‘Innovation happens when you work on a problem, but adoption happens only during a crisis.’ – Nimish Sharma (WorkEx)

The pandemic tested us in unimaginable ways. Many around us lost jobs, and as the economy slowed down, unemployment became a serious issue.

In a candid conversation with Akshay Datt, Nimish Sharma, Co-founder and CEO, WorkEx, takes us through his journey. He started his entrepreneurial journey way back in 2007 after graduating from IIT Kanpur.

Nimish fondly recalls his earlier days, when his passion for aerospace made him quit his job to start Aurora Integrated Systems in 2006, which was one of the earliest drone manufacturing companies in India.

In his second innings, he started WorkEx in 2017 to reduce the time taken between candidate discovery and hiring, especially for the blue and grey collar workforce.

Tune in to this episode to hear Nimish talk about how WorkEx is democratizing access to the job market through its disruptive AI/ML technology.

What you must not miss!

  • If you are passionate about something, nothing else matters.
  • WorkEx’s revenue generation model.
  • Fundraising journey.
  • How has COVID impacted the adoption of the WorkEx platform among job-seekers and employers?

EPISODE TRANSCRIPT

Akshay 01:29  

Nimish, tell me about your dad, like where is your family from basically?

Nimish 01:33  

I’m born and brought up in Kota, Rajasthan. Kota is popularly known for competitive exam preparation, specifically JEE. My father was an engineer, civil engineer, he was the guy who was a government servant working for the irrigation department. He was one of those guys who worked on the Indra Gandhi canal. And what I love them learned was that he used to love engineering drawings and design. And I developed an interest in flying paper planes from him. Okay, so I come from a very humble background, my mother is a Sanskrit and Hindi teacher. And I have an elder brother, who is also an engineer from IIT, Kanpur. 

Akshay 02:20  

So you grew up in a pretty academic environment like academics must have been important?

Nimish 02:25  

Yeah, typical middle class, basically, if you study well, you have to perform well. And that’s how your career is going to be defined. So was a decent good boy kind of person, a sincere one, but always curious. 

Akshay 02:42

And you join classes at Kota for the entrance exam?

Nimish 02:48

Being in Kota there’s a culture, but it was long back. Kota was not popularly known for coaching, it was just starting then. And whether it was various other competitive exams before JEE, like National Talent Search Examination, etc, everything was coming on the way and it’s basically you need to do that, and the question always was would you qualify or not? So I have lived that journey. It was kind of a journey where I did not like the format of education then, not always curiosity was the driving force, just come out educated more rather than accumulating information.

Akshay 03:32  

Okay, what were those years at IIT Kanpur like for you? This would have been my first time living away from home in a hostel environment.

Nimish 03:38  

Moving from Kota to Kanpur, again, my brother did his chemical engineering from there. So it was a kind of a rat race following that, if you go to this college, then there is a prestige associated with this. But there was another angle, I come from a humble family, the fees at the college was really low. So that was one of the motivations, landing at IIT, the first year was something that everyone is coming with a decent background academically. So that loss of identity of what you have accomplished before was really humbling, as well as gratifying also that there is no more comparison. There are no more things but competition is now going to be lived more than what has been lived so far. So that was a journey there. And after one year, I was under a crisis. What am I doing here? Because my life since till now has been something following, following, following, keeping up the matrices of math and performance, etc. So I landed in aerospace engineering, and there is a connection that I used to love making paper planes, hundreds of them. I used to fly from various heights. I used to love the flight and that’s how there is a natural connection there. And I actually had a huge impact because of the Kargil War. I don’t know why and how but it’s basically since childhood, Doordarshan’s impact or the family’s impact, my mother being an academician that I love my nation, like really. And I wanted to contribute and landed in aerospace. And then I realized that there is nothing taught, where I could actually come out as an engineer. So there is nothing hands-on. So I joined the aeromodelling club, and in the first year itself, I was made the coordinator because there was nobody doing that job. And the seniors who were in their final year were the coordinators, and they handed over the keys. And I found that it’s a dirty place. Let me just start by cleaning it up. And then I heard that I don’t know anything about how planes fly. So I learned on my own, a professor gave me an opportunity to go to Bangalore and learn flying.

Akshay 05:54  

Wow, pilots’ lessons you took?

Nimish 05:58  

Yeah. I went through that and came back and revived the entire class. But again, that sentiment of what am I learning and how am I going to come out better? Am I going to come out as an engineer or not? Because everyone was talking about the career ahead, living in now was not happening at all. And that was my crisis. And the second thing that I might be able to contribute as an engineer, to a nation, or to even justify my own well being and what am I doing? So I found a really good senior, who was a real techy in the third year, and I found one professor, Prof. Ghosh who was into missiles and he worked with Prof. Kalam, he was into Indian missiles, etc. And he was the only guy from the industry. So he took lessons on design, etc., in my second year itself, which was to be his final year. And he used to coach me, and he had a huge impact. And I consider him my guru. And I spent the next three years developing drones in it, and I’m talking from 2003 to 2006. And that was some amazing journey I had, that it’s not just a course anymore, I will take on my own courses and there is a room out there that something can be done. IIT Kanpur has a really good flight lap. So what Prof Ghosh did was he gave me his keys and said this is your R&D cell. And in that, I organized the entire thing, and it started building up. And we did not have components to the material which is required for it to be built. I spent around six months there creating that workshop to create the first model. Well, with the laptop given by the professor, I flew it around 20-30 times and every time it crashed, once it crashes, it’s like you’re having a small heart attack, you build for 10, 20, 30 hours, then you fly and it crashes. So those were the initial days where I learned perseverance in a true way. And what my professor taught me is, love the tools but have respect for the technicians more than engineers, because technicians actually help build and they really build. So that knowledge of how things are built that came from there and the grit of each time it breaks, you have to just build it all over again. And one fine evening it took off, and it took off so beautifully. There were tears in the eyes of the entire group, as well as my professor’s. If I remember that day, there are goosebumps. And my professor was really strict, really strict as he was a young professor. And then he used to just say that you can’t lose stuff. And I understand the root cause analysis from there. And then he then started sharing that what you just did in the past 15 years in this institute, which is considered the number one institute, nothing of the sort has happened before. He never revealed that to me before that. And then my wingmates used to just come around to see what exactly is going on and what is your pursuit and they started joining that and we found the team. From there on senior year dissertation was the Best Project Award. So my mother was invited by the director and I got the gold medal there. And then the entire faculty of the aerospace department said that this is something that you have been on 10 such projects combined together. And something coming out of that technical project is something really remarkable and it should not be left there. 

Akshay 09:49

What was the final project?

Nimish 09:50

The final project was to develop a medium-altitude, medium endurance tactical unmanned aerial vehicle.

Akshay 09:56  

What does that mean? Lots of jargon here.

Nimish 09:58  

Basically, you can do reconnaissance and surveillance stuff 

Akshay 10:03  

Okay, so a drone that can have a camera on it, which can be remotely navigated and it will beam back the images?

Nimish 10:13  

At that time there wasn’t any mobile facility. Nothing was available there. So right from communication, we are talking about an engineering project. It was not a hobby kind of a demonstration thing, we developed the 15 kg bird with a capacity of taking off with a four kg payload, and you can load anything and everything. Electro-optical cameras are one of those. And you can use it for civilian and military purposes. That becomes a vehicle of sorts that can be configured for various things. So I’m talking about going really, as an engineer on specking out things. So I learned my product design through aircraft design. In those days, there was nothing available on the internet that you can copy, there was no open-source project. Everything was from the first fundamental level of physics. That was quite a journey. And then I thought about what is next, I wanted to take it to a level where it can be handed over to the forces and various departments for exploration. And then came a time, we were a team of around five-six guys, aerospace engineers, electrical, computer science, and we were collectively working on it. And then few had their masters to be done. And there was a juncture that what next, we are not able to take it up. And I did not sit for any placement, company interviews, etc, then the team pushed me that this may not be the right time, and with a very low heart, I just had to pick up a job and move out. And after three months, I got a call that this was not working. And we created a brilliant thing. And we should take it forward. 

