Pawan Gadia, CEO, Ferns N Petals in conversation with Ashutosh Garg
Ashutosh Garg: Welcome to another episode of the brand called you. Today we have absolutely incredible individual who has built an organization from scratch. I’m sure you have heard of the organization it’s called Ferns N Petals. Pawan welcome to the show
Pawan Gadia: Thank you
Ashutosh Garg: Pawan has spent.. Started working when he was 16 years old and spent time in the steel forging business, where he worked as a factory head of an auxiliary of Tata motors and then 17 years ago he joined Ferns N Petals (https://www.fnp.com ). Pawan why don’t you tell us a little about your early journey.
Pawan Gadia: okay so.. I started working right after my higher secondary, the family circumstances were such I had to do that and the first job was in a factory which used to produce steel forgings for Indian railways and this is 1986. While I was working for that company I also used to part time in terms of consultancy company in the evenings and uh the owners realized that within 3 months I learned how to create a project report which included profitability, cash flow, working capital requirement and so does the balance sheet that they fired me by the 4 th month ki this guy wants to start up his own venture so that is to talk about steel forging.. uh.. been for a couple of years in Jamshedpur I moved on to Calcutta and then I was transferred at the age of 21 to Delhi to set up a steel forging plant in Behror in Rajasthan and that was to do with again with Rajasthan government and supplying it to railways. So post which that point of time I got married and shifted back to Jamshedpur and started the best innings of my life working for a Tata motors auxiliary this was in early 93 and you’ll be surprised to know within a month of joining the organization I realized that the nobody assigns me any kind of work and there is very little action happening on ground so I learned that the turnover which we are doing is less than the principle and interest out go which has to go to the vendors which uh made me realize that if I don’t start measuring up if I don’t start doing stuff.. I’ll be in trouble and I was newly married so Ashutosh those were the best 25 months of my life wherein almost from a negligible turnover building up the turnover and getting machines on finance from banks if banks refusing then from NBFCS getting money from them or for that matter getting raw materials from Sundaram fasteners from Bangalore and creating 3 shifts for continuous working from 1 shift, getting working capital from bank and getting subsidies from Bihar government and pushing everything possible to achieve whatever we had set out for and after the end of 2 years we were making money and passing on dividend to the promoter so that’s been.
Ashutosh Garg: You must have been very valuable to the promoters. Why did they let you got?
Pawan Gadia: So there were 3 partners this company I am talking about however they did not let me know that one of the directors shifted me to start up a new plant in Tata motors of Tata motors in Lucknow so there I again set up a unit from scratch in Lucknow and which again supplied steel machine parts to Tata motors Lucknow so that was another journey for 6 years however the company being the same the promoter being the same I was there for 6 odd years. It was again a beautiful journey starting something from scratch making it profitable and turning it.
Ashutosh Garg: And then not from steel to flowers what an ironic kind of transformation. How did that happen?
Pawan Gadia: so Vikaas is a very old friend of mine since Calcutta days and I am talking about 1990 and he’s the founder of the company and he got in touch with me in 99...2001 and said why don’t you us to do this. And I joined in August 2001. I believe whether its steel forging or flowers or anything else the fundamentals of the business remain the same that you grow the top line and make sure the bottom line is 20% plus that’s what everyone strives for and I, though the product change took me an year or two to catch on to it but eventually since the rules of the business I was able to do it quickly.
Ashutosh Garg: Fascinating so how does the dynamics of the flower business work? I mean you know here is a market that used to be completely in the unorganized sector from what I have heard early morning and maybe 2.30-3 in the morning you have to be at the mandi buy the flowers have them fresh and then the business closes by the time sun rises. What are the dynamics of this business?
Pawan Gadia: FERNS N PETALS/ Vikaas he also started the mandi you described so around 25 years back 28 years back when he shifted to Delhi he started creating the flower mandi and he was one of the founder members of the Delhi flower mandi where in flowers were procured. Talking about the flower business, flowers primarily in India comes from moderate climate Bangalore and Pune and part of them comes from the hills. These flowers are coming into the flower mandi and from there they get distributed to the various tier 2 and tier 3 cities. FERNS N PETALS in 94’ started with a single flower shop keeping in mind that we need to move flowers from a footpath to an air-conditioned showroom and provide some brilliant design and ideas for which the customers start appreciating and you start valuing that these guys can deliver what I have in mind so once it started from there we realized somebody comes to us a year or 2 later and asking hey you do such beautiful flowers why don’t I open a branch of yours in the city and all you need to give me is the guy who can do the flowers the way you do it and that is how franchising started for us and today we are wherever we are.
