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Taking Stock | Interview with Mandeep Singh

I caught up with friend and fellow entrepreneur Mandeep Singh who co-founded Trouva – the leading marketplace for independent shops across Europe.

Trouva’s mission is to help local communities and many family-backed shops who use the platform to sell to customers world-wide. Trouva allows them to connect with more customers than would typically walk into their stores – especially now during lockdown.

I thought Mandeep would be the right guy to tell us about what effect lockdown is having on independent retailers who have to fight for relevance even in normal times against their larger high street brand competitors.

We also touch on what Trouva has been doing during the Covid pandemic and how Mandeep is starting to give back to the entrepreneurial ecosystem in London by investing in early stage companies through angel rounds, and providing mentorship for many first-time entrepreneurs. This is a theme I will return to on Taking Stock.

I hope you enjoy.

Follow Mandeep on LinkedIn and Twitter.

TRANSCRIPT OF INTERVIEW

Anil Stocker:

Welcome everyone. To another episode of taking stock. I’m Anil Stocker, and I’m the co founder of MarketFinance, we started way back in 2011 and have been building the business since then. And one of the highlights of what I do is to talk with other entrepreneurs, partners, people in the industry that are growing the FinTech and tech scene here in London. And today I’m very happy to be hosting Mandeep Singh, a fellow entrepreneur and a friend who co-founded a great company called Trouva, which is a marketplace for the best independent and boutique shops across Europe. I’ve known Mandeep for quite a few years now. We’ve had a few beers here in Bermondsey Street, I remember comparing notes on the trials and tribulations of building a company, the things that are going wrong and things that are going well and why did we get into this in the first place. So I thought you were a great person to bring onto the show and pick your brain. So thanks for joining us, Mandeep.

Mandeep Singh:

No, thank you for having me much appreciated and for those kind words.

Anil Stocker:

So what I like, what I think we have in common with our businesses is that at MarketFinance, we try and help ambitious business leaders, entrepreneurs follow their dreams, and scale up their businesses, and employ people, and generate great products and great solutions for their local communities. And what’s really good about Trouva is that you have a similar mission, don’t you, in the sense that you’re helping a lot of these independent retailers in local communities. Tell me, how does it work, the model, exactly?

Mandeep Singh:

Sure. Yeah, so we’re a marketplace, so obviously there’s two sides. And first, on the customer side, we’ve got customers who want to be inspired and find beautiful products that you can’t find in the big chains or an Amazon and are only in stock in wonderful little independent shops and boutiques. And on the shop side, as you say, we went with amazing independents who have physical stores, but might be struggling or might not be big enough on their own, so really take advantage of the shift from offline shopping to online shopping. So we help these independents get online, we provide a technology platform for each of our independent shops, everything from inventory management through to logistics. And so every product you see on Trouva is in stock in one over independence. We don’t hold any products ourselves, every single product is coming from an independent. And customers can browse across now almost a thousand independents across Europe on trouva.com, in one place, buy through the platform. And we make sure that the product comes directly from the independent store to you, wherever you are in the world.

Anil Stocker:

Great. And give us a sense of the scale. So, obviously the high streets have been dominated, a lot of high streets are dominated by these big brands and these big, big stores, but people forget, I guess, how many independent retailers there still are there, often smaller businesses or family run. What’s the measure that you’re looking at? Is it the number of boutiques that are on the platform or is it number transactions? What’s the metric that you care a lot about?

Mandeep Singh:

Sure, yeah. So first, I mean the independent shop market is ginormous and you’re right, people do forget it. There are over 20,000 independent stores in the UK alone, that’s all sorts of categories and all sorts of products though, so we don’t necessarily work with whatever on it, in fact, we’re really quite picky about who fits the Trouva criteria. But even in the kinds of categories we focus on, which are things like homewares, fashion, gifts, actually the majority of retail is still offline. 80 to 90% of retail in these categories still takes place, at least pre pandemic, in physical stores. So there’s a huge market out there, but we don’t just, we do look at the number of shops on the platform and it’s almost 1,900 now across Europe. But for us, what’s much more important metric is how much sales we’re generating for each of our independent stores. And what we really aim to do is drive enough online sales for each of our independent stores, that it helps them keep the store open and helps them pay their rent. That’s really our metric. Can we generate enough sales that they don’t, they can keep their shop running, even if footfall decreases in future or even disappears?

Anil Stocker:

Interesting, and what’s the average persona or the profile of a person who’s buying these things? Are they doing it for birthday gifts, or what’s the trigger point that people would come onto your site versus going to ASOS or some more mainstream site?

