Many wise sayings speak of how small things can grow to greater sizers – ‘little drops make an ocean’, or ‘a journey of a thousand miles begins with a single step’. The story of how Sagar Daryani built Wow! Momo is a living example of this adage. The venture, which started with an investment of Rs 30,000, today generates over Rs 100 crore in revenue, and has attracted investments from many global firms.
Sagar, who was born and raised in Calcutta, hails from a business family. He attributes a lot of his interest in business to his father, who started a garment business with just Rs 10 in his pocket. “I often tell people that his is a story one could draw inspiration from – he truly came a long way from almost having nothing,” he says, adding, “I had the benefit of seeing his ups and downs from close quarters, and that made me who I am.”
‘A polished salesman’
One of the retail stores the family owned proved to be Sagar’s training ground. He says, “I spent all my time behind the store’s cash counter as a child, and picked up my selling skills there. I’d have to remain perched on my toes to even be able to reach the counter, but was always eager to make a sale.” Some skills he picked up during those days have held him in good stead over the years.
“I learned how someone who would walk in to buy a shirt could perhaps also be gently persuaded to pick up a trouser. I also learned how to measure waist sizes and alter a pair of trousers. So much so, that by the time I was in the seventh grade, I could call myself a polished salesman,” Sagar says.
Upselling, interacting with customers, management of stock and inventory, and packaging goods are some skills he picked up very early in his life.
Midnight hunger pangs
At 21, Sagar says he went through all the hallmarks of the age. He had just broken up, he tells me, and felt like he was slipping into depression. “It was a terrible time for me, and even the final examination for the B Com course I was pursuing was difficult to give. My friends would sit me down at night and help me study. These sessions ran late, and we would often get hungry. We experimented with the food we ate, both in the kind of cuisines we ate and the kind of food we made ourselves,” he says.
Binod Kumar Homagai, co-founder of Wow! Momos, was also Sagar’s batchmate, and would often make momos to satiate their midnight cravings. “It was also a time we were all trying to figure out what we wanted to do in life, and the idea of starting a food-related business struck then,” Sagar says. He knew that if momos were to be branded and packaged well, they would sell. “If pizzas and burgers could do so well, I was certain momos stood a chance too,” he adds.
In 2008, the roadmap to making momos into a standardised, branded food item was set in motion. “It was a project of passion, with the intention to create a strong brand,” Sagar says.
A business started with jugaad
“We started the business with only Rs 30,000,” says Sagar. With no money to advertise or print fancy pamphlets, he and Binod were walking-talking billboards for their brand. Their first break came when they managed to get a six-by-six foot tall space at Spencers, a supermarket in Calcutta. “We would portion out four pieces for one momo, and walk around trying to get customers to taste them. We were confident that once they would taste the product, they’d walk into the stall and purchase a plate,” Sagar recalls.
For almost six months, they worked out of this stall, and made an average of Rs 2,000 a day. “I would wake up at 5.30 am and go to source the ingredients we would use that day. The momos were all made in my home kitchen and were stored in my dad’s garage. I also managed to “steal” a few of my mother’s prized Tupperware containers, in which we would take the momos to Spencers each day,” he says.
Frugality was built in the duo’s DNA. Sagar says they would use the shuttle auto service in the morning, and walk back home in the evenings, just so they could save Rs 10. “This taught us an important business lesson, that one rupee saved is five rupees earned,” he says.
A leap of faith
The brand started gaining more visibility, and eventually moved from the small Spencers stall to one of Calcutta’s biggest malls, South City Mall. “From that 90 sq ft shop, we started making a revenue of almost Rs 2 lakh a month. Eventually, this went up to Rs 11 lakh,” Sagar says, adding that it was perhaps that one shop in Calcutta that made Wow! Momo the brand that it is today.
The money that was saved from the two outlets in Calcutta helped in the brand’s expansion and Wow! Momo was eventually was able to plough back profits and build on it. In 2011, the business opened its first outlet in Bangalore at the Phoenix market mall. “That led to us establishing ourselves in Chennai and Pune as well. With that one small store in Bangalore, we also managed to enter the mall segment,” Sagar says.
From 2008 to 2015, Wow! Momo had a presence in over 43 stores, with no debt-funding or venture capital funding.
While the business was growing, it wasn’t doing so at the pace the founders had envisioned. To tackle this, Wow! Momo raised Rs 10 crore from the Angel Investment Network in 2015. The brand ventured into Delhi/NCR by piggy-backing on this funding. “Being in the national capital also gave us wider brand visibility, and Wow! Momo soon became a household name,” Sagar says. In 2017, a little after demonetisation, they raised another round of capital from Lighthouse Fund.
In 2019, Tiger Global, which has invested in brands like Domino’s and Burger King in the US, came on board. “Getting a global investor to come on-board for the long term really boosted our confidence,” Sagar says.
Every rose has its thorn
The business venture didn’t come without its own setbacks for Sagar and his team. He says that during demonetisation, customers were not coming into the stores, because most of the country was lining up outside banks and ATMs instead. “We went on-ground to assess the situation, decided to start taking orders from the people in these queues, and delivered the momos directly to them,” he says. Such innovative thinking and the drive to convert challenges into opportunities were what set the company apart. “While many businesses were looking at their losses, we used this situation to our advantage and continued making profits,” Sagar adds.
But this blip was nothing compared to the onslaught of COVID-19. “It’s the mother of all storms,” he says, adding, “Up until March, everything was running smoothly, almost like it does in Bollywood movies. Then, coronavirus struck, and the brand went from being a profit-making venture to one that made a loss of almost Rs 6 crore in one month. From having zero losses for almost eleven and a half years to suddenly be hit by one of such magnitude was difficult for us.”
But things are looking up, and today, Wow! Momo has 272 operational stores, and is back on track to continue with its expansion plans.
Sagar credits Wow! Momo’s revival to the rigour with which they built the brand, and their laser focus on quality. Brand loyalty and recall value is high, he says. He received a request from a young girl, who has been a customer for years and is currently studying at Oxford, to consider opening a store there, since she misses the momos. “Positive stories like these keep us going,” he says.
Sagar concludes with a word of advice for young entrepreneurs. “If food is what you want to get into, then remember the customer is king in the business, and always comes first. Always be there to listen to what they want to say to you,” he says.
(Edited by Divya Sethu)