Ashutosh Garg: So you mentioned that you joined the company in 2001 and then I was reading about you that in 2002 you lost your entire management team and yet you had to rebuild and what happened and what did you do to rebuild?
Pawan Gadia: So it was in 2007 not in 2002 and by 2007 we were a significant force in online e-commerce at that point of time whatever it was and we had a GM who used to look after this business and I had started delegating them and I was in china traveling to buy some stuff and I get a mail from him saying that he has resigned. Doesn’t matter he has resigned resigned and two days later when I land up in India I realized no one has turned up in office for the online business. So this guy had decided to move with the entire team and set up his own business. Similar business taking away all the customers talking away the entire technology and the knowhow and the vendor details etc. as you know. However I believe that was a blessing in disguise. We of course got 1 or 2 guys back and pulled in people from other divisions we ensured that the day to day work did not stop. But within a year we were able to realize the major shortcomings and the loopholes which were not evident at that point of time running the business from outside we acquired newer technology and from 2007 onwards I think we have been able to take off towards a growth trajectory which was never before so that was wonderful that he left and we were able to start the business from scratch.
Ashutosh Garg: So you know obviously you have the reputation of being a good and strong man manager.. What are some of the ingredients that go into building a good team?
Pawan Gadia: Very interesting. I believe one learns every year after every hire you mature with your thoughts I realized that identifying the correct person and that person will come across you anywhere in life. So my retail CEO used to meet me in 2002-03 from a different organization selling me something else so I told him whenever you want to leave do join us. So that’s one method of hiring that identifying a correct person and asking to come on board so we have had all the EXO level of people which we have today. Once you meet them you realize they’re good people before they join us we show them ki hey we conduct a very intensive sessions wherein we make the person realize that this is what you are expected to do now let me take a couple of meeting online offline off-site and once the person realizes that this is what he has to do and after they join we set very clear cut goals ki this is what you need to do and leave it on the other person. Coach meet once a day or once a week as the periodic requirement is and let the other person perform and we have had people who have been with us for 15 years long 17 years long and the younger generation also we have been able to retain them and the average age of our team of 400 is somewhere around 6 odd years which is amazing.
Ashutosh Garg: And you had also mentioned that you’re a great believer in delegation and empowerment? How does that work in a strong team I mean at what stage do you decode I’m now going to delegate but empower as well and what kind of parameter do you look for to ensure accountability?
Pawan Gadia: So once you identify the correct resource in 2 to 3 months we realize that the person in an absolute fit or a medium fit to be kept a watch upon if the person is an absolute fit all I do is once the goals are identified on a common sheet and there after I set up periodical meetings wherein the review is happening and course correction is being done wherever required and another couple of months when we realize deliveries are happening as per expectations you leave with them more and more stuff so whether it is for example my retail business head, earlier I used to do the entire traveling the franchising now I haven’t been to anywhere except he’s running the entire show so empowering him to take decisions and out of 10, 2 decisions go wrong and 3 of them do not result into any kind of great positivity but overall if the person is able to deliver and keep align to the company’s goal we allow a lot of freedom for people to work and achieve whatever they want.
Ashutosh Garg: And you review them every month? Every few months?
Pawan Gadia: So depending upon the intensity of the project the importance the newness of the project it’s as frequent as possible and there after I also have also have meeting once in a month or for that matter once in a quarter which depending upon how what the need is.
Ashutosh Garg: You know flowers is a product and you are the expert as consumer I mean traditionally used to be something you have on a few occasions but I think one of the achievement you had is you have changed the consumer behaviors as far as flowers are concerned today flowers are not just given on a birthday etc. Flowers are something which you carry someone’s house you know you give it on any occasion you give when you’re rewarding an employee. What has started to change the mindset of the consumers in India as far as flowers are concerned?
Pawan Gadia: Flowers are something which will always make you happy. Doesn’t matter the most obvious or the most difficult deities or the gaze of the person will be happy and flowers are very powerful. Bring you an incident back in 2003 wherein I was trying to get online to a portal where I wanted to sell flowers and the lady out there said we are very happy with our current florist and we don’t need you and I kept sending flowers to her 1 st of every month saying dear X we are still waiting to be called on board have a nice day. It took us exactly 6 months but she called us we were there on board we continued that forever after it. So flowers are very powerful. So todays consumer has their discretionary spend he is quite aware and today if I had to come to your place what should I bring you I mean you have everything and the best way to express my feelings my happiness is flowers and nobody says no to flowers.
