The wild ride of a college dropout turned internet entrepreneur

2022 is a crazy year for Sidharth Rao. Dentsu Creative Bengaluru, which he headed, won the Cannes Lions Agency of the Year – but Sidharth quit to start something new. It’s all part of a long, heart-stopping business journey that began at 20.

July 2016: ‘Make us famous.’ That’s exactly the instruction Sidharth Rao received from his new boss, Ashish Bhasin, who recently took over as head of Dentsu Aegis in India. The international ad network acquired Webchutney Studio, the online agency founded by Sidharth (along with Sudesh Samaria), in 2013.

Cut to July 2022: Dentsu Creative Bengaluru (formerly Dentsu Webchutney) becomes the first agency from India to win the Cannes Lions Agency of the Year, possibly the highest honor an agency can hope to win. This win came on the back of a campaign done by Sidharth’s team: The Unfiltered History Tour for Vice (a US-based news website). Created during the worst of Covid, it focused on items stolen from around the world and now resides in the British Museum.

Sidharth – ‘Sid’ to all – received a message from Bhasin after the win. It was as brief as the original directive: ‘You deliver the brief.’

Ironically, Sid quit Dentsu a month before this big win. Does he regret not being on the international stage?

“Oh, no! I take no credit for the Unfiltered History campaign other than green-lighting the project. Webchutney has won big awards over the years but I have never been on stage,” he stated. He’s already decided to quit and it doesn’t seem like he’ll just stick around for Cannes and quit a few months later. It will hurt Dentsu’s image – and he owes the network a lot.

A pause. “Actually, I don’t even see my own adman. I consider myself an internet entrepreneur. “

It’s been a wild ride for this college dropout, the son of an army major general, for the past 23 years. “I almost gave up a few times,” he admitted.

His story is very entertaining in the way he tells it. It involves playing hard while simultaneously highlighting his own flaws. That’s Sid’s style. Maybe because he suffers from ‘imposter syndrome’, something he admits to? This condition is defined as ‘a feeling of inadequacy despite signs of apparent success’.

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After school, Sid received permission from his parents to take a year off while he explored the possibilities. He joined DDB Mudra at 19, later moving briefly to Gray where he was fired. I met him around 2000 when we started agencyfaqs! (now afaqs!) and he put together Gutterspace, a site in the same space. Looks great – “better than agencyfaqs!” he teased me gently – and he won jobs building websites for corporations. That’s how Webchutney was born.

Sidharth led his team from the front in 20

Sidharth led his team from the front in 20

Because of the money, he saved Rs 11 lakh by the time he was 20. He scoffed at the amount today but I found it amazing that a young person could save any money in India at that time. The entire country has less than half a million internet connections.

The internet is still young and Webchutney is one of only a few creative agencies. It won the first Golden Abby for a MakeMyTrip campaign that went viral before ‘viral’ was a thing. But finding money to grow is always a headache.

When in 2005 he decided that Webchutney should be part of an ad network, there were many suitors – “hamare swayamvar main sab aaye”, he recalled with satisfaction. Although nothing happened, he got an individual investor on board for Rs 60 lakh.

This sorted out the immediate money problems but a particular dark cloud continued to hover: he didn’t have enough money to expand. “And then I dug a nice, deep hole for myself,” Sid revealed.

The hole was dug when Webchutney, a creative agency, ventured into media buying for MakeMyTrip in 2007. It bought media worth Rs 1.5 crore a month for which it was paid in advance but managed to secure a 120 day line of credit from Google for advertising. This gives the agency solid short-term positive cash flow that it can use to grow.

But Sid, only 28 years old, does not have much financial discipline. When MakeMyTrip decided to move media buying to one of the ad networks and therefore cancel the arrangement with Webchutney, the agency did not have the money to square the accounts. Sid has 21 days to find the money. Or close up shop.

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In a dramatic move Sid vowed to his distraught group that “I’m going to find the money – and until that happens, I’m not going to change my shirt.” That’s how he wears the same shirt for 21 days at a stretch – “even though I wash it every night” he quickly clarifies when I scrunch up my nose.

He worked on the phone non-stop like a man with days to live. Sid was grateful that Ajit Balakrishnan of Rediff was quick to offer an investment. Looking for a better option, he called Haresh Chawla, then Group CEO of Viacom18. Time flew by and the two quickly signed an agreement: Capital18, the group’s investment arm, would invest Rs 8 crore for a majority stake.

Webchutney Studio survived.

Sid can’t help but praise Haresh whom he now describes as a close friend and mentor as well as Sarbvir Singh, former boss of Capital18. “They are like new age parents. They trusted me and allowed me to fly. That’s how my belief in myself as an entrepreneur and angel investor grew. (Sid has made about 20 angel investments so far.)

It is an informal, trust-based relationship. And when things went wrong, it earned Sid a sharp rap on the knuckles, mostly at Toto’s Garage, a Bandra pub.

All in all, it seems to be working. When Capital18 exited Webchutney in 2013, it made 3X its investment, according to an official statement at the time. According to Sid, this does not include the 12x return Webchutney got on an investment of Rs 2.5 crore it made in Network Play, an ad network that was later acquired by German media giant Bertelsmann.

The new partner of Webchutney Studios is Dentsu which was previously headed by Rohit Ohri. How did the change of ownership make a difference in his life?

The answer was not one I expected.

“Dentsu got a CFO, Benny Augustine. To be honest, I was skeptical at first. But over time I realized that instilling financial discipline in a freak like me was a game changer.” Profits are starting to rise year-on-year: last year, Dentsu Webchutney/DentsuMB hit a topline of around Rs 80 crore with an EBIDTA of around Rs 32 crore: things can’t get better than a 40 percent margin.

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His way of running the business has also changed. “For the first 14 years, I worked on my ass. But gradually I started to adopt the concept of ‘lazy entrepreneurship’ – that is, hire the best people you can and avoid. Seen I am myself as the main HR person at Webchutney.

And his angel investments. Many of them were ahead of their time. Some examples: Crude Area, an online platform for selling graphic art; Bombay Bitch, patterned after the American gossip site, Gawker; JuxtConsult, an online market research firm wants to be the ComScore for India. The old adage ‘timing is everything’ is off the mark.

“The thing I’ve learned about making investments is this: bet money only if you know the founders. Or else, stick with the big boys and invest where they are,” thought Sid. While most investments panned out, his biggest hits were Pepper Content and ScoopWhoop, each of which he claims gave him a 20x return.

He is also extremely active in two other companies that he has invested in – Invideo, an online video editing platform and Lio, an app that helps small and medium businesses organize their information. “You’ll hear a lot about them both,” he promised.

What drew him to angel investing? Is it money? Or what? “It’s the excitement of creating something new. Indeed I also feel privileged to work with such talented entrepreneurs. “

Sid has already started working on what he thinks will be his next big thing. Because, as I realized, he could never counter a punt. So, it comes as no surprise that his new venture is called Punt Partners which he co-founded with Bengaluru-based serial entrepreneur Madhu Sudhan.

The duo’s rationale for Punt is that ad agencies, over the last century, have helped businesses acquire customers through the use of advertising. In contrast, marketers don’t have the equivalent of an ad agency to help them retain customers in a period of churn. All marketers have is a smorgasbord of tech companies offering a bewildering array of retention tools. If Punt has its way, it will be the premier customer retention agency for marketers.

This is an interesting business that I look forward to hearing about for years to come.

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