From Spicy Dreams to Market Domination: Mikhel Rajani co-founder of Naagin Sauce on building India’s No.1 hot sauce brand.

The domain name was bought a couple of years before we even started the business. I was watching a cricket match and I saw the Bangladesh cricket players do this nagging dance. And I was just thinking to myself, this is such a unique Southeast Asian and Indian phenomenon in the nagging dance and how everyone busts out into it and it's a show and the words just came out of my mouth nagging sauce wise, there's no sort of nagging sauce in my body domain name. Hello everyone and welcome to the Indian Stuffed Up Show. So today I'm joined by Mikhail Rajjani, the co-founder of nagging sauce, India's first and favourite hot sauce brand. Five years ago Mikhail and his co-founder spotted a gap in the market and now nagging sauce is a household name partnering with KFC India and taking Indian ghost chillies global. So away in this episode you talk about how they built the brand from scratch, the spicy challenges they faced along the way. He talks about his insight from 15 years in the food business including branding, hiring and raising funding. Plus he shares advice of founders like handling rejection and why India is not for beginners. And why he prefers loyalty over certificates when hiring is a fun and fiery and inspiring conversation. So let's dive in. Hello Mikhail, thank you for coming in this show today. And how's it going? Nice to meet you. Awesome stuff. Please tell us what you do. So I am one of the co-founders of India's first and favourite hot sauce brand called nagging sauce. We're five years old as a company and we've quickly established ourselves as the most loved hot sauce in India. What was your initial desire to do this, you know, what a particular hot sauce? So I've been in the food business for, you know, almost 15 years now. I own a chain of restaurants in Mumbai and before that I was, you know, working on vineyards and hotels and cafes. So I've had a fair bit of experience in the FNB business and even when I studied in Canada use a lot of hot sauces myself, you know, when I used to cook and things like that. And while while doing this business and living in India, I love Indian food. I love Indian spices and spicy food. I've always wondered why India never had its own hot sauce brand. We had a lot of sources in the market, a lot of either western sources or copy of western brands like Thousand Islands and things like that or Asian brands. So, you know, like Sri Racha and of the likes. But nobody actually championed Indian chilies, popularized them and sort of bottled traditional classic Indian flavours, you know, when my co-founders met me, they actually met me to talk about some ideas to do content around food and spices and hot sauces. And there's a show in the US called Hot Wands. Yeah, I know that one, yeah, on YouTube, yeah. So people basically have this spicy sauce and I interviewed when they sort of brought that up. I told them about my idea of actually launching sort of India's first hot sauce. And it turned out that they were massive pepper heads themselves, you know, crazy about collecting hot sauces and had, you know, pretty impressive collections of their own. You know, we went into a deep dive about, you know, why we felt that India sort of needed its own hot sauce brand. There was an emergence of craft beer and, you know, new age beer brands all over the country, challenger brands. And, you know, beer and hot sauce sort of go hand in hand together. So we feel that, you know, as a complimentary industry, there weren't no players in the space. Nobody doing that. So we felt there was a good opportunity to sort of get in. You said you'd been doing this five years. Can you share some stats then in terms of, like, unique sold or countries you're selling to now? Yeah, sure. We're available in over a thousand retail locations now, over a thousand QSR points of sale as well. We're available in seven odd countries where a president mostly all national modern trade stores, because we're sort of first-movers as a hot sauce brand, we're president across all the quick commerce players, any companies in India as well. And we always, you know, built the company as an omnichannel business, rather than a purely online business, because we really felt that the best way to sell our product was for people that tasted it. Why do you think you were the first people to do this? Why is no one else seems to be? I mean, crazy. I don't know. There's a lot of localized food, so people already eat a lot of condiments in India. So, it's not like condiment culture is new. Every meal always has some sort of condiment, either spice makes a pickle, a chutney, which is pretty much like a hot sauce, you know, like a traditional version of a hot sauce. So, condiment culture was innately like familiar to Indians anyway, so I guess it just needed someone to take a shove. And we're young country, developing countries, so we first needed all the basics, so I guess all the large players that came in were still bringing in tried and tested sort of products in the global market. And yeah, it was just good timing, I guess. Good timing, yeah. Let's go back to the start, then, early challenge of spiciest challenges. If you're entrepreneur or a startup founder, I mean, it's challenges every day, so you've got to become very comfortable with being uncomfortable, I feel. That's a trait you should have. In the early days, you know, we