Ashutosh Garg: And also the I think with flowers there’s something which I often refer to as perceived value so perceived value of the flowers is much greater than the rupee value so if you’re going to spend 500 Rs 700 Rs or 1000 Rs on a bouquet the recipient will perceive it as something much greater. Do you agree?
Pawan Gadia: Absolutely and we have to live up to the expectations our customers as to how do we ensure that we not only deliver that we surpass that so we are conscious about the packaging which goes around to it the messaging which has to accompany the flowers the choice of flowers. These are a couple of things which we are very careful and sensitive about paranoid about and when the recipient gets the actual product the feel this is priceless. Say for example we deliver the flower and the message that has to go along does not deliver its worthless so how do we transfer that entire emotion of the sender to the recipient is the key here. Even If the flowers are not 1% or 5% not up to the mark but it is delivered professionally, politely with a hand written or printed in an envelope that makes a difference.
Ashutosh Garg: In fact I have always sent flowers to my wife on 3 occasions 1. Valentine’s Day 2. On her birthday and 3. On our anniversary and she loves receiving and they are always fromFERNS N PETALS but in a last few times I have discovered you are now giving plants and my wife loves plants and I have stopped ordering flowers, I order plants. Live plants and she just loves them.
Pawan Gadia: So you’ll be surprised to know though we are known as FERNS N PETALS we sell more cakes than flowers.
Ashutosh Garg: I was going to ask you that also yeah
Pawan Gadia: Yes, and we sell so much cakes that we realized the we need to have our own supply chain to deliver the best of the cakes possible and again ensure whereas as far as flowers both it only look and feel and smell here you also have to taste it so we set up our own FERNS N PETALS cakes as a brand and today we are present in more than 25 cities which is covering about majority of our volume and we are delivering lots and lots of cakes, 1000s of cakes daily. While all this is happening and the customers behavior evolving and everybody appreciating the pollution the perishable nature of the product flower scent of the day lasts you only x number of days we realized quickly that plants can also be a huge factor here so we have around 20-25 different varieties of plants and we have the capability of what you see on the website we deliver in 100 odd cities in a very short span of a couple of hours across the country
Ashutosh Garg: You know I have used FERNS N PETALS to deliver flowers and cakes in Canada and I see you have opened in Dubai and Singapore
what is your experience working outside India as compared to working in India? How is the Indian consumer different from an overseas customers?
Pawan Gadia: So one is obviously the ticket size which a customer is able to afford than whether it is UAE (https://www.fnp.ae ) or Singapore (https://www.fnp.sg) is around 4 times what you’re able to afford in India. Accordingly the flowers that are being procured in these countries come either from Holland or from Africa so they are a different breed of flowers so the selling price of what I sell in India the purchase price is more so that’s the breed of flowers we are buying. The customers that is very he differentiates between a good quality, the services the entire offering the style of what is delivered in those countries is very different from what I available in India. We are also able to offer a couple of flowers guitarists to play on occasion so these are a couple of differences which is there in these countries.
Ashutosh Garg: So what is the secret sauce FERNS N PETALS? What has made you so big, so powerful so successful? What do you do differently that others do not?
Pawan Gadia: We have around 300+ partners across the country people are backbone who are our strength that is who we are because of them plus our team we are super clear in our core values that whatever we will do we will do which makes money and we will ensure that all our 300 partners also do make money and there is no and if someone is not making money we are there to step out we go twice a year meet our partners across the country and asking them is there anything we can do? We make sure that partners are happy and they are making money. Similarly our entire team they are empowered, they are rewarded they are acknowledged so with these 2 team of people behind us everything falls in place whether you create a product you want to sell it you want to service it there is one after service everything falls into these two parameters and that’s what we’ve been able to do and of course we the founders wherein we are only going to be in these many things we are not going to want to do everything. So that’s the reason why we are here.
Ashutosh Garg: Before moving to another subject you also mentioned there has a company you work you build the whole company only with your own resources no private equity. Why is that philosophy in the company?
