Weekly Startup Profiles > Brewhaha

Brewhaha
It's not every day that IIM graduates opt out of placements to start a company. And it's rare to find an opportunity to feed one's passion and play into major growth trends. BrewHaHa does just that!

Quick Facts
Entrepreneur : Sreeraman Vaidyanathan
Age : 29
Company : Brewhaha
Based in : Bangalore
Founded in : 2005
Industry : Hospitality/ Service / Travel

Business Summary

 

Coffee and game lounge, targeting urban youth.


The Idea


"'Fun for groups' is what I call it. People can come into Brewhaha at any time of the day without a plan and expect to have fun," is how Sreeraman Vaidyanathan describes his outfit.

Brewhaha, housed in 1,500 square feet of sub-prime space in Bangalore, is not a coffee shop so much as a colorful, comfortable lounge where people come to hang out, meet other folks, and grab a lazy bite over a board game. Occasionally there's a band performing or a quiz competition going on. The menu ranges from pasta and lasagna to a variety of Indian snacks. But yes, there is coffee. Lots of it.

So what led an ex-Microsoft guy with a master's in computer science from the U.S. into the food retail and leisure entertainment business? "I needed a business idea that will generate positive cashflow. A tech company requires deeper pockets. You also need a large amount of patience, as a long time elapses before you get results in a product development company," says Sreeraman.

And food, it seems, was always a passion. "I knew I wanted to do something related to food," he says and adds that he even toyed with the idea of opening a pub.

Around the same time, Sreeraman reconnected with his junior at IIM, Mansur Nazimuddin, who was thinking of doing something in the gaming space. "Mansur had seen this game-based caf

The Opportunity


Sreeraman and Mansur's choice of business squarely intersects their personal passions and some major positive trends: in India food retailing and leisure entertainment are huge and growing sectors. "Over 30% per year growth" quotes Sreeraman from some of his market research.

The increase in spending in these sectors is driven by the rapid expansion in disposable incomes in India, combined with the urbanization and the fact that young people are holding more of the disposable income. "The emerging class of "mass affluents", with incomes between US$ 7,500 - US$ 50,000 per year, will swell from 5.2MM households in 2005 to 10.5MM by 2015," Sreeraman explains.

In India to date, food and entertainment remain separate, dominated by quick service restaurants, coffee retail and cinemas. "No one offers a multi-dimensional experience combining food and entertainment the way we do."

Since they have merged the food and entertainment space, their competition too is broader. "We compete for share of time and wallet with a whole bunch of folks, movie theatres, coffee shops, restaurants. This is because our concept straddles two spaces as it offers a composite experience," said Sreeraman.

Yet Sreeraman feels they hold a unique place with customers: "It's super hard to deliver "fun". Nobody else is trying to do it the way we are right now."



The Money


Sreeraman and Mansur bootstrapped the business with their personal savings and some loans from family and friends. "Our initial investment was about 22 lakhs," says Sreeraman adding that he was saving up for the business while working at Microsoft. The money went mainly into d

The Team


Sreeraman believes that "Being from IIM helped tremendously - what we learned there structures your thinking in a very different way; it's a very nice network to have, and the experience is awesome." He adds that Prof. Sunil Handa, who taught a course called Laboratory in Entrepreneurial motivation, reinforced his drive to become an entrepreneur.

"Now we have a team of eight employees that includes a manager in the store, a chef and others," said Sreeraman adding that most of them were hired through ads, walk-ins and referrals.

While the team takes care of the day-to day activities, the founding duo focus on the marketing and funding aspects of the business.



The Company - today and tomorrow


The business, which started in February of 2007, is doing well so far. "We are breaking even on our operational investment: we are meeting our monthly expenses which includes rent and other expenses," said Sreeraman. "We are at a point of inflection, we have to go forward," he adds.

Now that they've demonstrated that the concept works, they want to expand. "We are looking for Rs. 2 crores in funding to take it to the next level and are in the process of talking to angel investors," Sreeraman explains.

"Our plan is to reach seven stores in the next eight quarters in Hyderabad and Chennai, dependent on the funding we get," he said.

They are also hoping to branch out into corporate campuses. "We offer services for corporates to do team events, team lunches, managed recreation service for employees. We'd like to do that on corporate campuses soon," he said.

And since their board games have been extremely popular with the crowds, plans are on to get into the distribution of games and even develop some board games.



What keeps you awake at night?


"Funding," he says, almost immediately. "I think that's the primary concern. Whether we'll get funded soon or not, if so how and how soon, because these things are not entirely in our control," he adds.



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