Akshay 12:01

Got a call from?

Nimish 12:02

One of my previous co-founders. So this company that we incorporated, my first venture was Aurora Integrated Systems.

Akshay  12:08  

Your batchmates, who was working with you, he was one of them?

Nimish 12:11  

Yes, batchmates became wingmates then roommates. And then they called me and they said that we should do it. So I was on the job for over three months only. And I was working as a yield management analyst for an airline to maximize their revenue. And I was feeling so bad that I dedicated my entire three years to doing that. And I loved it every bit. And I did my internship also in the similar domain of understanding the entire data fusion to write filters, controls, so I’m a controls guy, systems engineering guy. So these are all things that were learnt during college in a very practical scenario. So I did my internship in France where I worked on the Airbus project, health monitoring, etc. I don’t want to go there, it will become really techie and I wrote an IEEE paper also on that. So the entire skillset got developed. And that’s what happened which took around 10 years. It happened in just a year. Right, that confidence. And then, as they called me, I quit my job. I came back to India in a week’s time.

Akshay 13:24  

Okay, your job was in the Gulf?

Nimish 13:27  

UAE, Abu Dhabi specifically I was working for Etihad Airways. So, if you are a control systems guy, you know an entire thing popularly known as AI and ML these days. So, that is taught there itself, if you are into those things. So that helped me at heart though, it was just a very short stint and I came back and then we started. It took us around five to six months in the Incubation Center of IIT Kanpur that we configured another…

Akshay 13:57  

Who is ‘we’ here, like how many of you were there?

Nimish 14:00  

So, we were seven. Two from aerospace including me, two from electrical, two from computer science and one from mechanical. 

Akshay 14:09

And all of you were like, who had completed your B Tech, like you all left your jobs and came back to do this or your Master’s course. 

Nimish 14:18

Yes. So, another friend or co-founder quit his job in Tata Motors. The guys had declined their offer and the teammate from mechanical quit his MBA. Because the call was really good, again all shared that bit of that we should contribute and just prove ourselves as engineers as well as to the nation and let us add to that because during the Kargil War it was like that we did not have drones. So that was a huge impact and that just connected us together. And then magic happened.

Akshay 14:55  

IIT Kanpur funded you? They just gave space and like, what was it like?

Nimish 15:03  

They gave us the space to park ourselves. We had flight lab support on that front. But there was no money. Then real magic happened. Raman, who was at IIM Lucknow, was being interviewed for Tata Administrative Services and Ashutosh Tyagi who was heading Tata Industries. And then during the interview, Raman said that I’m founding the company together, and though I can take up this internship, I’m not going to be joining, I won’t be starting. So the conversation then moved towards that Tata Group into aerospace and, and envisaging drones. And these people right after college had so much enthusiasm and just got recognized for the development of unmanned aerial drones from IIT Kanpur. So that was a huge impact story for them, and Ashutosh then quickly had to check with Mr Tata. And we had to just write a business plan, etc. Something happened, the wheels turning on, then what I gathered from Ashutosh was that Mr Tata’s words were that if we don’t, who will, and we should, and that’s how, in early 2007, we got funded with a million dollars from Tata Industries. So that was the initial journey of taking off from the concept to making it happen and living the journey of fundraising through that, but it was all organic, never thought of being an entrepreneur at all. And just finding the purpose and being real, and thorough with that.

Akshay 16:42  

How much stake did Tata take for that 1 million?

Nimish 16:45  

Back then there was no VC money, etc. It was around 40%. So it was a high stake. So then the Ministry of Science and Technology also did a soft loan of a million dollars. Okay, so we were able to get the capital gear in place, create a product, and then we were deployed. So if I have to say, long story short, our systems are deployed in Northern Command, Western and Southern Command of our country. And I’m talking 2000 to 2006. At that point of time, there was no VC money, there was no mission and this was a B2G – business to the government. Now if somebody has to think about this today, this was not the phase one could put. 

Akshay 17:29

Right. So how long did it take you to launch your first product? 2007 you got funded, then from then till your product launch? How long was that journey?

Nimish 17:39  

That was also beautiful, it was a term that a small portion of the funding is going to be given first as an investment, and in four months, you have to fly the entire bird autonomously. And so we took four months, day in and day out. So that became a kind of a culture that sleepless nights etc, can’t make a mistake, to make a mistake, you have to crash, you crash again, then you gather the debris together and then next day go back again. So in four months, the development of the product took place, but a product to ship to the market took around a year and a half.

Akshay 18:15  

Because you have to do it in mass production. So you have to have a different design versus producing hundreds.

Nimish 18:23  

Correct. So we talk of UX being so important these days. Our design requirement was that a 10th pass soldier can actually launch that drone on his or her own. And understand, directly taking the inputs from the touchpad based tablet. And we are talking about 2007. At that point in time, by creating something on a UX front to be so simple, anybody can fly. And then targeting, vision processing also came in and so it became really complex. Those vehicle dynamics is one part, another part is locking onto the target, time to target, coming back, the entire battery management. It was really, really tech-intensive. And the beauty was that we had to reinvent the entire structural part because every time it lands on an unprepared ground, you can’t just keep on repairing it. So it has to be modular, it has to undergo and take the impact and deliver what is needed. 

Akshay 19:32  

During this journey, was it funding itself through revenue or did you raise more funds after that?

Nimish 19:38  

So we raised in 2007, and then we raised in 2012. So we were participating in large value trials, which had a huge fund.

Akshay 19:52 

What does that mean, large value trials?

Nimish 19:54  

We are talking about 100s of 1000s of crores of procurement. Okay, and then came a situation of how we can actually bid for being a small company. And then Tata Advanced Systems in 2012 took a majority stake with Tata industries having 42%, they took it up to 72-74%. So the mandate became clear to us also that the group needs control, and we also found it prudent because the business cycle is capital intensive. And once you win a tender, you have to serve for 10 to 15 years. Tata Group is magnanimous and the values match, in a sense that they are the most ethical and very relevant to society and in a way that has an impact. So, we found good partners in our investors on the value side, and we took a call that, in 2012 they took a majority, in 2015 we exited. And by then our systems were deployed there and larger value orders were coming in. So, that was the take.

Akshay 20:59  

And you were essentially like the CEO till 2015. 

Nimish 21:03  

I was the managing director, I started it, but it was Raman, who was the CEO, because I wanted to just focus myself on the development and the operations better, making it happen.

Akshay  21:13  

Okay. And Raman was doing the commercial, the business.

Nimish  21:18  

Yes, commercial and investor relations. So, that was then till 2015.

Akshay 21:23  

So, in 2015, why did you leave, I mean, you could have continued as a managing director of a Tata Group company. 

Nimish 21:32  

So that fancy I did not have. As I shared before, I was about to say that I had no inkling towards a corporate culture or becoming a businessman or being in a senior position. So then came the next phase of my life. I’ve been living this for over a decade now. And what is next?

Akshay 22:16  

So then what did you decide to do next, you got an exit from your venture, and then what next?

Nimish  22:23  

Then I was in a different phase, that what I thought of as an 18-20-year-old, now after being at around 28-30. What exactly is the phase? So I thought that I have not developed a business that is scalable and has a high impact on the larger level. So I got the opportunity at that point of time from Delhivery, which was into E-commerce logistics than in 2015. So I was given a job to cross utilize various services and functions, bring down the cost and come up with new business verticals. And after four months of studying the entire network, proposed a new network, with modes of transport being different from air moving to ground, and then from moving in shipments in airlines to moving shipments in trucks and optimizing that.

Akshay 23:!5

So by trucking, that means that full truckload transportation, that business?

