Call Paul

Season 2 – Call Paul – Episode 2

Paul: Hello friend, I’m Paul Jarvis. Welcome to Call Paul, a show where I get to ring up some of the most interesting minds in small business and have thoughtful conversations about their unconventional approaches to commerce.

I’ve run my own small company for 21 years and I’ve written books on how bigger isn’t always better in business. In this season I’m talking to folks who are prioritizing doing the right thing over just the most profitable. Some are starting something brand new, standing up their businesses in an entirely new environment. Others have been at it a while, working to ensure their continued sustainability through turbulent times. And there’s lots to learn from everyone.

Ani: In Bengal, we have a concept what's called Adda, A-D-D-A and the concept of Adda is your entire family gathering together in the evening time to basically just talk over a cup of tea...Chai was an inextricable part of daily life.

Paul: That’s Ani Sanyal, co-founder of Kolkata Chai Co, which he runs with his brother Ayan. It was Ayan who first had the idea of a Chai cafe when he took a trip to India to escape the burnout he was feeling from their other business, a creative agency

Ani: We were kind of just going 150 miles an hour and he was like, "Hey, I'm taking three weeks off to go to India, and just eat and relax and recharge." That's where he kind of fell in love with this concept. He started making it when he got home and fast forward about two, two and a half, three years, we opened our first retail footprint in New York.

Paul: Kolkata Chai Co started with this simple idea from these two brothers: how could they bring the authenticity and communal experience of a cup of masala chai to New York City? Because a cup of chai is more than just a hot drink - and their mother made sure they understood that from a young age.

Ani: My mom was really instrumental in making sure my brother and I learned about our culture in India back home. She would drag us there for summers and kind of any opportunity she got, obviously, she was homesick, but she really made that emphasis and effort to make sure we were tapped into what our culture and what our people, what our family was.

Paul: So, for somebody who's never had a cup of Chai, can you describe the smell, the experience? Can you describe Chai?

Ani: Chai is a juxtaposition of so many things. It's sweet and spicy. It's milky, it's not thick. And so, the Chai that we really grew up drinking is very kind of cardamom forward. And so, you get that really nuanced flavor of cardamom and it's a milk tea, so it comes hot, but for some reason, whether it's 90 degrees outside or 30 degrees outside, it doesn't feel out of place. Chai is just, it's compliment to a lot of different moods and where you are in your day. And when you come to the Western world, it's been bastardized and watered down in so many ways that you don't realize, like there's something, a billion plus people enjoy every day in one form and then they go to the other side of the world, and it's completely different and not authentic. So for us, as storytellers, as marketers, as product people, it was just a no brainer to be like this is a story that has to be told the right way.

Paul: What does selling Chai look like? Because you said it's different over here in the West, right? So, what does the act of selling Chai look like in India?

Ani: So, if you go to 98% of cafes in America and you order a Chai, you're going to get a concentrated version, right? So, they're going to mix concentrate with milk, heat it up for you, maybe throw some pumpkin spice in there and call it a Chai.

You go to India, you go to Pakistan, you go to Bangladesh, you go to any South Asian country and there's people with a big stove and a big vat, a big pot, and they're just constantly stirring up this mix of the milk, the tea, the spices, and they literally take a big ladle, they pour in, pour you a little cup out of that big pot, and they go right back to stirring it. We use that same big pot process in our café in New York City. And so throughout the day, our chefs are making it live right there in a big pot and serving it to replicate that flavor, that freshness that doesn't come from a cup of concentrate.

Paul: In the documentary that you all made, which I think is awesome, you have a bunch of documentary videos on your YouTube channel. One of the things that stood out was you said people have to put their own identity in the context of somebody else. And that really stood out to me. Can you elaborate on that and how that kind of informed the brand and the identity of Kolkata Chai Co.?

