The wild ride of a college dropout turned internet entrepreneur

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

July 2016: ‘Make us famous.’ That was the exact order Sidharth Rao received from his new boss, Ashish Bhasin, who had just taken over as the head of Dentsu Aegis in India. The international ad network acquired Webchutney Studio, the online agency that Sidharth co-founded with Sudesh Samaria, in 2013.

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

Sidharth – ‘Sid’ to everyone – gets a message from Bhasin shortly after the win. It is as concise as the original assignment: ‘You have delivered the assignment.’

Ironically, Sid left Dentsu a month before this great triumph. Does he regret not going on the international stage?

“Oh, not at all! I cannot take any credit for the Unfiltered History campaign other than greenlighting the project. Webchutney has been winning major awards for years, but I’ve never been on stage,” he declares. He had already decided to quit and it didn’t seem right that he should stay just for Cannes and quit a few months later. It would make Dentsu look bad – and he owed the network a lot.

A break. “Actually, I don’t even see myself as an adman. I think of myself as an internet entrepreneur.”

The past 23 years have been a wild ride for this college dropout, the son of a major general in the army. “I almost gave up several times along the way,” he admits.

His story is very amusing as he tells it. It involves playing down the hard work while simultaneously highlighting his own mistakes. That’s just Sid’s style. Maybe it’s because he suffers from ‘impostor 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 got his parents’ permission to take a one-year break while he explored possibilities. He joined DDB Mudra at 19 and later moved briefly to Gray where he was fired. I met him around the year 2000 when we started agency inquiries! (now afaqs!) and he was putting together Gutterspace, a site in the same space. It looked cool – “better than agency questions!” he mocks me gently – and this has earned him commissions to make websites for corporate enterprises. This is how Webchutney was born.

Sidharth led his team from the front on 20

Sidharth led his team from the front on 20

Strapped for cash, he collected Rs 11 lakh when he was 20. He scoffs at the amount now, but I find it remarkable that someone so young could raise any money at all in the India of that time. The entire country had less than half a million Internet connections.

The Internet was still a baby and Webchutney was among 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 cash to grow was a constant headache.

When he decided in 2005 that Webchutney should be part of an ad network, there were many suitors – “hamare swayamvar main sab aaye”, he recalls with satisfaction. Although a big deal didn’t happen, he got an individual investor on board for Rs 60 lakh.

That solved the immediate money problems, but that particular dark cloud continued to hover: he didn’t have enough cash to expand. “And that’s when I dug myself a nice deep hole,” reveals Sid.

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 per month for which it was paid in advance, but managed to get a 120-day credit line from Google for advertising. This gave the agency a solid short-term positive cash flow that it could use to grow.

But Sid, only 28, didn’t have much financial discipline. When MakeMyTrip decided to shift media buys to one of the ad networks and thus cancel the deal with Webchutney, the agency didn’t have the cash to settle the bills. Sid had 21 days to find the money. Or close up shop.

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In a dramatic gesture, Sid vowed to his despondent team that “I will find the money – and until that happens, I won’t change my shirt.” That’s how he wore the same shirt for 21 days straight – “even though I washed it every night” he hurriedly explained when I wrinkled my nose.

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

Webchutney Studio survived.

Sid can’t stop praising Haresh, whom he now describes as a good friend and mentor as well as Sarbvir Singh, then boss of Capital18. “They were like new age parents. They trusted me and allowed me to fly. That’s how my faith in myself as an entrepreneur and angel investor grew.” (Sid has made about 20 angel investments so far.)

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

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

Webchutney Studios’ new partner was Dentsu which was then led by Rohit Ohri. How has the change of ownership made a difference to his life?

The answer is not one I expected.

“Dentsu got a CFO, Benny Augustine. To be honest, I was suspicious at first. But over time I realized that bringing financial discipline to a freak like me was a game changer.” Profitability started to rise year after year: last year Dentsu Webchutney/DentsuMB reached a top line of nearly Rs 80 crore with an EBIDTA of around Rs 32 crore: things can’t get much better than a 40 percent margin.

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His approach to running the business has also changed. “For the first 14 years I worked my ass off. But gradually I began to embrace the concept of ‘lazy entrepreneurship’ – 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 on his angel investments. Many of them were ahead of their time. Some examples: Crude Area, an online platform to sell graphic art; Bombay Bitch, modeled on the American gossip website, Gawker; JuxtConsult, an online market research firm that wanted to be the ComScore for India. The old saying that ‘timing is everything’ is not on point.

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

He’s also extremely positive about 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’re going to hear a lot from both of them,” he promises.

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

Sid is already creating what he thinks will be his next big thing. Because, as I realized, he can never resist a point. So it’s no surprise 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 over the past century, advertising agencies have helped businesses acquire customers through advertising. In contrast, marketers don’t have an ad agency equivalent to help them retain customers in an age of choice. All marketers have is a smorgasbord of tech firms offering a bewildering array of retention tools. If Punt could get its way, it would be the leading customer retention agency for marketers.

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

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