ST12 | Nidhi Arora | Challenges In Monetisation

Starting and running a business isn’t easy. A good idea is just the starting point. From there on, you need to build the product, find a way to market it cost-effectively, get enough people to buy it, and try to achieve at least a breakeven point quickly. So, you can become self-sustaining. These are all hard things. And I know personally having had a startup in the past it didn’t work out. So these are all hard things, that not all businesses are able to make happen, even if they have a good idea and put in all the hard work. One such business is the children’s post, which despite being a great idea, was just not able to gain enough traction to be able to sustain itself.

And today, we will be speaking with Nidhi Arora, founder and CEO about her journey, and the lessons that she learned on the way. We hope you will enjoy it.

Discussion Topics: Nidhi Arora | Challenges in Monetisation

• Starting the business with strong mission
• Testing the idea with no cost
• Tools can help you create and accelerate your business
• Expanding features based on the customer input

Transcript: Nidhi Arora | Challenges in Monetisation

So with that said, Nidhi thank you so much for taking the time to join us today at the ShopTok podcast. Maybe before we get going, you could introduce yourself, and maybe tell us a little bit about the children’s post and what it does.

Thank you so much, Amit, it’s a pleasure to be here. And thank you for having me. As you do know, I’m a management graduate, and from there, I worked in the IT industry all the way till December 2015. From there, I went to spend more time with my son, and the Children’s post was born out of a personal need, it started in July 2017 and we ran till December 31, 2021. We were the only daily newsletter being published for children. And we had readers from about 139 countries in all parts of India when we finished our journey.

Wow, Nidhi, 139 countries is a lot. And it sounds like you actually did a lot of good things to be able to get to that kind of scale. But perhaps before we get going, let’s maybe start at the beginning. Perhaps you could tell us how did you get started? What was the inspiration for this business? It’s obviously nothing to do with IT, so something very different from what you had done in the past.

I think we are in the Guinness Book of Records for the highest number of news dailies published from a single country but there is nothing for children in India. I researched US publications for children for one year and got a Ph.D. in children’s news publications in India but not a daily newsletter for children.

As a parent, it was very, very important that the child should be able to read and analyse news because after years of hard work you know, a child puts in a lot of effort into academics. Cambridge Analytica was caused by people who when they’re presented with a link that reinforces their bias they like instead of hide. As a parent, I really wanted to protect my child from that kind of mind control.

So I started with a paper made at home, printed on the home printer, and gave it to the child. And for over a year we were not a business. We were a group of parents coming together. The other moms heard about it and we took turns making newspapers. So for more than a year, we were a group of parents coming together to create a daily newsletter for our own children. And then when others heard about it, they said look, we cannot contribute our time, but we really think we would like to pay for a product like this.

So, in July 2018, we decided to share the paper with other children also. In October, we listed on readwhere dot com. And coincidentally, at the same time, the first press story about us came out in India, came out on a website called India Today, and immediately about 26 news publications covered our work in at least four languages. So that is what started our growth trajectory.

Wow, Nidhi, I think that’s amazing. First of all, it looks like you’re off to a really good start, because of all of this coverage and all of this interest that you generated. And I can see why because you are solving a problem that you have described very well, which is, how do you make children and people in general, be able to think independently so that they are not getting a spade by clicks and likes and other opinion makers. So a really interesting concept.

And you’re saying that you’ve got a bunch of parents who came together to do it for their own kids and then somehow this moved on to other people wanting it as well. So at what point did you realise that you had something which actually could become a business? And then how did you actually start trying to grow that?

The interesting thing was that the demand preceded opening it up for revenue. So we knew we were on to something, the only thing is content very rarely pays for itself in a market like India, and also at our heart was not business. In a way, it was a disadvantage that I was neither a media professional, nor someone who knows the education industry, but I think it kept our hearts in the right place.

And because of that media coverage, starting with the India Today feature, which was because of a mentor of ours that’s how we got the first clients who we did not know, the other people who were subscribing were mothers who had heard about us on Facebook, there’s a Facebook group called Gurgaon moms, where I had posted my frustration that I have been looking for a year and I haven’t got a newspaper, should I just make one? And over 140 mothers said, why not. You know, for them, it was just a word of encouragement.

But I believe that’s where the seed of the children’s post happened. Because if it wasn’t for those 140 comments, I would never have had the courage to open a laptop and make a newsletter for a child. And then as we started sharing it with other parents, and they shared in their own groups, it was surprising for me also that there are so many parents who have had the same hunger and the same perspective. That is how we got the first clients whom we did not know. And, of course, the people who are waiting for us to make a subscription-based offering were waiting so they signed up as soon as we made it available.

So Nidhi when you had these big people who wanted to actually pay for your service, how did you actually get started on that part of it? How did you make them pay given that maybe at this point, you didn’t really have the infrastructure to take payments or anything remotely?