Nimish 23:20

Yeah, truckload, full truckload, part truckload, optimizing. We deployed a capacitated timebase optimization approach in the system itself, on top of the ERP of Delhivery, we created a transport management system. And with that transport management system, the entire visibility to turnout service-level impact, that thing happened. It was great of Sahil to give me that kind of opportunity and stand by the idea and take the company fourfold from thereon. And this I will be able to achieve in just two years. And it was around eight months of development. And then around six to eight months of deployment. There I realized the entire scale impact and created the entire revenue stream. So there was no funding, per se. We were a small team of around 8 to 10 guys, and we were doing analytics. We were doing tech, we were doing products. We were deploying on the process part ourselves. So we were building, operating and transferring it to the larger team. So a handful of a team, impacting larger teams. So that was my journey there. 

Akshay 24:36

Why did you decide to move on?

Nimish 24:37

So the start-up for me happened. I never planned for it. So in a typical startup entrepreneurship term, I’m not following the pursuit of that, I want to be going in a certain format of doing things this way. The first thing is why starting a venture is fundamental. That problem is very close to your heart. So what triggered in Delhivery was something that I experienced in my early life. So, from Kota, Rajasthan and Kota used to be an industrial hub, I’ve seen companies shutting down and 1000s of people getting out of jobs. And that made me feel really bad. I mean, it had a very huge impact on me that I have seen the transformation that if education had not happened to Kota, then there would have been 1000s of families, and 1000s of jobless people in their mid-30s, mid-40s. And they had kids in my class, and I was studying with them. And I was just seeing it all wrong. So the education industry actually helped Kota cope up. But at Delhivery, what happened to me, I used to be there at the hub, at delivery centres, I found the company is growing rapidly, then the guy here has no trust because we had around 40-50 odd staffing partners, and who was supposed to hire and manage the workforce. 

Akshay 26:23

This is largely the blue-collar workforce like warehouse and logistics. 

Nimish 26:26

Yes. So at that point in time Delhivery had around 15,000. workforce. And currently around 35,000. So while working, while I was deploying my system and working closely, and at that point of time moving, whether it was a warehouse or the last-mile delivery, there used to be a lot of attrition. And these vendors were supposed to just bridge the gap. As per the International Labor Organization, around 90% of our enterprise workforce do not have a written contract. This is where it is fending off from, this is a problem that the government is dealing with, and has been dealing with for really long that it is a jobs problem, that is the recognition problem. So, for us, it was just three things that I was able to decipher functionally, the sourcing, hiring and managing platform is required and it is now possible after 2017. Before 2017, it was not possible. 

Akshay 27:30

Because of internet penetration.

Nimish 27:32

Internet penetration, smartphone adoption, what motivated me is that there’s a huge gap of trust, trust can be bridged through transparency. Transparency can come through tech. And as a job seeker moves to a particular job, and from there, they move to another job. So this transition, and trust to come in, requires a platform format, and hence WorkEx stands as an online staffing platform. So that there is an entire journey of a person which is tracked all through. And this is what is very essential that the entire process of walking through mutually, is transparent. And which brings in integrity and dignity for both sides. And which opens up doors through this recognition of financial inclusion of a very large workforce of our country, and nation. So I believe that innovation is achieved through problem-solving. And one day, innovation happens if you work on a problem. But adoption happens during a crisis.

Akshay 28:48

So what was version one, like version one of your product that you know, tell me about what you launched?

Nimish 28:54

Our go-to-market. So we thought that we are going to be building a platform, which can impart sourcing at scale, digitally and internet-based. Can enable screening, hiring of the workforce, then managing the workforce, their entire payouts to attendance, etc. So we started from the front in February 2017. We worked till April and created a management solution that you can manage your vendors, can manage your workforce. We got a push back in early 2017 that the vendors did not want this transparency to be there. 

Akshay 29:39

I want to understand this better. The version one which you launched, what was it like? Was it an ATS, applicant tracking system, in which vendors can upload profiles which the company can see and then can do interviews and then release an offer letter? Was that what you did for staffing vendors to share profiles with the employers? 

Nimish 30:01  

We did not start from the hiring bit, we started from the management, that they can mark their attendance, they can have their Aadhaar there, they can get their payouts from it. Yeah, payroll part, but the visibility with a principal employer that you are working for a Paytm, you’re working for Tata Chemicals, or you’re working for a large company enterprise, and you get the visibility of your workforce, and you get the management of your vendors that they are passing on the benefits to the workforce or not. And then there was a pushback from the vendors. So this pushback, that vendor did not want this transparency to be there and the principal employer wanted. The clients wanted it, but that adoption took pushback from there. So we went back to the design desk. And we thought that we should break the problem by way of sourcing, hiring and management separately. Because here the supply is the king, I think if we can source right and if we can source in large volume. And if we can filter those. So we then worked on sourcing and hiring first.

Akshay 31:12

If you can do sourcing and hiring then you don’t need vendors.

Nimish 31:15

You don’t need vendors, a step in the door is there and then you have leverage. So, we work with a matrix of time to hire should be very least and cost of hiring should be least. So with that, we started working on it. And we started with the first launch of 15% match rates. So this is not a search based market. These are discovery-based markets. So here a person doesn’t know how to search for a job. Like if you go to various job boards, if there is a job for an Android developer, the sales guy can also make an application right. It will not stop you. It is not a resume database kind of format, but a format where the matching is taken care of. 

Akshay 31:54

What is the pricing for self-service like? 

Nimish 31:58

So for 200 bucks, you can hire at least one staff member. You can hire more also.

Akshay 32:05  

Like you know, 2019 is when the revenue journey started. What was that revenue journey like for you?

Nimish 32:15  

We started clicking around 10 lakhs a month from September of 2019 taking it up to around 70 lakhs in November, then around 85-90 lakhs in December. So this is how our journey and we got our first interest in fundraising. So we started in late December, we closed within the first two weeks of January. 

Akshay 32:50

How much did you raise? 

Nimish 32:52

So in Series A, we raised $4 million. It was led by Joe Hirao when he runs a platform called ZIGExN which is a live media platform for real estate jobs, automobiles etc as a listed entity in Japan. So Joe has been in this space in Japan and he runs a billion-dollar staffing business also. And what he liked was that you have automated the entire hiring process, and this is something that we should take to Japan. So it is a global product, and you should scale first. And then Pravega participated in that round. And then Michael and Susan Dell Foundation, like the entire way the hiring in this space is cracked by WorkEx. Okay, so we raised the 4 million rounds by April of 2019. 

Akshay 34:01  

This, managing the workforce platform, who is responsible for payrolls like they are on the company’s payroll, or they are on your payrolls?

Nimish 34:13

So we then behave like a pass-through vehicle that you have to pay this workforce and we are your pass-through vehicle on the distribution of payouts. So in various for the format, whether it’s on a tax basis format, that you have to pay the workers on pay for delivery basis, or per item sales done or it is the time effort that you have come users come for one shift, or you come for one and a half shift on a shift basis. So these all formats are taken care of and we are your pass-through vehicle solution to manage your workforce, to manage their entire compliance also for the same. 

Akshay 34:58  

These are all the gig workers, they are not like in an employment contract with a fixed monthly salary and a PF and all that, you are not into that space?

Nimish 35:06  

So that’s what. So contract staffing is one, independent contractor management is one, managing the task-based worker is a gig base worker, we are in all three of them. And if you have permanent staff, you just want to go for hire. And if you want to manage your workforce, through a work-it solution, so that you get the benefits. So based on that the pricing is there, pay per click, if it is 100, then it is around 80, then the next one is 60. And the lowest one is then 20. So given this, you get the feel of it, and you always then are on the WorkEx platform, and the common denominator is the workforce to the platform that you have an assurance of.

Akshay 35:58  

Okay, and what do you charge for each of these formats? Like is it a percentage of salary, or is it a fixed rupee value?

Nimish 36:07  

So a mix of both. On a task-based level, we charge per task basis. On a time-based format, we charge. On a task-based like for a gig worker, in that case, we have a kind of a rating format that the person is getting this much, and then there’s going to be a rate chart for it. In the case of time-based one we have…

Akshay 36:35

What are the rates like?