Ani: For us as first generation kids, our parents are immigrants from India and we were born here and we grew up and learned with our parents. And so, but at the same time, our identity was very different, because it was a meeting point of two different ways of thought, right? It was the "American dream" and it was the actual mud and circumstances from where they came from. And so, our identity is always in the context of other things.

And with Kolkata Chai it's like it's not from where you're from or your family's from, and you're not completely representing where you grew up. You have this melded identity and you have this fusion of different thought and surprisingly enough, there's not too many places, at least, that we're aware of that celebrate that type of thinking.

Paul: So before there was the cafe there was the first version of Kolkata Chai can you explain a bit about the many evolutions the company has gone through?

Ani: Yeah, so my brother and I, we ran a marketing agency, creative agency and still do and we were on the front lines of watching people develop, iterate, and we were helping take products to market. And so, this idea of product market fit this idea of reaching critical mass, this idea of testing while you go and iterating on the go. These were things that we were helping other people do. And sometimes they would take our advice, sometimes they wouldn't, and we would lament like, "Well, we should have done that."

And so, when we decided to launch Kolkata Chai, we decided to literally take our own medicine. And the first thing that we had to do was make sure that there was enough demand to take a big step, such as opening a retail space, and that came in the form of about 18 months of Farmers Markets, of pop-up shops, of food festivals, the idea was what can we learn from our audience in real time? By getting customer feedback at point of sale, by walking around talking to people, gauging reactions, running surveys, just being really, really involved with the product,

So, we went through a very kind of iterative, step-by-step process. I mean, my brother woke up at 7:00 AM for 16 weeks in a row to make it to the Farmers Market, rain, hail or shine in Jersey City. And you go from having five sales a day to 15 sales a day, and we figure out, what did that? What was the reason? Was it the oat milk variation that we introduced? Was it the weather? Was it the fact that we changed our sign? And just being product people with the marketing mind, I think is like one of our biggest assets.

Paul: It's still a big leap to go from not having to pay rent and not having a physical location to opening up a cafe in one of the busiest and most expensive cities in the world. Right? So, walk me through what that process looked like and what that kind of involved.

Ani: The idea of owning a retail space in Manhattan, what I think is the epicenter of the world for my brother and I, first generation immigrant kids. It was unfathomable. That was not something that we believed could happen, but I think it was a confluence of different things. I think, first of all, through our agency business, we had been really strategic about investing and just finding ways for our money to work for us. We invested in real estate, we invested in a couple different things. And we were coming into this retail business with a little bit of capital, which I think is so important for entrepreneurs and business people. You can always raise money, but you give away equity, you give away control, you can come kind of limp into the game and hope that you're able to strike a match, but I think being well capitalized was something that really helped us.

The second thing was we were noticing just these cultural forces that were playing to our favor. I'm talking about Hasan Minhaj having a show on Netflix, Mindy Kaling, taking it to new heights. You have Aziz Ansari, you have athletes, and we're noticing the South Asian culture is having its first kind of Renaissance period in this country. Something that as an '80s baby, I had been trying to find my way and trying to find my place in this world and in this culture for so long and here it was unfolding in front of me. And that really sparked us to be like, "Hey, look, the time is never going to be better and if you're not the first, then that becomes a bigger problem." So, we were kind of inspired by that.

And then the third thing was just against a simple thing for entrepreneurs and businesses is literally just like dotting our Is and crossing our Ts in terms of hiring good lawyers, partnering with a good broker, and really vetting people and negotiating the hell out of a commercial lease to the point where our agent was like, "How did you guys learn to negotiate?"

Paul: What’s it like working with your brother, and how do you define your individual roles?

Ani: So, my brother and I are literally opposites in so many ways and so with this business, it's like the yin and yang that's come together. He is the master of product, so the Chai recipe and when you taste that mix, that is 100% him. That's all his experimentation, he runs the entire food menu and he also runs the entire retail operation. So, anytime, our customer service is through the roof or "That cup of Chai is perfect," that's all him and his team.