did a lot of research and we looked at what is the underlying sort of qualities that a product requires to be sold as a consumer package good. So, we decided that we would work on firstly, great taste quality of the product. We decided to never compromise on ingredients, things like that, those were the sort of pillars of what our company was going to be built on. Like high quality, locally sourced ingredients with the transparent sort of supply chain direct from farmers and sort of bring out and represent the best ingredients of India, you know, four Indians and the rest of the world. So once that was decided, we sort of looked for a lot of which direction do we go, the hundreds of chilies, thousands of different flavors in India, we decided to go with nostalgic flavors that were innately way familiar to a lot of Indians. So I'm from Bombay, there's a very popular local dish here called a Badapa which is like Indian burger basically where you have it and with that, they serve this spicy spice mix which is like garlicy spicy and everyone loves that sort of condiment. So that was the inspiration for our first hot sauce because we were like, that's the flavor that actually everyone loves, let's bottle that. So once we sort of got that going, we worked very hard with food technologies and manufacturers to sort of get an extended shelf life on the product because we realized if you had to do retail, you need at least 12 months of shelf life on the product sort of standard chance. You need to figure out how to sort of keep your product ambient, whereas you don't need refrigeration and things like that. So we worked with some really good food technologies, chefs and did a lot of trials and like a lot of trials. We must have made over 200 hot sauces in the process coming up with the first two but not complaining about that. It was a lot of fun, a lot of fun, a lot of sweating, a lot of good times and once we had that product, we said, let's try it out where we have a natural fit. So there was a beer festival happening, we entered a store that made a couple of hundred bottles and sort of went out over there and we got a fantastic response. We sold out, people were loving the product and they were loving the main joking around about it. And it's exactly what we sort of wanted and hoped would sort of happen and people responded very positively to it. So we decided that we were onto something, we had something good like people were going to respond positively to it and that's when we decided to sort of do it in a bigger way. So we not decided what our capital requirements would be pitched it to a couple of investors, we had a couple of early rejections and that's it, the third investor that sort of heard up it saw our product, it was a big lover of hot sauce himself and yeah, we signed up, we got a check, we got money in the bank and two months later we sort of got hit with COVID. So we were, all our plans went out the door and we sort of built our company as a COVID native company. So we got to just roll with the punches, everyone was dealing with the same issues at the time. We look at it as an advantage because a lot of time, a lot of people spending time in the kitchen at home looking at ingredients, spending time cooking. So we got to capture a lot of people's mind space during that time, even though we might not have been able to build out the best distribution and things like that. However, our online business did pretty well and we got to capture a lot of mind space with the income during because you obviously you had a 15 year previously doing F and B stuff. Was this like a big risk for you? Oh yeah, of course, anytime you start a business, it is, it is very risky. You hear all the statistics, you know, like one in 10,000 get funded and out of all that get funded, probably X percent make it, most people fail, you hear all of that and people scare they should view every day and tell you why you shouldn't sort of do something but it was scary but at the end of the day you need to trust your own thoughts, you're critical thinking how it's feel you should test your idea with people who are smarter than you, more experience than you sort of let people, let people punch holes in your business. You know, let people sort of tell you what's wrong and then you got to work through those sort of tough questions and if you can convince yourself, then then you have nothing to worry about because I think it's all about, you know, mindset and finding like-minded people. I'm lucky I had co-founders, you know, who as crazy as me, we always sort of kept each other motivated and eyes on the prize. I suppose the most important thing is the name as well. What's the story about the name and why particular that name? I was watching a cricket match and I saw these, the Bangladesh cricket players do this nagging dance and I was just thinking to myself like this is such a Indian, unique Southeast station and Indian phenomenon, the nagging dance and how everyone busts out into it and it's a show and the words just came out of my mouth, nagging sauce, why is there no sort of nagging sauce in my body domain name? I'm a serial domain name buyer so I ended up buying it. What does it actually mean? Because obviously we have listeners around the world as well, sir. I'm sorry, nagging is a Hindi word for King cobra which is a snake. So we thought it, you know, the snake bite is like a hot sauce, it stains the thought. So yeah. Awesome stuff. What was it like on