Nimish 36:36

So in the case of time-based, it is around 5% to around 12 to 15%, depending on the length of the contract, if it’s for longer then the percentage is lower, and it’s recurring revenue. If it was a shorter duration, then we charge more, and hence, the worker also gets paid more. In a gig format, if the gig worker is earning 200 bucks, then we are charging around 80-100 bucks.

Akshay 37:09  

The gig…this is task-based like 80 to 100 per task?

Nimish 37:15  

Yes. Like a delivery boy is doing a delivery then that person gets around 30 bucks 40 bucks. So they are on a per-unit basis charging them.

Akshay 37:27

So what do you charge on the per unit basis, per task?

Nimish 37:31

So there’s a margin for higher as a like, if a worker is getting paid around 200 bucks for a task then we charge around 80-100 bucks. 

Akshay 37:42  

Okay and this was paid by the employer…

Nimish 37:46  

We pay them

Akshay 37:49  

Okay. So the employer is still paying 200 But out of the 200, you keep 80 and 120 goes to the worker.

Nimish 37:54

No. The employer is paying 300. 200 is going to the gig worker. 80-100 is ours.

Akshay 38:00

Okay, got it. Okay, about like 30% or odd. And for the contractual workers like they are, on a fixed monthly kind of a salary, what do you charge there?

Nimish 38:22

Somewhere between 5% to around 12-13%. But then, again…

Akshay  38:28

Depending on the duration.

Nimish 38:30

Exactly. The shorter the duration, the higher the charges, longer the duration, the recurring. So, if you look at the CAC versus LTV. LTV, those are the gross margins are lower but the LTV is very high, specifically recurring revenue. In the case of a gig, etc., the volumes are seasonal, but again, they have a more gross margin.

Akshay 38:55  

Okay, okay, got it. So now tell me about COVID. What happened during COVID?

Nimish 39:00

So during COVID, we lost around 60% of our workforce last year. Okay, uncertainty being there and clients having kind of complete lockdown, so it took us around three months time, we got reduced to around 40% of them from 3 million ARR dropping it down. And then it took us around two months.

Akshay 39:28  

3 million ARR this is like monthly?

Nimish 39:31  

$3 million annual run rate we were there. We were at that point around two and a half crores there. And then it got reduced to around 40% of this. And then it took us once the lockdown opened up. So it was then in June, we got back to around 80% of the people there. Because the entire thing is digital, we were able to get the workforce back again. And by August, again, we were at where we were to around 95%. Because there was a lot of reordering in the market in various sectors, it happened that logistics increased, and then things decreased. So there was entirely a new format, but what worked for us was basically that now everyone wants to go digital. So what I was sharing before that innovation happens, then adoption happens during a crisis increases drastically. Right? Like, during World War II, it happened for various inventions, which was there in the late 1800s. And similarly, here, like many of the startups, got a tailspin because of COVID. It was a blessing in disguise that way, so migration happened, people lost jobs, and companies had to just come back to regular business order, and they had to hire back again. So hence, WorkEx on that system on the hiring front. That magic happens, then, so the confidence increased drastically both for the clients as well as for the workforce. And then we productized this entire management, which was sitting alone, and brought it there on the marketplace of our hiring, and we combined. So we alone in the market offer on the marketplace side, both hiring and the management of the workforce, in a single unified platform. Because a job seeker is a state, the staff is a state. People move from job to job and their duration, to their record getting created to businesses, trusting them, and finding and joining this broken ecosystem. This then is the approach from here on that we have completed our stack of hiring and management of workforce and being agnostic of the format of engagement and true identity getting created. So last year, we supported during COVID. And how trust plays such a crucial role, we gave insurance benefits, etc, to our workforce, which was managed by us. And then that is also a revenue contributor. But let me share that story that a truck driver met with an accident and the guy was taken to a really decent hospital and the coverage happened. And that experience and the humbling experience, that insurance was not that costly, it was 350 bucks. But the experience during those times was that the person did not have money, did not have the job then and the treatment and him coming out and going back to work. So these experiences. We have a feedback loop on our platform where people who get hired share their videos by having someone who developed during COVID addiction or alcoholism, and sharing that I got my integrity back to getting this job and getting paid. And my recognition and my self-confidence are back again. So this is what keeps us running and motivated, that we are in space and that has such a huge scale to bring in trust which is needed. And this is our nation’s identity, being a consumer economy and a large portion of the population, which contributes directly to a double-digit GDP. If that comes on a platform and is recognized, then this is something of the largest value. I don’t want to put a number to it on the valuation front or anything. The impact and unlocking of the economy are of the highest order. We are the human resource capital of the world. 

Akshay 44:43

Right. So the job seeker will have a single app for both searching for jobs and also for managing his employment or are there different apps?

Nimish 44:59 

So once you are managed, you don’t get an option to actually lookout for jobs. Okay, so that’s…

Akshay 45:06

But it is a human tendency now that you would want to search for a job. Then what do they do today, do they create another account to look for a job or?

Nimish 45:16

On the IP level, you have dual SIM etc you try it, but it doesn’t allow you if you are managed through a WorkEx platform, you can always quit and search. So in the job search market, you can be there or you can go through a referral etc. But the creation of identity requires this for the trust to come in. Maybe eventually we can give that option but again, a trusted front has to be built. And it has to be done honestly and thoroughly. Staff being managed is not given an option to look for a job on WorkEx.

Akshay 46:01

Okay, so the app is the same only but they don’t see this. Okay, they don’t see the search job option. 

Nimish 46:07

Yes. Phone number is the identifier.

Akshay 46:08

Okay. Phone number is the identifier, okay. And like, when somebody’s searching for a job at that stage, do they have to upload an Aadhaar or some identity proof or does that happen once they get employed?

Nimish 46:28

So once a person is shortlisted and offered, from there the documentation journey starts; that you share your Aadhaar and your bank details, we take that and we have a background verification API with us. We onboard the person with the new records and maintain them. 

Akshay 46:50

Okay. How do you do background verification? Like just confirming that this Aadhaar is genuine? 

Nimish 46:57

Yes, we have integrated the Aadhaar API background verification.

Akshay 47:06

Okay, got it. And for an employer, what is the journey for them, like they also have a mobile app, probably they would have a desktop and app also, right?

Nimish 47:18

Both. Because on a quick front level, whether you are a large company or a small company, the workforce, the portion of the workforce, large or small, there is a hierarchy there. So you manage them. So you need a phone, then if you have to manage your team, you have a web interface also.

Akshay 47:39

Manage in what sense like to see how many people are present today?

Nimish 47:42

How their performance is going. So what I was trying to communicate was that trust is built through performance. So that engagement that you asked me about was the part of the recognition. So if I’m managing a floor of around 20 guys, then I know that details right there in my app, but I need a larger interface, once I have to take actions further beyond. So, both web and app. In a quick action space, you require an app to be there to have that visibility, if you see a person has not appeared and you want the person you want to communicate with pretty quickly.

Akshay 48:26

So you can send a message?

Nimish 48:28

You can send a message, you can directly call from there. This mobile app on the business side gives the command and control and then the execution and orchestration, that shift rotation to managing the payouts and taking actions on having a collective view about analytics that is through the web.

Akshay 48:50

Okay, and what about things like somebody applying for leave and all that?

Nimish 48:55

Yes, that is also there. So, why have we amalgamated so many things into simple actions? If these simple actions are taken, the majority of the things are addressed that you need not have to work on at the end of the month. Everything is distributed throughout the process and with various players. Otherwise, the reconciliation process to taking an action and creating a collated view is not at all possible. And then either you overhire or you underhire, the relationship with the staff and staff relationship with business, that goes for a toss. It has to be a distributed activity throughout the month, throughout the business cycle and you know that the management accuracy increases drastically.

Akshay 49:54

What are the goals that you set for yourself?

Nimish 49:57

We aim for WorkEx to be known as the brand of trust for businesses and the workforce simultaneously and that this is a medium of fairness. This is a medium of growth and recognition to services at a large scale.