And my responsibilities are everything else on the marketing, content, digital, partnerships. He'll tell me, "Well, I don't know what's going on with social media, so you just do it. And I honestly couldn't start a stove to make a cup of Chai for my life and that's just, that's the dynamic that we have and that's how we work.

Paul: So, then you have the cafe, what was the opening like?

Ani: Opening night, man. In the hindsight with COVID, it's so funny to think that these things existed. But opening night 2019, we opened in September, about two months after we had anticipated, so we were paying the lease in this place, we're making no money. We were very stressed, but we were noticing a really interesting groundswell happening on social media, so there were still a lot of engagement, a lot of interests and actually directed my team, this is one of the craziest things I've done, but is to literally reach out to every person that liked or commented or engaged with a photo, to DM them one-on-one and be like, "Hey, thanks so much for engaging. Our opening night's coming up. Can we get your email?"

And we scaled this one-to-one interaction to the point where we had I think, 1,200 RSVPs for a four-seater café. And so, the momentum going into opening night was really special. I remember, my parents came the night before Kolkata is a city that my parents both grew up in. It's the city that my parents took us back to where we got to meet our extended family. On my parents first date, my mom's spilt tea on my dad, because she was so nervous. And so, having them come to the cafe, the night before, was just a really emotional, kind of full circle moment for us to be like, "Hey, we did this for you guys."

And the next day, there was just a certain palpable energy. We had just got a big review in Eater the magazine, the publication, and I could sense something was happening. I didn't know where it was going to go. I didn't know we would have 700 people line up. I didn't know people would be lined up for four hours to drink one cup of Chai. I didn't know Mindy Kaling will be tweeting about it and talking about, "Oh, wow. I want a Kolkata Chai now." But I do remember the moment that I shared with my parents ...

Paul: How long were you able to run the cafe as a cafe before the pandemic?

Ani: Yeah, six months to the day from September 18th to March 18th? Yep.

Paul: So, then what was it like to pivot, right? Like you had to go from one day people can come in, buy Chai. Next day, nobody can come in and sit and buy Chai. So, what did that look like to just basically have to go from one day to literally the next day and be like, "Okay, well, we've got to pivot or it's not going to work?"

Ani: So those first six months were full of learning and tripping over ourselves to even try to figure out the operation at that point. Things like labor and supplies and just the fundamentals, we were still figuring those things out. So, COVID hit, I think our bank balance was like maybe we had 30 days of cash. The winter in New York really does a number on your business, which is something we didn't know.

So, we were coming into March just being a little bit on the defensive and then once COVID hit we just started putting ourselves in our customers' shoes. I think that was the most important approach that we took, right? If you're scared and you're not leaving the house, if you're not willing to leave, how can we bring our product to you? We really focused on that customer experience. A couple of things that we did that really saved the business, we started doing our own delivery system, so we had resisted doing third party deliveries to that point, because it's just how predatory they are in terms of fees and structure.

So, we said, screw it, we'll build it ourselves and we basically built a Google form, set up a couple of things, we transformed our baristas into these logistics people and we started doing deliveries around the five boroughs. My brother and I in our Nissan Rogue just shipping 15 boxes of Chai around the city per day and that was exceeding the cafe revenue that we were doing at that time anyway.

Paul: Wow.

Ani: So, that was a really interesting moment. We were like, "Oh, my gosh." And then it got a little bit too dangerous to do delivery. You don't even want to be in the line of fire. So, then we said, "All right. eCommerce" is the only way out. And then we basically figured out a way to package our dry mix, built out an eCommerce store. And the month of March, I think, in a week, we had basically done enough revenue to pay for our rent for the next three months, like it was an explosive product market fit moment from the beginning.

And so that's when it became clear to me like customer behavior is changing, and how people are looking to shop is changing and if we don't meet a robust kind of online eCommerce, if we don't meet the needs for that, then we're going to be in danger. And so, since then, we've been building that out. And I think we did nearly six figures of revenue just in the last three months of the year. So, from October to December kind of holiday period, we had set a very aggressive revenue goal and to be at that point versus where we were in March, it's just been a really intense period of growth.

