company also changed. “For the first 14 years, I was working away. But gradually I started to embrace the concept of ‘lazy business’ – that is, hire the best people and get out of the way. I saw myself as the main HR guy at Webchutney.
And about his angel investments. Many of them were ahead of their time. Some examples: Crude Area, an online platform for the sale of graphic art; Bombay Bitch on American gossip site Gawker; JuxtConsult, an online market research company that wanted to be India’s ComScore. The old saying that “timing is everything” has not been forgotten.
“The thing I’ve learned about investing is this: Only bet if you know the founders really well. Or stick with the big boys and invest where they do,” muses Sid. While most investments have panned out, his biggest hits have been Pepper Content and ScoopWhoop, each of which he says has given him 20x returns.
He’s also bullish on two other companies he’s invested in, Invideo, an online video editing platform, and Lio, an app that helps small and medium-sized businesses organize information. “You’ll be hearing a lot about both of them,” he promises.
What draws him to angel investing? Is it money? Or what? “It’s the excitement of creating something new. Frankly, I also feel privileged to work with such talented entrepreneurs.
Sid is already gearing up to create what he believes will be his next big thing. Because, as I found out, he can never resist a punt. So it’s no surprise that his new venture is called Punt Partners, which he has co-founded with Bengaluru-based serial entrepreneur Madhu Sudhan.
Duet Punt’s premise is that advertising agencies have been helping businesses gain customers through advertising for the past century. In contrast, marketers don’t have the equivalent of an ad agency to help them retain customers in an age of choice. For marketers, there are only a handful of technology firms that offer a bewildering array of different retention tools. If Punt could act, it would be the premier customer retention agency for marketers.
It’s an interesting company that I hope to hear a lot about in the coming years.