So that was Nimish Sharma telling Akshay Datt about how he built WorkEx. To know more or to use their services log on to https://workex.jobs/

‘Innovation happens when you work on a problem, but adoption happens only during a crisis.’ – Nimish Sharma (WorkEx)

The pandemic tested us in unimaginable ways. Many around us lost jobs, and as the economy slowed down, unemployment became a serious issue.

In a candid conversation with Akshay Datt, Nimish Sharma, Co-founder and CEO, WorkEx, takes us through his journey. He started his entrepreneurial journey way back in 2007 after graduating from IIT Kanpur.

Nimish fondly recalls his earlier days, when his passion for aerospace made him quit his job to start Aurora Integrated Systems in 2006, which was one of the earliest drone manufacturing companies in India.

In his second innings, he started WorkEx in 2017 to reduce the time taken between candidate discovery and hiring, especially for the blue and grey collar workforce.

Tune in to this episode to hear Nimish talk about how WorkEx is democratizing access to the job market through its disruptive AI/ML technology.

What you must not miss!

  • If you are passionate about something, nothing else matters.
  • WorkEx’s revenue generation model.
  • Fundraising journey.
  • How has COVID impacted the adoption of the WorkEx platform among job-seekers and employers?

EPISODE TRANSCRIPT

Akshay 01:29  

Nimish, tell me about your dad, like where is your family from basically?

Nimish 01:33  

I’m born and brought up in Kota, Rajasthan. Kota is popularly known for competitive exam preparation, specifically JEE. My father was an engineer, civil engineer, he was the guy who was a government servant working for the irrigation department. He was one of those guys who worked on the Indra Gandhi canal. And what I love them learned was that he used to love engineering drawings and design. And I developed an interest in flying paper planes from him. Okay, so I come from a very humble background, my mother is a Sanskrit and Hindi teacher. And I have an elder brother, who is also an engineer from IIT, Kanpur. 

Akshay 02:20  

So you grew up in a pretty academic environment like academics must have been important?

Nimish 02:25  

Yeah, typical middle class, basically, if you study well, you have to perform well. And that’s how your career is going to be defined. So was a decent good boy kind of person, a sincere one, but always curious. 

Akshay 02:42

And you join classes at Kota for the entrance exam?

Nimish 02:48

Being in Kota there’s a culture, but it was long back. Kota was not popularly known for coaching, it was just starting then. And whether it was various other competitive exams before JEE, like National Talent Search Examination, etc, everything was coming on the way and it’s basically you need to do that, and the question always was would you qualify or not? So I have lived that journey. It was kind of a journey where I did not like the format of education then, not always curiosity was the driving force, just come out educated more rather than accumulating information.

Akshay 03:32  

Okay, what were those years at IIT Kanpur like for you? This would have been my first time living away from home in a hostel environment.

Nimish 03:38  

Moving from Kota to Kanpur, again, my brother did his chemical engineering from there. So it was a kind of a rat race following that, if you go to this college, then there is a prestige associated with this. But there was another angle, I come from a humble family, the fees at the college was really low. So that was one of the motivations, landing at IIT, the first year was something that everyone is coming with a decent background academically. So that loss of identity of what you have accomplished before was really humbling, as well as gratifying also that there is no more comparison. There are no more things but competition is now going to be lived more than what has been lived so far. So that was a journey there. And after one year, I was under a crisis. What am I doing here? Because my life since till now has been something following, following, following, keeping up the matrices of math and performance, etc. So I landed in aerospace engineering, and there is a connection that I used to love making paper planes, hundreds of them. I used to fly from various heights. I used to love the flight and that’s how there is a natural connection there. And I actually had a huge impact because of the Kargil War. I don’t know why and how but it’s basically since childhood, Doordarshan’s impact or the family’s impact, my mother being an academician that I love my nation, like really. And I wanted to contribute and landed in aerospace. And then I realized that there is nothing taught, where I could actually come out as an engineer. So there is nothing hands-on. So I joined the aeromodelling club, and in the first year itself, I was made the coordinator because there was nobody doing that job. And the seniors who were in their final year were the coordinators, and they handed over the keys. And I found that it’s a dirty place. Let me just start by cleaning it up. And then I heard that I don’t know anything about how planes fly. So I learned on my own, a professor gave me an opportunity to go to Bangalore and learn flying.

Akshay 05:54  

Wow, pilots’ lessons you took?

Nimish 05:58  

Yeah. I went through that and came back and revived the entire class. But again, that sentiment of what am I learning and how am I going to come out better? Am I going to come out as an engineer or not? Because everyone was talking about the career ahead, living in now was not happening at all. And that was my crisis. And the second thing that I might be able to contribute as an engineer, to a nation, or to even justify my own well being and what am I doing? So I found a really good senior, who was a real techy in the third year, and I found one professor, Prof. Ghosh who was into missiles and he worked with Prof. Kalam, he was into Indian missiles, etc. And he was the only guy from the industry. So he took lessons on design, etc., in my second year itself, which was to be his final year. And he used to coach me, and he had a huge impact. And I consider him my guru. And I spent the next three years developing drones in it, and I’m talking from 2003 to 2006. And that was some amazing journey I had, that it’s not just a course anymore, I will take on my own courses and there is a room out there that something can be done. IIT Kanpur has a really good flight lap. So what Prof Ghosh did was he gave me his keys and said this is your R&D cell. And in that, I organized the entire thing, and it started building up. And we did not have components to the material which is required for it to be built. I spent around six months there creating that workshop to create the first model. Well, with the laptop given by the professor, I flew it around 20-30 times and every time it crashed, once it crashes, it’s like you’re having a small heart attack, you build for 10, 20, 30 hours, then you fly and it crashes. So those were the initial days where I learned perseverance in a true way. And what my professor taught me is, love the tools but have respect for the technicians more than engineers, because technicians actually help build and they really build. So that knowledge of how things are built that came from there and the grit of each time it breaks, you have to just build it all over again. And one fine evening it took off, and it took off so beautifully. There were tears in the eyes of the entire group, as well as my professor’s. If I remember that day, there are goosebumps. And my professor was really strict, really strict as he was a young professor. And then he used to just say that you can’t lose stuff. And I understand the root cause analysis from there. And then he then started sharing that what you just did in the past 15 years in this institute, which is considered the number one institute, nothing of the sort has happened before. He never revealed that to me before that. And then my wingmates used to just come around to see what exactly is going on and what is your pursuit and they started joining that and we found the team. From there on senior year dissertation was the Best Project Award. So my mother was invited by the director and I got the gold medal there. And then the entire faculty of the aerospace department said that this is something that you have been on 10 such projects combined together. And something coming out of that technical project is something really remarkable and it should not be left there. 

Akshay 09:49

What was the final project?

Nimish 09:50

The final project was to develop a medium-altitude, medium endurance tactical unmanned aerial vehicle.

Akshay 09:56  

What does that mean? Lots of jargon here.

Nimish 09:58  

Basically, you can do reconnaissance and surveillance stuff 

Akshay 10:03  

Okay, so a drone that can have a camera on it, which can be remotely navigated and it will beam back the images?

Nimish 10:13  

At that time there wasn’t any mobile facility. Nothing was available there. So right from communication, we are talking about an engineering project. It was not a hobby kind of a demonstration thing, we developed the 15 kg bird with a capacity of taking off with a four kg payload, and you can load anything and everything. Electro-optical cameras are one of those. And you can use it for civilian and military purposes. That becomes a vehicle of sorts that can be configured for various things. So I’m talking about going really, as an engineer on specking out things. So I learned my product design through aircraft design. In those days, there was nothing available on the internet that you can copy, there was no open-source project. Everything was from the first fundamental level of physics. That was quite a journey. And then I thought about what is next, I wanted to take it to a level where it can be handed over to the forces and various departments for exploration. And then came a time, we were a team of around five-six guys, aerospace engineers, electrical, computer science, and we were collectively working on it. And then few had their masters to be done. And there was a juncture that what next, we are not able to take it up. And I did not sit for any placement, company interviews, etc, then the team pushed me that this may not be the right time, and with a very low heart, I just had to pick up a job and move out. And after three months, I got a call that this was not working. And we created a brilliant thing. And we should take it forward. 