launch day then, you know, 16 year bottles in the shop or online, you know, getting sales and stuff? You know, I've never been one for big launches or putting a lot of pressure on a launch date or time or anything like that, I always feel it's better to just maybe launch a bit more lucky and make an announcement a couple of weeks later or even a month later, once you figure out a lot of the headaches or or speed bumps along the way because it just puts a lot of pressure on you and on the company itself, if you know, there's a big launch, your inexperience that you're doing it for the first time. So I'm not one for big launches or single moments or events like that. I feel that consistency, banging things out regularly, regular marketing, doing all the traditional stuff right, obviously, you have to do fantastic work. So you've got to like always try and peak with creativity and be like, put originality above all else. It's more important to be consistent in what you do than like a single launch or anything like that. Obviously, in my neighborhood stores, when we had sort of when you go there and you see your bottles on the shelf, it feels awesome, you know, your friends and family, send you pictures from the store, it did sort of feel great, yeah, but eventually like sales feel great, you know, numbers feel great and that's something you sort of get a rush out of that rather than, you know, just recognition. Scary and exciting because obviously India's a massive country, obviously you're a small team and you're a limited budget. We raised a fairly large amount of capital as a pre-seat round. So it's always the many ways to go about, you know, about something. We felt we were second time founders, you know, we were not doing it for the first time. Right. So we're pretty confident in our skills and our ability to sort of execute. And we didn't want to, we knew what we needed as a starting point. We knew we wanted to get into X amount of retail locations. We knew roughly what it would cost, you know, to create eight plus listings on, you know, online platforms and have a good website up and things like that. So that's something that, you know, people, I would advise all, all founders, entrepreneurs is just be very comfortable and be very thorough about your capital requirements. And just be upfront about it, you know, like you can always be a dreamer and never limit your dreams either, you know, you can think as big as you like, just have a sound business plan behind it, you know, and have an idea how much sort of money you require and arrange for that. You know, make sure you have that before you go down a path, you know, before you start doing things or preempt to me or assume that money will just come in through revenues and things like that because it takes time, you know, it takes like, it takes time to build a brand, it takes time to build a company and you need to budget for that and plan for that. As boring as it sounds, but I feel that that's something that people should really think about upfront. So I've got a branding, then that's really important. Branding, positioning, differentiation, obviously you've got the name, you know, it's a bold name. How are you ensuring that this brand stands out as you're, because obviously it's it. So the way we positioned ourselves is we said that, you know, firstly that catch up, like catch up is for everyone, you know, and if it's like if you're an everyday Joe guy, like an average Joe guy, you have catch up. And we always as a login is for, you know, it's for people of passion. So we tried to align ourselves with everyone, all the outliers, you know, people doing something sort of different in life, you know, the skateboarders, the chefs, the, you know, the photographers, the artists, like, you know, athletes, people were always outliers, people doing something different outside of the norm. In India, you know, parents want you to be a doctor and engineer and, you know, they sort of were sort of pushed you in that direction. So we said that catch up is for everyone, you know, and then Nagan is for everyone else. And we actually looked for a lot of these subcultures and niches in the early days and sort of aligned ourselves with them. So be it like the small skateboarding community in India, you know, a lot of small restaurants and chefs. You know, people are really passionate about their food. We collaborated with them, worked with them on their menus and things like that. And honestly, through those niches, you know, we, we started small, but we built a community through that. And that's sort of what separated us. And ultimately, it's, we did upgrade our food. We are a better for you product. You know, we don't use all the sources traditionally in the market. We are used, made using cornstarch fructose, which is essentially like sugar syrup. You know, we use rail ingredients, real chilies, well, you know, better quality. And ultimately, people, you know, like they, it's how food makes you feel, you know, like after you eat it, you know, and that's what brings people back. So as I said, it's, it's, it's a lot of things. Like you get yourself out there. It's consistency. It's always being there in the store, making sure your products are displayed. Well, every week, you know, like once you get a customer, that guy, the customer should be able to, you know, rely on the brand being there for them. Yeah, that's, I think even brand building takes 10 years, probably like, how, how, how do these