So for that, I would like to thank our partners Readwhere, they got in touch with us, and we signed up with them. And they agreed to do this for a share of the revenue. So we had zero fixed cost. And I think because we started with that, we also then started with the mindset of having positive unit economics at all times, which was where we were even when we ended. We were still at positive unit economics. So Readwhere facilitated the payments. Subsequently, there was a demand for a WhatsApp subscription. So we signed up with the payment gateway and enabled that also.

Okay, so now you’re at a point where you’ve tested it on friends and family, you have got some sort of market validation through a Facebook group, actually pretty good market validation, and there are people wanting to buy it. So at this point, how did you think about expanding from this point onwards? How frequently, were you even publishing the newsletter?

We were the only daily for children that was available for home subscription in India. There are a couple of others, but they are available only through the school. And because it was a printed home, we don’t realise that a child struggles with the size of even a tabloid. But an A5 fits very beautifully in the hands of a child so children felt in control when they were reading. At first, we tried that subscription revenue thing which went off to a lovely start.

But in May of the following year, the subscription numbers dropped suddenly. And surprisingly, even after the summer break, they remained low and at the end of the year, we just had to acknowledge that maybe subscriptions were not going to come back to previous levels. And that was the point we also started doubting the product, if people love it so much, why are they not subscribing? Why are they not talking to their friends? And we were still exploring that when COVID happened and another pivot happened during the COVID time in March 2020.

From March to May, we shared the paper for free with anyone who wanted it. And I cannot tell you the number of emails I got from parents and children telling us how the children’s post was keeping them sane. So we said to check it, every child just needs to get the paper.

Right. So you made it free for all, is it at that point?

During the second wave of COVID, we did not take subscriptions and prioritised reach over revenue. We managed to create a database of over 14,000 schools, of which over 11,200 principals agreed to share the paper with their students. So even at an average of about 200 children per school, we were at about 22 lakh children. It was more important for children to get the paper first, later if you’re able to monetize the reach greatly.

Wow, that is massive.

As a strategy, we decided that we wanted to reach tier two and three cities, not the metros. Many people believe that the capacity to buy reduces as we move out of the city. But anyone who has done rural marketing and sales will tell you that’s a myth. What is not there is consumer education, and therefore it is not the capacity to purchase, it is the will to purchase that’s not there. We were stupendously high on engagement. And we were able to allow brands to do real consumer education and high engagement.

So these are all the places where you were distributing the newsletter and you actually got feedback from these places, right?

Yes, these are the places from where emails actually came back. The distribution obviously was, I used to tell people that we go to places where only two places reach either BSNL telegram or my newspaper.

Let’s just rewind a little bit to this whole outreach process. So first of all, you have spotted the opportunity to give something to kids at a time when schools are closed and so therefore they’re not getting any other form of information or education.

And you also realise that in the smaller cities of India, there is an opportunity to do this because there’s even less access to information there. And then you decided to do this outreach to schools, how did you actually go about doing that, making a database of 14,000 schools, from purely online sources sounds like a really intense effort.

It was a very intense effort. I’m not just making that database, reaching out to them, taking that go-ahead, things like that. It was literally like building a house brick by excruciating brick, each one of those records. But one of the other models we used was very interesting, you will want to hear about this, we tied up with the NAV Center for Women, which is a professional training institute for women, for visually challenged women here in Delhi.

And we said, why don’t you do the database work? And we showed them how we do it. And they trained their girls on it. So they did the database work for us, and we paid per record. And that was a fairly successful model, too. But all of it was done by us, we figured out how we are going to find out about these schools, how we were going to reach them and communicate with them.

Okay, and what were some of the responses you got from schools? I mean, I’m assuming you’re reaching out by email, right?

Yes, it was all email. So we also had to set up an email distribution infrastructure. So the model was that the schools which are not subscribing would get the paper three times a week, and we would not charge them for it. That was the 11,500 schools that we ended our journey with and the subscribers would get it every day.

Wow, that’s a really high rate of response. So clearly, there was a hunger in the market for the kind of information services that you were offering them. So far, the story sounds great, right, you started something which had initial validation, people wanted, and there’s a bunch of people actually paying for it, then the market changes in a way that even though the hard work favors the possibility of you actually outreaching to schools.

And then you have 1000s of schools who are on board, even if for a free product. But this is already the kind of scale, which even funded startups really can only dream about. What happened from there on? And what are some of the challenges that you faced?

So two major challenges we faced for growth and monetization, we could not solve the second monetization, the first we’ve just gone through how we solved we created our own database, school by school, but monetization, I think was also a scale issue at my end. And we tried to do this for a year, all of 2021, we tried to reach out to media agencies, and we tried to also bring a co-founder on both because I recognized, it’s not a skill that I possess.

So we will need someone else to take care of this. We tried to get into revenue share agreements, and none of that reached the scale where we knew this would take care of itself. After one year, we had to decide that either we keep it as a project of the heart, and recognize that unless we find an aggressive co-founder or someone who’s able to come and turn things around, it’s not going to be a revenue-generating thing, or we take the difficult decision that we do not want to sustain it like this.

And are you able to break even on what you were already doing?