Akshay 12:01

Got a call from?

Nimish 12:02

One of my previous co-founders. So this company that we incorporated, my first venture was Aurora Integrated Systems.

Akshay  12:08  

Your batchmates, who was working with you, he was one of them?

Nimish 12:11  

Yes, batchmates became wingmates then roommates. And then they called me and they said that we should do it. So I was on the job for over three months only. And I was working as a yield management analyst for an airline to maximize their revenue. And I was feeling so bad that I dedicated my entire three years to doing that. And I loved it every bit. And I did my internship also in the similar domain of understanding the entire data fusion to write filters, controls, so I’m a controls guy, systems engineering guy. So these are all things that were learnt during college in a very practical scenario. So I did my internship in France where I worked on the Airbus project, health monitoring, etc. I don’t want to go there, it will become really techie and I wrote an IEEE paper also on that. So the entire skillset got developed. And that’s what happened which took around 10 years. It happened in just a year. Right, that confidence. And then, as they called me, I quit my job. I came back to India in a week’s time.

Akshay 13:24  

Okay, your job was in the Gulf?

Nimish 13:27  

UAE, Abu Dhabi specifically I was working for Etihad Airways. So, if you are a control systems guy, you know an entire thing popularly known as AI and ML these days. So, that is taught there itself, if you are into those things. So that helped me at heart though, it was just a very short stint and I came back and then we started. It took us around five to six months in the Incubation Center of IIT Kanpur that we configured another…

Akshay 13:57  

Who is ‘we’ here, like how many of you were there?

Nimish 14:00  

So, we were seven. Two from aerospace including me, two from electrical, two from computer science and one from mechanical. 

Akshay 14:09

And all of you were like, who had completed your B Tech, like you all left your jobs and came back to do this or your Master’s course. 

Nimish 14:18

Yes. So, another friend or co-founder quit his job in Tata Motors. The guys had declined their offer and the teammate from mechanical quit his MBA. Because the call was really good, again all shared that bit of that we should contribute and just prove ourselves as engineers as well as to the nation and let us add to that because during the Kargil War it was like that we did not have drones. So that was a huge impact and that just connected us together. And then magic happened.

Akshay 14:55  

IIT Kanpur funded you? They just gave space and like, what was it like?

Nimish 15:03  

They gave us the space to park ourselves. We had flight lab support on that front. But there was no money. Then real magic happened. Raman, who was at IIM Lucknow, was being interviewed for Tata Administrative Services and Ashutosh Tyagi who was heading Tata Industries. And then during the interview, Raman said that I’m founding the company together, and though I can take up this internship, I’m not going to be joining, I won’t be starting. So the conversation then moved towards that Tata Group into aerospace and, and envisaging drones. And these people right after college had so much enthusiasm and just got recognized for the development of unmanned aerial drones from IIT Kanpur. So that was a huge impact story for them, and Ashutosh then quickly had to check with Mr Tata. And we had to just write a business plan, etc. Something happened, the wheels turning on, then what I gathered from Ashutosh was that Mr Tata’s words were that if we don’t, who will, and we should, and that’s how, in early 2007, we got funded with a million dollars from Tata Industries. So that was the initial journey of taking off from the concept to making it happen and living the journey of fundraising through that, but it was all organic, never thought of being an entrepreneur at all. And just finding the purpose and being real, and thorough with that.

Akshay 16:42  

How much stake did Tata take for that 1 million?

Nimish 16:45  

Back then there was no VC money, etc. It was around 40%. So it was a high stake. So then the Ministry of Science and Technology also did a soft loan of a million dollars. Okay, so we were able to get the capital gear in place, create a product, and then we were deployed. So if I have to say, long story short, our systems are deployed in Northern Command, Western and Southern Command of our country. And I’m talking 2000 to 2006. At that point of time, there was no VC money, there was no mission and this was a B2G – business to the government. Now if somebody has to think about this today, this was not the phase one could put. 

Akshay 17:29

Right. So how long did it take you to launch your first product? 2007 you got funded, then from then till your product launch? How long was that journey?

Nimish 17:39  

That was also beautiful, it was a term that a small portion of the funding is going to be given first as an investment, and in four months, you have to fly the entire bird autonomously. And so we took four months, day in and day out. So that became a kind of a culture that sleepless nights etc, can’t make a mistake, to make a mistake, you have to crash, you crash again, then you gather the debris together and then next day go back again. So in four months, the development of the product took place, but a product to ship to the market took around a year and a half.

Akshay 18:15  

Because you have to do it in mass production. So you have to have a different design versus producing hundreds.

Nimish 18:23  

Correct. So we talk of UX being so important these days. Our design requirement was that a 10th pass soldier can actually launch that drone on his or her own. And understand, directly taking the inputs from the touchpad based tablet. And we are talking about 2007. At that point in time, by creating something on a UX front to be so simple, anybody can fly. And then targeting, vision processing also came in and so it became really complex. Those vehicle dynamics is one part, another part is locking onto the target, time to target, coming back, the entire battery management. It was really, really tech-intensive. And the beauty was that we had to reinvent the entire structural part because every time it lands on an unprepared ground, you can’t just keep on repairing it. So it has to be modular, it has to undergo and take the impact and deliver what is needed. 

Akshay 19:32  

During this journey, was it funding itself through revenue or did you raise more funds after that?

Nimish 19:38  

So we raised in 2007, and then we raised in 2012. So we were participating in large value trials, which had a huge fund.

Akshay 19:52 

What does that mean, large value trials?

Nimish 19:54  

We are talking about 100s of 1000s of crores of procurement. Okay, and then came a situation of how we can actually bid for being a small company. And then Tata Advanced Systems in 2012 took a majority stake with Tata industries having 42%, they took it up to 72-74%. So the mandate became clear to us also that the group needs control, and we also found it prudent because the business cycle is capital intensive. And once you win a tender, you have to serve for 10 to 15 years. Tata Group is magnanimous and the values match, in a sense that they are the most ethical and very relevant to society and in a way that has an impact. So, we found good partners in our investors on the value side, and we took a call that, in 2012 they took a majority, in 2015 we exited. And by then our systems were deployed there and larger value orders were coming in. So, that was the take.

Akshay 20:59  

And you were essentially like the CEO till 2015. 

Nimish 21:03  

I was the managing director, I started it, but it was Raman, who was the CEO, because I wanted to just focus myself on the development and the operations better, making it happen.

Akshay  21:13  

Okay. And Raman was doing the commercial, the business.

Nimish  21:18  

Yes, commercial and investor relations. So, that was then till 2015.

Akshay 21:23  

So, in 2015, why did you leave, I mean, you could have continued as a managing director of a Tata Group company. 

Nimish 21:32  

So that fancy I did not have. As I shared before, I was about to say that I had no inkling towards a corporate culture or becoming a businessman or being in a senior position. So then came the next phase of my life. I’ve been living this for over a decade now. And what is next?

Akshay 22:16  

So then what did you decide to do next, you got an exit from your venture, and then what next?

Nimish  22:23  

Then I was in a different phase, that what I thought of as an 18-20-year-old, now after being at around 28-30. What exactly is the phase? So I thought that I have not developed a business that is scalable and has a high impact on the larger level. So I got the opportunity at that point of time from Delhivery, which was into E-commerce logistics than in 2015. So I was given a job to cross utilize various services and functions, bring down the cost and come up with new business verticals. And after four months of studying the entire network, proposed a new network, with modes of transport being different from air moving to ground, and then from moving in shipments in airlines to moving shipments in trucks and optimizing that.

Akshay 23:!5

So by trucking, that means that full truckload transportation, that business?