chilies then? Because obviously, you got the Mexican ghost chilies. I think that, I believe that's the hotness or the scotch bonnet, those, those like, ridiculous. No, they're not Mexican. The ghost peppers are actually Indian. It's the most spicy chili that naturally occurs in the world. So that's the butcher locuea, which is called the ghost pepper. So we make one of our sauces with that one, we tone down the spice level quite a lot so that it's actually palatable and people can sort of experience them, you know, the, the ghost pepper. And yeah, people love it. They all, these chilies grow in the northeast of India. So in Assam, Meghalya, that's where they naturally grow. Now there are spicier chilies that have been sort of hybrid and genetically modified. So you have the Carolina Reaper and, and sort of other things like, like funky names, I can't even sort of pronounce. But naturally occurring in the world is the ghost pepper, which is native to India. In terms of the marketing, then, that was played a big part in art and ships as well. How, how's that work for you? Do you have a strategy around that? We always try to, because we've always created original flavors. Yeah. You know, there's no Nangan Sri Racha or no Chipotle Nangan, you know, it's all flavors that we sort of created originally. That is attracted a lot of brands, restaurants, other categories of food products to us. So the biggest marketing for us has been actually very successful sort of collaborations with restaurants, with other snacking brands. So we launched a chip with a very big chip company in India called Tuyam. So they launched a Nangan flavor chip couple of months, like I think a year ago now. And they were a massive company with massive distribution. And that sort of worked really well in our favor in terms of marketing, reach, our name going out, our brand being available, you know, in tens of thousands of stores across the country. That was a big one. Being on a menu in a restaurant is like the biggest gold star for us. We feel very happy that we sort of get on a menu because, you know, not many restaurants of people actually name a source, you know, but because of our originality and they know that the quality is good and it aligns with what their values are. They sort of name us on their menus, which is being validation for sort of what we're doing and working with, most recently we have just partnered with KFC in India. So we're going to be present with a first Indian brand that's been actually branded and available as, you know, our original flavors in all, you know, 1100 KFCs across the country. How does that make you feel? That was like a fantastic feeling because KFC was honestly on our whiteboard when we were ideating like five years ago, it was like we sort of manifested it. We said that, you know, we're going to make India's favorite hot sauce, international brands we want to have Indian flavors, chicken and hot sauce are like a marriage made in heaven. You know, we got to get it to KFC and you know, it sort of happened. There was a tough journey getting that done as well. We had to operate a lot as a company and it improved everything about us to sort of get to that level. But it's been nothing but a sort of positive experience working with that team. And I think that really puts a smile on my face when I see that because you've done this for 15 years and how was the marketing strategies changed over those years? They must have changed a lot. So when I owned a pizza, pizza chain in Bombay, we did the world's first drone delivery of pizzas, which actually went viral in 2012. We got a national record for it. We were on global news, you know, BBC, CNBC, all of that. So I learned a lot about the internet and marketing, you know, like at an early age. And my co-founders, Arjun and Shiddidj also run a sort of marketing agency which is very successful for many years and sort of pioneers and sort of what they did. And you know, eventually, like, I feel the way marketing has changed and the way the internet has changed over the years is the way you run your company and the way you run your business and make your products is the content that you should be more transparent. Be able to be more transparent, transparent about as a company. And if what you're doing aligns with what, you know, customers really want or the direction that they're going to go in, I honestly think that's the best. Sort of marketing you could do, like, you know, like just building up that reputation by actually being who you say you are for many years. And that, like, meaning something, you know, when you say, you know, we have good, like, better quality than others that actually can be quantified and not just, you know, a statement thrown in the air. So I think consistently being who you say you are trying to be better every day and sharing your journey with your customers, I think that is, that is the best sort of marketing you can do today in today's world. It's changed a lot. Like earlier, I would say in the early days of D2C brands, I think that it was a very good strategy because there are very few players online. You could actually run a good strategy, have a good budget, be on the right platform and you could make a killing by doing something like that. Today you have, you know, everyone's on the internet and it's in fact harder for a startup because today I have multi-million dollars sort of food, food, you know, conglomerates who have millions of dollars in monthly