Mandeep Singh:

Sure. So most customers are buying for themselves. We’re now only about 50% UK, but we’re still the biggest market is UK, then after that, Germany. We haven’t officially launched yet in other countries, but we have a lot of customers in France, the US, et cetera. But the thing that really binds these customers together is that they are coming because they don’t necessarily know exactly what they want to buy. They want to fall in love with a beautiful product. And so we talk about words like inspiration and discovery, and ultimately a customer wants to buy something that’s pretty special and unique. And that can be a gift, but actually most of the time, yeah, they’re buying for themselves or buying something for their home, buying an item that they really treasure. And that’s what you don’t really get when you go to one of the big guys, and particularly if you don’t want your home or yourself to look the same as everyone else. Who does? and that’s often what happens if you’re buying from the large chains.

Anil Stocker:

Yeah, it’s an awkward moment when you go to some party and you’re going to the same shirt as someone else because it was on sale at Next or something like that.

Mandeep Singh:

Yes, exactly, exactly.

Anil Stocker:

Okay, so, okay. So let’s get to the point we’re living in crazy times, COVID, lock down, these shops are not essential, I’m guessing. So are you the lifeline then for these businesses? Are you saving them, literally saving them from going out of business?

Mandeep Singh:

So it’s obviously been a pretty, pretty busy time for us with the pandemic, and yeah, we’ve certainly, I don’t like the term saving them because that implies that these independents needs to be saved, when in fact, a lot of them are fantastic and have great products that you can’t find in the big guys and that’s why they’ve survived and thrived. But clearly we work with shops who may almost solely be trading offline in their bricks and mortar store. And the whole origin of the business was that yes, only 80 to 90%, so only 10 to 20% of transactions in these types of categories is taking place online, but that’s going to increase over time. And what’s obviously happened with the pandemic is just an overnight ginormous shift in shopping from offline to online, in a way, which I don’t think anyone could have foreseen when we even had here in the UK, Boris Johnson going on TV and encouraging people to buy online from offline shops.

In that sense, it clearly has been, it’s always been what we’ve been about in the DNA of the business, and it’s just, yeah, suddenly overnight become a lot more important. But one of the big challenges initially was that some of our shops are in the home category and could have opted to stay open, but very, very few did. And one of the first challenges was all the fulfillment takes place from physical stores. And in some cases, the owners couldn’t even get to their shops. We actually now have a few shops in Italy, in Rome. So we actually saw the lockdowns in Italy first. And we used that as a bit of a test bed to figure out what we were going to do to help independent shops elsewhere across Europe.

And so the team worked phenomenally hard to do things like moving the inventory in some cases from the store to the store owners home. So they could literally work from home during the pandemic, redirecting couriers to be able to pick up items from store owners’ homes. In some cases, it was moving inventory to a warehouse. In some cases, it was a bit simpler, maybe even though the physical doors were shut to customers that the owner could get to the store and carry on trading, particularly in the, for example, the Nordic countries, but generally speaking, yeah, overnight they had to shut their physical doors. And so the team worked really, really hard and amazingly most to keep the majority of the shops still open, 75% of the shops in the UK were able to carry on trading even though their physical store shut.

So that was the first step. And then clearly we’ve seen a big step up and engagement from a lot of our shops where we are maybe not even if not their own leap, certainly the main channel to trade during the pandemic. And that was great, and we’ve also been at the forefront of trying to help our shops understand what’s out there in terms of government support the rates relief worker, for example, that the government announced, but then what was a positive surprise and has been pretty amazing was that because obviously this enforced shift in retail from offline to online, customer demand exploded essentially. And customers who might previously never have bought online before were buying online for the first time. And a lot of the chains actually struggled to sell online during the pandemic, maybe they had a single warehouse and so they couldn’t do social distancing, the likes of Dunelm and Net A Porter had to stop trading initially. Whereas we, each of our independence because they’re their own to manage, they were able to trade and really take advantage of that huge pickup in demand.

Anil Stocker:

That’s super interesting because almost being less centralized helped in that way. You’re a bit more nimble, you could get stuff out and you weren’t captive to a factory being open and staff members being there, it’s quite-

Mandeep Singh:

Exactly. Yeah, exactly. And I think it’s something we perhaps don’t realize more that this decentralized model of retail that Alex and I’ve tried to build can be a real advantage. And particularly moments like this. And even if some shops couldn’t stay open, the majority could. Yeah, exactly.

Anil Stocker:

Yeah, exactly. And give us a sense of this increasing demand. Was it double or triple or give us a bit of a sense of that?