Nimish 23:20

Yeah, truckload, full truckload, part truckload, optimizing. We deployed a capacitated timebase optimization approach in the system itself, on top of the ERP of Delhivery, we created a transport management system. And with that transport management system, the entire visibility to turnout service-level impact, that thing happened. It was great of Sahil to give me that kind of opportunity and stand by the idea and take the company fourfold from thereon. And this I will be able to achieve in just two years. And it was around eight months of development. And then around six to eight months of deployment. There I realized the entire scale impact and created the entire revenue stream. So there was no funding, per se. We were a small team of around 8 to 10 guys, and we were doing analytics. We were doing tech, we were doing products. We were deploying on the process part ourselves. So we were building, operating and transferring it to the larger team. So a handful of a team, impacting larger teams. So that was my journey there. 

Akshay 24:36

Why did you decide to move on?

Nimish 24:37

So the start-up for me happened. I never planned for it. So in a typical startup entrepreneurship term, I’m not following the pursuit of that, I want to be going in a certain format of doing things this way. The first thing is why starting a venture is fundamental. That problem is very close to your heart. So what triggered in Delhivery was something that I experienced in my early life. So, from Kota, Rajasthan and Kota used to be an industrial hub, I’ve seen companies shutting down and 1000s of people getting out of jobs. And that made me feel really bad. I mean, it had a very huge impact on me that I have seen the transformation that if education had not happened to Kota, then there would have been 1000s of families, and 1000s of jobless people in their mid-30s, mid-40s. And they had kids in my class, and I was studying with them. And I was just seeing it all wrong. So the education industry actually helped Kota cope up. But at Delhivery, what happened to me, I used to be there at the hub, at delivery centres, I found the company is growing rapidly, then the guy here has no trust because we had around 40-50 odd staffing partners, and who was supposed to hire and manage the workforce. 

Akshay 26:23

This is largely the blue-collar workforce like warehouse and logistics. 

Nimish 26:26

Yes. So at that point in time Delhivery had around 15,000. workforce. And currently around 35,000. So while working, while I was deploying my system and working closely, and at that point of time moving, whether it was a warehouse or the last-mile delivery, there used to be a lot of attrition. And these vendors were supposed to just bridge the gap. As per the International Labor Organization, around 90% of our enterprise workforce do not have a written contract. This is where it is fending off from, this is a problem that the government is dealing with, and has been dealing with for really long that it is a jobs problem, that is the recognition problem. So, for us, it was just three things that I was able to decipher functionally, the sourcing, hiring and managing platform is required and it is now possible after 2017. Before 2017, it was not possible. 

Akshay 27:30

Because of internet penetration.

Nimish 27:32

Internet penetration, smartphone adoption, what motivated me is that there’s a huge gap of trust, trust can be bridged through transparency. Transparency can come through tech. And as a job seeker moves to a particular job, and from there, they move to another job. So this transition, and trust to come in, requires a platform format, and hence WorkEx stands as an online staffing platform. So that there is an entire journey of a person which is tracked all through. And this is what is very essential that the entire process of walking through mutually, is transparent. And which brings in integrity and dignity for both sides. And which opens up doors through this recognition of financial inclusion of a very large workforce of our country, and nation. So I believe that innovation is achieved through problem-solving. And one day, innovation happens if you work on a problem. But adoption happens during a crisis.

Akshay 28:48

So what was version one, like version one of your product that you know, tell me about what you launched?

Nimish 28:54

Our go-to-market. So we thought that we are going to be building a platform, which can impart sourcing at scale, digitally and internet-based. Can enable screening, hiring of the workforce, then managing the workforce, their entire payouts to attendance, etc. So we started from the front in February 2017. We worked till April and created a management solution that you can manage your vendors, can manage your workforce. We got a push back in early 2017 that the vendors did not want this transparency to be there. 

Akshay 29:39

I want to understand this better. The version one which you launched, what was it like? Was it an ATS, applicant tracking system, in which vendors can upload profiles which the company can see and then can do interviews and then release an offer letter? Was that what you did for staffing vendors to share profiles with the employers? 

Nimish 30:01  

We did not start from the hiring bit, we started from the management, that they can mark their attendance, they can have their Aadhaar there, they can get their payouts from it. Yeah, payroll part, but the visibility with a principal employer that you are working for a Paytm, you’re working for Tata Chemicals, or you’re working for a large company enterprise, and you get the visibility of your workforce, and you get the management of your vendors that they are passing on the benefits to the workforce or not. And then there was a pushback from the vendors. So this pushback, that vendor did not want this transparency to be there and the principal employer wanted. The clients wanted it, but that adoption took pushback from there. So we went back to the design desk. And we thought that we should break the problem by way of sourcing, hiring and management separately. Because here the supply is the king, I think if we can source right and if we can source in large volume. And if we can filter those. So we then worked on sourcing and hiring first.

Akshay 31:12

If you can do sourcing and hiring then you don’t need vendors.

Nimish 31:15

You don’t need vendors, a step in the door is there and then you have leverage. So, we work with a matrix of time to hire should be very least and cost of hiring should be least. So with that, we started working on it. And we started with the first launch of 15% match rates. So this is not a search based market. These are discovery-based markets. So here a person doesn’t know how to search for a job. Like if you go to various job boards, if there is a job for an Android developer, the sales guy can also make an application right. It will not stop you. It is not a resume database kind of format, but a format where the matching is taken care of. 

Akshay 31:54

What is the pricing for self-service like? 

Nimish 31:58

So for 200 bucks, you can hire at least one staff member. You can hire more also.

Akshay 32:05  

Like you know, 2019 is when the revenue journey started. What was that revenue journey like for you?

Nimish 32:15  

We started clicking around 10 lakhs a month from September of 2019 taking it up to around 70 lakhs in November, then around 85-90 lakhs in December. So this is how our journey and we got our first interest in fundraising. So we started in late December, we closed within the first two weeks of January. 

Akshay 32:50

How much did you raise? 

Nimish 32:52

So in Series A, we raised $4 million. It was led by Joe Hirao when he runs a platform called ZIGExN which is a live media platform for real estate jobs, automobiles etc as a listed entity in Japan. So Joe has been in this space in Japan and he runs a billion-dollar staffing business also. And what he liked was that you have automated the entire hiring process, and this is something that we should take to Japan. So it is a global product, and you should scale first. And then Pravega participated in that round. And then Michael and Susan Dell Foundation, like the entire way the hiring in this space is cracked by WorkEx. Okay, so we raised the 4 million rounds by April of 2019. 

Akshay 34:01  

This, managing the workforce platform, who is responsible for payrolls like they are on the company’s payroll, or they are on your payrolls?

Nimish 34:13

So we then behave like a pass-through vehicle that you have to pay this workforce and we are your pass-through vehicle on the distribution of payouts. So in various for the format, whether it’s on a tax basis format, that you have to pay the workers on pay for delivery basis, or per item sales done or it is the time effort that you have come users come for one shift, or you come for one and a half shift on a shift basis. So these all formats are taken care of and we are your pass-through vehicle solution to manage your workforce, to manage their entire compliance also for the same. 

Akshay 34:58  

These are all the gig workers, they are not like in an employment contract with a fixed monthly salary and a PF and all that, you are not into that space?

Nimish 35:06  

So that’s what. So contract staffing is one, independent contractor management is one, managing the task-based worker is a gig base worker, we are in all three of them. And if you have permanent staff, you just want to go for hire. And if you want to manage your workforce, through a work-it solution, so that you get the benefits. So based on that the pricing is there, pay per click, if it is 100, then it is around 80, then the next one is 60. And the lowest one is then 20. So given this, you get the feel of it, and you always then are on the WorkEx platform, and the common denominator is the workforce to the platform that you have an assurance of.

Akshay 35:58  

Okay, and what do you charge for each of these formats? Like is it a percentage of salary, or is it a fixed rupee value?

Nimish 36:07  

So a mix of both. On a task-based level, we charge per task basis. On a time-based format, we charge. On a task-based like for a gig worker, in that case, we have a kind of a rating format that the person is getting this much, and then there’s going to be a rate chart for it. In the case of time-based one we have…

Akshay 36:35

What are the rates like?

Nimish 36:36

So in the case of time-based, it is around 5% to around 12 to 15%, depending on the length of the contract, if it’s for longer then the percentage is lower, and it’s recurring revenue. If it was a shorter duration, then we charge more, and hence, the worker also gets paid more. In a gig format, if the gig worker is earning 200 bucks, then we are charging around 80-100 bucks.