budget who are buying up my name as an advert on all of them. You're competing with big guys and you've got to be a bit thick-skinned about that and be honest and keep talking to your customers and sharing your journey. As your business grows through, you know, various partnerships, you get lucky sometimes, that's how your brand will get built over time, I think. Like I feel today the way to do it is share your journey like honestly and actually do what you say you're doing. Yeah, you mentioned the co-founders, how did you meet the co-founders? So, shit, these are me one boarding school together, that's how we knew each other. And Arjun, my third co-founder and me, and sitting with him actually started an agency together, so that's how the three of us all got together and we ended up being from, you know, schools that are close by, we have a lot of common friends. What was your first impression of your co-founders? Like my friend from boarding school, the first impression of him is he sleeps too much, you know. He should always be late in the morning at dorm leaving school but always a solid guy, we always got along about everything, we agree on, you know, the larger things in life. So then the small stuff sort of doesn't matter and I think that's the shared quality between all three of us, you know, we all want the same things pretty much in life. What would you say is your main job now, obviously you're a co-founder now, what is your main job now then? For me, we all have shared split responsibilities, so I feel my job is, I look at myself more as a, if I were to actually tell you the technical, I'm in charge of business development, fundraising, offline sales, and the manufacturing and product development in the company. That's what sort of I do, however we all overlap a lot in each other, sort of roles, now a lot of our from shortage, you know, on the production side, a lot of help from margin on the business development side as well, and fundraising side, so we all sort of do it but broadly that's what I do, and today we have a pretty motivated and strong team as well, the almost 50 of us today, and I'm more of a like chief solutions officer, so I try to make sure that everyone has what they need, you know, arm to do their job, and yeah, that's pretty much what I do. What makes this partnership work then, you know, obviously if you can give our advice on our listeners as well, on making partnerships work or if they're working in a partnership, what advice would you give them? Brutal honesty, like don't wait to speak your mind, like Brutal honesty, say it upfront, have a thick chin, you know, like have a stiff chin, don't cry about everything, you know, stuff goes wrong all the time, so you've got to just have a good positive mindset and communicate very clearly, I think that's very important with your partners and co-founders, and I think that it's a mindset thing, no one motivates you when you're an entrepreneur, accept yourself, so if you keep motivated, you dreams without goals mean nothing, you know, so if you share the goals that your co-founders, you'll have the same goals, and you're working towards it, I think it can be a big, big asset having partners in a company, because you can, you know, have a lot of peace when you trust them, that a lot of stuff is getting done in the background while you're doing deep work on something yourself. Let's talk about funding then, obviously you've raised funds, it can be challenging, you know, for a fruit branded India, what lessons did you learn from the funding journey, and what advice would you give our founders, you know, pitching in a net and bee space? Never been a better time if you're a founder, like you can actually build anything you want to do, like whatever your business is, I know from experiences like mountains and mountains of dry powder in the country available to be deployed and invested, getting it is a different story, it's very hard, it's definitely not easy, India is not for beginners for sure, so you better have a deep understanding of what you're getting into in India as well. What I would advise when it comes to fundraising is, you know, have clear goals, be able to articulate what you require the money for very well and have more staggered goals, rather than, you know, talking about where you're going to be 20 years from now, you know, think about where you'll be in 18 months deep here, like, you know, and be able to explain that or communicate that to investors very clearly. The other, most important thing is that you don't take everything personally when you get rejections, like we've heard hundreds of rejections, you know, and as a founder, you might think or as a business that it's about you, but a lot of the time is not about you or your business, you know, it's just timing, it's where the other people's mind is out of the time. They're interests, and when you do find like-minded people and people that sort of believe in your vision and business, I feel you should really, you know, use their mentorship guidance network to upgrade yourself as an entrepreneur and founder. I would say all the services you work with, so the lawyers, the company secretaries, you know, agencies you work with, always try and, like, you know, punch above your weight a bit, you know, try and work with better people, like, even though that's where the money should be spent in a way, like on, you know, because a lot of soft things that come out of working with, you know, people