Mandeep Singh:

Sure. So I mentioned that one of the key metrics we look at is how much each individual store is doing. And it’s picked up more since then, but the last time I looked at the numbers, individual stores were doing 60% more sales during the crisis than there were before the pandemic and that’s continuing to increase. So not only is only Trouva overall doing a lot more sales year on year, but what’s even more important for us is that each individual shop is driving, is doing far more sales than they were before the crisis.

Anil Stocker:

Yeah. And it would be, I guess, you see that. So you see that online, you see the online component of their sales only, you don’t see the offline component, or do you see both?

Mandeep Singh:

We sometimes do, sometimes because we can see shops managing their inventory through our software so we can see offline sales. And also they’ll often share that data because we also want to look at what proportion of their sales we’re driving. But yeah, obviously in the pandemic, it went to a 100% online, almost overnight.

Anil Stocker:

Yeah, exactly. I’m just wondering whether the increase in the online made up for the, presumably the offline went down to zero because no one was walking into the store and buying. My guess is that they probably didn’t quite cover it, but you never know. It feels like a lot of these retailers used to have a side wing of their business, which was online and it was small percentage, and now suddenly that is the business.

Mandeep Singh:

Yeah, that’s right. Some of our shops who have been on the platform for a couple of years, we’re driving hundreds of thousands of pounds of sales a year or so. So actually that increase does more than make up for their offline sales. But the majority, maybe some of the newer shops, it was less about necessarily trying to cover every single sale that they would have had to offline, but about trying to, a) give them a channel so that they’re not stuck with a bunch of excess stock, no pun intended, that they otherwise wouldn’t be able to shift, and you’ll know better than I do, margins can be very, very tight in retail, particularly, as an independent retailer. And so if your capital’s all tied up in a stock you can’t buy any new stock.

It’s been a well-publicized problem with chains like Primark has being stuck with stock it can’t sell, because it doesn’t have an online presence. But also for us, even just by increasing the sales by that amount, their online sales, it does create enough revenue, it is a lifeline to help them cover their rent because they also often fall between the cracks of some of the government support out there. The owners themselves are not covered typically by furloughing or by self-employment. So for us, it’s about generating enough sales to keep them alive during the crisis.

Anil Stocker:

On the downside, are some going out of business? Are some saying, “Look, we’ve had a go at this and it’s not working, we’re hanging up our boots.” Or is there a feeling that actually the bounce back is going to come sooner and we’re going to get back on track quite quickly.

Mandeep Singh:

So we’ve not seen our shops in particularly going out to business. And obviously that’s, I’d like to think that’s a large part down to amazing what the team’s been doing through their online sales. In the wider, independent shopper and independent restaurant market, I’d be very surprised if that isn’t the case. One of the things that has been quite interesting for us is that we basically have quite a lot of shops in Germany. Germany is one of the first countries in Europe to open up again to nonessential retail and things have not returned to normal. At least the early evidence suggests. People are still wary of going out and shopping offline. And I suspect that a lot of people have bought online for the first time and have found the experience very convenient, then they may not return to the offline world. So we don’t think that there’s going to be a return to normality pre crisis, but for our shops, at least, we’re not looking to drive, replace all their offline sales online permanently. And those offline sales will return and as long as they’re generating enough revenue to survive this storm.

Anil Stocker:

Really interesting. Really interesting. So let’s move a little bit to your business then. Did you have to change how you did business? Did you used to have people going out and signing up these shops in person, knocking on doors, or what’s happened at Trouva, that your company itself?

Mandeep Singh:

Yeah, interestingly enough, that has been the most effected team and Alex, my co founder, who now runs the business as CEO, has seen it’s hard to do some work because for some teams like business development, the model of flying out to cities and going to visit shops, it’s just not been possible. Fortunately, we do get a lot of shops who just contact us directly and who will sign up over the phone or just over the website, it’s not fully being affected. We don’t have an operational team per se, as in, we don’t hold products ourselves in a warehouse, et cetera. So operations for us, per se, has not been directly impacted. But as I talked about, we’ve had to be very nimble and imaginative in how to help the shops carry on trading and keeping them open and moving all the couriers to collect from owner’s homes is something that we just never would have done before. So there’s certainly been impacts in how we do how we do business, even though the businesses has grown fantastic history of the crisis.

Anil Stocker:

So any other changes in your business that will be permanent, you think, through this crisis?

Mandeep Singh:

One which isn’t certainly not unique to Trouva, I’m sure, all your listeners are thinking about is the model of work. So we, Trouva, decided to shut down our office quite early, ahead of lockdown. Interesting enough, we’ve always had a remote working has always been part of the DNA of the business, partly because a lot of our team are in Lisbon as well as London. So it’s helped with that transition, but I don’t think we’ll be going back to office working in the same way again, for sure. And so we certainly rethinking about what kind of size office space you might need, whether actually everyone does need to be in the office, different for some people, some people, I think definitely prefer the office environment, for others they are more comfortable with remote working. So I certainly suspect the model of mandating everyone to coming into the office is not going to be the future, for sure.