Pawan Gadia: So we are a zero debt company we have no outside funding from anywhere and we are a profitable business and we come from the traditional background of promoters wherein we feel that “ki koi bhi dhanda karo toh make sure that it makes money” we are not into the valuation game. We are here to make money and only when we have money is where we will invest. We will not borrow and invest and if a business is not doing well we are ready to walk out of the business in that appropriate given time and that from our DNAs and that is how we have built ourselves and we are very doing today so that’s a blessing.
Ashutosh Garg: Wonderful! And yet when I look at whats happening in the country. I was really seeing when PM Modi now goes for any meeting he has said give me 1 rose and not big bouquet of flowers etc. Do you see the market for flowers changing or reducing?
Pawan Gadia: No, very clearly there are different occasions which require different kind of expressions. When you are romantic a plant or a cactus will definitely never make sense. When you’re going for a wedding it does not make sense. Flowers will always continue to be the primary business of FERNS N PETALS. It’s a way of expression Ashutosh. In whatever form you want to do depending upon a small bouquet to a large arrangement to a very exquisite made arrangement, flowers are always going to be there and there might be compulsions with somebody wherein they don’t want to or there is too much of flowers happening there where one feels there is too much wastage but for an individuals like us the best mediums to express without any baggage is flowers.
Ashutosh Garg: So moving on you said you enjoy reading what are you reading now?
Pawan Gadia: So I’m reading a book which is a couple of years old I think. Which is guns, germs and steel by Jared Diamond and I am a history buff and I enjoy connecting the dots as to what has happened in the past and then I see the scope and expanse of what he has written starting of earth till today. It gives me goosebumps. This one particular book I’m reading Jared.
Ashutosh Garg: So 17 years with FERNS N PETALS and talking to you I can see you are as excited as you were 17 years ago what keeps you going with such high energy and such a successful business?
Pawan Gadia: Money does not matter anymore. What matters is we want to be known as people who were the flower guys. So tomorrow if anybody remembers “phool bhejna hai to FERNS N PETALS” if it has to be cake its FERNS N PETALS if its plants its FERNS N PETALS if it’s personalized its FERNS N PETALS. So we want to make sure that we are the people that remain at the top of the mind remembered for these are the original guys who kind of brought this business to where it is today and not just to follow and with no zeal. End of the day I am at your show wherein I am speaking to you and talking about where it has brought us. Why not!
Ashutosh Garg: So you know you mentioned you’re from Calcutta I don’t know if you recall that old Jensen and Nicholson 9 which says whenever color you think of us. So I think that epitomizes exactly what you are saying whenever you think of flowers think of us. Whenever you think of cake think of us.
Pawan Gadia: That’s what we strive to do.
Ashutosh Garg: So I’m going to ask you a question I ask all my guests because a lot of our listeners want to hear about out failures. So Pawan what are your learnings from your failures?
Pawan Gadia: So I tried thinking about this in the past as well and I realize most of what we have done it’s a lot of thought and careful planning and we have not had such a large failure which can be mentioned here. However on the personal and the only regret I have in my life is that I did not take care of my grandmother in her last days. So that is that’s something which I am not very proud of and I wish I could reverse that. Other than that I don’t see anything which is monumental failure and or something. Of course everyday learning happens which course correction which happens.
Ashutosh Garg: Well good luck. I hope you never any failures I mean you don’t sure. So my last question to you is you know there is the whole start up system in our country is very exciting today and 1000s and 1000s of young men and women are wanting to start up. You have not done not one but 3 different startups from your steel days to your forging days to your flower days what would your advice be to a startup entrepreneur?
Pawan Gadia: Whether it is Netflix, amazon or FERNS N PETALS anything. Starts with that single order. That single order a day. Start with small but make sure that the business is there to make money or to solve a problem. Don’t start a business or get into something which is 1. For a valuation game. The moment you are solving a problem and growing it gradually or fast but it has to make money at the end of the day and the end of the day cannot be a couple of years but it has to be one. 2. You cannot do this alone. Have a team of people or a co-founder who is supporting you and helping you advising you being a soundboard to do that. 3. Have a mentor or a coach who can help you to guide whenever there is a peril at the inside and finally get into this only when you have adequate finances in place. I have seen a lot of startups failing within a couple of months and they start with a lot of zeal and they realize you know it does not make sense and avoid being copying somebody else’s business because the passion it the most important thing to make a business be successful wherever it is. So these are a couple of I would give to upcoming entrepreneurs.
Ashutosh Garg: Very well. Pawan thank you so much for your words of wisdom for scope of experience your successes I’m sure all our listeners are really going to enjoy this podcast. Thank you very much for coming.
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