Oh, yes. The distribution infrastructure gave us a fixed cost every month that we could not. But other than that, all our expenses were a share of revenue. So we were always unit economics positive. So even if we got the money, we could only have used it for a big ad blitzkrieg. And that, as we’d already seen on December 28, it would get us traction for maybe five, six months. And after that, we would have to consistently, you know, the cost of customer acquisition would constantly be high. And that would have led to unit economics becoming negative because as a newsletter, we were not priced that high.

That’s an interesting point about pricing. So maybe let’s dig into that for a little bit. How much have you priced the newsletter? And why did you think that was the right price?

It was 10 rupees per edition 274 a month and like that all the way up to annual there were some discounts built in. It was definitely pricier than what other people call newspapers. But we were a newsletter. So it was slightly pricier but I thought it was worth it. And it was lower than a lot of other educational products in the market.

So obviously, in all of this one is the cost of the content and the production. And then there’s the cost of the distribution. The content cost was low is it, because you were doing it, I think amongst parents or something like that? It was a share of the revenue

Yes. So, the idea was that when revenue grows, everyone will sort of get multiples and that didn’t happen.

Okay, so that’s around the pricing, and I get what you’re saying. It’s not a newspaper. It’s a newsletter very targeted and has content that is well thought out for children. Did you consider the prospect of running ads or something within the newsletter?

Yes, we did and obviously, being a parent’s product, we were into ethical advertising, which means we kind of would have supported products that are safe and healthy for children. And as I said earlier, we were just not able to make that happen. Or let me be very specific, I was not able to make that happen.

So you had the reach and the circulation, you just weren’t able to break into the advertiser-sponsor sort of space. That’s quite a pity, actually. I think the reach was quite incredible. Are there any other kinds of challenges or lessons that you’d like to highlight from your journey?

Imitation is the greatest form of flattery, and if you want to succeed at something, don’t do me to produce, collaborate with people who are already doing it, create something new only if there’s demand for it. The journey was a lot happier, because we did not have to worry about our burn rate, so we kind of worked hard on making the model, but it sorts of work for us.

I decided that it would be best to call this quits, but I think we will sort of leave a legacy. The entire program owes itself to the readers. And then again, the readers who helped us did Scrabble contests during the 2020 lockdown where you know, children were at home. And we did a startup contest in October. So had we continued, contests and events would have been a revenue stream for us.

So Nidhi thanks a lot, I took down some notes. And maybe I could just spend a minute summarising them from all the stuff that you said, you know, like I said, at the start, businesses are difficult to run and sustain. And not everybody makes it and I’d really like to thank you for sharing very candidly, your journey, even though it’s not a story of unmitigated success, like the kind of stuff that you normally read about in newspapers, and you’re on podcasts.

So I really want to acknowledge that and thank you for sharing all of this. I do think that you had a fair number of successes. So I want to summarise that bit, as well as some of the learnings that we talked about.

So first you started off with a strong mission that was aligned with your personal belief. And I think that is very important for businesses, at least in the early stages, because if you don’t personally believe in it, then you know, when the going gets tough, you aren’t really going to be able to keep it going.

The second one I like about what you said was how you were able to test the waters by using existing tribes in other words, Facebook groups, where you could get feedback, even before you actually made something, even though you stumbled onto that kind of, I think that was a really good way of validating the idea before even spending a penny on.

Third, I think you used third-party tools to get going, which is something that I think all startups or all businesses who are trying to work on their initial version of the product should be looking to do rather than building something fantastic from scratch, leveraging what is already there in terms of tools. And in terms of ecosystem, you mentioned that as well, which is maybe using things that are already available to you versus trying to invent everything in-house.

The next one, which I really liked, was your point about how newspapers and tabloids are not really designed for children to read because they’re too big. And so you kind of figured that out. It’s what I think in the startup world would be called user experience or user design. So designing for the customer is important and the corollary is taking their feedback, and expanding features based on the customer input, which in your case, were the children.

The other one I like very much in what you said was the opportunistic thing that you did when COVID struck, you realise that schools would be shut and so therefore, whatever information access people were getting, especially in smaller towns was now no longer available. So you could step into that gap.

The other point is about looking for markets that are not the obvious ones. So you didn’t go and try to sell newsletters in Mumbai, where everybody has access to information, you try to do this in smaller towns where such information is less available. So they get this excellent new source of information. And you do it in a place where there isn’t really that much competition.

So these are all the good points and these are what led to, I would say pretty rapid growth, I think something that any even VC-funded startup would be quite proud to achieve. And then where it fell apart was around the monetization because you couldn’t price it at a level at which you would actually be able to make money, and you weren’t able to get enough people to pay for that subscription.

Since that model didn’t work out, you look for sponsors and ads and stuff like that, and you weren’t able to do that, because maybe lack of network, lack of ability, that kind of stuff. I think these are all good things to learn in terms of how to grow. And also maybe things to avoid or consider earlier in terms of how to monetize. Really good Nidhi. I mean, I learned a lot from this.

Thank you, Amit, it was so good to speak with you.

Same here and thank you very much for joining us. We were Nidhi and Amit, with ShopTok. See you next time.