Anil Stocker:

Yeah. You wonder what’s going to happen to all these offices in London, because everyone I’m speaking to is saying the same thing and you just got to wonder, “Are those things is going to be repurposed and what are they going to be?”

Mandeep Singh:

Yeah. I totally agree, and I suspect that the real estate industry hasn’t quite clocked onto that yet, because a lot of, maybe the large corporates haven’t thought about this yet, but I’m certainly seeing a lot of rates, rents being renegotiated, leases being terminated, rent-free periods. And I think it, yeah, it changes the whole commercial office space environment in cities across the world, almost certain.

Anil Stocker:

Yeah. If you take even a broader view, it changes the whole concept of what a city is because cities are places where we come and work and live in close proximity to their work. And if you don’t need to do that anymore, why do you need to live in the city?

Mandeep Singh:

Yeah, exactly.

Anil Stocker:

Which we could talk for hours on. Your background is private equity working for big organizations, famous organizations that invest in big companies and consultancy as well. Why did you choose to start a business?

Mandeep Singh:

Yeah. And good question. So, yeah, as I say, in my career path after university was initially very traditional, strategy consultancy, then private equity investing. A bit of my background that might help explain why I always had the itch, when I was a teenager, I set up a web design business from my bedroom with the mate. I’ve been doing web development since I was 14. And so I think I’d always had that itch, but one of the, quite aside from the idea behind what became Trouva, in terms of enabling these independent shops to get online and building a destination for this inspirational commerce. One of the things that actually inspired me was seeing businesses that are being founded by great entrepreneurs. And when I was in private equity, whilst we were buying very large companies, one of the smallest actually was Foxtons or Fitness First in the US, most of these businesses had been founded by entrepreneurs.

And I found myself wanting to be on that side of things. I personally found it quite frustrating, being an investor, because your job is not to run the business. And there was a business that someone else had created that you were lucky enough to buy. So for me, that itch got bigger and bigger, and I realized that if I didn’t quit to go start something, then I had my fear that I’d wake up one day and had great corporate career as it were, but never have actually gone and done what I was really passionate about.

Anil Stocker:

Interesting. And you’ve been one of the, you were one of the early cohorts of entrepreneurs, I think in London, in this London scene, you’ve been around been around for a while and, and I’ve noticed that you’re also doing angel investing as well in some companies. You looking to do more of that? Is that something that excites you now that you’ve learned some lessons, you want to mentor startups as well?

Mandeep Singh:

Right. Well, so as you say, Trouva only launched in late 2015, but Alex and I started building it in 2013 and seven years is a long time actually in the London startup scene. I’ve seen a lot over that time. And one of the things that I wonder if it might be in the same for you now, but one of the things that I found most difficult was the first couple of years, and raising that first money and taking people who really believed in us, and building the product and finding product market fit. And I think there’s a lot of, the London startup scene has changed a lot. There’s a lot more capital around now, but most of that capital is directed when for business, which may be late seed, they’ve already launched, they’re driving revenue, starting to scale.

So I look back at those first couple of years and I was really, really lucky to meet a bunch of entrepreneurs who, sometimes only a little bit ahead of me and sometimes much further ahead of me, like yourself, like Tom Longfield, GoCardless at the time and now Monzo. And those entrepreneurs were the biggest help to me, cause they’d been on the journey, and then also they’d been on the journey not that long ago. And so one of the things that when I was CEO of Trouva, I found quite guilty about was that I did, often a lot of startup founders reach out to me looking for advice. And as you know, you’re just so busy that you sometimes just don’t have the time to be able to spend time with everyone you want to.

Mandeep Singh:

So now I’ve got a little bit more time. Certainly one of the things that I’m really loving is spending time with other startup founders who are earlier stage, and just sharing some of the lessons of what we did well, but also all the things we did badly, and sometimes investing in them as well. So for me, I’m doing it because I find it interesting. I also think that we as entrepreneurs almost owe it to other startup founders to do that. I think it’s something that in the US is much more advanced, particularly in the Valley, where a lot of angel investors, all previous entrepreneurs and historically in London, it’s largely been people who’ve made their money from finance, which is great, but that’s very different, right? It’s just there’s offering capital, but this is really being able to empathize with the journey and offer personal experiences. So cut a long story short, yeah, I’m spending a lot more time doing angel investing and helping out other startups and it’s something I’m just doing because I enjoy it. And as well as something I think we should do.