Akshay 37:09  

The gig…this is task-based like 80 to 100 per task?

Nimish 37:15  

Yes. Like a delivery boy is doing a delivery then that person gets around 30 bucks 40 bucks. So they are on a per-unit basis charging them.

Akshay 37:27

So what do you charge on the per unit basis, per task?

Nimish 37:31

So there’s a margin for higher as a like, if a worker is getting paid around 200 bucks for a task then we charge around 80-100 bucks. 

Akshay 37:42  

Okay and this was paid by the employer…

Nimish 37:46  

We pay them

Akshay 37:49  

Okay. So the employer is still paying 200 But out of the 200, you keep 80 and 120 goes to the worker.

Nimish 37:54

No. The employer is paying 300. 200 is going to the gig worker. 80-100 is ours.

Akshay 38:00

Okay, got it. Okay, about like 30% or odd. And for the contractual workers like they are, on a fixed monthly kind of a salary, what do you charge there?

Nimish 38:22

Somewhere between 5% to around 12-13%. But then, again…

Akshay  38:28

Depending on the duration.

Nimish 38:30

Exactly. The shorter the duration, the higher the charges, longer the duration, the recurring. So, if you look at the CAC versus LTV. LTV, those are the gross margins are lower but the LTV is very high, specifically recurring revenue. In the case of a gig, etc., the volumes are seasonal, but again, they have a more gross margin.

Akshay 38:55  

Okay, okay, got it. So now tell me about COVID. What happened during COVID?

Nimish 39:00

So during COVID, we lost around 60% of our workforce last year. Okay, uncertainty being there and clients having kind of complete lockdown, so it took us around three months time, we got reduced to around 40% of them from 3 million ARR dropping it down. And then it took us around two months.

Akshay 39:28  

3 million ARR this is like monthly?

Nimish 39:31  

$3 million annual run rate we were there. We were at that point around two and a half crores there. And then it got reduced to around 40% of this. And then it took us once the lockdown opened up. So it was then in June, we got back to around 80% of the people there. Because the entire thing is digital, we were able to get the workforce back again. And by August, again, we were at where we were to around 95%. Because there was a lot of reordering in the market in various sectors, it happened that logistics increased, and then things decreased. So there was entirely a new format, but what worked for us was basically that now everyone wants to go digital. So what I was sharing before that innovation happens, then adoption happens during a crisis increases drastically. Right? Like, during World War II, it happened for various inventions, which was there in the late 1800s. And similarly, here, like many of the startups, got a tailspin because of COVID. It was a blessing in disguise that way, so migration happened, people lost jobs, and companies had to just come back to regular business order, and they had to hire back again. So hence, WorkEx on that system on the hiring front. That magic happens, then, so the confidence increased drastically both for the clients as well as for the workforce. And then we productized this entire management, which was sitting alone, and brought it there on the marketplace of our hiring, and we combined. So we alone in the market offer on the marketplace side, both hiring and the management of the workforce, in a single unified platform. Because a job seeker is a state, the staff is a state. People move from job to job and their duration, to their record getting created to businesses, trusting them, and finding and joining this broken ecosystem. This then is the approach from here on that we have completed our stack of hiring and management of workforce and being agnostic of the format of engagement and true identity getting created. So last year, we supported during COVID. And how trust plays such a crucial role, we gave insurance benefits, etc, to our workforce, which was managed by us. And then that is also a revenue contributor. But let me share that story that a truck driver met with an accident and the guy was taken to a really decent hospital and the coverage happened. And that experience and the humbling experience, that insurance was not that costly, it was 350 bucks. But the experience during those times was that the person did not have money, did not have the job then and the treatment and him coming out and going back to work. So these experiences. We have a feedback loop on our platform where people who get hired share their videos by having someone who developed during COVID addiction or alcoholism, and sharing that I got my integrity back to getting this job and getting paid. And my recognition and my self-confidence are back again. So this is what keeps us running and motivated, that we are in space and that has such a huge scale to bring in trust which is needed. And this is our nation’s identity, being a consumer economy and a large portion of the population, which contributes directly to a double-digit GDP. If that comes on a platform and is recognized, then this is something of the largest value. I don’t want to put a number to it on the valuation front or anything. The impact and unlocking of the economy are of the highest order. We are the human resource capital of the world. 

Akshay 44:43

Right. So the job seeker will have a single app for both searching for jobs and also for managing his employment or are there different apps?

Nimish 44:59 

So once you are managed, you don’t get an option to actually lookout for jobs. Okay, so that’s…

Akshay 45:06

But it is a human tendency now that you would want to search for a job. Then what do they do today, do they create another account to look for a job or?

Nimish 45:16

On the IP level, you have dual SIM etc you try it, but it doesn’t allow you if you are managed through a WorkEx platform, you can always quit and search. So in the job search market, you can be there or you can go through a referral etc. But the creation of identity requires this for the trust to come in. Maybe eventually we can give that option but again, a trusted front has to be built. And it has to be done honestly and thoroughly. Staff being managed is not given an option to look for a job on WorkEx.

Akshay 46:01

Okay, so the app is the same only but they don’t see this. Okay, they don’t see the search job option. 

Nimish 46:07

Yes. Phone number is the identifier.

Akshay 46:08

Okay. Phone number is the identifier, okay. And like, when somebody’s searching for a job at that stage, do they have to upload an Aadhaar or some identity proof or does that happen once they get employed?

Nimish 46:28

So once a person is shortlisted and offered, from there the documentation journey starts; that you share your Aadhaar and your bank details, we take that and we have a background verification API with us. We onboard the person with the new records and maintain them. 

Akshay 46:50

Okay. How do you do background verification? Like just confirming that this Aadhaar is genuine? 

Nimish 46:57

Yes, we have integrated the Aadhaar API background verification.

Akshay 47:06

Okay, got it. And for an employer, what is the journey for them, like they also have a mobile app, probably they would have a desktop and app also, right?

Nimish 47:18

Both. Because on a quick front level, whether you are a large company or a small company, the workforce, the portion of the workforce, large or small, there is a hierarchy there. So you manage them. So you need a phone, then if you have to manage your team, you have a web interface also.

Akshay 47:39

Manage in what sense like to see how many people are present today?

Nimish 47:42

How their performance is going. So what I was trying to communicate was that trust is built through performance. So that engagement that you asked me about was the part of the recognition. So if I’m managing a floor of around 20 guys, then I know that details right there in my app, but I need a larger interface, once I have to take actions further beyond. So, both web and app. In a quick action space, you require an app to be there to have that visibility, if you see a person has not appeared and you want the person you want to communicate with pretty quickly.

Akshay 48:26

So you can send a message?

Nimish 48:28

You can send a message, you can directly call from there. This mobile app on the business side gives the command and control and then the execution and orchestration, that shift rotation to managing the payouts and taking actions on having a collective view about analytics that is through the web.

Akshay 48:50

Okay, and what about things like somebody applying for leave and all that?

Nimish 48:55

Yes, that is also there. So, why have we amalgamated so many things into simple actions? If these simple actions are taken, the majority of the things are addressed that you need not have to work on at the end of the month. Everything is distributed throughout the process and with various players. Otherwise, the reconciliation process to taking an action and creating a collated view is not at all possible. And then either you overhire or you underhire, the relationship with the staff and staff relationship with business, that goes for a toss. It has to be a distributed activity throughout the month, throughout the business cycle and you know that the management accuracy increases drastically.

Akshay 49:54

What are the goals that you set for yourself?

Nimish 49:57

We aim for WorkEx to be known as the brand of trust for businesses and the workforce simultaneously and that this is a medium of fairness. This is a medium of growth and recognition to services at a large scale.

So that was Nimish Sharma telling Akshay Datt about how he built WorkEx. To know more or to use their services log on to https://workex.jobs/

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Nimish Sharma Co-founder and CEO, WorkEx

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