Paul: How do you sustain momentum with this, right? Because it starts out as no physical location, then a cafe, then delivery, then selling eCommerce, I guess it's like dry Chai.

Ani: I think one thing for us that has really saved us in this pandemic is our ability to be top of mind for people, just staying on top of their mind.And so, the things that we did for momentum were a couple of things. We did a couple of collaborations, which were really timely. We did a collaboration with Mikey Likes It black-owned ice cream shop. Mikey is a great guy. Mikey is a like an established small business in New York. He's catered for Obama, Jay-Z, Oprah. He's like the crème de la crème.

We did a Chai caramel ice cream. We did an ice cream Chai float and we did Chai waffles with vanilla caramel ice cream in these like three socially distant pop-up events throughout July. So, that was like immediately kind of kept us on top of people's mind. And then from a marketing side, we are constantly storytelling. And what I mean by that is whether it's something as simple as a micro Instagram story moment where we're producing it and making it feel like it's something that people want to buy into ,or whether it's a documentary. We created a documentary in real time while COVID was happening, right? So, I think one thing we're really focused on is like how do we constantly storytell even if it's not all perfect, right?

We took our Chai, our eCommerce, we started doing recipes with what else can you make out of your Chai kit? We started doing Instagram live with different chefs and other people in the community to say, "Hey, go crazy with this Chai kit."

We started doing a weekly trivia night on our Instagram Live from the café. My brother and I would like do this really fun trivia. Brown people love trivia, by the way and we would give away Chai kits and stickers, and samples and T-shirts. And we just like tried to find moments of escapism for people during a very dark time and we just brought our product into that mix without it being kind of like forced on people.

Paul: How do you feel about your business then, doing ok, when so many other cafes and restaurants are struggling?

Ani: Yeah, I think there's an element, a little bit of survivor's guilt, but at the end of the day, we're both really competitive people and we came into this business to be the best and I think there's no shame in that. And so, we're growing and God willing, we continue to do the right things.

Ani: It's a validation for us as first time restaurateurs to be like, "You guys didn't know anything, but in the same vein you knew just enough and you knew what you needed to know to keep it going. And I think what it does also is give us a really strong idea of the future, that if we can grow during COVID, when and if this thing lifts, we have a really exciting next couple of years ahead of us,

Paul: What do you want it to be and what do you intend it to be and how do you want people to think about it when they think about it?

Ani: I was a brown kid growing up in the '90s and there was no reference points, right? And nowadays, that's changed a lot, but I think what Kolkata Chai represents is an example of what happens when you are authentic to your own story and to your own culture and you deliver it in a way to people that is a reflection of who you are and where you come from, and the possibilities that exist when you do that.

So, whether you're from Somalia, whether you're from Pakistan or wherever it is, there's so many things that are unique to you and your people. A lot of times we're ashamed of them or we don't know if you want to highlight them. Kolkata Chai, our mission is to remind you that your perspective is powerful and that culture is what brings us all together and food is, it communicates stories and feelings in a way that no other medium does, so that's a big part of our mission.

From a business side, I think we have tapped into a really interesting expansive mindset when it comes to like people that share this same notion of "Well, I was born here, but my family's here and therefore, my identity is a combination of different things." And we represent those people and so, that extends into food, to media, to content to we want to do music festivals, we want to do, larger events, and talks and panels and we feel like there's an entire footprint that we can create under the guise of food, but that really brings people together at a massive level.

Paul: So on the more personal side of running a business, it's hard to run a business normal times, right? How do you manage the stress? What does that aspect of running a business look like for you and your brother?

Ani: We've been working together for almost 7, 8, 9 years now, so we have a good cadence and we understand each other. At the same time, we clash. There was points in the business last year where we were clashing a lot and we understood that was affecting the business, and it was affecting us personally.