Anil Stocker:

Yeah. I’m seeing a lot more of that happening now from what I call the early cohort of entrepreneurs. People who have started businesses, might be running them, but maybe take a step back from the daily operations and have more time, a little bit like I guess what you’re doing now. Because it is time consuming, right, to do that and find businesses to invest in and mentor them and give them some advice. And so if you were, if I came to you and you invested in, how involved are you? Do you… Give us an example. What’s one thing that you look back on and you thought you could’ve done better, in when you built Trouva.

Mandeep Singh:

Yeah. So I think one of the, your listeners may not know, between 2013, ’15 when Alex and I were building what became Trouva, we were called Street Hub and we were initially focused on building the B2B side that the technology layer for the shops and hadn’t really figured out mostly what the consumer side was going to be. When in particular, when I look back in those first of years, we were very fortunate that we had some large, some pretty amazing investors, Index Ventures, invested in us very early, but that was very, that was actually a very tough period because we have big names invested and a lot of pressure, and we hadn’t really figured out what the revenue model was going to be and what the consumer side was going to be. And so I look back at that now, I think we spent a lot of time doing things that felt good at that time, for example, I spent a lot of time doing PR. When I wish someone had just said to me, “Just focus on cracking product market fit.”

Maybe even like, maybe we shouldn’t have taken such large investors so early, because I think that that’s not their forte really helping you through, that kind of thing. We’ve fortunate to raise quite a lot of capital over the years, but some of these lessons around fundraising are some of the things I look back on and pretty much everything, every mistake we could make we probably have made at some point. So, hopefully I can help other founders avoid at least some of them.

Anil Stocker:

Yeah, no, absolutely. I think the advice from people who’ve started from literally nothing like an idea, a piece of paper around the dinner table is super valuable because there’s quite a lot of people in the venture community who’ve never done that. And they’re really good at looking at market sizing and they’re super smart people, but in those darkest hours of what should I be spending my time on? What do I do next? Who do I hire right now? I think that you could be no… There’s nothing better than hearing from someone who’s been through that journey themselves.

Mandeep Singh:

Yeah. Yeah, exactly. And you talked about happening more in London. I think the Valley has got to the point where a lot of the angel investors and even the venture community, were former entrepreneurs. And so as we see more exits as we’ll see in the short here, I hope we’ll see more of that because one of my overall lessons is that entrepreneurship is bloody hard, really bloody hard. And so sometimes even just having someone you can talk to about that who understands that can be super valuable.

Anil Stocker:

Yeah. What’s your best investment you’ve done? Angel investment, I see Urban Massage was on your LinkedIn.

Mandeep Singh:

Well, that’d be really hard on picking which.

Anil Stocker:

Is doing well, isn’t it? Or it used to be doing well, I don’t know anymore.

Mandeep Singh:

Which one? Sorry.

Anil Stocker:

Urban Massage

Mandeep Singh:

Right, right, yeah. That’s one of the late stage ones, on Series, as you say it’s obviously like a lot of businesses, yes, it’s core business. Can’t remember the name, I think they’re doing a good job at trying to work hard at doing, helping people with things like remote wellness and it’s obviously another market place, which is close to my heart. I almost invested in a friend’s company called Urban Jungle, it’s an insurance business and nothing to do with the same, but I only call it Urban, so which is a bit confusing, but that’s a great business as well, much closer to your area. And as a consumer FinTech business, helping disrupting insurance, but starting off with renters.

Anil Stocker:

Okay, okay, great. Great. Well, listen, thanks for taking the time to share some of your insights into what’s happening, not only in the market you operate in, but a little bit more about yourself as well. So appreciate it. We always end with one question when taking stock of what you’ve done so far in your entrepreneurial career, what advice would you give yourself at the beginning?

Mandeep Singh:

Yeah, I don’t know if you’ve got time for all that, but just picking one thing. I think hire people who are better than you. And I think that is one of the conundrums of being a founder that initially you have to do everything, but over time, you’re probably not the best at any of those things. And so finding great, great people who you can really trust to take on those bits of the business, no matter what they might be has been amazing at Trouva and I wish we’d done that sooner.

Anil Stocker:

Excellent. That’s a very common piece of advice and what I’m hearing a lot from entrepreneurs and what you learned in this journey, which is, as you say, we could be talking for hours on the things that we’ve learned, but that’s a good note to end on. So, Mandeep, thank you very much. Thanks for taking time. Goodbye.

Mandeep Singh:

Thank you, Anil, thank you for having me, cheers.

Anil Stocker View All

Co-Founder of MarketFinance

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