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 left it to start something new. It’s all part of a long, breathtaking business journey that began in the 20s.

July 2016: ‘We’re popular.’ That was the precise instruction Sidharth Rao received from his new boss, Ashish Bhasin, who had just become 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 outside India to win the Cannes Lions Agency of the Year, arguably the highest honor an agency can hope to win. This success 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 the Covid era, it focuses on objects that have been stolen from around the world and now reside in the British Museum.

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

Ironically, Sid left Dentsu a month before this grand achievement. 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 been winning major awards for years but I have never been on stage,” he declared. He had already decided to quit and it didn’t seem right that he stayed just for Cannes and quit after a few months. Dentsu will look bad – and owe the network a lot.

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

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

His story is very entertaining in the way he tells it. It involves playing the tough job while simultaneously highlighting his own mistakes. That’s just Sid’s style. Maybe because he has ‘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 allowed his parents to take a year off while he explored possibilities. He joined DDB Mudra at the age of 19, later moving briefly to Gray where he was fired. I met him in the year 2000 when we were starting agencyfaqs! (now afaqs!) and he’s putting together Gutterspace, a site in the same space. Looks cool – “better than agencyfaqs!” he mocks me gently – and it wins him assignments to create websites for corporations. That’s how Webchutney was born.

Sidharth led his team from the front in 20 overs

Sidharth led his team from the front in 20 overs

Cashed in, he raised Rs 11 lakh when he was 20. He scoffs at the amount now but I find it remarkable that a kid could raise any money in India at that time. The entire country has less than half a million internet connections.

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

In 2005 he decided Webchutney needed to be part of an ad network, many suitors – “hamare swayamvar main sab aaye”, he recalls with satisfaction. Although the big thing didn’t happen, he got an individual investor on board for Rs 60 lakh.

This fixed the immediate money problem but a particularly dark cloud continued to hover: he didn’t have enough money to expand. “And there I dug a nice, deep hole for myself,” said Sid.

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

But Sid, only 28, doesn’t have much financial discipline. When MakeMyTrip decided to shift media buying to one of the ad networks and hence stop the arrangement with Webchutney, the agency did not have the money to square off the accounts. Sid has 21 days to find the money. Or close up shop.

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In a dramatic move Sid vows to his dejected team “I’m going to find the money – and until that happens, I’m not changing 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 wrinkle my nose.

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

Webchutney Studio survived.

Sid can’t stop praising Haresh whom he now describes as a close friend and mentor as well as Sarbvir Singh, then boss of Capital18. “They are like new parents. They trusted me and allowed me to fly. That is 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 relationship based on trust. And when it went wrong, it won Sid a sharp rap on the knuckles, usually at Toto’s Garage, a Bandra pub.

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

Webchutney Studios’ new partner is Dentsu which was then headed by Rohit Ohri. How has the change of ownership changed his life?

The answer is not what I expected.

“Dentsu acquired a CFO, Benny Augustine. To be honest, at first I was suspicious. But over time, I realized that putting financial discipline in an extraordinary like me changes the game. Profitability is started increasing year on year: last year, Dentsu Webchutney/DentsuMB reached a topline of around Rs 80 crore with an EBIDTA of around Rs 32 crore: things couldn’t be better than a 40 percent margin .

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His approach to running the business also changed. “For the first 14 years, I worked hard on myself. But gradually I started to use the concept of ‘lazy business’ – that is, hire the best people you can and get out of the way. I saw myself as the main HR guy at Webchutney.

And with his angel investments. Many of them were ahead of their time. Some examples: Crude Area, an online platform to sell graphic art; Bombay Bitch, patterned after the American gossip site, Gawker; JuxtConsult, an online market research firm that wants to be the ComScore for India. The old saying ‘timing is everything’ is not off the mark.

“The thing I’ve learned about making investments is this: only bet money if you really know the founders. Or else, stick with the big boys and invest where they do,” muses Sid. While most investments have taken off, his big hits are Pepper Content and ScoopWhoop, which each is what he claims has brought him 20x profits.

He’s also very 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 their information. “You’ll hear a lot about the two of them,” he promised.

What attracted him to angel investing? Is it money? So what? “It’s the excitement of creating something new. Honestly, I also feel privileged to work with great entrepreneurs.”

Sid is about to do what he thinks is his next big thing. Because, as I realized, he couldn’t fight a punt. No wonder, then, that his new venture is called Punt Partners which he co-founded with Bengaluru-based serial entrepreneur Madhu Sudhan.

The duo’s basic premise for Punt is that ad agencies have, for the past century, helped businesses gain customers through the use of advertising. Conversely, marketers do not have the equivalent of an ad agency to assist them in customer retention in a period of churn. All marketers have is a plethora of tech companies offering a bewildering variety of retention tools. If Punt can, it will become the premier customer retention agency for marketers.

This is an interesting business that I hope to hear a lot about in the coming years.

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