And so, being really honest and transparent about fixing things at the root or as close as you can to the root for business owners, I think is critical. If there's something bothering you, it's going to affect your business, so you got to make sure you take care of yourself. I think during COVID and just for the future of all this, I think one thing that we have to accept is that every day is different. And so, that pressure that you put on yourself or those expectations you have, you have to be able to adjust and be agile in the face of all that and I think one thing we do is we take things day-by-day. We have a 30-day plan, we have a 90-day plan, we have a five-year plan, but at the end of the day, it's literally, "What are we doing today? What do I need to do to execute today?" And we run it like that.

Paul: Can you speak to how you’ve kind of turned the concept of what a cafe can be on its head -- like that you’re kind of running it like a software company, digital first?

Ani: Yeah, I think that restaurants have been grandfathered in for so many years as this like very static concept, right? The people come if there's an exchange that happens there, food for money and then you leave.

But the idea that you could fall in love with a food brand concept idea online and then support them, however, you want with something that's really intriguing to us and we studied some of our favorite brands kind of that came out of the direct to consumer, boom, brands like Casper or Allbirds and similar of these. Those are more like super VC-funded concepts, which I have my thoughts on, but just this idea of like you really learn and meet somebody online before you meet them in real life in so many ways. So, we wanted to build a food brand that reflected that because whether we have one store in New York City or we have 10 stores, our ability to reach people online is always going to be exponential. And that's like a very important ethos to our company.

Paul: So, I guess I want to dream a little bit. What do you think the cafe or the brand or company in general is going to look like or grow into or pivot to once this pandemic is over, once everybody's vaccinated and there's whatever "normal" happens to be, what does that look like for you?

Ani: Our goal is to extend our retail footprint in a couple of key markets. We want to be on the West Coast, we want to be somewhere in the South, like Dallas or Virginia somewhere in there where there's these large pockets of people from the diaspora. That really would support this type of product, we want to raise the profile of this to being a national brand that is talked about the same way that you talk about a Milk Bar or some of these other like niche companies that have exploded.

There's so much value you can provide to people outside of just a product and for us, it was really giving the people space, both digitally and in the physical world where they felt like they could come learn, share, grow, laugh, and do these things that most restaurants, most food places don't think about. And so, community has just been like our X factor to all of this

Paul: Although 2020 had challenges for Kolkata Chai Co that required several pivots, the one thing that was never in question was their connection to their community. Even as people could no longer linger at their cafe, they used it to bring people together online: through virtual concerts and even trivia nights.

Along with this, they moved slowly and iteratively. So they didn’t open a store with rent instantly, they tested out their recipe at farmers markets. This is useful even if you’re not selling Chai, I mean, I use this approach for software too. Perhaps the biggest takeaway is that they’re true to themselves in everything they do, and they let that lead their decisions.

The business is about more than just sales and marketing for these brothers. Their brand and ethos is bridging the connection between two cultures and, their company is a reflection of both. Just like the act of drinking Chai itself, the Kolkata Chai Co is about more than tea, it’s about the connection and communal act of sharing culture. And everyone, regardless of background, is welcome to join in. - - - - Next Friday I’ll be chatting with a wife and husband team who took an emotional tallisman and turned it into a funded business that’s not just a marketplace but a community. I hope you’ll join us.

Adena: Sneakers act is they act as emotional talisman, I like to call them, right? There are people who can look at a pair of sneakers, whether they own it or not. And draw back to a moment. A moment in their life, thats special to them that they may never get back.

Paul: In the meantime you can listen to the small business spotlight, sharing with you a behind the scenes peek at the day to day of running a company. These stories are from folks who are doing amazing things, I think you'll really enjoy them. They’re also in the Call Paul feed.

Call Paul is wonderfully produced by Ruth Eddy and is a Mailchimp Original Podcast. Subscribe now on your favourite podcast player, so you can check out all our other episodes and seasons. And if you want more awesome content, go to mailchimp dot com slash presents.