who just do bigger business and, you know, have a bigger range of experience. Now, I'd say, yeah, learn a lot constantly and then just try to work with people who are of the best pedigree and best reputation. Yeah, because you've gone from three to 50 people. What was your, what is your hiring philosophy now then? It's more of a mindset thing, it's just a mindset, like, I don't really value the certificates, you know, the paper certificates and things like that. I look at loyalty a lot, like, I see how long people have worked at companies and someone has worked and jumped around every year or two years, and, you know, for me, that's usually a red flag, the way. I like loyalty and I like, I just like the mindset, you know, people who match our, match our mindset. What's your management style like, and how's it changed over the 15, 16 years? A lot, it's changed a lot. In the beginning, I used to get very involved on a personal level with people, with everyone I was managing, sort of, micromanaged them, their life, you know, like what's going on, be involved in every single thing. However, over time, I realized that it's building good systems, you know, SOPs stick to the system. Every time you make a mistake, you should document that, put a process in place, and I feel that every time you do that, that sort of builds your company's IP, because every time you make a mistake, you document it, that's a new SOP, when you collect SOPs, that becomes like your IP, and your IP has value, right, as a company. So, I feel that I'm more a process driven right now, like it's not so personal with people, when they, you know, either way, like there's no, there's no getting angry at someone or shouting at someone, if anything like that, it's more about the work, you know, how to prevent an error like that occurring again, you know, like quickly taking a decision about if someone is the right person for the job or not, you know, by purely looking at the KRA and KPIs, rather than, you know, who he is, you know, what his mood was like, how nice he is, what a nice guy or anything like that. So, I feel that comes second, you know, the basic expectation now is to, you know, is he doing his job to the bed level, or is he or she doing his job to the bed level first? Has anything surprised you about your entrepreneurial journey so far? Yeah, like that, I'm still crazy enough to continue doing it, like I think we all look at that, and I think that, yeah, resilience between me and my co-founders, you know, after the sort of setback challenges we faced, I think like that is something that I realized about myself, you know, that I now don't ever worry about things like, you know, what will happen if it all fails, what will happen if, you know, everything goes to the same, because, you know, I learn to, I never doubt my intentions, you know, I might not know everything, I might not know how something is going to pan out, but I'm always 100% certain about my intentions when I approach something. I always make that very clear, you know, to my partners, to our investors, and I, I don't think living like that, you know, you know, you know, like lead you down a wrong path for a very long time. Oh, some last few questions, then is anyone helped from the journey, obviously co-founders? Anyone else helped you or supported you, would you like to make it? Lots of people, a lot of people, you know, are families to begin with, like family supportive, all our families have not just invested money in our business, but put up with all our moods and attitudes and craziness throughout the time. So our family, for one, a lot of our investors have, you know, backed us from day one multiple rounds, only been helpful, you know, told us harsh truths when we needed to hear it, you know, the first fund that invested in us is the Crumb, Chacha, you know, we would definitely like to mention him, to be someone who's, you know, always helped us out, our lawyers who been with us from day one, they've pulled us out of some, some situations and got us some deals at the right time when we sort of needed it. So, you know, Metha and Padamsi, and I would give a shout out to Siddharth and his team for that also. So yeah, there are a lot of people who have passed along the way, you need, you need a village, you know, you need a lot of people to sort of build a company. Yeah, awesome. Advice for our first time founders or entrepreneurs. Yeah, just be very passionate about what you're doing, build fantastic products, build better products that are there today, you know, like differentiate yourself by, you know, quality and what you're actually building and have a lot of great and resilience, like I feel if you just don't accept defeat, you, there will be people who align with you, there will be investors who'll fund you, there will be someone who's going to sort of support you on your journey because there's a massive ecosystem in India, there's a lot of entrepreneurs and there's, and, and, and yeah, just be very resilient. Yeah, don't accept defeat, I like that one, because thank you for going on this show. For people who want more information on the nagging source, how can they get more information or how can they buy this? They can get onto, you know, naggingsource.com to start with or if then the UK, they can find us on, on Amazon and yeah, naggingsource.com will probably be your best resource. Miguel, thank you for going on this show today. I really, really enjoyed it. Thank you, Neil. [Music]